Real Estate Information

Bank of America says its begun refinancing mortgages under the Obama administration's "Making Home Affordable" initiative, which is designed to allow homeowners with loans owned by Fannie Mae or Freddie Mac to take advantage of lower rates.

Homeowners who are current on their mortgages are eligible to refinance under the program even if their loan-to-value ratio has ballooned to as much as 105 percent because of falling property values.

There's no minimum credit score for "Home Affordable" refinancings, and no mortgage insurance is required to refinance loans that didn't require it in the first place (because borrowers had made down payments of 20 percent or more).

Bank of America said it's been contacted by 200,000 homeowners since the program was announced. In a first wave of refinancings, Bank of America said it will first serve homeowners whose mortgages are serviced by Bank of America or Countrywide, and who do not have mortgage insurance on their current loans.

Other borrowers will be served "as systems become operational," the company said in a press release.

Bank of America, which completed its acquisition of Countrywide Financial this year, will combine the companies' mortgage brands as Bank of America Home Loans on April 27.

Wells Fargo & Co. reported "exceptionally strong mortgage banking results" Thursday, saying it originated more more than 450,000 loans totalling upward of $100 billion during the first quarter.

The San Francisco-based bank said it received 800,000 mortgage applications for $190 billion in loans, up 64 percent from the fourth quarter, with $100 billion in applications in the pipeline at the end of the quarter. The strength in mortgage lending helped Wells Fargo boost projected net income for the quarter to a record $3 billion, news that sent stocks in the financial sector soaring Thursday.

Have rates and prices come down to where it now makes sense to buy or should you wait?  Let us know what you think. 

Sales of existing homes rose 5.1 percent from January to February, to a seasonally adjusted annual rate of 4.72 million units, the National Association of Realtors reported today.

Distressed sales accounted for 40 to 45 percent of transactions, and total housing inventory grew 5.2 percent, to 3.8 million existing homes for sale.

At the current pace of sales, that's a 9.7-month supply of homes, unchanged from January but down from the record of 11.2 months seen in July. A six-month supply of housing is generally seen as a healthy balance between supply and demand.

The national median existing-home price for all housing types was $165,400 in February, down 15.5 percent from a year ago. The median home price was pushed down by sales of distressed homes, which are selling for 20 percent less than normal market price, said NAR Chief Economist Lawrence Yun.

The median condominium price was down 18.2 percent from a year ago, to $172,200, and sales of existing condos and co-ops were up 11.4 percent from January, to a seasonally adjusted rate of 490,000 units. Looking back a year, condo sales were down 13.1 percent.

The median existing single-family home price was down 15 percent from a year ago, to $164,600, and sales rose 4.4 percent from January to a seasonally adjusted annual rate of 4.23 million units. That's 3.6 percent below the pace of sales a year ago.

Regionally, California saw a strong gain in sales, with the median listing price on the rise for the first time in three years.

Existing-home sales in the West increased 2.6 percent from January to February, to an annual rate of 1.2 million, but were down 30.4 percent increase from a year ago. The West has also seen the greatest year-over-year price declines, with median price falling 30.3 percent from a year ago, to $204,600.

In the Northeast, sales were up 15.6 percent from January to an annual pace of 740,000, but are down 14.9 percent from a year ago. The median price in the Northeast was $251,200, down 4.8 percent from a year ago.

Existing-home sales in the Midwest increased 1 percent from January to an annual pace of 1.04 million, down 14 percent from a year ago. The median price in the Midwest was $131,000, down 7.8 percent from a year ago.

In the South, existing-home sales rose 6.1 percent from January to an annual pace of 1.74 million, but were down 11.2 percent from a year ago. The median price in the South was $146,700, down 10 percent from a year ago.

The Obama administration has released the guidelines that loan servicers will use to determine who is eligible for mortgage loan modifications and refinancings under a new initiative aimed at helping up to 9 million homeowners avoid foreclosure.

The Homeowner Affordability and Stability Plan's "Home Affordable Refinance" component will rely on Fannie Mae and Freddie Mac to refinance 4 million to 5 million mortgages for borrowers who might otherwise be unable to refinance because their homes have lost value and they have less than 20 percent equity in their property.

First American CoreLogic released a report Wednesday estimating that more than 8.3 million homeowners were "upside down" at the end of 2008, meaning they owed more on their mortgage than their homes were worth.

The "Home Affordable Modification" component of the initiative will provide insurance and incentives for both borrowers and lenders that the Obama administration hopes will generate 3 million to 4 million loan modifications.

When the plan was announced, the Mortgage Bankers Association pointed out that it would not help borrowers refinance if their loan-to-value ratio had ballooned past 105 percent, or if their loans aren't owned or guaranteed by Fannie and Freddie (see story).

Although those aspSects of the program remain in place, the MBA said Wednesday that it was pleased that mortgages of up to $729,750 will qualify for modifications under the program's guidelines, regardless of whether they are in high-cost areas.

The National Association of Realtors welcomed the release of the guidelines, saying the initiative will help stabilize home prices by helping "millions of families avoid foreclosure."

But NAR said in addition to preventing foreclosures, incentives for buyers are needed. The group called for "creative approaches that will lower interest rates for all homeowners and buyers."

For those struggling to make sense of the economic crisis, help is on the way. Inside the Meltdown is producer Michael Kirk's gripping account of how the country ended up in the worst financial crisis since 1929. The program airs Tuesday night on PBS and will be watchable online after that. This preview excerpt tracks the crisis back upstream to a key source -- the government's failure to heed early warnings on the housing bubble, and the havoc that ensued as a result.

For a preview of Inside the Meltdown, click the link below.

http://www.pbs.org/wgbh/pages/frontline/story/2009/02/banking-at-the-brink.html

Who do you think is to blame regarding the mortgage and ensuing economic meltdown?  Let us know what you think.

1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose
10. Atlanta

Based on this information, now would be a great time to consider buying.  Let us know what you think.

Rates on 30-year, fixed-rate, conforming mortgages took a tumble well below 6 percent on Tuesday after the Fed announced that it intended to buy up to a half-trillion dollars' worth of mortgage-backed securities over the next 18 months. Bankers and brokers say rates fell as far as 5.25 percent, at least for a while in comparison to last week, where the 30-year fixed averaged 6.33 percent.

So the question now becomes, will this drop in interest rates be enough to get unwilling Westside buyers off the fence and into to market or will they continue to sit on the sidelines waiting for what they believe to be are future reductions in price?  What do you think?  Let us know.