Jason Potrzeba~ Commercial Loan Officer ~ RI

January 2010 Existing Home Sales: Northeast Region.

Big big increases in sales of existing home sales when January 2010 is compared with January 2009.

Here is the breakdown on the percent increase in sales broken down into 6 separate sales brackets. These numbers look very good and the northeast region absolutely blew away the rest of the country in 5 out of the 6 categories. (The less than 100k category went to another region in the south)

If you are in Rhode Island or Massachusetts and would like to speak about some financing options, please call my office at 401-437-2008.

Here are the numbers. Enjoy!

0-100k: <-4.6%>

100-250k: 12.1%

250-500k: 14.3%

500-750k: 35.8%

750- 1 Million: 69.8%

1million and beyond: 61.2%

Jumbo loans seem to be moving through underwriting more easily these days. I think quicker underwriting and along with the current state of the economy being very good for someone looking to purchase a home in this price range, it's easier to take on the larger purcahse. This greater confidence is reflected in the monster jump in activity with higher priced homes. Super low rates also are a factor here.

Jason

My House is Worth Less Than I owe.

If this is a statement that rings true to your current situation and in the past has been the main reason you could not refinance, there are programs today designed to offer some help.

Not everyone qualifies and there still is an approval process but if you've got a current rate at 6% or higher, lowering your mortgage payment may still be possible.

I started ringing the bell on two of these programs last September and I am still speaking with clients (as early as yesterday) who have been turned away elsewhere simply because the other lender didn't recognize that the Fannie Mae Du Refi Plus program or the Freddie Mac Relief Refinance might be an option.

I am working on one right now that has saving approaching $300 a month and this is on a client who was turned away elsewhere.

Here is a snap shot of these two programs...

• The loan amount is allowed to be as high as 125% of the properties value.
• Offered on owner occupied properties, 1 unit up to 4 unit multi-families.
• NO MINIMUM CREDIT SCORE REQUIRED.
• An expectation is that there have been no 30 day late payments on your existing mortgage in the past 12 months.
• The rates I have been seeing on 30 year fixed mortgages have been in the high 4's and into the low 5's.
• Neither have a limit on combined loan to value. This means the new first mortgage could go to 125% of the properties value and at the same time still have a second mortgage in place. Guidelines allow for this, however the existing second mortgage must agree to subordinate and stay in second position on title.

There are restrictions and certain guidelines to be met. The existing loan also has to be a current Fannie Mae or Freddie Mac loan and the presence of mortgage insurance will also play a factor on any approval offers.

Stating "My house is worth less than I owe" doesn't have to mean you cannot benefit from a refinance.

If you own and live in a home as your primary residence in either Rhode Island or Massachusetts, please call my office. With one brief conversation, we should be able to identify if one of these two programs could help you.

Jason

Local Applebee's marketing (and advertisement) gone right.

Two weeks ago my family and I had to run some errands in Seekonk. When we were finished and heading home for dinner, my wife had noticed the words "Thursday is Family Night at Applebee's" painted on the restaurants windows.

It was Thursday night, time for dinner, with had the kids with us and my wife enjoys going out to eat.

Even though we had had everything at home defrosted and ready to go for dinner that night, she convinced me to turn around.

That night the kids were treated to balloons, the kind that get twisted into animals and other objects, and they also got to mess around with a person who was dressed up a Captain Jack Sparrow from Pirates of the Caribbean,

My son got a balloon twisted into a sword and my daughter got one twisted into a flower. Applebee's also had a photographer taking pictures and we went home with a picture of the kids standing with Captain Jack.

That restaurant introducing a little bit of fun into our dining experience has worked. The kids are still talking about that night and asking when we will go back.

By making that night fun and memorable for the family, there is no choice but to go back to that specific restaurant when before that night we wouldn't have. Plus I have no choice, especially with the kids still talking about that night. As a parent I was also very happy to see them both clean their plates, something that doesn't normally happen at home.

What type of experience are you offering your clients and customers? Are they still talking about you and the service you gave them? Are you memorable and will your clients and customers be raving to others about you and the time they spent with you?

Jason

It also hasn't gone unnoticed, by me, that the Seekonk Applebee's is still benefiting from that night by me writing of that night right now. Additionally, I posted the picture on my Facebook, so Applebee's is truly getting some mileage from the pirate and those balloons...

For a while now I've been sounding the alarm of an inevitable rate increase this year. The frequency in which I send out this warning is also increasing.

I haven't hit the panic button yet but this morning I was thinking about the S.O.S I've been sending out to existing and potential home owners. I also thought about the stories of Chicken Little when he cried out that the sky was falling. The story of the little boy who cried wolf occurred to me as well.

Has my repeated message put me in the category of one of these characters? Am I that man standing on the street corner dressed in drab holding the sign reading that the end is near?

I'm generally very optimistic and the glass is always half full. I just know that there are still clients out there who think rates will get lower or that there is still plenty of time to replace an existing mortgage. I don't want to see these people miss out. April 30^th is approaching quickly and if a buyer doesn't have their signed purchase and sales agreement and aren't in escrow, there will not be an $8,000 tax credit for them.

I read both these nursery rhymes this morning, Chicken Little and The Boy Who Cried Wolf.

The Sky is Falling has several different versions, some of which have Chicken Little and his friends getting eating by a fox. In most of the tellings, an acorn had bounced off of Chicken Little's head and the sky wasn't falling. The message to this story has been basically, do not believe everything you are told.

With the rates being at historic lows today and the economy showing signs of improvement, the Fed will have to raise rates to avoid inflation. With the 1.3 trillion that the Fed has been dumping into the bond market ending next month, rates will go up. I am also convinced that when this happens, property values will have a small slide backwards because the higher rates will weaken the buyers spending power. This will also effect the refinance market be reducing the important leverage of existing home equity crucial to an approval.

The Boy Who Cried Wolf was eventually ignored because of all his false warnings of wolf. My warnings and the warnings of others may have been premature but not false. We all shouted from rooftops last August and September about the First Time Homeowners Tax Credit expiring. It didn't expire, was extended and was even expanded on...premature but not false. It is going away this year. The wolf is coming and I do not want to see all the sheep I care for get eaten...

That's all I got for now. I will continue to encourage anyone considering refinancing to do so quickly. Home shoppers, the time is coming to hold a match under your rear as the tax credit deadline is quickly approaching. A quick look at the calendar tells me you've got 10 weeks to get into escrow.

If you are in Rhode Island or Massachusetts, I can be reached directly at 401-437-2008.

Jason

Market Update.: 30 year fixed rates below 5%.

Multiple news agencies are reporting today that the average rate on a 30 year fixed mortgage has dropped below 5%. The average rate based off of last weeks locks/closings is 4.93%.

On the application side of things, applications actually dipped by 2.1% last week. I think this may have been caused by news of increasing rates, widely reported on February 4^th, and this news may have cooled some interest in homeowners replacing an existing mortgage.

With rates seeing some temporary downward pressure, application numbers this week and next week may show an increase.

Once it set's in with everyone that the Fed will stop pumping money into the mortgage market as the 1.3 trillion they've dumped in already runs out in 6 weeks, there might quite possibly be a huge spike in applications while everyone looks to grab the low rate before the jump up to what some analysts suggest will be rates at 6%.

If you are in Rhode Island or Massachusetts, I can be reached directly at 401-437-2008 to have a conversation about your current loan and if it would save you some money to replace it.

Jason