Monthly Archive for April, 2010

San Jose Mortgage Rate & Market Commentary

by
Shashank
on April 19, 2010
in Mortgage Rates
. 1 Comment

San Jose Mortgage Rate & Market commentary. Check out how the 30 year fixed mortgage rate and 5 year ARM rates did last week and how they are expected to fare this week.

The week that was:

  • Last week Freddie Mac in its Primary Mortgage Market Survey®  reported the 30-year fixed-rate mortgage averaged 5.07 percent with an average 0.6 point for the week ending April 15, 2010, down from last week when it averaged 5.21 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.08 percent this week, with an average 0.6 point, down from last week when it averaged 4.25 percent.

“After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low,” said Frank Nothaft, Freddie Mac vice president and chief economist. “”Low mortgage rates continue to help stabilize the housing market. The Fed  noted that residential activity increased while home prices were stable across most of its 12 Districts over the six weeks prior to April 5th. In addition, credit standards remained generally unchanged across the nation, while credit quality was mixed according to the report.”

  • The story of the week however didn’t hit until Friday morning when the SEC announced it was charging Goldman Sachs with fraud in its dealings in the sub prime mortgage markets. Specifically, for mis-leading a client while another client was setting up to short the same security. The immediate result was a strong sell-off in the stock market, led by financial stocks and money moving into the bond market, lowering rates.

The Week that will be:

  • Will begin with the Goldman Sachs fraud charges following the stock market decline on Friday. This week the economic data is sparse with existing and new home sales the headliners on Thursday and Friday.
  • We are not expecting any major rate declines unless there is a sea change in the economic outlook, and that isn’t likely.
  • The Goldman situation will settle down; the key take away from the charges filed is whether this is the beginning of a sweep through Wall Street by the SEC. The Street is likely to get a lot of attention and likely more firms and charges will unfold.

If you would like to be updated on where the mortgage rates and market are moving follow me on Twitter.

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Everything you wanted to know about FHA condominium approval

by
Shashank
on April 12, 2010
in FHA Loans and First Time Home Buyer
. 1 Comment

FHA CondominiumIn this blog post I will try to answer all FAQs related to FHA condominium project approval.  Beginning this year, FHA made some major changes to the Condominium process. I have done a lot of speaking on this topic and have written several blog posts. In this post, I am trying to get the most frequently asked questions and answers to those questions in one post:

Where can I go to find if the FHA project is already approved?

Go to FHA Condominium page to check if a project is approved with FHA. You can also check for all the approved projects by State, City or Zip code. Make sure in the “Approval Method” you pick “HRAP/DELRAP”.

What are the documents required to obtain project approval?

Click here to download the FHA mortgagee letter and scroll down to page # 16 to get a list of documents required for project approvals on condos which are either proposed, existing or converted. The same document also talks about the eligibility parameters of condominiums for FHA approval. Be sure to read the other mortgagee letter that gives some respite in the guidelines till  Dec 31, 2010.

How much time it would take to get a Condominium project FHA approved?

FHA in a notice sent on 4/9 mentioned that processing time for condo project is approximately 30 days from the receipt of a complete application.

Where can I go if I have more questions?

You can email to a dedicated mailbox at FHA at CondoProjectApprovalInquiries@hud.gov. The response time can exceed 72 hours.

You can also go to FHA page for frequently asked questions on condominium project approval.

And of course, you can always contact me by email at shashank@arcuslending.com.

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California approves tax break for people in Foreclosure, Short Sales

by
Shashank
on April 9, 2010
in Others and Real Estate Trends
. 1 Comment

As reported by LA Times the measure, which is expected to be signed by Gov. Arnold Schwarzenegger, would waive California state taxes on mortgage debt that has been forgiven in a foreclosure or short sale. So far, the amount waived has been considered taxable income under California law. The measure passed Thursday would eliminate that tax when a bank agrees to accept less than what is owed on a home.

Schwarzenegger said “I will sign the measure when it reaches my desk. I want to give homeowners and businesses the relief they need. We want to be helpful in every way we can, so we will sign it.”

This is a big news for thousands of Californians whose homes were foreclosed on or sold at a loss. It also comes as a relief to thousand others who are going through this process and may lose their homes via foreclosure or short sales in the future. In California 1 out of every 195 housing units received a foreclosure filing in February 2010. (source RealtyTrac. See Chart below)


foreclosure_activity_in_ca
Californians can already claim the tax breaks on federal returns. Lawmakers passed the measure in time for people to take advantage of it by the April 15 deadline for filing tax returns.

With the plunge in the real estate market, many Californians have found themselves owing much more on their mortgages than their homes are worth. First American Core Logic reports that 37% of the homes in California were underwater in Q4 2009. (See chart below)

negative_equity_share
If you are a distressed homeowner and would like to explore different options available to you, call me at 408.905.6261 or email me at shashank@arcuslending.com.

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What happens to mortgage rates; now that FED stopped buying it?

by
Shashank
on April 4, 2010
in Mortgage Rates
. 1 Comment

Mortgage rates were hammered last week after Fed officially stopped buying mortgage backed securities. Fannie Mae 30 year (4.5%) mortgage bond opened the week at 100.44, was down 97 bps for the week as it closed at 99.47 (see chart below). The mortgage rates for most of the programs had jumped up by .25%. These are ominous signs.

mbs_last_week_march1

If last week was any indication this is not going to be a slow rise in interest rates as a lot of experts had predicted.

mortgage_rates_forecast1

From what we have seen so far we are definitely looking at mid -high 5s by the end of the year. For the real estate market that is still fragile, more than .5% increase in rates could come as a big blow.

If you were looking to buy a house and had a Pre-approval done, it may be a good idea to get it reviewed again by your lender. An already .25% increase in rate means that  you may not qualify for the same amount of mortgage that you did 1 week back. And if you are looking to refinance, you opportunity to get a low rate may be limited.

If you would like to be updated on how the mortgage bond market and hence the mortgage rate market is moving, follow me on twitter or complete our live rate quote form.

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