Category — Real Estate

Consumer confidence came out this morning. The figure at 105, down from 111.9 in July but up from August 2006. Of course the doom and gloom headlines to quote “Consumer Confidence Falls To Lowest Level in a Year”, I mean come on, expectations were for 104.5 so how come the headline does not say “consumer confidence comes in much better than expected.” Listen to the media as an investor and you will be sure to go broke. That I can GUARANTEE you!

What I can tell you is,,,,,,,, 105 is a far cry from a recession (so far), considering the consumer is 1/3 of GDP, wages are another component and wages are growing at 4% and corporate profits are expected to be in the low double digits so I think the chances of a recession are slim, unless the consumer confidence number falls another 35 points. What this does show is the resiliency of the American consumer in wake of the so called “subprime crisis” or mortgage meltdown or any other name the media has created. Gas prices are still high although a lot lower than the highs, food costs increasing and mortgage rates have ticked up a bit. So IMO, I think the number is strong considering the environment.

The biggest worry for the number is that it was not worse and may be a reason for the stock sell off. Obviously over the next month or so this number could be dramatically lower and with back to school coming we will see if the retail sales numbers are any indication. But as always the media plays a big role in consumer sentiment so we will see how they spin the recession talk and what effect this has on the number going into the coming months.

The 10 year note is trading off its highs up .25bps and less effected is the 6% mortgage backed securities trading up .6bps and seems to be hitting a ceiling of resistance at 100.16. Bond prices have been on a tear since the end of July and rates have came down nicely but may be running out of steam.

At 2pm ET today the Fed will release the Minutes from the August 7th meeting. It will be interesting to get the Fed’s views on the credit crunch, since it was just beginning to unfold at the time they met. The Fed Fund Futures are currently showing a 72% probability of a .25% cut at the September 18th meeting, with some predicting a chance of a .50% rate cut.

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Well Countrywide CEO, Chief Executive Angelo Mozilo, was on CNBC today and uttered the dreaded R word. Mr. Mozilo seems to think that the current housing market will throw the US economy into a recession. I guess anything is possible, though highly unlikely. Funny thing is you never know you are in a recession until you are out of one. “Recession” by definition, is two consecutive quarters of negative GDP growth. Yes, the housing is bad, yes many jobs will be lost within construction, real estate and mortgage divisions. Seems I heard around 40,000 jobs have been lost so far but really, a recession? When I hear this “R Word” I always want to ask them what a recession really means. Its so funny to hear these people that catch on to these “buzzwords” and talk like they know what they are talking about. I would have loved to say “well Mr. Countrywide CEO, tell me sir, how exactly would you define a recession?”

The only real losers in the game where and will be those that came to the party a little too late. [Read more →]

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Over the last few weeks there has been a lot of action from the Federal Reserve. First the Federal Reserve implemented two cash infusions into the market and very unexpectedly cut the Fed Discount Rate. Its important to understand what led up to this and I will put into perspective what all this means. [Read more →]

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There are currently dramatic and sweeping changes occurring within the mortgage industry. If you or any one you know needing a mortgage within the coming months, you need to read this!

Just last week there were two high profile lenders that shut their doors. One being the Wells Fargo subprime unit and more importantly American Home Mortgage and its wholesale counterpart, American Brokers Conduit. American Home Mortgage was no small potato. American Home Mortgage was the 10th largest lender in the U.S. and last year closed over $58 BILLION in loans. Its been reported, this shutdown left billions in UNFUNDED loans. Imagine a day, a week or an hour before closing and you get the call from a mortgage loan officer that the loan is not closing. [Read more →]

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Applying for a mortgage? Be prepared for your phone to ring off the hook with unscrupulous lenders calling offering their services. How did they get the information when you did not give it to them? From the credit bureaus. Equifax, Transunion and Experian all sell your personal information to lenders and lead providers. [Read more →]

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I am a regular reader of Ken Harney’s articles in the Washington Post. Sundays article “Buyers often clueless on their loans” just caught my eye and I continued to read through. At the end I just thought how off base the article was.
Come on Ken, give us credit. First off don’t you think ADJUSTABLE RATE is about a clear disclosure as you can get. Remember these people sit on front of a closing attorney, in most cases. Which leads me to make another point. [Read more →]

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It is very important that home buyers choose the right real estate agent. I can not stress this enough. A real estate agent is more than someone to show you homes for sale. The majority of the real estate markets in Virginia such as, Northern Virginia real estate market, Fredericksburg Real Estate, Tidewater real estate and Richmond real estate markets are hot. More often then not, when you submit a contract there is already a contract on that home. When it comes to having someone represent you as a buyer, it is incredibly important that you have a strong negotiator. [Read more →]

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There is a little known way that you can own a home with no money. No down payment and no “out of pocket” closing costs. The idea is called a “seller concession”. Seller concessions are when the home seller agrees to offer a percentage of the sales price, anywhere from 1% to 6%, as a credit for your down payment or closing costs.Very simply, Lets say you were buying a home for $150,000. In the contract to buy the home its written that the seller agrees to pay 3% or $4,500 towards all closing costs, pre-paids or points. [Read more →]

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