Finally the MBA lowered their market projections, which are in line with what we had been thinking for the rest of the year.
Washington, DC (June 22, 2009) — The Mortgage Bankers Association today lowered its forecast of mortgage originations in 2009 to $2.03 trillion, a drop of over $700 billion from its March forecast. $84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinancings and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP). MBA is now forecasting $737 billion in purchase originations and $1,297 billion in refinance originations.
In announcing the drop in the forecast, MBA’s Chief Economist Jay Brinkmann issued the following statement:
“In March we boosted our forecast of mortgage originations by over $800 billion following the drop in interest rates associated with the Federal Reserve’s announcement on the Treasury bond and mortgage-backed securities (MBS) purchases programs as well as the implementation of HARP. We warned at the time that with the billions in Treasury securities that would be issued to finance record budget deficits and with the Fed expected to purchase only a portion of those Treasury securities, how long rates stayed low would depend on whether other investors stayed in the market. If other investors shied away from Treasuries due to expectations of future inflation and the declining value of the dollar, the effect on rates would be more short-lived and our mortgage originations forecast would prove too optimistic. That has proven to be the case.
“While the Fed has been successful in reducing the spread between conforming mortgage and Treasury rates through its purchase of agency MBS, it has not been successful in maintaining lower Treasury yields. Since March, the Federal Reserve purchases have equaled approximately 85% of new MBS issuance for Fannie Mae, Freddie Mac and Ginnie Mae combined. In contrast, Federal Reserve purchases of long-term Treasuries equaled about 50% on new issuance during that same three month period. Given the high issuance volume of Treasuries in June, the Fed is likely approaching its self-imposed ceiling of $300 billion and may be reluctant to increase its current commitment to purchase long-term Treasuries for two reasons. First, Fed officials have made public statements about their outlook for an improving economy. Second, the Fed may have decided that its purchases may not be efficacious in maintaining lower long-term Treasury rates and may not be worth the risks entailed in building up a large Fed balance sheet that will need to be reduced at some future point.
“The March increase in refinance originations was driven by two factors. The first factor was the drop in interest rates. The subsequent increase in interest rates, however, began to choke off the refinance wave in May, much earlier than anticipated in the March forecast. The second factor was the large volume of loans expected from HARP. While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed according to press reports. While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment.
“MBA had estimated that purchase mortgage originations in 2009 would be $821 billion. We have now lowered this to $737 billion for several reasons. First, while home sales have been higher than expected, home prices have fallen more than expected leading to smaller loans. Second, the large share of distressed sales or homes purchased by investors has resulted in the share of all cash home purchases being higher than normal. Therefore, even with higher projected home sales for all of 2009, the projected lower average home price and higher cash share have combined to lower projected volume of purchase originations.
“MBA now projects that total existing home sales for 2009 will be 4.8 million units, a drop of 1.2 percent from 2008. MBA projects new home sales will be 352,000 units, a decline of about 27 percent from 2008. Median home prices for new and existing homes will likely continue to fall, dropping by about ten percent from 2008 levels, but leveling off in 2010 as the economy improves.
“There are several schools of thought about where long-term interest rates are headed. One school holds that continued anemic growth and high unemployment will combine to hold down inflation and the demand for debt. The increase in government debt has been partially offset by declines in other forms of debt, especially mortgage and other consumer debt. The result will be long-term interest rates at approximately current levels through the end of 2010. Another school of thought holds that the large increases in federal debt will put tremendous pressure on domestic and international investors to absorb this debt, and that the large increases in the money supply and declines in the dollar could trigger inflation, all leading to higher rates. The MBA forecast is for increasing rates through the end of the year and through 2010. Adding to the pressure for higher long-term Treasury yields is the notion that, at some point, the Fed has to withdraw the substantial liquidity it has injected into the financial markets to keep a lid on expected inflation. On the other hand, a resumption of a flight to quality, induced by political unrests around the globe or a renewed financial crisis, could cause long-term Treasury yields to reverse their course.”
Wednesday, June 24, 2009
Wednesday, June 17, 2009
Petition against New Law for Appraisals!
Request For Reconsideration of HVCC
View Current Signatures Sign the Petition
We the undersigned understand that the intentions of the Home Valuation Code of Conduct ("HVCC") were to help curb the potential for fraud with respect to the valuation of residential properties. We must however bring to your attention the reality of the situation that HVCC has already caused.
Since "Appraisal Management Companies (AMC’s)" are taking up to 40% of the total appraisal fee, and are not being regulated to ensure that their appraisers are licensed and competent, we are seeing unlicensed and inexperienced individuals performing property inspections with grave data entry errors. These inferior appraisals are then being “signed-off” by other parties that NEVER INSPECTED THE PROPERTY and are creating unnecessary financial hardship for buyers and sellers.
With mortgage loans being denied due to inaccurate appraisals, borrowers are being forced to apply with other lenders who in turn have to charge the consumer ANOTHER APPRAISAL FEE to proceed with the transaction. This vicious cycle can go on endlessly costing well intended clients a great deal of money and time.
Under HVCC, no one involved in the transaction is allowed to communicate these major issues (EVEN LICENSED LOAN ORIGINATORS) directly to their appraisers. So countless real estate transactions that would have otherwise closed are now failing, resulting in continued property devaluation and offering NO stimulus to our economy with the exception of the unregulated AMC’s who are making unjustified profits at the expense of home loan applicants and licensed, qualified appraisers.
Licensed appraisers have legal and ethical standards in place already. The emphasis should be on making appraisers abide by these, rather than frustrating the ordering and communication process. This well intended legislation is severely misguided. Although HVCC has good intentions, its flaws are severely hurting our housing industry, the consumer and our economy. We are requesting that HVCC be discontinued or thought through thoroughly and retooled in order to stop the devastation it has caused and will continue to cause on our housing industry and our economy. Sincerely, The Undersigned
Click here to sign http://www.hvccpetition.com/SignPetition.aspx
View Current Signatures Sign the Petition
We the undersigned understand that the intentions of the Home Valuation Code of Conduct ("HVCC") were to help curb the potential for fraud with respect to the valuation of residential properties. We must however bring to your attention the reality of the situation that HVCC has already caused.
Since "Appraisal Management Companies (AMC’s)" are taking up to 40% of the total appraisal fee, and are not being regulated to ensure that their appraisers are licensed and competent, we are seeing unlicensed and inexperienced individuals performing property inspections with grave data entry errors. These inferior appraisals are then being “signed-off” by other parties that NEVER INSPECTED THE PROPERTY and are creating unnecessary financial hardship for buyers and sellers.
With mortgage loans being denied due to inaccurate appraisals, borrowers are being forced to apply with other lenders who in turn have to charge the consumer ANOTHER APPRAISAL FEE to proceed with the transaction. This vicious cycle can go on endlessly costing well intended clients a great deal of money and time.
Under HVCC, no one involved in the transaction is allowed to communicate these major issues (EVEN LICENSED LOAN ORIGINATORS) directly to their appraisers. So countless real estate transactions that would have otherwise closed are now failing, resulting in continued property devaluation and offering NO stimulus to our economy with the exception of the unregulated AMC’s who are making unjustified profits at the expense of home loan applicants and licensed, qualified appraisers.
Licensed appraisers have legal and ethical standards in place already. The emphasis should be on making appraisers abide by these, rather than frustrating the ordering and communication process. This well intended legislation is severely misguided. Although HVCC has good intentions, its flaws are severely hurting our housing industry, the consumer and our economy. We are requesting that HVCC be discontinued or thought through thoroughly and retooled in order to stop the devastation it has caused and will continue to cause on our housing industry and our economy. Sincerely, The Undersigned
Click here to sign http://www.hvccpetition.com/SignPetition.aspx
Friday, June 12, 2009
Local Sales up but Values are down
Local Business
Local home sales up, but values down
$210,000 was median price in May, 16.3% less than last year
Thursday, June 11 5:35 p.m.
BY CAMI JONERCOLUMBIAN STAFF WRITER
Sales of new and pre-owned homes in Clark County inched up from April to May, but the still-sluggish market and a spike in local foreclosures are dragging down home values.The median price of all new and pre-owned homes sold in May was $210,000, according to benchmarks, a service of Riley & Marks appraisal firm. In May 2008, Clark County's median was $251,000. That represents a 16.3 percent year-over-year decline.Shrinking sales prices are due in part to the county's rising number of short sale listings, said Sharry McNeel, a Realtor and sales associate with Coldwell Banker Barbara Sue Seal Properties in Vancouver. Time-consuming short-sale transactions — in which homeowners negotiate to get their lenders to take less than is owed on the mortgage — can cause deal-killing backups as buyers wait for months to hear whether the bank has accepted their offer."Until they can get some of these short sales off the market or moved, it's tough. There's a big clog in the drain," McNeel said.410 homes sold in May
Countywide, 410 homes were sold in May, a 17.7 percent decline from the May 2008 total of 498. Median price of pre-owned homes sold last month was $208,750, down from $246,000 in the same month last year. The median price of a new home was $248,212, down from $279,900 a year ago. It's hard to tell whether the free fall in prices is nearing bottom, said Dick Riley, a Riley & Marks co-owner."If we haven't, it's scary. When you look at a median of $210,000, that's really low," he said. Riley blamed job insecurity and the county's rising unemployment rate at 13.4 percent in April for slow home sales that have kept many buyers sidelined since 2007."When in doubt, what do people do? They don't do anything," Riley said. "They hunker down."He pointed out the market's positives, such as the county's high inventory of homes listed for sale, softening prices and mortgage interest rates that remain below 6 percent, despite inching upward. The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, according to Freddie Mac. The last time the average 30-year mortgage was higher was the week of Nov. 26, when it averaged 5.97 percent.Low loan rates
Low loan rates could be one reason May saw an uptick in the new-home sales category, as home builders worked to clear their backlog of inventory.For the month, 77 new homes were sold, compared with 48 new homes in April and 53 new homes in March."The builders pay higher interest rates," McNeel said.That has cut the profits of new-home builders over the past year, said Michael Shanaberger, sales and marketing director for Manor Homes in Vancouver."We're not really taking a loss, we're just not making any money," he said.Other home builders say they are scrambling to sell off "spec" houses, homes that were built without a buyer in hand.Kevin Wann, president of Vancouver-based Pacific Lifestyle Homes, said he sees the market stablizing."I am encouraged that people are out there," Wann said. "It doesn't feel like it's continuing to drop."
Local home sales up, but values down
$210,000 was median price in May, 16.3% less than last year
Thursday, June 11 5:35 p.m.
BY CAMI JONERCOLUMBIAN STAFF WRITER
Sales of new and pre-owned homes in Clark County inched up from April to May, but the still-sluggish market and a spike in local foreclosures are dragging down home values.The median price of all new and pre-owned homes sold in May was $210,000, according to benchmarks, a service of Riley & Marks appraisal firm. In May 2008, Clark County's median was $251,000. That represents a 16.3 percent year-over-year decline.Shrinking sales prices are due in part to the county's rising number of short sale listings, said Sharry McNeel, a Realtor and sales associate with Coldwell Banker Barbara Sue Seal Properties in Vancouver. Time-consuming short-sale transactions — in which homeowners negotiate to get their lenders to take less than is owed on the mortgage — can cause deal-killing backups as buyers wait for months to hear whether the bank has accepted their offer."Until they can get some of these short sales off the market or moved, it's tough. There's a big clog in the drain," McNeel said.410 homes sold in May
Countywide, 410 homes were sold in May, a 17.7 percent decline from the May 2008 total of 498. Median price of pre-owned homes sold last month was $208,750, down from $246,000 in the same month last year. The median price of a new home was $248,212, down from $279,900 a year ago. It's hard to tell whether the free fall in prices is nearing bottom, said Dick Riley, a Riley & Marks co-owner."If we haven't, it's scary. When you look at a median of $210,000, that's really low," he said. Riley blamed job insecurity and the county's rising unemployment rate at 13.4 percent in April for slow home sales that have kept many buyers sidelined since 2007."When in doubt, what do people do? They don't do anything," Riley said. "They hunker down."He pointed out the market's positives, such as the county's high inventory of homes listed for sale, softening prices and mortgage interest rates that remain below 6 percent, despite inching upward. The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, according to Freddie Mac. The last time the average 30-year mortgage was higher was the week of Nov. 26, when it averaged 5.97 percent.Low loan rates
Low loan rates could be one reason May saw an uptick in the new-home sales category, as home builders worked to clear their backlog of inventory.For the month, 77 new homes were sold, compared with 48 new homes in April and 53 new homes in March."The builders pay higher interest rates," McNeel said.That has cut the profits of new-home builders over the past year, said Michael Shanaberger, sales and marketing director for Manor Homes in Vancouver."We're not really taking a loss, we're just not making any money," he said.Other home builders say they are scrambling to sell off "spec" houses, homes that were built without a buyer in hand.Kevin Wann, president of Vancouver-based Pacific Lifestyle Homes, said he sees the market stablizing."I am encouraged that people are out there," Wann said. "It doesn't feel like it's continuing to drop."
Tuesday, June 2, 2009
Showing Your Home Successfully
Showing Your Home Successfully
Your house should always be available for show, even though there may be times that will be inconvenient for you. Allow your Realtor to put a lock box on the front door to make it easy for other Realtors to show your home to their prospective homebuyers. Otherwise, prospective buyers and selling agents will have to schedule appointments for later dates, which is a nuisance and inconvenient. The majority of these potential buyers and selling agents will simply skip your home to show the house of someone else who is more cooperative. Find Something Else To Do Potential buyers will feel like intruders if you are there when they visit, and they might not be as receptive toward touring your home. Take your family to the closest park or stop by your local Starbucks. If you are still adamant about staying, and will not take my advice, remain in an out of the way area of the house and do not move from room to room. By all means, keep quiet, and do not volunteer any information. Feel free to answer any questions that the prospective buyer or the selling agent may ask. Lighting to Set the Mood When you know that someone is coming by to show your home, turn on all the indoor and outdoor lights, even during the day. In the evening, a house that is full of light, gives a warm, and inviting impression when viewed from the street. During the daytime, having al of the lights on prevents harsh shadows from sunlight, and brightens up any dim areas. Trust me; your house will appear more inviting, and cheerful with all of the lights on. Just remember to turn all of the lights off after the showing so as not to make an extra donation to your local utility company. Inviting Scents Whatever you do, stay away from scented sprays when you are preparing for showings. It is very obvious to prospective buyers and selling agents and many will find the smells of those sprays offensive, not to mention that some may be allergic. If you are trying to achieve a pleasant aroma in your house, a little preparation is in order. Purchase a potpourri pot, a scented candle or something else natural. If you have not planned for this event, simply turn on a stove burner for a moment and put a drop of vanilla extract on it. It will smell like you have been cooking all day. Believe It Or Not, Everyone Does Not Like Fido If you have pets, make sure your listing agent puts a notice with your listing in the local Multiple Listing Service. The last thing you want is to have Fido running out the front door and getting lost. If you have been given enough time, and know someone is coming to show your home, take the pets with you while the prospective homebuyers and selling agents tour your home. If you absolutely cannot take them with you, it is advisable to keep Fido in a penned area in the back yard. Try to keep any other pets, such as cats, in a specific room when you expect visitors, and e sure to place a sign on the door. Most of the time, an indoor cat will hide when buyers come to view your property, but they may panic and try to escape. Remember, not everyone is a pet lover. The Kitchen Trash Make sure you empty your kitchen trash before every showing. The prospective homebuyer is more than likely going to open up every cabinet and door in your kitchen, the last thing they want to see is garbage. Remember that you want to send a positive image about every aspect of your home. Kitchen trash does not, and will not, ever send a positive message. You may go through more plastic bags than usual, but that small cost is well worth it. Cleanliness Is Next To Godliness Not everyone makes their bed, and tidies up everyday, but when you are trying to sell your home, I strongly recommended that you quickly begin to develop the habit. Pick up daily newspapers, do not leave empty glasses on end tables, and most importantly, keep everything freshly dusted and vacuumed. Try your best to have it look like a model home.
Todd Little
President at Americas Housing Educators, LLC
Your house should always be available for show, even though there may be times that will be inconvenient for you. Allow your Realtor to put a lock box on the front door to make it easy for other Realtors to show your home to their prospective homebuyers. Otherwise, prospective buyers and selling agents will have to schedule appointments for later dates, which is a nuisance and inconvenient. The majority of these potential buyers and selling agents will simply skip your home to show the house of someone else who is more cooperative. Find Something Else To Do Potential buyers will feel like intruders if you are there when they visit, and they might not be as receptive toward touring your home. Take your family to the closest park or stop by your local Starbucks. If you are still adamant about staying, and will not take my advice, remain in an out of the way area of the house and do not move from room to room. By all means, keep quiet, and do not volunteer any information. Feel free to answer any questions that the prospective buyer or the selling agent may ask. Lighting to Set the Mood When you know that someone is coming by to show your home, turn on all the indoor and outdoor lights, even during the day. In the evening, a house that is full of light, gives a warm, and inviting impression when viewed from the street. During the daytime, having al of the lights on prevents harsh shadows from sunlight, and brightens up any dim areas. Trust me; your house will appear more inviting, and cheerful with all of the lights on. Just remember to turn all of the lights off after the showing so as not to make an extra donation to your local utility company. Inviting Scents Whatever you do, stay away from scented sprays when you are preparing for showings. It is very obvious to prospective buyers and selling agents and many will find the smells of those sprays offensive, not to mention that some may be allergic. If you are trying to achieve a pleasant aroma in your house, a little preparation is in order. Purchase a potpourri pot, a scented candle or something else natural. If you have not planned for this event, simply turn on a stove burner for a moment and put a drop of vanilla extract on it. It will smell like you have been cooking all day. Believe It Or Not, Everyone Does Not Like Fido If you have pets, make sure your listing agent puts a notice with your listing in the local Multiple Listing Service. The last thing you want is to have Fido running out the front door and getting lost. If you have been given enough time, and know someone is coming to show your home, take the pets with you while the prospective homebuyers and selling agents tour your home. If you absolutely cannot take them with you, it is advisable to keep Fido in a penned area in the back yard. Try to keep any other pets, such as cats, in a specific room when you expect visitors, and e sure to place a sign on the door. Most of the time, an indoor cat will hide when buyers come to view your property, but they may panic and try to escape. Remember, not everyone is a pet lover. The Kitchen Trash Make sure you empty your kitchen trash before every showing. The prospective homebuyer is more than likely going to open up every cabinet and door in your kitchen, the last thing they want to see is garbage. Remember that you want to send a positive image about every aspect of your home. Kitchen trash does not, and will not, ever send a positive message. You may go through more plastic bags than usual, but that small cost is well worth it. Cleanliness Is Next To Godliness Not everyone makes their bed, and tidies up everyday, but when you are trying to sell your home, I strongly recommended that you quickly begin to develop the habit. Pick up daily newspapers, do not leave empty glasses on end tables, and most importantly, keep everything freshly dusted and vacuumed. Try your best to have it look like a model home.
Todd Little
President at Americas Housing Educators, LLC
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