You may have missed the fact that 10 banks were allowed to repay TARP money this week. I find it interesting that many months of impassioned TARP discussions would result in a rather silent repayment of the funds this week. Scanning this morning's headlines across several financial websites and news channels, there is scant evidence of this monumental event. I did learn about another ponzi scheme arrest, and a highly respected financial publication is reporting that TARP recipients had executives using corporate jets for personal use. Whether you feel that negative news sells better or not, is not up for debate in this newsletter. The point I wish to reflect on today is the significance of TARP repayment.
Some would consider it shocking that financial firms would be able to repay the money so quickly after it widely believed that the BANK BAILOUT was a waste of taxpayer's money with little hope of ever being repaid. While it was admittedly unpopular when introduced by the previous administration, it was an active step toward a solution. Again, not debating whether it was the right choice, but glad that a decision was made to do something as opposed to nothing. Now that the money is rolling back into Washington, it will be interesting to see if it applied to the deficit, or to fund a different program. Clearly, the banking industry has much to prove before it is no longer considered at risk. The optimist in me feels that the healthiest banks will lead the way to recovery, and will most likely not need more reserves than they have at this time.
I received a surprise when reading the Volusia Building Industry Association Newsletter that came out this week. I have been named in the Volunteer Spotlight for my work as Vice Chair of the Green Building Council.
I am very proud of my work, and appreciative of the recognition. Please mark your calendar to attend our next event on June 24 which will show you ways to reduce your summer A/C Bill. Please email, call or text me to RSVP for this event. Highlights of the event include guest speakers from FPL and Total Comfort, free breakfast, and a drawing for a gift certificate for a free A/C Maintenance checkup.
1- Interest Rates are still very close to historical lows, and still lower than they have been in several years
2- Home prices are much lower than they have been in years
3- $8000 Tax Credit for 1st time home buyers
4- If you have not owned a home for 3 years, you are considered a 1st time home buyer
5- For many, it is better than continuing to rent
6- Purchasing power - a slightly higher rate combined with a slightly lower price could equal the same payment with a lower size loan to pay back
Interest rates have increased dramatically since Black Wednesday - May 27,2009. Homeowners looking to refinance to rates near historical lows are clearly divided into 2 groups. Those that grabbed the brass ring, and those that waited too long. Many took the "bird in the hand" path and got a great fixed rate and lower payments to help budgets strained by the recession. Others waited for the mythical 4% rate that this professional felt would never materialize, and are faced with current rates that have increased nearly a full percent in the last 2 weeks.
While rates are unpredictable in these turbulent times, there is scant economic data to suggest a return to the rates prior to May 27. In the unlikely event of a return to those rates, the time to act upon them would seem to brief at best. The following economic data appears to help you make your own informed decision regarding which direction rates will be heading.
•· May 2009 - 1 in 398 homes nationwide received a foreclosure notice
•· Temporary freezes on foreclosure filings ended in March
•· Nearly 1,000,000 new filings since March
•· Approximately 750,000 homes taken back by banks not even on the market
•· Unemployment peak in May is a 26 year high
•· Rising oil prices likely to stall recovery efforts
•· 10 year T Bill auctions this week were Weak
Help A Vet: Many vets are not aware of the great loans available through the VA. A brief summary is below. Did you know that a 15 year VA Loan purchase loan with 10% down does not require monthly mortgage insurance? Here are some fast facts regarding VA Home Loans.
VA Purchase:
•v 100% Financing Available
•v Seller Can Pay Up To 4% of buyers closing costs
•v VA Funding Fee Can Be Financed
•v Many lenders now require a 620 Credit Score (some exceptions may be granted)
•v No cash reserves required in most cases
•v NO monthly MI on 15 year loans with 10% down
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