Weekly Twin Cities Real Estate Market Report

Click Here For Full Report

Weekly Market Activity Report

The recent plunge downward in mortgage rates to a decades-low level is spurring Twin Cities home sales, despite shorter days and holiday interruptions. For the week ending December 20, there were 553 purchase agreements signed (pending sales), which is an increase of 20.0 percent from the same week last year. Since rates dropped three weeks ago, there have been 368 more pending sales than there were during the same period in 2007, an increase of 27.5 percent. During this period, 57.6 percent of sales have been lender-mediated foreclosures and short sales and 45.8 percent are below $150,000.

Listing supply is relatively flat with last year at this time over the past few weeks, with an increasing share of new listings being lender-mediated. Traditionally, sellers often pull back at this time of year to wait out the holidays, but banks continue to list no matter what time of year it is.

Letter From Tyler - One of my amazing loan officers.

Rates at 4.5% !!!!!!!!!!!!!!!!!!!!!!!!!

Burnet Home Loans Rate Sheet
December 23, 2008
Conventional Fixed Rate

30 Year Conforming 15Year Conforming
($417,000 MAX. LOAN AMOUNT) ($417,000 MAX. LOAN AMOUNT)
5.000% 0.000 4.750% 0.000
4.750% 0.750 4.500% 0.750


30 Year Jumbo 15 Year Jumbo
6.750% 0.000 6.250% 0.000


FHA & VA Programs....

FHA 30 Year Fixed VA 30 Year Fixed
($365,000+MIP MAX LOAN) ($417,000 MAX TOTAL LOAN)
5.000% 0.000 5.000% 0.000
4.750% 1.500 4.750% 1.500

FHA ARM
($365,000 MAX BASE LOAN)
6.250%
4.750%

Seventh Annual Trees for Toys a Success–9,167 Toys

Thank You for Making the Seventh Annual Trees for Toys a Success–9,167 Toys Collected and Donated to Needy Children!
Coldwell Banker Burnet’s seventh annual Trees for Toys on Dec. 6 was a success, with 9,167 toys collected and donated to needy children through Toys for Tots and other local children’s charities. In addition, Coldwell Banker Burnet sales associates gave away more than 4,000 trees and nearly 5,000 wreaths.

Since this exclusive, annual program began in 2002, the company has given away more than 39,000 trees and donated more than 67,000 toys to local children’s charities.

The unselfish efforts of hundreds of our sales associates and employees and the generosity of our customers make it possible for many needy local children to enjoy a happy holiday. Thanks to all of you who donated your time to make this event such a success!

Coldwell Banker Burnet Implements New Online Listings Distribution Partnerships

Coldwell Banker Burnet Implements New Online Listings Distribution Partnerships Coldwell Banker Burnet has been a leader in implementing innovative online strategies that address consumers’ desire to use technology as a key component to help them buy or sell a home. This has included developing partnerships with the most highly visible, popular Web sites and search portals to ensure that sellers’ properties receive maximum exposure to potential buyers. These sites and portals include ColdwellBanker.com, Realtor.com, OpenHouse.com, Trulia.com, Google.com, and Zillow.com.

Coldwell Banker Burnet recently initiated relationships with additional listing distribution partners that expands our online presence even more. The following partnerships were launched this month and all include the use of the rapid response system LeadRouter:

WSJ.com (Wall Street Journal) (for listings over $500,000)
AOL.com (all listings displayed)
Cyberhomes.com (all listings displayed)
Homescape.com (all listings distributed to Homescape’s network of 128 local newspaper sites, including the St. Cloud Times and the Pioneer Press)

In addition, the allocation methods for “sister” listings and IDX (Internet Data Exchange) listings has changed from Areas Served to number of listings in a zip code area. Under the sister and IDX listing program, Realogy brands including Coldwell Banker, ERA, and Century 21 share listings for display on their respective brand Web sites. When a consumer performs a property search on one of the brand Web sites, their results include all listings matching the search criteria from all of the participating Realogy brands.

Coldwell Banker Burnet will announce additional online marketing initiatives in the months ahead.

The Skinny Twin Cities Real Estate Market Update - MAAR

The Skinny Twin Cities Real Estate Market Update - MAAR

Mortgage Rates Drop, Affordability Jumps

For More Visit SanctuaryRealtyGroup.Com & check out the home page as well as the area info page.

Mortgage Rates Drop, Affordability Jumps - MAAR


Mortgage Rates Drop, Affordability Jumps

We released our monthly stats for November last week. These were our main points:

A combination of substantial declines in mortgage rates and the continued downward movement of home prices is leading to an unusually attractive affordability environment. Rates declined well into the 5 percent range in the last month—the best rates of 2008 and the most attractive since 2003. Add November’s tantalizingly low median sales price of $175,000—down 19.2 percent from the same time last year and the lowest November showing since 2001—and you have extremely healthy affordability.

MAAR’s Housing Affordability Index (HAI) jumped 19 points in the last month, and currently sits at 180. This is up 27.7 percent from last December’s mark of 141 and is the highest recorded HAI since we began tracking the data in 1990.

Lender-mediated home sales, which accounted for 53.5 percent of pending sales and 47.3 percent of closed sales, posted a November median price of $130,881. This is a drop of $5,000 from last month and a decline of 20.7 percent from last year. Traditional properties, which exclude foreclosures and short sales, had a November median sales price of $225,420, a decrease of 2.0 percent from last year. -MAAR

Weekly Market Activity Report

Click Here To See The Full Report
As fall turns into winter—and winter turns dark and cold—activity in the Twin Cities housing market has entered its annual hibernation. On a weekly basis, new listings, total inventory and sales are all declining as consumers batten down the hatches and prepare for the holidays. Relative to this time last year, however, activity is stronger. For the week ending December 6, there were 597 signed purchase agreements (pending sales), which is up 27.6 percent over the same week last year. Roughly half of these sales—54.7 percent—were lender-mediated foreclosures or short sales.

On the supply side, new listings were relatively flat, up only 0.7 percent for the same time period comparison. The total supply of homes for sale currently sits at 27,035, down 8.2 percent compared to this time last year. Expect the decline in overall supply to continue into January. At the same time, expect the lender-mediated market share of that supply to increase. - MAAR Weekly Newsletter

Home Selling Tips

Way to go Maple Grove.....

Fed’s Plan ‘An Important Move’ for Real Estate, Mortgage Rates

Fed’s Plan ‘An Important Move’ for Real Estate, Mortgage Rates
Summary Reprinted Courtesy of RISMedia, Nov. 26, 2008

Following the Fed’s announcement of its plans to buy up to $600 billion in mortgage-backed assets, the housing industry welcomed this solution, citing Main Street and mortgage rates as the direct beneficiaries.

Charles McMillan, the 2009 president of the National Association of REALTORS®, (NAR) said, “This is one of the key actions we’ve been advocating ever since the Treasury altered its course on how it would use the $700 billion recovery package passed in September. This is great news for home buyers and sellers and we applaud the Fed for taking this historic step. Housing recovery is the key to economic recovery in this country and it always has been.”

In its recent announcement, the Fed said it will purchase up to $100 billion of government sponsored enterprise debt from primary dealers through a series of competitive auctions to begin in early December. It also will purchase up to $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae.

Lawrence Yun, NAR chief economist, said purchasing debt obligations of Fannie Mae and Freddie Mac is an important move. “We commend the Fed decision because it will directly bring down long-term interest rates,” he said. “The level of investment should be aggressive enough to bring rates down in a meaningful manner. As we’ve seen in past recessions, home sales rise when mortgage interest rates fall.”

Yun said that given the present state of the mortgage market, interest rates on 30-year fixed-rate mortgages are too high. “If Fed action brings down mortgage interest rates by even 1 percentage point, it would increase home sales by 500,000 units. That should help to draw inventory down and stabilize prices. Only with stabilization in home prices can we have a healthy housing and economic recovery.”


In addition, Treasury Department Secretary Henry Paulson said the department will provide $20 billion of credit protection to the Fed from the recent $700 billion financial rescue package. The protection will be part of a new Fed program that could lend as much as $200 billion to investors in securities backed by credit card, auto and other loans.

Paulson said this new fund, which is aimed at freeing up credit, “will enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower cost consumer financing and small business loans.”

MarketWatch Ranks Twin Cities Business Market #1

Players shift, but Twin Cities still best for business
Dallas, Columbus move into top 10 in MarketWatch study of metro regions
By Russ Britt, MarketWatch
Last update: 10:45 a.m. EST Dec. 2, 2008LOS ANGELES (MarketWatch) -- Minneapolis-St. Paul, far and away, remains where it's at for business.
For the second year in a row, the Twin Cities region stayed at the top of MarketWatch's list of best metro areas for business, based on results from a variety of sources. While a number of other players shifted around in the standings, and a couple fell out of the top 10, Minneapolis-St. Paul lost a little bit in the scoring. But the area still outdistanced its closest competitor, Boston, by more than 20 points.
Last year, the Twin Cities was at the top of MarketWatch's list in the first annual survey of where companies tend to gravitate and create the most jobs. It appears little has changed for the region, as the concentration of companies has stayed strong, and job growth continues while unemployment remains relatively low.
Best & Worst U.S. Cities for Business


Twin Cities on top
Minneapolis-St. Paul, far and away, remains where it’s at for business. For the second year in a row, the Twin Cities region stayed at the top of MarketWatch’s list of best metro areas for business.
• Slideshow: Views of the Top 10
• The bottom 10: That sinking feeling
• Methodology: How the ranking works
• Which cities climbed, which fell
• What is it about the Twin Cities?
The Twin Cities area has a baker's dozen of public and private firms with sales of more than $10 billion, up from 12 a year ago. But the region also is friendly to small business, as it garnered the top ranking among all metro areas in that category.
How is it possible for a frigid northern outpost to attract the talent it needs to support the region's massive business community? It's not always easy, locals concede.
"Why is it hard to get people here? Because they expect snow to be blowing in July," said Douglas Baker, chairman and chief executive at Ecolab Inc. (ECLEcolab Inc
ECL) , based in St. Paul.
It typically takes 60 to 90 days to close the deal with a potential executive, according to Tom Valerius, vice president of recruitment services for Minneapolis-based UnitedHealth Group Inc. (UNHunitedhealth group inc com
UNH) , the country's biggest health insurer.
"You sell them on the job, and then you sell them on the Twin Cities," Valerius said. "Usually, at the end of the day, the big sell is on the spouse, more than the executive."
The area has managed to attract enough talent to support those two firms, as well as such legacy companies as industrial conglomerate 3M Co. (MMM3m co com
MMM) , food heavyweight General Mills Inc. (GISGeneral Mills, Inc
GIS) , insurer Travelers Cos. (TRVtravelers companies inc com
TRV) and financial powerhouse U.S. Bancorp. (USBus bancorp del com new
The Twin Cities are also home to retail giants Target Corp. (TGTtarget corp com
TGT) and Best Buy Co. (BBYBest Buy Co., Inc
BBY) , medical-device makers Medtronic Inc. (MDTMedtronic, Inc
MDT) and St. Jude Medical (STJst jude med inc com
STJ) , and big private firms Cargill and CHS. Cargill has replaced Kansas chemical maker Koch Industries at the very top of Forbes' rankings of the nation's biggest private firms.
There are a few vulnerable companies in the region, to be sure; Northwest Airlines (NWANWA
NWA) is one. But the Twin Cities ticked up slightly in the rankings of concentration of Russell 2000 companies, so the region seems prepared to handle whatever economic onslaught may be on tap.
Many of the region's companies are home-grown and have thrived in the environment. UnitedHealth, for example, was started in 1974 and now boasts $80 billion in annual sales.
Other companies have deeper roots, such as Traveler's in St. Paul, which got its start in 1853. It's been sustained in part by a highly ranked school system and the network of higher-education providers in the region.
"It's a very educated workforce," said Andy Bessette, Traveler's chief administrative officer. "The people here, the school systems, are very good."
In the MarketWatch rankings, Minneapolis-St. Paul ended up with 324 points overall, down five points from the 329 it notched last year. It was in the top 10 in five of the eight categories studied, and it was just one spot out of the top 10 in concentration of Russell 2000 companies.
The Twin Cities were in the middle of the pack of 50 metro areas studied -- those with roughly 1 million in population or more -- in population growth and job growth. It lost a little ground in the unemployment average but still ranked high.
The rest of the top 10:
2. Boston -- 302 points: Beantown was ranked fourth a year ago but moved up by 19 points due to better rankings in concentration of Fortune 1000 and S&P 500 companies, as well as small businesses. Boston also climbed the ranks in the jobless category but remained in the bottom 10 in population growth.
Among the local companies that boosted its rankings: PerkinElmer Inc. (PKIPerkinElmer Inc
PKI) made it into the Fortune 1000, along with Beacon Roofing Supply Inc. (BECNbeacon roofing supply inc com
BECN) . And different metrics on jobless rates aided its rankings.
Like Minneapolis-St. Paul, Boston benefits from a workforce that's often been trained at the area's dozens upon dozens of higher-learning institutions, including the venerable Harvard University and the highly regarded Massachusetts Institute of Technology, as well as Boston University, the city's No. 4 employer.
That's helped the Hub City create a wide diversity of companies in health care, finance, higher education, high tech and tourism.
"It really is the skilled workforce that drives these industries," said Tim Sweeney, director of public policy at the Greater Boston Chamber of Commerce. "Having that balance [of firms] has really helped us to sustain the economy."
3. Denver -- 297 points: Denver got a better score this year but fell to third place from last year's second ranking as Boston shot up the charts in several categories.
Denver maintained most of the scores it achieved a year ago, losing a few points in some categories but making that up elsewhere. Three local firms were added to the Forbes list of top private companies, including financial firm First Data Corp., building-materials company Pro-Build Holdings, and resource manager MWH. This was the main reason the region's score was up from the 291 it posted a year ago.
4. Washington -- 282 points: The nation's capital was one of several cities to benefit from an expanded check of small-business data in the survey. Washington moved up 11 places in that category as MarketWatch ranked cities on four separate small-business parameters provided by the Department of Commerce.
Washington gained 21 points in the study, moving it from seventh place to fourth.
Two area firms, Pepco Holdings Inc. (POMpepco holdings inc com
POM) and Washington Post Co. (WPOThe Washington Post Company
WPO) , were added to the S&P 500, moving the District of Columbia seven spaces higher in the rankings -- an illustration of how the addition or loss of one or two companies can have a marked effect on rankings.
And, at least for now, Washington doesn't seem to be having trouble creating jobs, according to Steve Moore, a marketing manager for the Washington, D.C., Economic Partnership. The area has produced 11,000 jobs this year, nearly 5,000 more than it expected. The area's unemployment numbers are up, as well.
Moore said more companies seem to be gravitating to D.C. and northern Virginia. He remembered a recent mixer for small software developers. "Two-thousand people showed up," he said.
Employers like the region because of its highly educated workforce. Nearly one in two workers has a college degree, and 22% have advanced degrees, reported Matt Erskine, executive director of the Greater Washington Initiative. "It's the best-educated workforce in the nation," he said.
5. Richmond, Va. -- 275 points: This region has benefitted from a migration toward Virginia, as well as residual effects of proximity to Washington, though it may end up slipping somewhat in future rankings now that one of its largest companies, Circuit City Stores Inc. (CCTYQCircuit City Stores, Inc.- Circuit City Group
CCTYQ) , has fallen into bankruptcy.
Richmond lost 13 points in the rankings from last year and thus slipped from third place to fifth. Circuit City's ejection from the S&P 500 contributed to that slippage. Richmond also lost ground in concentration of Russell 2000 companies. But the area remained at the top of the list in the concentration of Fortune 1000 companies.
6. Charlotte, N.C. -- 268 points: This North Carolina city lost just four points, but that was enough to knock it down a notch in the rankings. Charlotte moved up in the small-business category but slipped in the unemployment rankings by nine spots.
The city faces the prospect of further ranking declines as it is heavily reliant on financial-services companies, including Wachovia Corp. (WBWachovia Corp
BAC) , the biggest outfits in the region.
7. Columbus, Ohio -- 263 points: This state capital is one of two cities new to the top 10 this year, rising from 14th place a year ago with a 26-point gain.
The home of Ohio State University, Limited Brands (LTDlimited brands inc com
BIG) also benefited from a broader survey of small-business figures. The city moved up 10 slots in that category.
And the addition of two financial firms, Diamond Hill Investment Group (DHILdiamond hill investment grou com new PROS) , to the Russell 2000 index helped Columbus surge 11 spots in that category.
The region has managed to avoid the Rust Belt troubles that hit other Ohio cities like Cleveland, said Steve Mangum, the interim dean of Ohio State's business school. Columbus has built an entire economy around the university -- the country's biggest by enrollment -- using its research and educational might to fuel various types of industry.
The university also is a cornerstone of Columbus residents' down time, bringing art and culture to the region, as well, of course, as the beloved Buckeyes football team.
Locals like the intimate nature of the city.
"It has a small-town feel to it, but it's the [30th] largest city in the country," Mangum said. "There's something about the spirit of this place."
8 (tie). Nashville -- 262 points: Tennessee's capital had an even tougher break than Charlotte, as it slipped just one point but lost two spots on the charts. Nashville gained eight spots in the small-business category but lost nine in job growth.
Then it made marginal gains in various other categories but lost eight spots in the unemployment check.
So instead of a tie for seventh with Columbus, Nashville's in a tie for eighth with ...
8 (tie). Dallas -- 262 points: "The Big D" is the other newcomer among the top 10, moving up five spots and gaining 22 points. This central Texas city didn't yield any of its rankings and made modest gains in a number of categories, including its rosters of S&P 500 and Russell 2000 companies, its small-business climate and the unemployment picture.
After the savings and loan debacle of the 1980s and the telecom bust in the late 1990s and early 2000s, the city's economy was forced to diversify, according to Jim Murdoch, economics professor at the University of Texas at Dallas. Since then, he said, Dallas has had the capacity to add companies at a clip faster than most regions because the region is fairly well spread out. "That allows us to do a lot of things other places can't do because of gridlock."
The region has had a run of good luck, as well: A critical natural-gas discovery is helping the oil-rich region to diversify its energy resources.
Further, a General Motors (GMGeneral Motors Corporation
GM) plant in suburban Arlington was the only one left open by the company recently to make Cadillac models and luxury sport-utility vehicles. How long that plant will last with GM's current troubles is questionable, though.
"They closed all the other plants that were making those vehicles," Murdoch said. "That was a pure luck kind of thing."
10. San Francisco -- 260 points: The City by the Bay joins Minneapolis-St. Paul as the only members of the top 10 to retain same overall ranks from 2007 to 2008.
San Francisco actually gained 13 points from a year ago, thanks mostly to a marked improvement in unemployment standings. But other cities made even larger gains, thus leaving the Bay Area in the same spot.
Dropped from top 10: New York and Birmingham, Ala.: The biggest U.S. city and one of the least populous metropolitan areas in the study dropped out due to various reasons.
New York gained eight points but fell prey to other regions' more dramatic advances. The city moved up 15 spots in the unemployment rankings and eight spots in job growth. But it lost ground in other categories, particularly on the small-business measure.
The Big Apple ended up just outside the top 10 in 11th place, down from eighth a year ago. It scored 257 points this year.
Birmingham, meanwhile, fell 10 spots, from ninth to 19th, and lost 22 points to end up with a score of 226. The city remains in the top spot for concentration of Forbes private companies, but it lost significant ground by shedding one Russell 2000 firm and two Fortune 1000 companies.
Russ Britt is the Los Angeles bureau chief for MarketWatch.

Weekly Market Activity Report has Great News

Great News!!!!!! Inventory in the 13 county metro area has fallen bellow 28,000!! As of this week it's 27,733. Down over 8% from the same time last year. Check it out at SanctuaryRealtyGroup.com

12/3/08 Rate Sheet - Can you believe these numbers?

December 3, 2008
Conventional Fixed Rate
30 Year Conforming 15Year Conforming
($417,000 MAX. LOAN AMOUNT) ($417,000 MAX. LOAN AMOUNT)
5.375% 0.000 5.250% 0.000
5.250% 0.250 5.125% 0.250


30 Year Jumbo 15 Year Jumbo
6.750% 0.000 6.250% 0.000


Conventional ARM Programs
5/1 ARM 7/1 ARM
5.750% 0.000 6.000% 0.000
5.625% 0.500 5.750% 0.625
Arms over $417,000 call for quote


FHA & VA Programs
FHA 30 Year Fixed VA 30 Year Fixed
($365,000+MIP MAX LOAN) ($417,000 MAX TOTAL LOAN)
5.500% 0.000 5.500% 0.000
5.375% 0.500 5.375% 0.500

FHA ARM
($365,000 MAX BASE LOAN)
6.250% nq
4.750% nq

Home Staging - Why Stage Your Home? - Staging Places

My Listing On 3204 Georgia Ave S, St. Louis Park ($224,900)

One Story in St. Louis Park. New furnace. New roof before close. Just $224,900!

My Listing On 7604 Zinnia Way N, Maple Grove (Now $166,000)

Maple Grove Townhome. Now just $166,000.

My Listing On 9400 Nike Rd

Beautiful 47 Acre Counrtry Estate

Foreclosures and Short Sales Report - Minneapolis/Twin Cities Housing Market

Click Here To View Full Report

November Skinny from MAAR

Home sales stubbornly continue to increase through October

Home sales stubbornly continue to increase through October

Minneapolis, Minnesota (November 12, 2008) – According to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc., there were 3,480 pending sales in October, a surprising 6.9 percent increase over October 2007. Closed sales were up 12.0 percent from last year for the same time period comparison.

Year-to-date, pending sales are only 200 units behind this time last year. If these monthly year-over-year increases continue through the remainder of 2008, we will likely end the year with a higher sales count than 2007, something which seemed impossible at the outset of the year when sales activity was considerably slower.

"With weak consumer confidence and a fluctuating stock market, the fact that sales activity has shown a slight improvement indicates that people are tired of sitting on the fence," said Kevin Knudsen, MAAR President.

Consumers are finding opportunities in the more accessible price ranges. Of October's total pending sales, 40.7 percent were listed below $150,000. The increased market share of these bargain-priced properties led to further declines in overall median home prices.

As a result, the October median sales price for the entire 13-county metro area was $180,000, down from last year by 18.2 percent.

Lender-mediated home sales, which accounted for 48.8 percent of all sales, posted a median price of $146,000. This is a drop of $11,000 from last month and a decline of 16.7 percent from last year. Traditional properties had an October median sales price of $223,000, a decrease of 1.4 percent.

The overall decline in home prices helps offset a recent increase in mortgage rates, coaxing the November Housing Affordability Index (HAI) on its upward trajectory by two points over last month to 161. This is an impressive 16.7 percent higher than where it was at this time last year, and back up at extremely healthy levels following a few years of unsustainably low affordability. The national HAI, provided by the National Association of REALTORS®, is currently at a less-healthy figure of 123.

"What's a safer investment right now—housing or the stock market?'" asked MAAR President-Elect, Steve Havig. "The increase in sales activity seems to point to housing for many folks around here."

-MAAR

November Maple Grove Newsletter

Grant Cardone On Fox Business

Connie On Fox Business with Liz Claman & David Asman on Fox News

Connie appeared with Neil Cavuto, Fox News

October Twin Cities Newsletter

NAR Recommends New Housing Stimulus Legislation

Here is a good article from MAR......


NAR Recommends New Housing Stimulus Legislation


The National Association of REALTORS® will offer a four-point legislative plan to reinvigorate the housing market, calling on Congress to act during a lame-duck session. NAR believes the plan will give a boost to the economy and help to calm jittery potential homebuyers.

The plan features such consumer-driven provisions as eliminating the repayment of the first-time homebuyer tax credit and expanding it to all homebuyers, making higher mortgage loan limits permanent, pushing banks to extend credit to Main Street, and prohibiting banks from entering into real estate.

"Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible," said NAR President Richard F. Gaylord. "It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans. We are asking Congress to act right away."

The four-point plan includes the following provisions:

Remove the requirement in the current law that first-time homebuyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.
Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for homebuyers in high cost areas.
Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury Department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:
Extend credit down to Main Street, making credit more available to consumers and small businesses;
Expedite the process for short sales;
Expedite the resolution of banks' real estate owned (REOs) properties.
Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

October Maple Grove Newsletter

Coldwell Banker Agent on Fox News

My New Listing / Maple Grove Townhome / $171,000

Top 10 Winter Energy Savings Tips

Top 10 Winter Energy Savings Tips
Reward yourself and save energy while maintaining your home comfort-level. If these are things you do already, challenge yourself to take the next step. The following are 10 easy tips that are divided among “no-cost, low-cost, and ‘go-big’ (investment)” decisions. So, go on, give them a try!
No Cost
1. Set your water heater to 120°.
It’s simple. Your hot water heater won’t have to work so hard if it’s set at a lower temperature. The temperature control settings on water heaters either indicate “low, medium, and high” or actual temperature settings. Simply consider turning down your water heater to a slightly cooler setting to reduce the amount of energy used to heat the water while still keeping the water warm enough for home use. In fact, each time you lower the temperature by 10°F you’ll save 3–5% on your water heating costs. That’s a savings of $6-$10 a year. *
2. In the winter, to make the most of what Mother Nature gives us—sunlight
Open drapes on south-facing windows to warm your home. Consider closing drapes in rooms that receive no direct sunlight to insulate from cold window drafts. At night, close drapes to retain heat. Up to 15% of your heat can escape through unprotected windows, but the solar heat gain from the sun during the day can conserve valuable energy.
3. Start by setting your thermostat to 68°
Your heating system will operate less and use less energy. Turn your thermostat down 5° at night or when leaving your home for an hour or more to save up to $70 on energy costs each year.**
4. If you have a clothes washing machine, use cold water.
Washing clothes in cold water will save you about $40 a year.
Low Cost
5. Replace your furnace or heat pump filter regularly.
Dirty filters reduce airflow, making your equipment work harder and use more energy. Replace your furnace filter monthly (unless it is a high efficiency filter designed to last several months) during the heating season to reduce heating costs by up to $35 a year.
6. Install a programmable thermostat.
It’s a cinch. A programmable thermostat automatically adjusts your home's temperature settings when you're sleeping or away. Using a programmable thermostat can save you as much as 10%, or $70 a year.
7. Install low-flow showerheads and faucets.
It really helps! 1.8 gallon per minute showerheads can reduce your hot water consumption by as much as 10%. You’ll see savings up to $6 per year for a sink faucet aerator and $20 per year for a showerhead.
8. Switch to compact fluorescent light (CFL) bulbs.
They cost a little more, but you can save about $50 over the life of just one bulb.
Go Big
9. Weatherize and insulate older homes.
This saves up to 20% of your heating and cooling costs. A handy homeowner can seal up holes to the outside by weather-stripping doors and sealing windows and gaps along the home’s foundation. The easiest and most cost-effective way to insulate your home is to add insulation in the attic. Other effective places to add insulation include unfinished basement walls and crawlspaces. Insulating walls can be more complex, so check with a contractor for advice. The average home can see a savings of $140 a year.
10. Purchase ENERGY STAR® appliances.
A smart choice. Appliances and electronics really contribute to your energy bill. When it is time to replace, remember items like refrigerators, washers, TVs and computers have two price tags--purchase price and lifetime energy cost. According to ENERGY STAR, the average homeowner spends about $2,000 on energy bills every year. Change to appliances that have earned the ENERGY STAR rating, and you can save $75 a year in energy costs, while saving the environment.

Good Quote

"Former U.S. Federal Reserve Chairman Alan Greenspan wrote in an article for Emerging Markets newspaper that the U.S. housing market will recover in the first half of 2009. 'The recent slowing in the rate of decline in U.S. home prices is the first positive note in this now year-long trauma. More conclusive signs of pending home price stability are likely to become visible in the first half of 2009.'"
--"Greenspan Sees Housing Recovery in First Half of 2009," by Jake Lee, Bloomberg News, Oct. 10, 2008

Good Quote

"Existing home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of REALTORS. Existing home sales...rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million unit pace in September 2007. Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. 'The sales turnaround that began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,' he said."
--"Existing Home Sales Rise on Improved Affordability," News release issued by the National Association of REALTORS, Oct. 24, 2008

MAAR Article on Minneapolis Real Estate Market

MAAR: Pending and Closed Sales Increased
Dramatically in September

The Twin Cities recently got some good news
about the housing market. The Minneapolis Area
Association of REALTORS® (MAAR) reported that
both pending and closed sales increased significantly
in September.

MAAR reported that there were 4,036 pending
sales in September 2008—a 42.2 percent increase
over September 2007’s number of 2,839. This
was the highest year-over-year pending sales increase
since March 1998 when the increase over
March 1997 was 38.6 percent.

MAAR said that closed sales also increased dramatically
in September 2008—34.9 percent higher
than September 2007.

Kevin Knudsen, MAAR president and branch
vice president of Coldwell Banker Burnet’s Minneapolis
South office, said, “There are some incredible
buying opportunities out there and this
is the surest sign yet.”

In addition, MAAR reported that the October 2008
Housing Affordability Index jumped to 159—21.4
percent higher than October 2007. This means
that housing is even more accessible for the average
home buyer in the local market.
Steve Havig, MAAR president-elect, said, “It’s
hard to predict now if the sales upturn will continue.
But affordability and inventory are still
very attractive, and that bodes well for our
long-term picture.”

Trump on the state of investing during the credit crunch...

Tumps Talk Financial Crisis

Existing Home Sales Up 3.1% / Lawrence Yun

This was done back in Aug, but I thought it was good. For more recent info see two links below (The Skinny)......

Yes, There is still money out there!!!!

October Monthly Skinny

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Plymouth Regional Office
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SanctuaryRealtyGroup.Com

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Top 10 Winter Energy Savings Tips

Here are are some great winter energy savings tips I found on the Xcel Energy webpage. Hope you find some of them helpful.



Top 10 Winter Energy Savings Tips


Reward yourself and save energy while maintaining your home comfort-level. If these are things you do already, challenge yourself to take the next step. The following are 10 easy tips that are divided among “no-cost, low-cost, and ‘go-big’ (investment)” decisions. So, go on, give them a try!

No Cost
1. Set your water heater to 120°.
It’s simple. Your hot water heater won’t have to work so hard if it’s set at a lower temperature. The temperature control settings on water heaters either indicate “low, medium, and high” or actual temperature settings. Simply consider turning down your water heater to a slightly cooler setting to reduce the amount of energy used to heat the water while still keeping the water warm enough for home use. In fact, each time you lower the temperature by 10°F you’ll save 3–5% on your water heating costs. That’s a savings of $6-$10 a year. *


2. In the winter, to make the most of what Mother Nature gives us—sunlight
Open drapes on south-facing windows to warm your home. Consider closing drapes in rooms that receive no direct sunlight to insulate from cold window drafts. At night, close drapes to retain heat. Up to 15% of your heat can escape through unprotected windows, but the solar heat gain from the sun during the day can conserve valuable energy.


3. Start by setting your thermostat to 68°
Your heating system will operate less and use less energy. Turn your thermostat down 5° at night or when leaving your home for an hour or more to save up to $70 on energy costs each year.**


4. If you have a clothes washing machine, use cold water.
Washing clothes in cold water will save you about $40 a year.
Low Cost
5. Replace your furnace or heat pump filter regularly.
Dirty filters reduce airflow, making your equipment work harder and use more energy. Replace your furnace filter monthly (unless it is a high efficiency filter designed to last several months) during the heating season to reduce heating costs by up to $35 a year.


6. Install a programmable thermostat.
It’s a cinch. A programmable thermostat automatically adjusts your home's temperature settings when you're sleeping or away. Using a programmable thermostat can save you as much as 10%, or $70 a year.


7. Install low-flow showerheads and faucets.
It really helps! 1.8 gallon per minute showerheads can reduce your hot water consumption by as much as 10%. You’ll see savings up to $6 per year for a sink faucet aerator and $20 per year for a showerhead.


8. Switch to compact fluorescent light (CFL) bulbs.
They cost a little more, but you can save about $50 over the life of just one bulb.
Go Big
9. Weatherize and insulate older homes.
This saves up to 20% of your heating and cooling costs. A handy homeowner can seal up holes to the outside by weather-stripping doors and sealing windows and gaps along the home’s foundation. The easiest and most cost-effective way to insulate your home is to add insulation in the attic. Other effective places to add insulation include unfinished basement walls and crawlspaces. Insulating walls can be more complex, so check with a contractor for advice. The average home can see a savings of $140 a year.


10. Purchase ENERGY STAR® appliances.
A smart choice. Appliances and electronics really contribute to your energy bill. When it is time to replace, remember items like refrigerators, washers, TVs and computers have two price tags--purchase price and lifetime energy cost. According to ENERGY STAR, the average homeowner spends about $2,000 on energy bills every year. Change to appliances that have earned the ENERGY STAR rating, and you can save $75 a year in energy costs, while saving the environment.

The Real Story About the Availability of Mortgage Money

Great article from one of my lenders....

The Real Story About the Availability of
Mortgage Money

By Mary Baymler, President, Burnet Home Loans

I am sure that you have recently had as many questions
as I regarding the availability of mortgage
money. The current economic crisis has led many
in the public to worry about whether or not mortgage
money is even available should they choose
to buy a house. Statements from government and
commentary by the media have certainly played a
part in creating this perception.
So, what is the real story? Here at PHH Home Loans
it continues to be business as usual. Perhaps, because
that statement is so ordinary, it gets overlooked.
I would like to give you the facts so that
you can share them with your customers.
First, frankly we have access to more funds to lend
than we can actually use! Our warehouse facility
has a $350 million capacity. Given that most loans
cycle through the warehouse in 15 days, our group
effectively has access to $700 million a month! This
morning we were only using a fraction of the line.
I would say we have access to plenty of credit.
Second, mortgage product is widely available. So
far this year, we have sold loans to 21 different
state and national investors. Within our investor
group we still have more than 450 products to offer.
Furthermore, we constantly seek out new investors
and, just as importantly, they seek us out
to sell their product! It is important to remember
that we have the best mortgage customers
around, the purchase money borrowers who come
through Coldwell Banker’s doors every day. Our
investors recognize this fact and want to do business
with us.
Third, borrowers can still qualify for a loan. It is
absolutely true that today’s underwriting standards
are now stricter than those of the recent past.
However, that is a good thing for our industry. Borrowers
should be able to document their income,
their assets and prove that they are credit worthy.
Old fashioned? Perhaps, but it is certainly prudent.
Furthermore, PHH Home Loans was never a major
player in the sub-prime market. In 2005 when
things were getting rather wild and crazy, PHH
Home Loans did just 3.5 percent of our closed loan
volume in this category. It was never our stock in
trade and this has served us, and our parent company,
quite well. The marketplace is littered with
the wreckage of companies who choose the subprime
path.
Finally, as you know, this last weekend wrapped up
Coldwell Banker’s 10-Day Sales Event. This was a
tremendous opportunity for the consumer to get
into a new house. This is all the more true because,
as you know, interest rates have been moving
up for the last several weeks. It will certainly
do the consumer little good to hold out for that
last $5,000.00 on the sales price and then have to
pay a half percent or more on their interest rate
for the next 30 years. This may well be the best
time to buy!
As always, if you have questions, please consult
your Burnet Home Loans loan officer.

Case-Shiller on Twin Cities Real Estate Market

New Case-Shiller Report Brings Good News
About Twin Cities Home Prices; MAAR Reports
Increases in Home Sales

In the middle of the current financial turmoil,
Standard & Poor’s Case-Shiller Report
has some good news regarding home prices in
the Twin Cities.
The Case-Shiller report, which was released
Sept. 30, notes that home prices in the Twin Cities
rose for two consecutive months this summer.
From May to June, prices rose 0.9 percent,
and from June to July, prices rose 1.3 percent—
the largest increase of all 20 metropolitan areas
surveyed in the report.
In other good news, the Minneapolis Area Association
of REALTORS® (MAAR) has been reporting
an increase in home sales in the metro area over
the summer and early fall, and in some cases dramatic
increases. MAAR just reported that there
were 4,036 pending sales during the month of
September 2008—a 42.2 percent increase over
September 2007’s number of 2,839. MAAR said
that closed sales also increased dramatically—
34.9 percent higher than in September 2007. In
addition, MAAR reported that the October 2008
Housing Affordability Index jumped to 159—21.4
percent higher than October 2007.
The Case-Shiller Report reviews home prices in
the 20 largest U.S. metropolitan areas. The report
is based on thousands of repeat sales of
the same single-family houses. The MAAR report
studies the median sale prices of all singlefamily
homes, condominiums, and townhomes
on the Regional Multiple Listing Service that sold
during a specific period.

Coldwell Banker 10 Day Sale

New Maple Grove Recycling Program

MAAR Press Release

Pending sales skyrocket over 40 percent as prices decline

Minneapolis, Minnesota (October 10, 2008) – Buyers flocked to the Twin Cities housing market in September to take advantage of attractive home prices and a sunsetting federal loan program, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

There were 4,036 pending sales in September, which represented a whopping 42.2 percent increase over September 2007's mark of 2,839. Closed sales, too, were up dramatically—34.9 percent higher for the same time period comparison. The last time there was a year-over-year pending sales increase even close to this large was in March of 1998 when the increase over March of 1997 was 38.6 percent.

"There really are some incredible buying opportunities out there and this is the surest sign yet," said Kevin Knudsen, MAAR President. "But we also need to keep in mind that September of last year was extremely slow, which makes these figures pop a little more."

Also adding to the influx of September buyers was "last call" activity before the October 1 dissolution of the FHA-sponsored seller-funded downpayment assistance program, which was the last of a dying breed of zero-down loan programs remaining on the market.

A hearty 41.6 percent of September's pending sales were lender-mediated foreclosures and short sales, up from 17.5 percent in September 2007. The increased market share of these bargain-priced properties led to further declines in home prices. The overall September median sales price of $189,900 fell from last year by 15.6 percent. Lender-mediated homes posted a median sales price of $146,000, a decrease of 11.5 percent from last year. Traditional properties had a September median sales price of $212,500, a decrease of 8.6 percent.

Due to the decline in home prices and another downtick in mortgage rates, the October Housing Affordability Index jettisoned upward from last month to 159, which is 21.4 percent higher than this time last year, and back up at extremely healthy levels following a few years of unsustainably low affordability. While challenging for sellers, this means a more accessible market for potential home buyers, thus the resurgence in sales activity.

"With all the uncertainties in the economy, it's hard to predict right now if the sales upturn will continue," said Steve Havig, MAAR President-Elect. "But the affordability and inventory choice picture is still very attractive, which bodes well for our long-term picture."

Forrest Gump Explains Mortgage Backed Securities

Forrest Gump Explains Mortgage Backed Securities


Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.

Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank's buddies, the Wall Street criminals who stole all the good chocolates are not being investigated, arrested, or indicted.

Mama always said: 'Sniff the chocolates first Forrest'.

Emergency Economic Stabilization Act of 2008 Signed

Emergency Economic Stabilization Act of 2008 Signed

On Friday, October 3, the U.S. House of Representatives voted 263 to 171 to enact the Emergency Economic Stabilization Act of 2008 into law. After being rejected earlier in the week, the legislation received a number of enhancements in the areas of consumer and taxpayer protection which made the bill more palatable for congressional leaders who were initially opposed to the bill.

"The vote on the bill reflects how many of you feel—torn. "We realize this bill is not perfect," said NAR President, Richard Gaylord. "However...the additions made by the Senate, including raising the FDIC insurance limit and several other measures that will benefit and protect taxpayers, make it a more favorable solution than the previous proposal. More importantly, failure to act would have pushed consumers into more dire circumstances."

Included in the revised bill language is an increase in the amount of deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC), legislation that will shield many taxpayers from the ravages of the Alternative Minimum Tax (AMT), and strengthened directives to lenders to work with borrowers to prevent foreclosures and to provide timely responses to short sales. You can review the bill in more detail at the House Financial Services Committee website.

NAR will continue to make sure the measures included in this bill are implemented quickly and will provide updates and information at www.realtor.org/creditcrisis.

Source: National Association of REALTORS®

Michael Hellickson On Dave Ramsey - Part 2

More great short sale information.....

Michael Hellickson On Dave Ramsey

Great short sale information.....

Lawrence Yun on Bailout

Congress Passes Rescue Plan

Here is an update I recieved from one of my lenders.



Mortgage Time
Mortgage Market News for the week ending October 3, 2008



Congress Passes Rescue Plan

All eyes were on Congress this week as they debated the financial rescue plan. Fed Chief Bernanke and Treasury Secretary Paulson proposed the $700 billion plan to purchase troubled mortgage assets from financial institutions, providing the institutions with much needed capital. The expectation is that the institutions will use the freed up capital to make credit more readily available. On Monday, the House unexpectedly voted against the plan, and the stock market plunged. A revised plan, which retained the core of the original plan, passed by a wide margin in the Senate on Wednesday and passed in the House on Friday. Despite the historic events this week, mortgage rates ended the week nearly unchanged.

In the shadow of the debate over the rescue plan, the economic data released during the week continued to highlight the weakness in the economy. The monthly Employment report showed that the economy lost -159K jobs in September, worse than the consensus forecast of -105K. The economy has lost jobs for nine straight months, which is the worst performance since the period following 9/11. The Unemployment Rate remained at 6.1%, which was up from 4.7% one year ago. Exports have been a source of strength this year, but economic weakness around the world has hurt in this area as well.

It is hoped that the rescue plan will be a strong first step in boosting the economy, and other actions are also expected to help. Falling oil prices and low wage inflation have eased inflationary pressures. This will allow the Fed more flexibility to cut rates and stimulate the economy. Investors have priced in a half-point cut in the Fed Funds rate by the end of the year.

Great Donald Trump Quote

"Well, it's both a very tough time and a great opportunity. There are great opportunities right now for people when you say average family. It's an unbelievable time to buy a house and especially if a bank happens to own it because they've put the money in so it's not a question of getting financing. The money is already there. Go out and make a deal. The banks want to unload their stock. Go out, see what they have, get yourself a great house, they will give you financing."
--Donald Trump on "Larry King Live", (transcript), CNN.com, Sept. 18, 2008

Bailout Article from MAR COO Chris Galler

Helping to Explain the Bailout Issue to Jittery Clients/Consumers

by: Chris Galler, COO


Most of the consumers you talk with will not have a good handle - I am not sure anyone does yet - of the nature of the credit problem. In this short article, I hope to give you at least some quick, understandable talking points when discussing the issue. It is not 100% complete but should give most members an understandable overview of the issue. There is plenty written about the subject if people are interested in more detail.

The vast majority of people are not in trouble. About 3% of total households are behind on mortgage payments (33% of households have no mortgage) and about 1% eventually go through foreclosure.

Most homes are not mortgaged over their true value. The national number is that home owners have a 71% LTV mortgage on the property (2006).

The foreclosure level of today is very similar to the foreclosure level in 1986 from a national perspective. MN did better that time around.

A major difference today is about how financial firms packaged and sold mortgage securities to investors - often leveraging the value many times. (see more below)

No mortgage insurance as consumers opted for loans that avoided PMI, thus increasing the lender's exposure.

Government asset reporting, as a result of Enron, requires a true reflection of the asset value on balance sheets. This means that the 65% LTV mortgage that a financial institution or Fannie/Freddie issued and now holds in their portfolio is reported as a bad investment because the value of the asset has dropped. As an example, Chris takes out a mortgage with 5% down and is issued a 95% LTV mortgage on a $200,000 home. This means the mortgage is $190,000, but it is protected by an asset valued at $200,000. Chris makes all of his payments on time for 3 years. However, in the last 3-years the home's value has dropped by 10% to $180,000. The bank/financial institution/Fannie/Freddie now must report the lower asset value on their books - which means they do not have enough asset value in the home to cover their loan.

Remember the leverage issue. The financial institution now must report and the investors will see that the assets protecting their securities are not sufficient protection to cover their investment. Keep in mid, Chris is paying his mortgage on time - as are the vast majority of people with a mortgage. Yet, if the LTV is upside down because the asset value dropped, the lender is in trouble and in need of funds to shore-up his balance sheet for the investors who purchased the securities backed by mortgages.

Mortgage insurance was part of the protection against falling asset values in the past. Because so many newer loans were issued without PMI, the lender exposure is much greater this time around.

Liar loans and other poor lending practices are a piece of the problem and demonstrate clearly how greed (at all levels - consumer, lender and advisors) overwhelmed reasonableness. This also happened in the mid-1980's with FHA/VA "fog a mirror" assumable mortgages. Credit tightening and consumer "skin-in-the-game" will help eliminate this in the future.

Problem loans in the next 2-years will be a result of 2nd/3rd mortgages which are tied to the LIBOR index. Some are subprime, many are Alt-A and prime.

The LIBOR went up 50% last week and it is the index used to determine the ARM interest rate. Many of these are held by middle-class folks who spent their home equity taking out 2nd & 3rd mortgages. The problem they face is LTV when they go to refinance out of the bad ARM product. Example: Chris has an 80% 1st mortgage and a 20% 2nd mortgage he took out in 2005 to buy a boat and pay off credit cards. The total of the 2 loans is $200,000 on January 1, 2005. He makes all of his payments on time. In October, his 2nd mortgage - which is an ARM - has a payment increase of 25% because of the LIBOR index. He cannot afford the additional payment because of job situation, health insurance, etc. so he goes to the bank to refinance. Because the value of his property has fallen since he took out the mortgages, he can no longer borrow an amount equal to the 1st and 2nd mortgage he has on the house. You can see the hole that Chris has dug for himself - whether he used a subprime or "liar-loan" - as the asset value drops his options are significantly reduced and now must make some very difficult choices.
It is important to remember that for many years homes were considered a hard un-liquid asset. People rarely borrowed against their home, except for repairs or emergencies, and the equity growth made upward movement possible. Over time, financial geniuses invented tools and convinced people that homes should be a liquid asset that they individually leverage in order to increase their standard of living. That strategy worked for a while until people in mass began living beyond their means.

Often we find that the fundamental principals of the past are concrete solutions for the future.

What Caused This Economic Mess?

Sorry Gang, Need to rant a little. Check This Out

Prelim Rescue Plan Info

Congress Debates Rescue Plan, appears a tentative deal has been reached.

Credit markets are dragging down the economy, and the basic problem is clear. Many financial institutions hold large quantities of complex mortgage securities which have declined in value. The precise value of these securities is difficult to determine, since there are few buyers and the market is not functioning efficiently. Amid the uncertainty, it's very difficult and costly to raise additional capital, so financial institutions are conserving their remaining capital. These institutions are very reluctant to make new loans of any kind. If businesses have no capital to grow and consumers have trouble purchasing homes and cars, the economy suffers and jobs are lost.

Fed Chief Bernanke and Treasury Secretary Paulson spent two long days this week presenting a $700 billion rescue plan to Congress. Much of the testimony noted that the rescue plan would be an acquisition of assets. Mortgages and mortgage backed securities will be purchased at a significant discount to the face amount of the underlying mortgages. Many of the mortgages will be performing, while some will not, and they will have houses as collateral. Ultimately, the orderly liquidation of the acquired assets should recover most, if not all, of the purchase price, and the taxpayer might come out ahead. The plan would provide much needed capital to institutions, which is expected to be used to make more loans.

Heading into the weekend, lawmakers have been meeting on the details of the plan and exploring alternatives, such as an insurance solution. For mortgage markets, expectations that funding a rescue plan will increase the supply of debt pushed mortgage rates a little higher during the week. On late Saturday, it appears the Congressional Leaders and the Bush Administration reached a tentative deal and now will be brought to the House for vote, followed by the Senate. If all goes as planned, should be on the President’s desk for signature this week. We will be watching closing the world wide financial markets reactions to the weekend’s legislation progress.

Compliments of
PHH Home Loans
Plymouth Mortgage Team

Interview with National Association of Realtors Chief Economist Lawrence Yun

Mortgage Market in Review

Mortgage Market in Review
Week of September 22, 2008 Volume 15, Issue 39


Mortgage bond prices rose last week applying a slight
downward pressure on mortgage rates. Trading in the
financial markets remained in disarray. The Dow
Jones index moved more than 400 points, both up and
down, several times during the week. Rates fell
sharply early in the week as traders fled stocks for the
safety of bonds. This money flow reversed Thursday
afternoon after rumors of a massive government
intervention into the financial markets surfaced.
For the week, interest rates on government and
conventional loans fell by about 1/8 of a discount point.
Durable goods orders and new home sales data will be
the most important events this week. The mortgage
interest rate market remains volatile as US Government
officials strive to bring liquidity to the financial
markets.

PHH Home Loans - Plymouth Team

Housing and Economic Recovery Act of 2008 FAQ

Housing and Economic Recovery Act of 2008 FAQ



Q: How will the law help struggling homeowners keep their homes?
A: Through the Federal Housing Administration (FHA), an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages. The program offers government insurance to lenders who voluntarily reduce mortgages for at-risk homeowners to at least 90% of the property’s current value.

Q: When will the program begin?
A: The program will begin on October 1, 2008 and sunset on September 30, 2011. Homeowners in danger of losing their homes before October 1, however, should not wait to contact their loan servicers and should begin applying for federally insured mortgages now.

Q: Who is eligible?
A: To be eligible to participate in this program, a borrower must:

Have a loan on an owner-occupied principal residence. Investors, speculators, or borrowers who own second homes cannot participate in this program.
Have a monthly mortgage payment greater than at least 31 percent of the borrower’s total monthly income, as of March 1, 2008.
Certify that he or she has not intentionally defaulted on an existing mortgage, and did not obtain the existing loan fraudulently.
Not have been convicted of fraud.
Q: How can a homeowner access this new program?
A: Homeowners or a servicer of an existing eligible loan need to contact an FHA-approved lender. The FHA-approved lender will determine the size of a loan that a borrower can reasonably repay and that meets the requirements of the program. If the current lender or mortgage holder agrees to write-down the amount of the existing mortgage and make the new loan affordable, the FHA lender will pay off the discounted existing mortgage. Loans provided under this program must be 30-year fixed rate loans.

Q: Are lenders required to participate in this program?
A: No. The program is completely voluntary for lenders, investors, loan servicers, and borrowers.

Q: How does this law help neighborhoods that have been hit by the foreclosure crisis?
A: The impact of the current crisis has not been isolated to individual borrowers or investors, but has been felt broadly by neighbors, communities, and governments across the nation. The law strengthens neighborhoods hit hardest by the foreclosure crisis by providing $3.9 billion in Community Development Block Grants to states and localities to buy foreclosed homes standing empty, rehabilitate foreclosed properties, and stabilize the housing market.

Q: Will this law be a bailout for speculators, homeowners, investors, and lenders?
A: No. It is narrowly tailored to keep families in their homes. For example:

Only primary residences are eligible: NO speculators, investment properties, second or third homes will be refinanced.
Investors and lenders must take big losses first in order even to participate. The owner of the old mortgage can get a maximum of 90% of the current value of the home (which presumably will be considerably less than the value of the original loan). In many cases the loss will be significantly greater, but 10% is the minimum.
In addition, lenders must waive any penalties or fees, and help pay for the origination and closing costs of the new loans.
Most homeowners will have seen the equity in their homes disappear before being able to refinance under this program. In addition, the FHA will get a portion of any future profits on the house, to make sure the government recoups its investment over the long run.
Q: Will this law reward families who bought homes they could not afford?
A: Many homeowners facing foreclosure were misled, were deceived, or were in other ways the victims of unfair lending practices.
To prevent future abuses by lenders, this law will establish a nationwide loan originator licensing and registration system to set minimum standards for all residential mortgage brokers and lenders. It also strengthens mortgage disclosure requirements to help ensure that borrowers understand their mortgage loan terms.

Q: How will this law make it more affordable to own a home?
A: There are a number of provisions that will make homeownership more affordable:

Creates a refundable tax credit for first-time homebuyers that works like an interest-free loan of up to $7,500 (to be paid back over 15 years).
Grants states $11 billion of additional tax-exempt bond authority in 2008 that they can use to refinance subprime loans, make loans to first-time homebuyers and to finance the building of affordable rental housing.
Raises conforming loan limits for the FHA, Fannie Mae and Freddie Mac to $625,500. Because of the high cost of housing in California, a majority of the state’s residents were previously shut out from these programs. Raising these loan limits will lead to lower interest rates on some loans, greater refinancing opportunities, and enable more borrowers in high cost areas to avoid the type of nontraditional and frequently abusive loans that led to the current crisis.
Provides couples using the standard deduction with up to an additional $1,000 deduction for property taxes ($500 for individuals).
Q: Does the law provide help to those who still cannot afford to own a home?
A: Yes. The bill includes a number of provisions to increase the supply of affordable housing, which has been a major problem in California pre-dating the current foreclosure crisis. For example:

The bill creates a new permanent affordable housing trust fund – financed by Fannie Mae and Freddie Mac and not by taxpayers – to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas.
In addition, the legislation provides a temporary increase in the Low-Income Housing Tax Credit and simplification of the credit to help put builders to work to create new options for families seeking affordable housing alternatives.

-from USA.Gov & the HUD site

New Freddie Mac Incentives

Freddie Mac on Thursday said it is boosting incentives to mortgage servicing companies to help more borrowers renegotiate loans in an effort to curb rising delinquencies.
Freddie Mac, a government-chartered company, will also increase the time it gives mortgage servicers to negotiate with delinquent borrowers in Washington, D.C., and 20 states to 300 days from a range of 120 to 299 days, a spokeswoman said. The states are those with relatively fast foreclosure processes, Freddie Mac said.
Freddie Mac is struggling to contain billions of dollars in losses sustained since mid-2007 as the housing slump deepened more than expected. Speculation that losses will severely pinch capital positions at the company and rival Fannie Mae, led to sharp drops in their share prices since May and legislation this week to provide emergency financial backstops from the U.S. Treasury.
Delinquencies on loans guaranteed by Freddie Mac more than doubled in the year through May to 0.86 percent. The most recent national delinquency rate calculated by the Mortgage Bankers Association is 6.35 percent, Freddie Mac said.
Compensation to loan servicers that negotiate new payment plans and loan contracts will double to $500 and $800, respectively, Freddie Mac said. For a servicer that completes a so-called short-sale, in which Freddie Mac accepts a sale price on a home below the balance of the mortgage, payments also double, to $2,200. Accepting short sales can result in lower losses for lenders by ending the delinquency period and preventing ownership of the property through foreclosure.
Among new incentives, Freddie Mac said it will reimburse servicers for the cost of door-to-door programs — in which services seek out troubled borrowers in person to discuss renegotiating their loans — if they result in the borrower contacting the servicer.
Servicers have also been hurt since they must advance payments to investors even if the loan is in arrears, and as they hire more skilled workers to negotiate with borrowers and re-underwrite loans.
Servicing companies, often units of major lenders, this week said they increased the number of mortgages they have modified to more affordable terms last quarter.
Source: Reuters 2008

September Skinny

Gov Takeover Of Fannie and Freddie

What the Government Takeover of Fannie Mae and
Freddie Mac Means to the Housing Industry

Click Here To See Article


Below is a statement issued by the National Association
of REALTORS® on the Department of
Treasury takeover of mortgage giants Fannie Mae
and Freddie Mac. It is important that Minnesota
REALTORS® have information about the action
and how this step might influence the housing
marketplace. Your clients and consumers may
have questions about how this action will impact
their housing decisions. In the next few weeks,
Minnesota REALTORS® will have additional contact
with Minnesota housing consumers through
the Fall Parade of Homes event. Some may have
questions or concerns about the conservatorship
and you should have some knowledge about the
actions and where consumers can find more information.
On the MNAR website, www.mnrealtor.com, you
will find two additional pieces of information
about the conservatorship, including a broad Q
& A. There is a document from Federal Housing
Finance Agency Director James Lockhart discussing
why the Treasury Department took these
steps to shore up Fannie Mae and Freddie Mac.
The second piece is a detailed question and answer
sheet about conservatorship and what it
means to the financial giants. ....

Click Here To See Article

NAR Statement about Fannie Mae & Freddie Mac

NAR Statement:
What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry

In short-term, home sales should improve as mortgage rates fall.

Washington, D.C. (September 8, 2008) — The federal government's takeover of secondary mortgage giants Fannie Mae and Freddie Mac should cause a drop in mortgage rates in the short term that benefits home buyers, but the long-term outlook is too early to call. NAR fully supports the action of the U.S. Treasury and the Federal Housing Finance Agency.

The federal government had no choice. The capital situation of the tow companies was not enough to handle the fallout from rising mortgage defaults in the near future. In addition, investors who purchase Fannie Mae and Freddie Mac debt have lost confidence in the two.

In a statement, NAR commended the Treasury's action, announced yesterday, to bring stability and continued liquidity to the mortgage market. "The plan will help restore confidence in the secondary mortgage market," said NAR President Richard F. Gaylord. "We appreciate the steps taken to calm the market, make mortgages more widely available and protect taxpayers. We look forward to working with the administration and Congress to ensure the continued vibrancy of the secondary mortgage market."

Summary of what the Treasury actually did and what it means:

In the takeover, Treasury placed the GSEs into a conservatorship — similar to a Chapter 11 bankruptcy — which fully protects taxpayers from conflicts of interest between taxpayers and shareholders or current management.

The federal government is authorized to take up to an 80 percent stake in the companies, will review their financial condition quarterly, and inject money into the operations as needed. That means the market for GSE securities will be treated more like Treasury obligations, which should push mortgage interest rates down. That in turn, is expected to speed up home sales and help stabilize home prices.

The GSEs will be allowed to increase their mortgage funding over the next year and a half to help stabilize markets. Starting in 2010, the plan calls for them to reduce their portfolios.

The heads of Fannie Mae and Freddie Mac have been relieved of their duties. Treasury selected HErbert Allison, former Merrill Lynch vice chairman, to lead Fannie Mae and David Moffett, former U.S. Bancorp CFO, to guide Freddie Mac.

Talking Points

NAR, as the leading advocate for homeownership and housing issues, has closely monitored the market turmoil affecting the stock and debts of the two government-sponsored enterprises (GSEs) - Fannie Mae and Freddie Mac. Their mission is crucial to the economy to make fair and affordable mortgages available to home owners and home buyers. That mission must not be interrupted.
Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners. That must not be interrupted. Treasury Secretary Henry M. Paulson Jr. and James B. Lockhart III, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, have issued strong statements assuring the public that credit will continue to flow over the next 12 to 18 months.
Short term, the takeover will result in government money driving down interest rates, which is expected to spur an increase in home sales.
Long term, the action will lead to a major reorganization of the two GSEs as privately owned models. The brunt of that work will fall to the new administration and new Congress. NAR will help shape that process and the association is already working on a plan to do that.
The action taken by Treasury and FHFA, which regulates GSEs, makes clear the government will not let the deteriorating conditions of the GSEs disrupt the flow of capital to the housing sector, or harm the national and international financial system.
The GSEs guarantee more than 40 percent of the nation's mortgages and own or guarantee more than $5 trillion in mortgages. Since the credit crunch began in August 2007, the private sector mortgage securitizatation market has virtually disappeared and the market share of the GSEs has jumped to about 70 percent.
NAR will continue to follow events closely and develop recommendations on the future of the GSEs' mission to ensure there will be a robust secondary mortgage market in all markets.
For detailed information about this issue, visit
www.realtor.org/gapublic.nsf/pages/gses_conservatorship?OpenDocument

Fannie / Freddie Article at foxbusiness.com

Here is an article I found at Fox News.

"Government Seizes Fannie Mae, Freddie Mac

The U.S. government seized control of the mortgage giants Fannie Mae (FNM: 7.04, +0.62, +9.65%) and Freddie Mac (FRE: 5.10, +0.15, +3.03%) on Sunday, placing the liabilities of more than $5 trillion worth of mortgages onto the backs of the U.S. taxpayer.

Both companies have been now been placed into a government conservatorship under the recently created Federal Housing Finance Agency, under a plan announced by Treasury Secretary Henry Paulson and FHFA Director Jim Lockhart.

The chief executives of the mortgage companies – Dick Syron of Freddie Mac and Daniel Mudd of Fannie Mae – have stepped down, but will continue stay on temporarily to oversee the transition, Paulson said. Herb Allison, former chairman of TIAA-CREF, will take over as CEO of Fannie, while U.S. Bancorp (USB: 32.74, +1.09, +3.44%) Chief Executive David Moffett will become CEO of Freddie.

“Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” Paulson said, speaking at a press conference in Washington D.C. on Sunday morning. “A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance."

The Sunday announcement and themes of "too big to fail" brought stark reminders of the government’s March intervention of Bear Stearns, which came within hours of filing for bankruptcy.

It also brings both Fannie Mae, which was created by Congress during the Great Depression to help with home ownership, and Freddie Mac, created in 1970 as a competitor to Fannie Mae, back into the fold of the government after a multi-decade attempt at privatization.

As part of the plan, both Fannie and Freddie’s day-to-day operations will be under the direction of Lockhart. Officials provided no indication of when the government conservatorship will end – that will be up to the health of the U.S. housing economy as well as the next administration.

"Conservatorship will give the enterprises time to restore the balances between safety and soundness and provide affordable housing and stability and liquidity to the mortgage markets," Lockhart said.

As part of the government's plan of taking over the companies, and to protect taxpayers, Paulson said the Treasury will receive $1 billion in senior preferred stock, with a yield of 10% a year, in both Fannie and Freddie, and will also receive "warrant for the purchase of common stock of each company representing 79.9% of the common stock of each company on a fully-diluted basis at a nominal price."

The government’s plan will close to wipe out any worth that common or preferred stock holders have in the two mortgage companies. All dividends for Fannie and Freddie will be eliminated, Paulson said.

All company political lobbying efforts will cease as well.

While under the direction of the government, the two companies will then take additional mortgage-backed securities to help stabilize the mortgage markets through the end of 2009, Paulson said. As the market begins to recover in 2010, both Fannie and Freddie will reduce the size of their mortgage portfolios at a rate of 10% a year.

The ultimate goal is to reduce the size of Fannie and Freddie's mortgage holdings -- around $1.5 billion altogether -- to about $250 billion each.

Now because the government controls the liabilities of Fannie and Freddie, it could potentially cost the taxpayers billions of dollars in losses. However, Paulson emphasized that, because of the long-term value of these securities, the taxpayer would have “a large stake in the future value of these entities.”

"The ultimate cost to the taxpayer will depend on the business results of (Fannie and Freddie) going forward," Paulson said.

The plan was endorsed and planned in cooperation with the Federal Reserve and Congress, including House Financial Committee Chairman Rep. Barney Frank, D-Mass.

“These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets,” said Fed Chairman Ben Bernanke in a statement.

Rating agency Standard & Poor's affirmed Fannie and Freddie's long-term AAA credit rating.

"We believe the government has now clearly reinforced its support of (Fannie and Freddie)," said S&P's credit analyst Victoria Wagner, in a statement.

Democratic Presidential Candidate Sen. Barack Obama, D-Ill., said "given the substantial role that Fannie Mae and Freddie Mac play in our housing system, I believe that some form of intervention is necessary to prevent a larger and deeper crisis throughout the entire economy."

The implications to consumers and taxpayers are not immediately clear. Unlike the bailout of Chrysler in the early 1980s or the Airlines after 9/11 where the amount of money loaned to Corporate America was clear, the U.S. government could be on the hooks for potential losses that could linger for years. Paulson could not provide an estimate of how much the plan would cost taxpayers.

Mortgage rates are expected to be unaffected in the short-term."