Wednesday, March 12, 2008
Is it a Buyers Market?
On the surface that would be an immediate yes if you polled every Realtor in the DFW area.However there may be an exception or two to that rule. If your house is currently on the market you need to make it the best it can be. Nuetral colors, no wall paper, fresh paint where needed and landscape spiff up just to name a few. I show between 15 and 50 houses a week and 48 out of 50 are in a buyers market. However there are always 2 that sell in 3 days. These houses are priced right on appraisal but have extra little touchs and upgrades to make a potential buyer stop and take a second look. I see it every week and sometimes my clients are there with the first offer and sometimes not. The moral to the story is that you still get what you pay for with maybe just a little extra added.Please visit my homepage for information on this or any other real estate topic at www.tombrewerjr.com.
Today and Last Week in Review on the Bond Market Express
Today the Rates are falling again - Thank Goodness for small favors!!
Today we are experiencing a rapid change for the positive in mortgage lending rates. Now is an incredible time if you are a home buyer as rates not only are falling but the house selection is wonderful. The Fed came in on Monday and made some significant policy changes to their bank lending practices not to mention about 200 billion to aid in the easement of the credit crunch and the Bond market currently loves it!!!What a train ride this is.For more information on this or other topics please log into my home page at www.tombrewerjr.com.
Last Week in Review
"I'M GOING OFF THE RAILS ON A CRAZY TRAIN..." OZZY OSBOURNE And speaking of going off the rails crazy...Bonds and home loan rates just experienced one of the most volatile, crazy weeks ever seen, with fixed home loan rates rising by about .375% by the time the smoke cleared.
During the first four days of last week, Bonds underwent a crazy 313 basis point sell-off - more than they sometimes move over the course of six months. Why the insane action? Uninspiring commentary from Federal Reserve officials, renewed fears of inflation...and another very interesting story playing out last Thursday. Losses from The Carlyle Capital Group and Thornburg Mortgage decreased their capital to the point where their financial backers had asked for cash back in the way of a "margin call". What does this mean?
Imagine a home that received a loan for 50% of the value...but a provision in the loan stated that under no circumstances could the equity fall below 50%. And the home would need to be appraised every day to evaluate this. If the home lost significant value, the lender would be entitled to an immediate payment to retain the 50% equity position. So if the home did indeed decline in value, the lender would make a call for capital to make sure their 50% margin of loan-to-value remains intact...hence the name margin call. If the homeowner had the cash to meet this call - all is well. But if the homeowner did not have the cash, the only way to satisfy the lender would be a sale of the home. And that is basically what Carlyle Capital Group and Thornburg Mortgage had to do last Thursday...they didn't have enough cash on hand to meet their margin call, so they were forced to sell home loans that they were holding. This flood of mortgage paper on the market pushed Mortgage Bond prices lower...much lower.
The week was shaping up to be one of the worst in history for Bonds and home loan rates - but then, remembering that weak financial news is good for Bonds and home loan rates, Friday's utterly dismal monthly Jobs Report came to the rescue. On the report that there were a net loss of 63,000 jobs in the US last month - as well as negative revisions to previous months reports - Bonds rocketed back higher, at least enough to erase the previous day's losses, but still ended significantly worse off for the week overall.
"I'D GLADLY PAY YOU TUESDAY FOR A HAMBURGER TODAY"...BUT DID WIMPY REALLY EVER PAY POPEYE BACK? OR DID POPEYE SOMEHOW GET OUT OF MAKING THE LOAN IN THE FIRST PLACE? IF YOU'VE EVER HAD A FRIEND OR FAMILY MEMBER HIT YOU UP FOR MONEY, YOU KNOW IT CAN BE AWKWARD. READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME TIPS ON HOW TO HANDLE THOSE APPEALS.
Forecast for the Week
And don't think the wild ride is over...Bonds and home loan rates are probably not pulling into the station just yet, so stay strapped in and keep your hands on the safety bar. Another week of potential volatility lies ahead, with several key economic reports due for release, including Retail Sales, Initial Jobless Claims, Consumer Sentiment and the inflation-measuring Consumer Price Index.
Remembering that when Bond prices move lower, home loan rates move higher - the chart below shows just what kind of dramatic volatility has been seen of late. The 200-day Moving Average shown in blue has traditionally been a very strong "floor of support" or "ceiling of resistance", depending on which side of the line Bonds are trading. Last Thursday's action saw a deep dip below this benchmark line in the sand - but Friday's strong positive move helped Bonds power their way back above the line.
The news in the days ahead will dictate which side of this important line Bonds will head next, and could determine the trend for the next several weeks...and perhaps even months.
Today we are experiencing a rapid change for the positive in mortgage lending rates. Now is an incredible time if you are a home buyer as rates not only are falling but the house selection is wonderful. The Fed came in on Monday and made some significant policy changes to their bank lending practices not to mention about 200 billion to aid in the easement of the credit crunch and the Bond market currently loves it!!!What a train ride this is.For more information on this or other topics please log into my home page at www.tombrewerjr.com.
Last Week in Review
"I'M GOING OFF THE RAILS ON A CRAZY TRAIN..." OZZY OSBOURNE And speaking of going off the rails crazy...Bonds and home loan rates just experienced one of the most volatile, crazy weeks ever seen, with fixed home loan rates rising by about .375% by the time the smoke cleared.
During the first four days of last week, Bonds underwent a crazy 313 basis point sell-off - more than they sometimes move over the course of six months. Why the insane action? Uninspiring commentary from Federal Reserve officials, renewed fears of inflation...and another very interesting story playing out last Thursday. Losses from The Carlyle Capital Group and Thornburg Mortgage decreased their capital to the point where their financial backers had asked for cash back in the way of a "margin call". What does this mean?
Imagine a home that received a loan for 50% of the value...but a provision in the loan stated that under no circumstances could the equity fall below 50%. And the home would need to be appraised every day to evaluate this. If the home lost significant value, the lender would be entitled to an immediate payment to retain the 50% equity position. So if the home did indeed decline in value, the lender would make a call for capital to make sure their 50% margin of loan-to-value remains intact...hence the name margin call. If the homeowner had the cash to meet this call - all is well. But if the homeowner did not have the cash, the only way to satisfy the lender would be a sale of the home. And that is basically what Carlyle Capital Group and Thornburg Mortgage had to do last Thursday...they didn't have enough cash on hand to meet their margin call, so they were forced to sell home loans that they were holding. This flood of mortgage paper on the market pushed Mortgage Bond prices lower...much lower.
The week was shaping up to be one of the worst in history for Bonds and home loan rates - but then, remembering that weak financial news is good for Bonds and home loan rates, Friday's utterly dismal monthly Jobs Report came to the rescue. On the report that there were a net loss of 63,000 jobs in the US last month - as well as negative revisions to previous months reports - Bonds rocketed back higher, at least enough to erase the previous day's losses, but still ended significantly worse off for the week overall.
"I'D GLADLY PAY YOU TUESDAY FOR A HAMBURGER TODAY"...BUT DID WIMPY REALLY EVER PAY POPEYE BACK? OR DID POPEYE SOMEHOW GET OUT OF MAKING THE LOAN IN THE FIRST PLACE? IF YOU'VE EVER HAD A FRIEND OR FAMILY MEMBER HIT YOU UP FOR MONEY, YOU KNOW IT CAN BE AWKWARD. READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME TIPS ON HOW TO HANDLE THOSE APPEALS.
Forecast for the Week
And don't think the wild ride is over...Bonds and home loan rates are probably not pulling into the station just yet, so stay strapped in and keep your hands on the safety bar. Another week of potential volatility lies ahead, with several key economic reports due for release, including Retail Sales, Initial Jobless Claims, Consumer Sentiment and the inflation-measuring Consumer Price Index.
Remembering that when Bond prices move lower, home loan rates move higher - the chart below shows just what kind of dramatic volatility has been seen of late. The 200-day Moving Average shown in blue has traditionally been a very strong "floor of support" or "ceiling of resistance", depending on which side of the line Bonds are trading. Last Thursday's action saw a deep dip below this benchmark line in the sand - but Friday's strong positive move helped Bonds power their way back above the line.
The news in the days ahead will dictate which side of this important line Bonds will head next, and could determine the trend for the next several weeks...and perhaps even months.
Buying a Home? Can I get financing? The Real Answer
The mortgage market and investor requirements are changing at a daily pace on what level of financing that they do and at what loan to value. The first question to answer is that the FHA is still financing at the 100% level with the AmeriDream program.The minimum FICO Score for these programs is for all practical purposes 540 however there will be some Mortgage Brokers that will tell you different stories. Freddie and Fannie both are still financing at the 100% level but the programs are FICO Score Driven and you must be at a minimum of 680 as of today. You may still obtain financing through the VA at 100% as well.I have been selling real estate and mortgages for 12 years now and these statements above are the truth not the myth concerning Real Estate buying today. Loans are still available and are obtainable. Please make sure to consult a qualified mortgage broker who is up to date with the requirements to secure your mortgage and buy with as little stress as possible. Please refer to my home page at http://www.tombrewerjr.com for more information.
Selling your Home?
Today's Real Estate Market is to say the least unpredictable because of the mortgage situation - Not Your House Value!Make sure that you find a realtor that has strong knowledge of why things are happening and not just handing you a Competitive Market Analysis on your house and convincing you that it is indeed accurate because it probably is not. Lenders in Today's market are looking at house comps no more than 6 months old and will stay in the same neighborhood for those comparables unless the comparables do not exist. The old school realtor will hand you a CMA and say here is your value. What is more important to distinguish is that very rarely is the CMA appraised value of your property.The appraisal takes into account many more variables than a CMA so be careful not to fall into the 6 month listing trap and have your price lowered 5 times. The value SOLD to you in the beginning was not accurate and was done only to earn business. Please see my home site at http://www.tombrewerjr.com for more information.Happy Real Estate Shopping!!
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