Presidental Initiatives to Help Borrowers & Mortgage Companies

The president spoke at 11:00 am today about assisting the sub prime mortgage borrowers. Although no follow up questions were taken, the presidents statement centered on 3 initatives:

1. Enforcement of predatory lending laws, and "more clarity" on brokers fees and closing costs.
2. Easing of FHA rules to allow borrowers to refi into FHA loans.
3. Changing tax laws that would elimnate or reduce capital gains taxes for ARM refis
   

Most are bills going through congress and the senate, so nothing solid yet.

An important item mentioned was Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac have asked the govornment to increase the maximums on thier loan portfolios. Initially denied, Bernake has made allusions to increasing the loan volume the govornment back companies can take on.

See more here

Latest Real Estate, Mortgage and Title News 8.29.2007

LandAmerica announces layoffs, stock repurchase

Similar to other underwriters, Land America is reducing staff. They may be positioning themselves for a buy out. This may be a move to "pretty them up" for a possible buy out. What interesting is that the stock price opened at 52.01 and is up to 54.54 at noon. There is always a spike in stock prices after a layoff notice.

Existing Home Sales Essentially Unchanged In July

The National Association of Realtors said things are remaing steady. Steady and lower than last year, but steady.

Cook County, Illinois Government Monopoly?

Cook county, IL has an interesting monopoly on the public records data. Highly populated and active because of proximity to Chicago, the county knows people need their data. Here is the interesting part: They are competing with private real estate records providers. If a lender servicing company needs access to the records to pay taxes, the cost is $60,000 per year. So with 10 customers the county brings in $6,000,000 annually


In their data base subscription agreement they state:


"Neither the Bulk Commercial User nor any Authorized User (as defined below) shall have any right, title or interest in the Database. Except as provided above, neither the Bulk Commercial User nor any Authorized User shall copy, reproduce, duplicate, publish, disclose, distribute, license, sub-license, relicense, use as the basis for a derivative database, assign, release, transfer, sell or otherwise make the Database available to any other organization or person in any form or manner whatsoever."


Also, the county requires indemnification against errors. Caveat Emptor, I assume.


First American went up against Cook County, attempting to reduce or eliminate the large fees for access to the records. See Article. Not much movement was made towards a fair fee.


So to sum up:

1. The county is the ONLY original source for the data.
2. The county is not held accountable for the accuracy of the information.
3. The county charges and arm and a leg for the data.
4. The county is preventing access to the data through technological means.

The county does incur a cost in maintaining the data which they should be compensated for, but in Florida, the cost for a same size county (Miami-Dade) is $5,000 to $6,000 per year. Unless the data has magical powers, I don't see how they can legitimately charge $60,000 for bulk access to the data.

Take this senario:

I am an appraiser working in Cook County. I need to list comparable sales for a property. I have access to the county records and create my comparable list. Once I have created the appraisal I receive payment for it. Haven’t I essentially violated the access codes? I used the data from Cook County to produce an appraisal that I have sold.
-- or --
What if I am writing a news article on real estate sales for Cook county. I review the data and derive total home sales for the past year. I print this article in the news paper. The news paper sells advertisements. Have I broken the agreement?

It seems like the county is getting greedy. There is value to the information provided and they should be fairly compensated for producing the information. But $60,000 a year seems a little out of bounds.

Latest Real Estate, Mortgage and Title News 8.28.2007

Countrywide Rating Watch Revised By Fitch
Now that Country wide has borrowed to keep them selves afloat, Fitch has downgraded them. To be expected, but Buffet has an eye on them. If Warren Buffet purchased a stake in Country Wide; his interest in the company would be worth more than the borrowed money.

Dumping the real-estate agent might spur your home's sale
Is a real estate agent needed any more? When sellers are scrambling for buyers, cutting out a 6 percent commission can make the home more appealing. For good or ill, many people don't trust or don't want to deal with a real estate agent. There is a perception that realtors "don't do much for thier commission."

New Home Sales Register Improvement Over June
More positive news for the builders. The builders are reducing prices and adding all sorts of add-ons like pools and free trips to entice buyers.

Latest Real Estate, Mortgage and Title News 8.27.2007

Fed bends rules to help two big banks
Interesting move by the fed. Seems like the goal is to let the lenders protect themselves before a federal bail out is required. Bank of America, just "invested" 2 billion in CountryWide. Buffet is also looking to buy a chunk of CountryWide. Interesting movements here.

Existing-homes sales stable in July
Good news here. This keeps the market moving. Florida is remaining steady. One of the affects of the slow down is a "thinning of the herd" for agents and mortgage brokers who were smaller operators.

New-home sales show promise
Builders are liking this. Although plans have slowed, buyers are taking advantage of the free-bees offered by the agents

Credit Union Strength
If more restrictive lending terms are preventing borrowers from getting a loan. Credit Unions offer a lower rate and better terms.

Florida Property Tax Forum with Governor Crist

Florida Property Tax Forum with Governor Charlie Crist
Thursday August 23, 2007

MicroDecisions attended the Florida Property Tax Forum on Thursday 8.23.2007 with Florida Governor Crist. Governor Crist clarified some of the statutory and legislative changes for Florida Property Taxes.

There are statutory changes reducing taxes for the up coming payments. The statutory property tax reduction is relatively small. In most counties, the increase in assessed values negates the statutory tax savings. Some residents are seeing between a $25 to $300 reduction in taxes. But others are seeing an increase.

In January of 2008, a special legislative session will send to voters a measure that, if approved, would increase the homestead exemption from $25,000 to over $175,000. The exemption increase will reduce the property taxes significantly.

Mayors and counties are against the proposal, because of the loss of control of tax dollars.


How will tax cuts affect your hometown
Real life article about what happens when property taxes go down

Conflicting Stories

Daily there are signs that the real estate industry is on and up swing.
Daily there are signs that the real estate industry is going to destroy the economy.
Which one is it?


From the same source here are two articles:

Mortgage activity continues late-summer push

U.S. home starts at 10-year low

For the average consumer, they can be frighted by the conflicting information. Scared to the point of not buying or selling a home. The information is legitamite, but confusing for the average person to digest.

So for people living day to day on the mortgage market, its up and down. For the average consumer its never as good or as bad as it seems. But that's just ones man opinion

Mortgage Watch

Commentary on the mortgage business:

Countrywide secures $11.5B loan to avoid bankruptcy.

Glad to see they are backing up expansion plans. Hopefully the Fed will let Fannie Mae and Freddie Mac expand thier portfolio so Countrywide can stay in business. They are a good company and one of the leading lenders.


Borrowers With Good Credit Are Paying Higher Rates

The funds are still there. I don't think the mortgage companies are going to stop lending to good clients. Even though there be more strick lending standards, the credit worthy customers are going to get loans. Good customers can negotiate a better rate. If a person has a 675 credit score, and good credit; go in and negotiate the best rate. The brokers are fighting for business so the customers have the power.