Interest rates spiked about 1/4 point yesterday as investors worry that the Fed’s pumping of trillions of dollars into the recovery will lead to inflation. The Obama administration has been trying to spur the real estate industry with low interest rates through the purchase of mortgage backed securities, but investors, sensing the market is turning upward, are beginning to NOT invest in those super safe investments, but believe they can get better returns elsewhere. Thus, the returns for the Treasuries must also increase to attract buyers. For more detail, read today’s Wall Street Journal article about these issues.

Over the weekend I caught up on my Wall Street Journal reading, and Friday’s column of  “Heard on the Street – Financial Analysis and Commentary” had a title that caught my eye – “Dream Mortgage Bailout Has a Darker Side”. Hmm, I thought. What’s that all about? Read the rest of this article »

Is a bird in the hand worth 2 in the bush? I was musing at my desk this morning about all things real estate, the stock market, the jobs loss report and the incredibly low interest rates out there. So I asked myself, which is better? To buy today with today’s low interest rates (with the possibility prices may still decline 5%), vs. the idea of waiting for prices to stabilize and then start up (but that interest rates will have climbed back to “normal” to compensate for that stabilization). Here’s how the numbers look…

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Today is Saturday morning and Leslie and I are back from my Tenant in Common Association (TICA) conference in San Diego. With the bombshell announcement by the Fed on Wednesday, I was curious to see how fast interest rates would soften, so this morning I checked a mortgage rate sheet we get daily and was pleasantly surprised to see that rates have softened by about 1/4%. Not too shabby! It would appear the Fed’s decision is starting to have its intended impact on the mortgage market.

Driving down to San Diego today to attend the Tenant in Common Association’s spring conference, I was blown away listening to the radio that the Federal Reserve will buy up to 1 trillion dollars of bonds. Huge news! It was reported that this caused the most significant drop in yields on 10 year Treasury bonds since at least 1962. But how does this affect  potential homebuyers? Read the rest of this article »

The U.S. Treasury Department just issued rules this morning allowing troubled homeowners the opportunity to do a loan modification.

A parallel story line is that the House is coming closer to voting on legislation (maybe tomorrow?) that would allow bankruptcy judges to “cram down” loan terms on lenders. One potential provision to this legislation is that homeowners must first have attempted to do a loan modification prior to seeking relief in bankruptcy court.

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I was just looking at BankRate.com to see how the FHA interest rate has changed over the last couple of months (it’s plunged), and their chart says it all:

That’s why entry level buyers are coming out of the woodwork to snap up the REO and distressed sale properties!

The California Association of Realtors (CAR) has just published updated links and fact sheets for the loan modification programs of the larger lenders plus government entities.

I was just skimming an article at CNN Money and it raised a great question – should you pay points for your loan? Read the rest of this article »

The Wall Street Journal reported that unnamed sources in the Treasury department are floating the idea of 4.5% mortgages that would be bought by Fannie, Freddie and the FHA to stimulate the housing market. These rates would not be available for refinances. But don’t hold your breath… Read the rest of this article »