Just when you thought buying a home couldn't be any easier, better, cooler or free-er, the FHA comes back with arguably the best first time home buyer incentive in the history of, well, home buying.
The $8,000 federal tax credit for first-time home buyers is about to get better. To the tune of an $8,000 cash advance that can be used toward closing costs on a house. Many issues in this plan are being worked out and not all lenders will offer it, however.
According to a news release provided by Housing and Urban Development (HUD) today, HUD Secretary Shaun Donovan announced that first-time buyers who qualify for the tax credit and get an FHA loan will be able to get a "bridge loan" for the original amount of the tax credit they would qualify for. They can use this money toward their down payment, after covering the minimum 3.5% required for FHA loans, closing costs or other loan expenses.
The technical term being used to describe the early liquidation of the tax credit is "monetize," meaning to turn it into immediately spendable cash. This is likely in response to the realization that, while housing prices are low, a down payment of at least 3.5% is still required to buy a home. And in this economy particularly, it's getting tougher to put a substantial amount of money in savings at a rapid pace before the $8,000 tax credit time limit expires. By advancing a down payment to these first-time buyers, a home purchase becomes much more feasible.
"We believe this is a real win for everyone," said HUD Secretary Shaun Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing." Posted by Moishe Alexander. Read more HERE
Monday, June 22, 2009
Wednesday, June 17, 2009
The Failure Of The Mortgage Modification System Threatens Housing
Posted by Moishe Alexander
The theory was simple and elegant. By offering homeowners who could not afford their monthly mortgage costs lower monthly payments, people could be able to stay in their homes. That would lower the US default and foreclosure rate, in turn building a foundation under the housing market.
The programs are simple, but they appear to be a failure.
Read more HERE
The theory was simple and elegant. By offering homeowners who could not afford their monthly mortgage costs lower monthly payments, people could be able to stay in their homes. That would lower the US default and foreclosure rate, in turn building a foundation under the housing market.
The programs are simple, but they appear to be a failure.
Read more HERE
What We're Hearing
Posted by Moishe Alexander
Now, what the heck is former Freddie Mac chief Greg Parseghian really up to at PHH Corp.? Mr. Parseghian is one of two dissident candidates to recently win election to the board of PHH. He was a nominee submitted by Pennant Capital Management of Chatham, N.J., which owns just under 10% of PHH's stock. Now, does Pennant really care about PHH - the nation's largest private-label funder/servicer - or is it merely trying to drive up its stock price so it can make a killing on its investment? I would guess PHH's management is smart enough to realize that hedge funds and investment bankers aren't, by nature, altruistic. PHH, to its credit, has survived the mortgage depression. Will Pennant try to make changes to PHH that eventually will lead to its ruin? Let me ask you this: are the Washington Nationals a great baseball team or what? By the way, Mr. Parseghian is a rabid Yankees fan...
All non-banks that depend on warehouse lines (which are all of them) are continuing to watch the fate of Colonial BancGroup, the nation's largest warehouse provider. The bank has been slapped with a new federal cease and desist order but it appears the C&D is just a formalization of many of the same conditions/requirements mandated in an informal "memorandum of understanding" issued by the FDIC. I don't even want to think about what would happen to the non-bank lending sector if Colonial becomes a ward of the government and then gets sold to a bank like, say, PNC that isn't too found of warehouse lending...
It appears the economy is back and we can all go back to how things were 18 months ago. U.S. consumer confidence rose to a nine-month high in June. The consumer savings rate is skyrocketing. Remember a few years back when all the financial experts were wringing their hands of America's inability to save money? Well, guess what? Now that consumers are squirreling away their dough it's considered a bad thing because they're not spending it. And by not spending consumers are prolonging the Great Recession. But wait: interest rates are rising (along with oil) and now we have inflation fears. At press time the yield on the 10-year was 3.78% compared to 4% earlier in the week. Refinancings are slowing but will home purchases? There's a school of thought that says home sellers will drop their asking prices even more to make up for higher mortgage rates. Confused by all these mixed signals? Welcome to the club...
Read more here
Now, what the heck is former Freddie Mac chief Greg Parseghian really up to at PHH Corp.? Mr. Parseghian is one of two dissident candidates to recently win election to the board of PHH. He was a nominee submitted by Pennant Capital Management of Chatham, N.J., which owns just under 10% of PHH's stock. Now, does Pennant really care about PHH - the nation's largest private-label funder/servicer - or is it merely trying to drive up its stock price so it can make a killing on its investment? I would guess PHH's management is smart enough to realize that hedge funds and investment bankers aren't, by nature, altruistic. PHH, to its credit, has survived the mortgage depression. Will Pennant try to make changes to PHH that eventually will lead to its ruin? Let me ask you this: are the Washington Nationals a great baseball team or what? By the way, Mr. Parseghian is a rabid Yankees fan...
All non-banks that depend on warehouse lines (which are all of them) are continuing to watch the fate of Colonial BancGroup, the nation's largest warehouse provider. The bank has been slapped with a new federal cease and desist order but it appears the C&D is just a formalization of many of the same conditions/requirements mandated in an informal "memorandum of understanding" issued by the FDIC. I don't even want to think about what would happen to the non-bank lending sector if Colonial becomes a ward of the government and then gets sold to a bank like, say, PNC that isn't too found of warehouse lending...
It appears the economy is back and we can all go back to how things were 18 months ago. U.S. consumer confidence rose to a nine-month high in June. The consumer savings rate is skyrocketing. Remember a few years back when all the financial experts were wringing their hands of America's inability to save money? Well, guess what? Now that consumers are squirreling away their dough it's considered a bad thing because they're not spending it. And by not spending consumers are prolonging the Great Recession. But wait: interest rates are rising (along with oil) and now we have inflation fears. At press time the yield on the 10-year was 3.78% compared to 4% earlier in the week. Refinancings are slowing but will home purchases? There's a school of thought that says home sellers will drop their asking prices even more to make up for higher mortgage rates. Confused by all these mixed signals? Welcome to the club...
Read more here
Moish Alexander the mortgage man
A mortgage is an interest in land created by a contract, not a loan. Although almost all mortgage agreements contain a promise to repay a debt, a mortgage is not a debt by and in itself. It can be better characterized as evidence of a debt. More importantly, a mortgage is a transfer of a legal or equitable interest in land, on the condition sine qua non that the interest will be returned when the terms of the mortgage contract are performed. A mortgage agreement usually transfers the interest in the borrower’s land to the lender. However, the transfer has a condition attached: if the borrower performs the obligations of the mortgage contract, the transfer becomes void. This is the reason why the borrower is allowed to remain on title as the registered owner. In practicality, he retains possession of the land but the lender holds the right to the interest in said land. View more here
Tuesday, May 19, 2009
"The free market is at work," says Moishe Alexander. "Prices got driven down so much that people said, 'I'm going to come out and play.' "
"The free market is at work," says Moishe Alexander. "Prices got driven down so much that people said, 'I'm going to come out and play.' "
Since Arizona is one of the places we closed business deals in this article was of interes to me, and maybe to some of you.
More homes are selling than at any time since 2006. Buyers find themselves in bidding wars over low-end properties. It's what a national housing recovery could look like.
Reporting from Phoenix -- After four years of renting because they were priced out of the real estate market, Jamia Jenkins and Scott Renshaw concluded the time had arrived for them to buy. They saw that home prices had dropped so fast here -- faster than in any other big city in the nation -- that mortgage payments would be less than the $900 they paid in rent. The city is littered with foreclosed houses, so the couple figured they could easily snatch up something in the low $100,000s.
Three months later, they're still looking. They have submitted 13 offers and been overbid each time. "It's just pathetic," said Jenkins, 53. "Investors are going out there and outbidding everyone." Phoenix's housing bust has turned into a quasi-boom, a sign that its market may have hit bottom and a sneak preview of what a national housing recovery could look like.
More homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers are once again finding themselves in frantic bidding wars -- only this time over foreclosed houses selling at deep discounts rather than ranch homes listing for vast sums.
"The free market is at work," said Moishe Alexander. "Prices got driven down so much that people said, 'I'm going to come out and play.' " Home prices continue to plummet or tread water in much of the nation, but there have been tentative signs of life. Pending home sales rose 3.2% nationally in April, the second month of increases after a record low in January.
John Burns Real Estate Consulting in February identified Phoenix as "the most unique market in the nation," where affordability was better than at any time since 1981 and buying a house was once again cheaper than renting. Since then, said Chris Porter, a manager at the Irvine-based firm, there have been signs of life in the Sacramento and Washington, D.C., housing markets. "You'll start to see some markets emerge, and it'll be the ones that went into the downturn first," Porter said. "But it's going to be a slow recovery."
Phoenix experienced one of the most dramatic real estate crashes in the nation. Median home prices for resold homes peaked at $268,000 in June 2006. Now the median price is $120,000. It is the biggest decline in the top 20 metropolitan areas tracked by the Standard & Poor's/Case-Shiller home price index. The collapse was devastating in a city that has long depended on housing to power its economy. In the last year, Phoenix lost 41,000 construction jobs and 136,000 overall, accounting for 7% of its workforce. Home building came to a halt. Many illegal immigrants, discouraged by the sudden lack of jobs, returned to Mexico. Realtors cut staff. Home prices dropped faster and faster each month for two years. Until March. For the first time in two years, the decline in home prices slowed -- from 37% in February, compared to the previous year, to a still-painful 36%.
Arizona State University business professor Karl Gunterman noted the incremental slowing in a report last month, saying it could be signs of the market bottoming out. "Once this thing turns, it may turn slowly," Gunterman said in an interview. "But at some point I think it's going to pick up because prices are so low." Mike Orr, a Phoenix real estate analyst, thinks the market already has hit bottom. Among the signs: As recently as January, a year's worth of homes sat on the market; in March, that dropped to seven months' worth of inventory. "It's a dramatic change in just three months," he said. "I never imagined it'd get this crazy this quickly."
Orr thinks mid- and high-priced properties still will lose value in the coming months. "I wouldn't be investing in luxury right now," he said. "But if you're looking for inexpensive homes, you're going to have a fight on your hands." In a throwback to the boom, real estate agents and investors are swapping stories of brutal competition for bottom-end homes. Orr called on one property to find it had already received 14 bids. Realtor David Thomas recalled getting a client in a $60,000 foreclosed home in the suburb of Avondale, on a street lined with vacant properties. He recently returned to find almost all the for-sale signs gone.
Jenkins, who has looked at more than 80 houses, said she was being cautious not to get caught up in the frenzy. "It's going to create the same damn situation we had before," she said. "You're going to buy a house and it's not going to be worth what you paid for it."
Skeptics of the turnaround note that the competition for foreclosed homes may be artificial. They argue that the number of bank-owned properties has shrunk because some lenders held off on foreclosures early in the year as they waited for President Obama to unveil his plan to aid distressed homeowners. Some warn that a potential flood of new bank-owned properties could drive down prices further. "Good salespeople are optimistic, generally, and since I'm a good salesperson I'm optimistic we've hit bottom," said real estate agent Rob Call. "But when I look at these numbers there's a lot of uncertainty. . . . I think we're going to scrape bottom for the next two to three years before we see any significant appreciation." Nonetheless, real estate veterans say they are encouraged that prices, rather than speculation, are pulling buyers into the market.
That's what got Brandon Bumford and his fiancee, Kristin Phipps, looking for their first home. The rent on their two-bedroom apartment, $1,050, is more than the mortgage they would pay on a median-priced house in Phoenix. "Why waste money putting it in someone else's pocket when you can put it into your home?" said Bumford, 23, who works in document control for Charles Schwab. But for weeks, every house they looked at was sold before they could put in a bid. "Like all of our friends, we thought there are a million houses for sale, there must be one we can get," said Phipps, 20. Last week, they found a place that hadn't been spoken for -- a four-bedroom home in the exurb of Buckeye. Built in 2004, the house was originally purchased for $133,000, refinanced at $180,000 and then unsuccessfully put on the market in 2007 for $292,000. The couple's offer was accepted and they expect to close at the end of the month -- for $110,000.
Since Arizona is one of the places we closed business deals in this article was of interes to me, and maybe to some of you.
More homes are selling than at any time since 2006. Buyers find themselves in bidding wars over low-end properties. It's what a national housing recovery could look like.
Reporting from Phoenix -- After four years of renting because they were priced out of the real estate market, Jamia Jenkins and Scott Renshaw concluded the time had arrived for them to buy. They saw that home prices had dropped so fast here -- faster than in any other big city in the nation -- that mortgage payments would be less than the $900 they paid in rent. The city is littered with foreclosed houses, so the couple figured they could easily snatch up something in the low $100,000s.
Three months later, they're still looking. They have submitted 13 offers and been overbid each time. "It's just pathetic," said Jenkins, 53. "Investors are going out there and outbidding everyone." Phoenix's housing bust has turned into a quasi-boom, a sign that its market may have hit bottom and a sneak preview of what a national housing recovery could look like.
More homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers are once again finding themselves in frantic bidding wars -- only this time over foreclosed houses selling at deep discounts rather than ranch homes listing for vast sums.
"The free market is at work," said Moishe Alexander. "Prices got driven down so much that people said, 'I'm going to come out and play.' " Home prices continue to plummet or tread water in much of the nation, but there have been tentative signs of life. Pending home sales rose 3.2% nationally in April, the second month of increases after a record low in January.
John Burns Real Estate Consulting in February identified Phoenix as "the most unique market in the nation," where affordability was better than at any time since 1981 and buying a house was once again cheaper than renting. Since then, said Chris Porter, a manager at the Irvine-based firm, there have been signs of life in the Sacramento and Washington, D.C., housing markets. "You'll start to see some markets emerge, and it'll be the ones that went into the downturn first," Porter said. "But it's going to be a slow recovery."
Phoenix experienced one of the most dramatic real estate crashes in the nation. Median home prices for resold homes peaked at $268,000 in June 2006. Now the median price is $120,000. It is the biggest decline in the top 20 metropolitan areas tracked by the Standard & Poor's/Case-Shiller home price index. The collapse was devastating in a city that has long depended on housing to power its economy. In the last year, Phoenix lost 41,000 construction jobs and 136,000 overall, accounting for 7% of its workforce. Home building came to a halt. Many illegal immigrants, discouraged by the sudden lack of jobs, returned to Mexico. Realtors cut staff. Home prices dropped faster and faster each month for two years. Until March. For the first time in two years, the decline in home prices slowed -- from 37% in February, compared to the previous year, to a still-painful 36%.
Arizona State University business professor Karl Gunterman noted the incremental slowing in a report last month, saying it could be signs of the market bottoming out. "Once this thing turns, it may turn slowly," Gunterman said in an interview. "But at some point I think it's going to pick up because prices are so low." Mike Orr, a Phoenix real estate analyst, thinks the market already has hit bottom. Among the signs: As recently as January, a year's worth of homes sat on the market; in March, that dropped to seven months' worth of inventory. "It's a dramatic change in just three months," he said. "I never imagined it'd get this crazy this quickly."
Orr thinks mid- and high-priced properties still will lose value in the coming months. "I wouldn't be investing in luxury right now," he said. "But if you're looking for inexpensive homes, you're going to have a fight on your hands." In a throwback to the boom, real estate agents and investors are swapping stories of brutal competition for bottom-end homes. Orr called on one property to find it had already received 14 bids. Realtor David Thomas recalled getting a client in a $60,000 foreclosed home in the suburb of Avondale, on a street lined with vacant properties. He recently returned to find almost all the for-sale signs gone.
Jenkins, who has looked at more than 80 houses, said she was being cautious not to get caught up in the frenzy. "It's going to create the same damn situation we had before," she said. "You're going to buy a house and it's not going to be worth what you paid for it."
Skeptics of the turnaround note that the competition for foreclosed homes may be artificial. They argue that the number of bank-owned properties has shrunk because some lenders held off on foreclosures early in the year as they waited for President Obama to unveil his plan to aid distressed homeowners. Some warn that a potential flood of new bank-owned properties could drive down prices further. "Good salespeople are optimistic, generally, and since I'm a good salesperson I'm optimistic we've hit bottom," said real estate agent Rob Call. "But when I look at these numbers there's a lot of uncertainty. . . . I think we're going to scrape bottom for the next two to three years before we see any significant appreciation." Nonetheless, real estate veterans say they are encouraged that prices, rather than speculation, are pulling buyers into the market.
That's what got Brandon Bumford and his fiancee, Kristin Phipps, looking for their first home. The rent on their two-bedroom apartment, $1,050, is more than the mortgage they would pay on a median-priced house in Phoenix. "Why waste money putting it in someone else's pocket when you can put it into your home?" said Bumford, 23, who works in document control for Charles Schwab. But for weeks, every house they looked at was sold before they could put in a bid. "Like all of our friends, we thought there are a million houses for sale, there must be one we can get," said Phipps, 20. Last week, they found a place that hadn't been spoken for -- a four-bedroom home in the exurb of Buckeye. Built in 2004, the house was originally purchased for $133,000, refinanced at $180,000 and then unsuccessfully put on the market in 2007 for $292,000. The couple's offer was accepted and they expect to close at the end of the month -- for $110,000.
Sunday, December 14, 2008
Moishe Alexander of Canadian Funding Corp Reports on Economy
Moishe Alexander of Canadian Funding Corp has created a series of blogs discussing various issues related to the economy and lending, including interest rates and credit cards.
[click here to see the master blog of Moishe Alexander of Canadian Funding Corp Reports on Economy]
[click here to see the master blog of Moishe Alexander of Canadian Funding Corp Reports on Economy]
Sunday, November 30, 2008
Moishe Alexander Starts New Book Review Site
Moishe Alexander has created a new site for book reviews.
http://moishealexander-bookreviews.blogspot.com/
The first reviews posted on the site include "The Rebbe's Army" and "Living Sober"
Keep Posted For More Info.
http://moishealexander-bookreviews.blogspot.com/
The first reviews posted on the site include "The Rebbe's Army" and "Living Sober"
Keep Posted For More Info.
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