Recent News

International Real Estate Investors Should Consider Buying U.S. Real Estate In 2008 Instead Of 2012

When foreign national buyers consider investing in U.S. real estate, they often focus on projects set to deliver 2-4 years out as opposed to projects that are ready to deliver today. Considering the path of the world's economy , this long-term investment strategy may be a bit short-sighted. For non-U.S....

Open Letter To Congress: Your Indecision Is Making Rates Rise On A Day When They Should Be Falling

Dear Congress, My clients are shopping for mortgages and your ongoing debates are causing problems. Mortgage rates are rising this week when all the data points to them falling. This is happening because the whole world is waiting for your vote. For example, the September jobs report showed extreme weakness...

Mortgage Rates Are Falling On The Combined Impact Of The Bailout Bill And The Washington Mutual And Wachovia Seizures

With mortgage rates moving faster than the Spread HD offense this morning, let's take a few minutes to recap what's going on, and what's causing rates to fall. First, the bailout. Late Sunday, Congress drafted the Emergency Economic Stabilization Act of 2008 bill and it goes to vote sometime today....

What To Do When Your Mortgage Lender Goes Out Of Business

Today's lesson from the Washington Mutual's seizure comes in the form of a haiku: Mortgage guys "retire" and never tell their clients, who then miss rate dips. Story goes like this, folks. Mortgage guys are leaving the business in droves. Some leave because their company failed, but many more leave...

Mortgage Rates Respond To A Rapidly-Devaluing U.S. Dollar

Monday, Wall Street made its verdict in the case of Government vs The Credit Markets, a knock-down, drag-out fight that may have ended last Friday. Government wins, but not without inflation. To an economist, inflation is the general increase in the price of everyday goods and services that occurs over...

How Mortgage Rates Are Responding To Lehman Brothers, Merrill Lynch, And AIG

After writing yesterday's blog post, my ThinkPad went blue. Cue the video above. It's a shame because the post went deep on Wall Street's recent troubles and how each piece of bad news actually helps everyday homeowners. When I went to publish, the post vanished. And by that point, markets...

Signs That The U.S. Foreclosure Rate May Be Cresting

RealtyTrac released its foreclosure data for August 2008, its headline reading in the usual Armageddon-like style: FORECLOSURE ACTIVITY INCREASES 12 PERCENT IN AUGUST Activity Up 27 Percent From August 2007 But, as is also typical, the news isn't nearly as dire as the headline would make us believe. Looking at...

Fannie Mae’s Last Act : New Loan Fees And Maximum Property Restrictions For Real Estate Investors

For owners of investment properties, the mortgage market is getting ugly. In its last act as a semi-private company, Fannie Mae updated its lending guidelines Friday, this time slapping new restrictions and additional fees on income-producing properties. The most impactful change is Fannie Mae's new, 4-property limitation. Based on the...

Explaining What The Government’s Takeover Of Fannie Mae and Freddie Mac Means To Mortgage Rates (In 265 Words)

Sunday, the government announced that it will takeover Fannie Mae and Freddie Mac and assume their respective operations. Mortgage-backed debt is now government debt. But for all the front page stories today, there's suprisingly little coverage about how the news impacts homeowners in need of a mortgage. Mortgage rates are...

Interview With First Business : New Fannie Mae and Freddie Mac Loan Fees

I spoke with Beejal Patel of First Business last week on Fannie Mae and Freddie Mac's new mandatory loan fees. The story is especially timely because mortgage servicing data showed that a greater number of "prime" mortgages defaulted in July 2008 than sub-prime ones. Now, the data is somewhat misleading...

Why Economic Weakness In Europe Is Causing Mortgage Rates To Fall

In the United States, tales of economic gloom in Europe barely register in our business newspapers let alone our local ones. But, for Americans in need of a mortgage, what happens economically across the Atlantic Ocean can have a big impact on mortgage rates here in the United States. It...

What Is A “Conforming Mortgage”?

Lately, Fannie Mae and Freddie Mac have been in the news every day as economists and lawmakers question the future of conforming mortgages. But among everyday Americans, a more common question is: "What is a conforming mortgage?" A conforming mortgage is one that adheres to the mortgage guidelines set forth...

What The Surprising Strength Of The U.S. Dollar Is Doing To Mortgage Rates

Before getting marked-up, mortgage rates are based on the price of mortgage bonds, a complex debt security that can be dramatically simplified in three bullet points: An investor buys for the bond for, say, $10,000 He collects regular interest payments on his $10,000 When the bond "matures", he gets his...

How Foreign National Real Estate Investors Can Leverage The U.S. Dollar For Better Returns

The U.S. dollar is gaining value rapidly, changing the financials for foreigners buying U.S. property. The rising Greenback makes a case for Irish, British and Canadian foreign nationals to make as large a downpayment as possible on their next investment unit. It's a mortgage strategy reversal for the international real...

A Six-Figure Income And Impeccable Credit Doesn’t Insulate You From Tightening Mortgage Guidelines

Four times annually, the Federal Reserve surveys 84 banks around the country about general lending standards and banking conditions. One of the survey questions asks about current mortgage lending standards and whether it's getting harder, or easier, to get approved for a home loan. Modified from the report, we see...

Fannie Mae Adds New Risk-Based Pricing And “Adverse Market” Fees For All Conforming Mortgage Applicants

Effective October 1, 2008, Fannie Mae is making home loans more expensive for Americans. You may want to bookmark this page because where Fannie goes, Freddie often follows. The first part of Fannie's two-part change is a remodel on its risk-based fee structure, also known as loan-level pricing adjustments. The...

Use A Boy Scout’s Approach When Shopping For Mortgage Rates

If the changing mortgage guidelines don't bedevil you, changing mortgage rates will. It's getting even tougher to shop for low mortgages rate because rates refuse to stay in any one place for very long. The pie chart above puts it in perspective. The data is astounding -- especially against the...

With The New Housing Law, The $250,000/$500,000 Capital Gains Exclusion Is Gone For Some

The Housing and Economic Recovery Act of 2008 passed into law this week with a lot of positives for the American people. Some of the law's highlights include: Up to $7,500 in purchase "credits" for first-time homebuyers Conforming loan limit increases to $625,000 in high-cost areas Expansion of the FHA...

As Gas Prices Fall, Mortgage Rates Are Responding Accordingly

If you study mortgage rates long enough, you realize that "good mortgage rates" are under constant attack from a number of sources, including: World events and geopolitics U.S. employment data U.S. government and policy The price of oil and gasoline And this is just a sampler. There are literally thousands...

FHA Institutes Risk-Based Pricing, Rewarding Owners Of Multi-Family Properties (In A Relative Way)

The FHA rolled out risk-based mortgage pricing this week, matching steps that Fannie and Freddie took earlier this year. In its press release, the FHA lists some exceptions including 15-year mortgages. Prior to the risk-based changes, FHA home loans were usually accompanied by an easy-to-remember fee schedule of 1.500 percent...