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If you are interested in reading the actual legislative language of the Home Buying Tax Credit Extension bill, it is available by going to this link: http://bit.ly/3UustY This is an amendment (S.AMDT.2724 to H.R.3548) to the Unemployment Extension Bill as offered by Senator Schumer. As described previously the terms of the expansion to long-time homeowners includes a requirement that they have lived in the same principal residence at least 5 of the last 8 years. The credit will be $6,500 for those individuals. Limitations are set at income of $150,000 single and $225,000 married (previously reported at $250k) Maximum home purchase price is set at $800,000 to qualify for the credit. This will be of more interest in California and High priced regions. Happy reading and remember it is still in amendments to a bill that hasn't passed yet. More legislative "sausage" to be made before we have something to send to the White House for signature.
Plenty of news from last week and I mean even bigger than the Ducks’ smothering of the overmatched Trojans.
In FHA and FNMA home financing news, the High-Balance Conforming Limits that were set to expire this year have been extended through all of 2010. This is big residential real estate news. This legislation means that Central Oregon FHA limits will remain at $417k rather than rolling back to the ~$300k level they were headed for. And for Fannie Mae loans, while the difference in OR between “standard” conforming ($417k) and “high-balance” conforming ($447k) is minimal, the difference in markets that often provide buyers into Central Oregon is very important. California’s high balance limit of $729,750 when combined with a purchase-money second of $350,000 and an approx 20% down payment means that a home with a purchase price of $1,350,000 can be purchased without jumbo financing. FNMA-backed, conforming rates are better than Jumbo residential rates which still don’t enjoy a secondary market.
In economic news, the Q3 GDP numbers were published with a surprisingly high 3.5% growth. This news has to be tempered with a few caveats as cheerleaders call for the official end of the recession. The start of a recession officially waits for 2 consecutive quarters of GDP decline. People often look back to an earlier date to peg the start but it isn’t official until we’ve experienced the 2 consecutive quarters. With this one-quarter upturn, even at the surprising, >1% growth number, we need to remember some of the temporary stimuli that are included in the 3rd quarter, especially the Clunk of a car incentive program (see here for $24,000 per car taxpayer cost analysis.) Local inquiry resulted in one car dealership indicating that they have had ZERO new car sales in the weeks since Clunker ended. So, while we are happy for some upturn in the GDP, let’s watch for more signs of broad improvement before we relax.
In banking news, the FDIC shutdown 9 more banks on Friday and this was before the CIT restructure announcement. This brings to 141 the number of FDIC takeovers since the beginning of “The Great Recession” and 115 on the year. Incidentally, the 9 banks along with CIT are heavily invested in Commercial Real Estate. Many community banks are the repositories of land, development and commercial lending and we are just still seeing the tip of the iceberg on problems there. Once again this past week Signet stepped in to help a building owner who had been turned down on a loan renewal request with their bank (of 30 years!!) unwilling or unable to extend credit in this region. Please have building owners you know step forward early and get refinanced now rather than waiting for the current note to come due. Signet is ready to take care of their refinancing needs now.
In other legislative news, the Home Buyer Tax Credit Extension gathered momentum and some clarity this past week as we reported on Thursday. However, this is not yet a done deal. The progress last week included a voice vote of confidence in the Senate and an assurance of House passage, but the actual vehicle for passage in both houses needs to be finalized. The likely scenario has the Home Buyer Credit being attached to an unemployment extension bill that has similar levels of support. While the benefits of kick starting the economic engine are likely, the results still raise questions (see Clunker discussion above.) Assuming passage here are the high points again:
I appreciate all of your support ... lots of changes in the industry and many have not survived - Thanks to you keeping us top of mind - Signet has continued to thrive and celebrated its 6th year in business this summer! As I am 100% referral based - I depend on you to keep growing! We have added exceptional professionals to handle the increase – don’t hesitate to call.
Look for expanded resources on our web site coming soon - an increased emphasis on Commercial Financing, Renovation Lending and Reverse Mortgages.
Rates continue to be excellent for home buying and refinancing, whether for personal use or investment. And while the MBS prices just dropped below the 200-day moving average we are still in better territory than we were all summer which was very good on its own.
Commercial property loans have also benefited from the improving rates recently. And while many lenders are just saying “no!”, Signet Mortgage’s lender connections are closing commercial purchases and refinances for owner-users and investors. During this past week, the White House was actively pushing for extending small business lending options (click here.). The key improvement that may affect commercial property owner-users is the expansion of limits where prior SBA caps were in the $2M neighborhood, would be moved to $5 - 5.5M. This will allow operators with existing SBA loans to go back to the well for additional loans. We are tracking legislation sponsored by Senator Landrieu (D-LA) to implement that change.
On the Homebuyer Credit front, hearings on the topic drew some attention in the week. For a good summary from Bulletin writer Keith Chu, scroll to the very bottom of this newsletter. One of those giving testimony was Senator Johnny Isakson (R-GA) who has been a Realtor in his career. Senator Isakson made a passionate plea for extension and expansion of the credit through the middle of next year. Other senators listen to him on Real Estate matters. Isakson’s testimony complete with charts showing examples of the pricing meltdown and the effect of foreclosures in the suburban Atlanta area is interesting and you can view it by clicking here.
A quick note on the residential lending process: I’m sure you have all experienced of heard of difficulties with residential appraisals recently. This has been the result of the HVCC imposed on banks and therefore borrowers by the NY State Attorney General. There is currently legislation making real headway in congress that would overturn the HVCC, allowing qualified lenders and brokers to order appraisals again. Another processing matter you need to be aware of is the change to Truth in Lending (TIL) rules. The effect is a 3-7 day disclosure requirement at the end of the process that can extend closings. Make sure you have baked in enough time to cover these longer turn times when writing contracts.
If these process headaches have been making you ill, you will want to check the helpful chart further down that compares the H1N1 swine flu symptoms to the common cold. Most important to remember is, if you have the flu, stay away from others for 24 hours after your fever (100°) has subsided for 24 hours without fever reducing aids like Tylenol
Important economic news in the coming week includes housing on Wednesday, jobs and GDP on Thursday and Consumer Prices/Inflation (PCE) on Friday.
Through all of this, rates remain fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
Fall colors are in full swing and the chill of inflation is just starting to be seen in early reports. While we don’t feel inflation will roar until unemployment has peaked and a hot economy starts to pay more and hire more, it will start to make its presence known in the coming months. This week we saw it in the CPI numbers coming in a little higher than expected and a little higher than the prior month, too. Only a tenth higher and that wouldn’t be as concerning except for the fact that the CPI measure includes all the cash for clunker rebates as if they were price decreases. Certainly we would have seen an even-hotter CPI increase if the pre-rebate price had been used. Another small indicator was the NY State Manufacturing index coming in at 34.57, not high on its own but when compared to expectations of 17.25 it was noticed.
Remember that two things drive long-term real estate interest rates: INFLATION and SUPPLY AND DEMAND. On the scorecard, mark inflation as a tiny rattle of the sabers this week. Supply and Demand remains in our favor, BUT we like Belshazzar are reading the writing on the wall and it too isn’t pretty for the near future. The Fed purchases of MBS will taper off but continue through about 3/31/10. Over the past many months they have purchased at about a $25B/wk run rate. This week was $16B and on average it would be near $14B to hit $1.25T in March. You can mark your scorecard here as Writing-on-the-wall, still helping but it won’t be there for long.
One further indicator we use measure the two keys mentioned is the words of the Fed. And this morning, even as we write, Fed Chairman Ben Bernanke is speaking in San Francisco. Watch for news on this tonight and in the a.m. to see if he gives any further hints on their exit strategy from the current near-zero interest rate policy, weak-dollar actions and inflation watch. Another powerful voice is FDIC Chairman Sheila Bair. She testified before the Senate Banking Committee this past week that the biggest pressure that will bear on insured lenders in the near term will be troubled commercial real estate (CRE) loans. She recommended modifications and workouts as the way to head off this trouble at the pass. Watch for more news on CRE workouts.
On the Legislative front, Homebuyer Tax Credit extension bills are multiplying and sitting. The Military Extension that passed the house waits in the Senate Finance Committee for discussion and eventually a floor vote. The other extension bills are in two camps, the “As-is until June 1, 2010” camp and the “Take-it-to-the-Limit, $15k, All-Buyers, January 1, 2011” camp. The latter sounds like the NAR drafted the bill. In fact, the chief proponent of that approach, Senator Johnny Isakson, R-GA, spoke up this past week. He wants the “All-in” approach but is willing to extend it just to June 30. Read his entire comments by clicking here, or read a taste of it: “So I would submit that when we look at the sunset date of November 30 on the first-time home buyer tax credit, we should extend it--not forever but through midyear next year, to the end of June 2010. There is a reason for that recommendation. The worst 3 months of the year in any housing market anywhere in the United States are December, January, and February because it is winter and because it is the holidays.” Right now bills for both camps are in the Senate Finance and the House Ways & Means committees. The working proposal for paying for either camp is now to ratchet back some of the discretionary ARRA stimulus act spending, and reallocate it. We’ll keep our eye on progress there and let you know.
Through all of this, rates remain fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
Catching up on the recent blog posts this one is from 10/19 - if you would like to receive these real time, send me an email: dave@signetmortgage.com.
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20+ years background as a CPA in Silicon Valley prior to relocating to the paradise of Bend, OR. I love helping people meet their dreams, and brokers beat their financial goals. Let's talk! -Dave
Signet Mortgage has a unique and proven-succesful lending proposition. Founders and principals are former CPAs with a view to a buyer's whole financial picture when structuring the right loan.
As your loan officer, my job is to oversee your loan and be a resource for you throughout the loan process in regards to interest rates, programs, and de-mystifying the world of real estate loans. I will work hard to ensure your loan is structured to not only be a perfect match with your real estate needs, but to also complement and enhance your entire financial picture.
Our team has one basic philosophy
We want you to have the best financing experience of your life.
Commercial and Residential Lending
Commercial Expertise: 20+ years in Financial Services has led to relationships and abilities to get loans done.
Our stable of commercial lenders include many well-known Wall Street banks, regional banks throughout the country - especially in California, Texas, Utah, Washington and Oregon - and local banks in Central Oregon. We like to say that we'll work your loan "from Wall Street to Bond Street" sm and everything in between.
Residential Programs include:
FHA and Conventional
Luxury Home/Jumbo and Conforming
USDA Guaranteed Housing loans
Oregon Bond First-Time Home Buyer programs
Reverse Mortgages
Construction and Permanent Financing
For your Principal Residence, Vacation Home and Investment Properties
Dave Woodland is our Northwest Regional Manager located in beautiful Bend, OR. He and his wife Satu and kids relocated to Bend, opening the Signet Mortgage operation there in 2006. Prior to that, Dave worked as a financial executive in Silicon Valley with two semiconductor companies as well as 10 years in public accounting with one of the largest international CPA firms. Dave notes, “my financial services business background allows me to help people make dreams become reality.”
Dave has a significant number of relationships with investors, a variety of lenders, commercial and residential brokers and attorneys that help serve his clients’ needs in getting deals done.
When not financing deals, Dave can be found with his wife and boys – Matt and Josh - hiking, camping, skiing, cycling and golfing. Come over to the house and they’ll challenge you to a game of bocce ball.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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