Fed Survey Reports Banks Tightening Credit

The Federal Reserve reported Monday that its quarterly survey of lending found 95 percent of banks said they had tightened lending standards on some loans.

Business and credit card lending was most affected. However, the survey reported that banks have adopted tighter standards for all kind of loans, including mortgages.

The survey was taken during the first two weeks of October, so its results don’t reflect government efforts to loosen credit.

Source: The Associated Press (11/03/2008)

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Presented by Klemens Raab | Community: Financial News, News

Tax Credits Give Solar Power a Boost

A series of tax credits for wind, solar, geothermal, tidal energy and others was among the tenets of the October congressional financial rescue legislation.

The law increased the investment credit for solar from $2,000 to $7,500 for a buyer who spends $25,000 to install solar panels on his roof.

In states like California, Connecticut, and New Jersey, where the cost of power is considerable, the pretax compound rate of return on a typical home solar system will be greater than 15 percent per year, says Andy Black, CEO of OnGrid Solar, an industry research firm.

Home builders, including some of the biggest, such as Centex, Lennar, Pulte Homes, and Woodside Homes, are seeing advantages to including solar. All are developing successful communities where all of the homes have solar panels capable of making most if not all power.

Source: BusinessWeek, Adam Aston (11/3/08)

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Presented by Klemens Raab | Community: Home News, News

Bernanke Offers Plan for Securitizing Mortgages

Speaking to a mortgage-finance symposium in Berkeley, Calif., by videoconference Friday, Federal Reserve Chairman Ben Bernanke described a plan for managing the mortgage-securitization crisis.

He suggested creating a government bond insurer for mortgage funding.

"Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress," Bernanke said.

Bernanke urged continued government support for Fannie Mae and Freddie Mac.

"Their ability to continue to securitize when private firms could not, did not appear to result from superior business models or management," Bernanke said. "Instead, investors remained willing to accept GSE mortgage-backed securities because they continued to believe that the government stood behind them."
He suggested that making Fannie and Freddie government-owned cooperatives or public utilities might be the best answer.

"A public-utility model might allow the enterprise to retain some of the flexibility and innovation associated with private-sector enterprises in which management is accountable to its shareholders," Bernanke said.

Source: The Wall Street Journal, Sudeep Reddy (11/01/08)

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Presented by Klemens Raab | Community: Mortgage News, News

Mortgage Rates Inch Up This Week

Freddie Mac reports a jump in the 30-year fixed mortgage rate to 6.46 percent during the week ended Oct. 30 from 6.04 percent the prior week, as long-term mortgages rates moved in line with long-term Treasury bonds.

The 15-year fixed mortgage rate rose as well, climbing to 6.19 percent from 5.72 percent.

Meanwhile, the five-year hybrid adjustable mortgage rate moved up to 6.36 percent from 6.06 percent; and the one-year ARM increased to 5.38 percent from 5.23 percent.

Freddie Mac chief economist Frank Nothaft expects short-term rates to remain low due to the Federal Reserve’s recent cut in the discount and federal-funds rates, and he notes that falling home prices have jump-started residential sales in some markets by making properties more affordable.

Source: The Wall Street Journal (10/31/08)

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Presented by Klemens Raab | Community: Mortgage News, News

Consumers Want Federal Oversight of Lending

More consumers are open to the federal government stepping up its role overseeing mortgage and lending practices, according to the 2008 National Housing Pulse Survey, an annual survey released today by the NATIONAL ASSOCIATION OF REALTORS®.

More than half (56 percent) of those surveyed said they favor the federal government taking a more active oversight role, while 38 percent prefer that private companies oversee their businesses. That is a marked shift from the 2007 survey, which showed respondents were more evenly split on the issue of government involvement.

“As the leading advocate for homeownership and housing issues, NAR has supported more government oversight in lending as a result of abusive and predatory lending practices that have caused families to lose their homes and savings and led to increased foreclosure and vacancy rates,” said NAR President Dick Gaylord.

Fewer People Worried About Affordable Housing

The survey also revealed that concerns about a dearth of affordable housing are the lowest they’ve been in six years of polling.
“The survey clearly shows that falling home prices have improved housing affordability, allowing many Americans—some of whom may have been priced out of the market a few years ago—to achieve the dream of homeownership,” Gaylord said.

Thirty-nine percent of respondents said they were concerned about a lack of affordable housing, down from 48 percent last year and 51 percent the year before that.

Consumer Not Happy About Economy

Nearly eight out of 10 consumers said they think the country is headed in the wrong direction, and a majority (55 percent) said the current state of the economy is poor. Survey respondents don’t expect to see improvement in the economy anytime soon either; more than two-thirds believe the economy will stay about the same or get worse over the next year.

Regarding the economy, Americans are most concerned about high energy costs including gasoline and utilities, followed by inflation and higher priced staples such as groceries, increased health care costs, job security and reduced wages, as well as challenges in the housing market, including foreclosures and reduced home values.

Buying a Home Still Considered Smart Move

Despite troubles with the economy and difficult housing news, Americans remain surprisingly confident about the housing market. Eighty-five percent of respondents believe buying a home is a good financial decision, down 2 percent from last year. Two-thirds of Americans believe now is a good time to buy a home, up nearly 12 percent from 2007.

“Homeownership offers immediate benefits and long-term value, and despite recent slowdowns in some markets, consumers continue to believe that now is a good time to buy a home,” Gaylord said.

Other Interesting Findings

When it comes to challenges facing their communities, Americans are less concerned about the lack of affordable housing than a lack of affordable health care options, job layoffs and unemployment. This year’s results shows that the economy, energy, the war in Iraq, health care and taxes are among Americans’ top voting issues. Here are other findings:

Foreclosures also remain a concern among many Americans. Over one-quarter of respondents expressed concern that their home or the home of a family member may be foreclosed upon because of their inability to make mortgage payments. Nearly half of respondents (46 percent) report that foreclosures are a problem in their area, up from 38 percent in 2007; and 42 percent say the rate of foreclosures has increased over the last year.

Nearly four out of 10 say the economy has taken a personal toll. They report that their personal financial situation has gotten worse over the course of the past year. The majority, 47 percent, feel their personal financial situation has stayed about the same. Despite these challenges, people remain optimistic that they could secure the credit they need; eight out of 10 are confident in their ability to refinance should they have the need. Only 8 percent of respondents say they are worried about being able to make their mortgage payments over the next year.

Fewer people have variable-rate mortgages. Of respondents with a mortgage, 26 percent have some type of variable-rate mortgage, including interest-only (19 percent), adjustable rate (7 percent) or balloon or other large payment due in the next 5 years (1 percent). Two years ago, the percentage of respondents holding a variable-rate mortgage was twice as high (56 percent).

About the Survey
The 2008 National Housing Pulse Survey is conducted by NAR’s Housing Opportunity Program. The telephone survey was among 1,000 adults living in the 25 most populous metropolitan statistical areas. The study has a margin of error of plus or minus 3.1 percentage points.

Presented by Klemens Raab | Community: Mortgage News, News

5934 Lofland Ln

5934 Lofland Ln, Frisco, TX 75034

Property Features

Beautiful Highland Home with Game Room and Study! PLUS, the community is the ONLY neighborhood in Frisco with DIRECT TOLLWAY ACCESS!

Price – $329,900
Sq. Ft. – 3,053
Stories – 2
Bedrooms – 4
Bathrooms – 3.1
Living Areas – 3 (including Game Room and Study
Dining Areas – 2
Garages – 2 (rear entry)
Master – Downstairs

Schools:

District: Frisco ISD
Elementary: CARROLL
Middle: STAFFORD
High: WAKELAND

Additional Pictures

Presented by Klemens Raab | Community: Cobb Hill

5878 Haverhill Ln

5878 Haverhill Ln, Frisco, TX 75034

Property Features

Beautiful Highland Home with Game Room, Media Room, and Study! PLUS, the community is the ONLY neighborhood in Frisco with DIRECT TOLLWAY ACCESS!

Price – $505,500
Sq. Ft. – 4,632
Stories – 2
Bedrooms – 5
Bathrooms – 3.1
Living Areas – 5 (including Game Room, Study, and Media Room
Dining Areas – 2
Garages – 3 (rear entry)
Master – Downstairs

Schools:

District: Frisco ISD
Elementary: CARROLL
Middle: STAFFORD
High: WAKELAND

Additional Pictures

Presented by Klemens Raab | Community: Cobb Hill

13390 King George Ln

13390 King George Ln, Frisco, TX 75034

Property Features

Beautiful Highland Home with 5 Bedrooms and Game Room, Media Room, and Study! PLUS, the community is the ONLY neighborhood in Frisco with DIRECT TOLLWAY ACCESS!