Mortgage News: Commercial Mortgages Down

The Mortgage Bankers Association’s (MBA) Quarterly Survey reports that commercial mortgage loan originations continued to drop in the first quarter of 2009. At this point, they are an astounding 70% lower than during the same period in 2008, and down 26% from the fourth quarter of 2008. The 70% overall decrease in commercial lending activity during the first quarter was driven by decreases in originations for all property types.  When compared to the first quarter of 2008, the decrease included:

• 88% decrease in loans for hotel properties

• 80% decrease in loans for health care properties

• 76% decrease in loans for retail properties

• 66% decrease in loans for office properties

• 61% decrease in multifamily property loans

• 50% decrease in industrial property loans

Market Activity Affected by Economy

As the unemployment rate hovers around 9%, most economists expect that the rate of foreclosures will account for approximately 60% of mortgage defaults this year alone. The next wave of foreclosures is expected to include not only the “sub-prime” mortgages, but also those who have been traditionally financially healthy, but have been affected by job-loss.  As a result of these foreclosures, housing prices are expected to decline overall. Do not expect to see price declines at ALL price points however. Many realtors have expressed that in some of the moderate price ranges, prices have become so attractive that buyers are jumping back into the fray in waves. In many instances buyers & sellers are once again involved in “multiple offer negotiations.” This has been scarce since the real estate boom of 2006. The home price decline that has resulted from the increasing number of foreclosures, tighter lending standards, & large supply of unsold inventory will eventually spur activity. With mortgage interest rates still at all-time lows, many buyers are viewing NOW as the time to act upon golden buying opportunities. According to Standard & Poor’s/Case-Shiller Home Price Indices, home prices in the U.S. fell by 18.7% in March from a year earlier.

National Real Estate Sales Increase Overall

The National Association of Realtors just announced that home sales rose a respectable 2.9% in the month of April from March. The increase can be attributed to the increased volume of sales in the “lower-end” market. I touched upon this in my last BLOG posting. The market for the “high-end” properties has been particularly slow. With the continued tightening of mortgage qualification standards, it is getting difficult to obtain “jumbo loans.” Jumbo loans are defined as those mortgages above $730,000. These loans accounted for over 17% of the mortgage market in 2007. Now they account for only 5%. Another contributing factor is that Fannie Mae & Freddie Mac cannot purchase jumbo loans. The chief economist at NAR, Lawrence Yun, has lobbied for the Federal Reserve to buy jumbo loans to restore liquidity in this segment of the market as well.

Keller Williams Realty Cleans Up, Literally!

The Keller Williams Realty office located in downtown Lakeland will be getting their hands dirty Saturday June 6th. As participants of the “Adopt A Lake” program, Keller Williams Realty will be cleaning up Lake Mirror. The festivities will begin at 9 a.m. The City of Lakeland will be providing garbage bags, garbage grabbers, vests, gloves, & nets. Refreshments will also be provided by Keller Williams Realty. Help keep our beautiful community clean!

Citigroup Lowering Morgage Payments

The national unemployment rate has climbed to 5.8%. Citigroup has announced however that it plans on lowering payments for those recently unemployed. The bank, which is now 36% owned by the federal government, established the Homeowner Unemployment Assist program, which will modify those who are unemployed and are 60 days behind on payments to an average payment of $500 for three months.  Customers must have a loan that is owned and serviced by CitiMortgage to participate in the program.

Read more at our Lakeland Real Estate Blog

Foreclosure Search in Lakeland Florida ?

Like searching the web for new property listings? Statistics indicate you are a part of a growing segment of consumers that make their initial property research online. Recent studies indicate that 97% of buyers search for real estate information on the internet first! That’s even before they contact a licensed professional REALTOR for assistance.  Well here at gatearty.com, we have added a new feature that we are very excited about. With the overwhelming influx of foreclosures in today’s market, there is increased demand for information on new foreclosures. Now you can find them! With our MAP SEARCH feature, you can specifically identify “FORECLOSURES” as a search function. So you can search & receive e-mail notifications once a property comes on the market that meets your specifications. Of course the most up-to-date information is available thru contact with your REALTOR, as the MLS database will feature the properties the instant they hit the market.

Read more at Gate Arty’s Real Estate Blog

Fannie Mae Loosens Up

Effective March 1st, Fannie Mae (which guarantees approximately half of the $12 TRILLION of the United State’s mortgage market) loosened loan restrictions on real estate investors & secondary home buyers. This move is seen as a major coup for real estate investors that wanted back IN the real estate market, but were essentially locked out. The new guidelines allow these borrowers to obtain Fannie Mae-secured financing for up to 10 properties. Most recently the amended limit was only 4 properties. Meaning, if you had already four mortgages, you could not buy another property with Fannie-backed financing. In essence, making it nearly impossible to buy & borrow. There are, of course, stricter financial underwriting guidelines. Some things to expect are:

• No foreclosures or bankruptcies in the last 7 years.

• A minimum credit score of 720 when the four property threshold is exceeded.

• Heightened reserve requirements that are tied to the type of property being purchased. For example, a multi-family dwelling (duplex, triplex, etc.) would have stricter reserve requirements than a single-family home.

• A borrower MUST have at least 25% down on a second home & at least 30% down on an investment property.

In spite of these stricter guidelines, this is great news for professional real estate investors, and is a major step toward loosening the credit flow stranglehold on the housing market. Now Freddie Mac, the other major player & insurer of mortgages, needs to follow suit.

Go here for more details

More Foreclosures

National filings of foreclosure exceeded 3 million in the 2008. Sound like a lot? Let’s put this into some context. That figure represents a staggering 81% increase from the already trying year in 2007. What’s even worse that that is it’s an astonishing 225% increase over 2006. If you are an investor looking for the “PERFECT” time to jump into the market, that time is NOW! With mortgage rates as low as they are, it is the perfect storm for the savvy investor or entrepreneur. The bold buyers must seize the opportunity because markets like this only come around once in a great while.

Read more at our Lakeland Real Estate Blog

The “NEW” housing tax CREDIT

The American Recovery and Reinvestment Act of 2009 is now in effect. A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, that offered a $7500 deduction that had to be repaid, the new $8000 figure credit does NOT have to be repaid. The high points of the tax credit are as follows:

* It is for first-time home buyers only. A first-time home buyer is defined as as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
* This is a tax credit & does not have to be repaid. For example, If you owe $5,000 in taxes & qualify for the $8,000 credit, then you would get a REFUND of $3,000! A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. Windfall!
* The duration of this program is only for homes purchased between January 1st, 2009 to December 1st, 2009. Act NOW!
* There is an income limit. It is $75,000 for singles & $150,000 for married couple’s combined incomes.

Real Estate mogul gets Trumped

Well he didn’t get fired, but mega-renowned real estate mogul Donald Trump is no longer a part of Trump Entertainment Resorts, Inc. On Tuesday after “the Donald” resigned as chairman, the company filed for Chapter 11 bankruptcy. Trump has long been distancing himself from the troubled yet highly visible segment of his business, noting that the casino accounted for a mere 1% of his extensive empire & went on to say, “my investment in it is worthless to me now.” Last December, the casino missed its $53.1 million bond payment. It has assets listed at 2.1 billion & a total debt of $1.74 billion.

By the way, the new season of Celebrity Apprentice premieres soon. That Trump will go to any means to make news, huh?