Market Analysis for 05-14-2010

The Market was doing good most of yesterday but took a nose dive near closing, after Kohl cautioned and the Euro drop against US Dollar. Well, investors are skittish and careful. They are Continue reading

Short Market Analysis for 05-07-2010

What a train wreck in the financial market yesterday? Could you imagine the cause of the huge market drop was a typo? 16 billions rather than 16 millions  and then the computer trades just sell off under auto mode. This morning the market opened slightly higher, then the down draft took over. Am I worried, yes of course. But, on the bright side,  the 10 years treasuries is at 3.40% therefore bond is higher. When fixed income goes up, investors dump stock and move into fixed income. Finally, the job market added 290,000 jobs and more unemployed are returning to look for jobs.. a good sign. In spite of the disappointing retail sales, most companies are meeting or exceeding their numbers. Add on to the recovering housing market, US economy looks okay in the short run.

And what about Greece, you might ask….. I don’t really want to talk about it. It’s Friday and let’s enjoy the great day

Interest in Owning a Home Remains Strong

More than 17 percent of potential home buyers say they plan to purchase a home in the near future as an investment, compared to just 5.6 percent in March 2009, the survey found.

Owning a residence in remains a goal for many more potential buyers:
21 percent of consumers report they plan to purchase a home in the next 12 months to five years.
7.9 percent plan to purchase in the next two years.
49 percent of all home owners would buy another home today if they could sell the one they currently own for what they paid for it.

Of those planning to purchase a home in the near future, 50.7 percent are first-time buyers. About 55 percent of potential first-time buyers are men.

While access to financing is important, many buyers plan to use cash to make real estate purchase:
12.3 percent of Americans planning to purchase investment property in the near future say they will pay for the property using 100 percent cash.
12.8 percent will use cash for more than 50 percent of the purchase price and finance the rest.
49.2 percent say they will buy the property with less than 50 percent cash down and finance the remainder.

Short-Sale Departments Hone In On Fraud

As short sales absorb a larger role in foreclosure prevention, concerns about possible increased occurrences of fraud persist. From valuation fraud to post-transaction flipping, there are several stages in the short-sale process during which a servicer must be especially vigilant.

“My staff puts a lot of focus on making sure it’s an arm’s-length transaction,” says Jon Meade, vice president of loss mitigation at Fifth Third Bank. “We’re not looking to take a short sale so your brother can buy it and ultimately give it back to you.”

The federal government’s short-sale program, Home Affordable Foreclosure Alternatives, explicitly forbids Continue reading

The Inevitable home loan rate and the SAFE Act

 It is inevitable home loan rate will go up. The question is by how much & how soon. Then, the next question to ask is after June 1st., where are we going to find our friendly mortgage originator.  This is because the SAFE Act requires all originators except those working for “banks” to pass a very stringent law like Fed Sanction Examination and 20 hours of studies. Since there is no scope of studies, except word of mouth from those who have taken the test and I bet many, many failed, that it is loaded with questions on RESPA, TILA, etc. Do you feel, like me, there is something “strange” going on, especially, now that it is official, the Fed has stopped buying MBS (Mortgage Back Security)? 

I believe the SAFE Act is there to finally break the backs of Continue reading

Short Market Analysis

The financial market continues it slow, but at least we are moving forward and upward. This morning, the market is pulled down by the ADP just released data that private sector lost 20,000 jobs. The key to remember is that ADP only reports private sector, while the Labor Dept’s all important report on Friday is for both private and government sectors.

The Fed finished their purchasing of mortgage back security from Freddie & Fannie. Now, these two government sponsored agencies will really have to compete with other fixed income products in the open market. What does this mean? Expect them to pay more and in turn expect home loan rates to go up… very soon. This could also be the reason why the new issues of Treasuries have not been selling well recently.

$600 million in housing aid

Five more states will receive federal funding to help troubled homeowners avoid foreclosure, the Obama administration announced Monday.

Last month, President Obama unveiled the Hardest Hit Fund, which pumped $1.5 billion into state housing agencies in California, Arizona, Florida, Nevada and Michigan. These five were originally identified because they had been hardest hit by the housing bust, with prices declining more than 20%.

Now, an additional $600 million is being doled out to the five states that have the largest number of counties suffering unemployment rates above 12%: North Carolina, Ohio, Oregon, Rhode Island and South Carolina.

“The goal for our second set of awards was to identify states suffering from high shares of populations living in concentrated areas of economic distress,” said Alan Krueger, Treasury assistant secretary.

Unemployed and ‘underwater’ to get mortgage relief

Although these five states are receiving less funding than their predecessors, Krueger said the amounts are equal on a per-person basis.

Because Ohio has the largest proportion of its population living in high-unemployment counties, it will receive the largest share of the funds, totaling $172 million. North Carolina is on tap to receive $159 million; South Carolina will secure $138 million; Oregon is due to receive $88 million; and Rhode Island will get $43 million.

The program, which is funded with money from the TARP bank bailout, allows each of the states’ agencies to propose foreclosure solutions that address local conditions. States that received funds during the first round are due to present proposals on April 16.

The Treasury suggests states offer assistance through innovative initiatives, including unemployment programs and mortgage modifications. As a result, some states are looking at a program in Pennsylvania that offers low-interest bridge loans to the unemployed so that they can pay their mortgages.

By Hibah Yousuf