Mortgage Rate Freeze Looms

Associated Press reports the Bush administration has allegedly worked out an agreement to freeze certain sub-prime mortgage interest rates for an alleged 5 years to stave off further foreclosures, according to congressional aides who spoke on condition of anonymity (of course).  Another anonymous person (don't ya just love it?) says the freeze will apply to loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.

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Posted on December 05, 2007 12:32:42 by Laurie.Manny

Remortgaging Your Long Beach Home Will Get Harder on January 1, 2008

Why it makes sense to refinance...TODAY, instead of next year.

I'm telling everyone I know about this.  Mortgages for Long Beach real estate are going to be harder to get next year.  Two major events happened this week which affect you:

1- 30 year fixed rate mortgages dropped below 6% for the first time since October, 2005.  While I am a staunch advocate of ARMs, as the least expensive mortgage, Wall Street seems to be rewarding the credit-worthy borrowers who are willing to lock-into a fixed rate mortgage.  Wall Street may be trying to push people into locking into loans, because they believe that rates are dropping, but I think that a fixed rate loan under 6% is about as good as it gets.

2- Fannie Mae and Freddie Mac are about to make borrowers jump through more hoops...again.  Next month, borrowers who do NOT have a FICO score of at least 680 will be assessed with a healthy penalty; 1-2% of the loan amount.  What that means is that the interest rate charged could be as much as .75% higher than the rates offered to borrowers with stellar credit (or the cost of the loan will be 1%-2% more).

If you are holding out for lower mortgage rates, that may happen next month.  You might be left out in the cold if your credit score isn't high enough.  I've seen people who have perfect credit histories  with a credit score under 680 so don't get cocky; this could happen to you !  While rates could drop another .25%, you could be forced into a rate that is .25 higher than you could get today.

ACTION PLAN:  Call me today at 858-699-4590 for a mortgage rate review.

Posted on November 30, 2007 13:22:29 by Brian.Brady

Long Beach Homeowners - Foreclosure Relief is on the Way!

LONG BEACH REAL ESTATE - FORECLOSURES - SHORT SALES

Keeping Families in their Long Beach Homes!

This Thanksgiving day we have some good news for Long Beach Homeowners facing the possibility of foreclosure. California Governor Schwarzenegger has worked with loan service providers from: Countrywide, GMAC, Litton and HomEq to agree to streamline "fast-track" procedures to help keep more subprime borrowers in their Long Beach homes.  These service providers are responsible for having issued more than 25% of current subprime mortgage loans. 

Seven of the top sixteen metropolitan areas with the highest rates of foreclosures in the nation are in the state of California, according to the latest data from RealtyTrac.

Read the entire Press Release:

Governor Schwarzenegger Works with Lenders to help Avoid Foreclosure

Back in October 2007 Sheila Bair, the Federal Deposit Insurance Coproration (FDIC) Chair, encouraged lending agencies to keep subprime mortgage borrowers at their initial interest rate if they are living in their home, making timely payments, but can't afford the loan "re-set"--or jump to a higher rate.  A half million Californians have subprime loans that will jump to higher rates in the next two years. Bair's proposal has been endorsed by the newspapers including the Wall Street Journal and New York Times as well as public and community leaders.

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Posted on November 22, 2007 19:28:23 by Laurie.Manny

Long Beach mortgage lenders are watching the Fed Thursday

Why do mortgage rates for Long Beach real estate go up and down?    Here are four questions to ask any lender (and the current answers):

What are mortgage rates based on...is it Treasury Bonds or the Federal Reserve Bank?

Neither.  Mortgage rates are based on mortgage-backed securities.  Ultimately, the mortgage markets are less worried about the Fed than they are about their ability to fight inflation.  Inflation is the number one enemy of low mortgage rates.  Subsequently, the Fed can raise rates and mortgage backed securities can gain value because they think the Fed is doing a good job fighting inflation.  So...mortgage rates drop...weird huh?

What is the next economic report that can severly move the market?

Tomorrow morning. Thursday, is a big deal for mortgage rates, especially if you're looking to purchase a Long beach home.  fed Chairman, Ben Bernanke, will be testifying to the Senate Banking Committee.  We'll be listening and analyzing his words more than Gorbachev analyzed Reagan's words during the Cold War.  We want to know if he thinks he has a handle on inflation.

When the Fed "changes rates" does that mess me up?

Sure, if you have a home equity line of credit, your rate will be affected.  The Fed only controls short-term rates.  They've raised them so much , they think they have inflation under control but the higher oil prices are surprising everyone.  It's not the action of the rates, it's the ability to proactively fight inflation that mortgage markets seek.  The Fed has been relatively "hands off" in their policy, lately and that makes the mortgage markets fear that they aren't fighting inflation enough.  If the Fed raised rates, your HELOC would rise, and longer term mortgages may actually drop. 

What's happening in the mortgage market today?

I'm cautious short-term and advising an aggressive locking posture for mortgage rates.  This means that I think you shouldn't gamble with the mortgage rate game.  If you're pre-approved, and have a property, lock the rate.  Floating the rate or playing the interest rate game is risky right now.  Lock your loan and demand written proof from the lender; it takes about 48 hours to get.  We issue a mortgage loan commitment reflecting a locked interest rate.

This could all change tomorrow when Fed Chairman Bernanke speaks.  If it's clear that he has a handle on inflation, I'll change my posture about locking your mortgage rate but for now, lock your loans.

Oh, by the way...if you're talking to a lender and they don't know the answers to these questions...run, don't walk away from them.

Posted on July 18, 2007 19:24:43 by Brian.Brady

Long Beach Real Estate Attractive to European Investors

Euopean investors have a double bonus with an investment in Long Beach real estate as the dollar sinks to an all-time low against the Euro.  I'm going to explain how a weakened US Dollar can benefit a foreign investor should they buy real estate in Long Beach.

Five years ago, $100,000 was equal to 100,000 Euro (the currency in Europe).  Today, that $100,000 is only worth 72,000 Euros.  A foreign investor can withdraw 72,000 Euros and convert it to $100,000 to use for a down payment on a Downtown Long Beach condo.  That  property may have cost as much as $360,000 two years ago but is selling today for $300,000.

Prices fluctuate in cycles.  Let's not forget that there will be close to 50 million Californians by 2020, 12 million more than our current population.  There is a significant, 12 year demographic trend that points to the probablity of higher prices in Long Beach.  Traditionally, real estate has returned 6% annually these past 25 years.  Let's assume it returns just 4% these next five years.  This means that that $300,000 Downtown Long Beach condo will be worth about $360,000.

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Posted on July 10, 2007 18:41:46 by Brian.Brady