Summary of Key Provisions of H.R. 3221 – The Housing Stimulus Bill (as of 7/30/08)
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:
- GSE Reform
- FHA Reform
- FHA foreclosure rescue
- Seller-funded downpayment assistance programs
- VA loan limits
- Risk-based pricing
- GSE Stabilization
- Mortgage Revenue Bond Authority
- National Affordable Housing Trust Fund
- CDBG Funding
- LIHTC
- Loan Originator Requirements
For more information, visit http://www.realtor.org/governmentaffairs
Congress Passes FHA/GSE
Dear Igor,
Thank you for taking action on the recent Call for Action on the FHA/GSE legislation. We are happy to report that the U.S. Senate today passed a final bill on FHA and GSE that NAR had long fought for, after deliberations and negotiations for the past few weeks. The House passed the identical bill on Wednesday, July 23. For more information, read the bill summary. The President has said he will sign the legislation into law.
This bi-partisan legislation, we believe, will aid in calming mortgage markets, strengthen housing markets, and stabilizing our economy. As a result of your efforts, the new loan limits are now set at $625,500 for the GSEs and FHA, as well as an $7,500 home ownership tax credit. The legislation also includes broad GSE Reform, FHA Reform, development of a National Affordable Housing Trust Fund, and creates a new FHA program to help homeowners at risk for foreclosure.
NAR thanks you for your support for this important legislation. It proves that when REALTORS® speak Congress must act.
Jerry Giovaniello
Senior Vice President, Government Affairs
& Chief Lobbyist
U.S. economy: Consumer confidence, house prices slide
Thursday, June 26, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
The Conference Board reported that its confidence index fell from 57.2 in May to 50.4 in June thanks to the housing downturn, higher unemployment and the rising cost of food and fuel. The last time the index was this low was in February 1992, when the economy was beginning to recover from the 1990-91 economic downturn.
The S&P/Case-Shiller index fell by 15.3 percent in April from the previous April, continuing March’s 14.4 percent year-over-year decline. However, eight of the 20 cities included in the index experienced month-over-month increases in prices. That shows cities “are beginning to sort themselves into the bad and not-so-bad,” said economics professor and index co-founder Karl Case. “It’s not like the whole market is collapsing.”
California cities included in the index continued to experience price declines: In Los Angeles, the index fell 2.2 percent from March to April and 32.1 percent year over year. San Diego was down 2.6 percent for the month and 22.4 percent compared with April 2007, and San Francisco declined 2.2 percent in April and was 22.1 percent below last April’s index.
To read the full story, please click here:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aX6aDvhPpltY&refer=home
U.S. home slump harder to reverse than usual – Harvard
- Homebuyers remain on the sidelines as they face the highest mortgage rates in nine months and stricter lending criteria. The Federal Reserve?s efforts to keep interest rates low with the hope of stimulating buyer activity has largely fallen on deaf ears as potential homebuyers watch prices continue to slide in many areas of the nation courtesy of a large inventory of foreclosed properties for sale.
- Director Nicolas Retsinas observed that housing markets “historically recover only after the economy has entered a recession and a combination of falling mortgage interest rates and house prices have improved housing affordability. It will take longer to rebound given the unusually high levels of foreclosures and constrained credit markets. The slump in housing markets has not yet run its full course.”
- The report concludes: “…if the economy slips into a recession or job losses keep racking up, household growth and homeownership demand could fall even more.”
To read the full story, please click here:
http://www.reuters.com/article/marketsNews/idUSN2347133320080623?sp=true
California unemployment hits 6.8%
- California’s unemployment rate trails four other states: Michigan, Rhode Island, Alaska and Mississippi. Some 1.26 million Californians were unemployed in May, up 115,000 from April and 300,000 higher than in May 2007. The state posted a net loss of 10,900 jobs in May, primarily in construction. However, there were net gains in jobs in education and health services, natural resources and mining, information, leisure, and hospitality.
- The state’s employment situation could worsen later this year under the weight of state and local government budget cuts and a threatened actor’s strike.
- Economists say an employment recovery may be as long as a year off. That’s when the construction sector is expected to benefit from billions of dollars in public infrastructure projects approved by California voters.
To read the full story, please click here:
http://www.latimes.com/news/printedition/front/la-fi-caljobs21-2008jun21,0,5760427.story
Fannie, Freddie Fail to Relieve Housing by Shunning Jumbo Loans
- Jumbo loans of more than $417,000 accounted for about one-third of the mortgage market last year and represented a fifth of all mortgage applications in May, sources say. Since March, however, Fannie Mae has packaged only $24 million in jumbo loans into securities while Freddie Mac has packaged about $220 million. Meanwhile, the two companies invested more than $32.4 billion to buy their own securities, according to regulatory filings.
- The NATIONAL ASSOCIATION of REALTORS® (NAR) had projected the two companies would buy $150 billion in jumbo loans this year. UBS AG now predicts that total may be less than $74 billion. Freddie Mac has said it would buy between $10 billion and $15 billion in jumbo loans this year.
- The two companies own or guarantee almost half of the $12 trillion in U.S. residential mortgage debt. They experienced record losses totaling $11.8 billion over the last three quarters as mortgage defaults climbed to 30-year highs.
To read the full story, please click here:http://www.bloomberg.com/apps/news?pid=20601103&sid=a57eFJtEHSHI&refer=us
THE MORTGAGE MARKET GUIDE
“VERY NICE. IT’S A LITTLE GREASY…BUT VERY NICE. CRUMBLE SOME CRACKERS INTO IT SHELL, THAT WILL HELP TO ABSORB THE GREASE…” Peter Falk’s line from the 1979 classic movie “The In-Laws” is good advice about soup…but doesn’t help us much when it comes to absorbing the high price of oil, a greasy topic that continues to permeate financial headlines.
And last week was no exception, with oil prices continuing to march ever higher, despite an announcement early last week by OPEC member Saudi Arabia that they will increase oil production in the near future. They are concerned that the high price of oil will lead to lower demand and a turn toward alternative energy sources. And Friday’s news didn’t help, with a strike at a Chevron plant in war-torn Nigeria, Africa’s largest oil producing nation. Additionally, Israel conducted a military operation for preparedness in case of a potential strike against Iran’s nuclear plants – which all served to push oil prices higher still. High oil prices are inflationary – so if the march higher in oil prices continues, both the Stock and Bond markets will suffer…and even crumbled crackers won’t help sop up the mess.
But Bonds did manage to find some improvement last week, helping home loan rates get better by about .125%. Negative economic news, including soft housing numbers, weakness from the manufacturing sector and more write-downs announced by financial giant Citigroup all played a hand – causing money to flow out of Stocks and over into Bonds, which helped prices improve.
WANT TO HELP YOUR CAR’S MAINTENANCE BUDGET IMPROVE? YOU MIGHT BE SURPRISED TO LEARN HOW MUCH YOU CAN SAVE…READ THIS WEEK’S MORTGAGE MARKET VIEW!
Forecast for the Week
The coming week is chock full of economic reports that will likely have a big influence on the financial markets. We start off on Tuesday with a report on Consumer Confidence, and also the beginning of Fed meetings which will culminate in a Rate Decision and Policy Statement on Wednesday afternoon at 2:15pm ET. It is widely believed that the Fed will keep the Fed Funds Rate at 2%…but what will be most interesting is the wording of their carefully crafted Policy Statement. If it gives hints of their intent to hike rates in the near future to help fight inflation, it could actually be good news for Bonds and home loan rates.
A look at sales numbers in the new and existing housing markets will come Wednesday and Thursday, and Friday will wrap up the week with a bang as the Fed’s favorite gauge of inflation, the Core PCE (Personal Consumption Expenditure) data will be released. Since this will be following the Fed’s announcement on Wednesday – will the Fed look smart if they’ve held rates steady, or perhaps come under criticism if the inflation numbers are super-heated? Could be a greasy few days for the Fed, so stay tuned.
Remember that when Bond pricing moves higher, home loan rates move lower – and then take a look at the chart below. You can see how in recent days, Bonds have moved higher, but are now battling an overhead “ceiling” of technical resistance. If Bonds and home loan rates are to improve in the near future, it will take some very Bond-friendly news to help crash through the ceiling that has stopped progress in its tracks for the time being.
The Mortgage Market View…
TIME FOR A CHANGE…OR NOT?
The rising cost of crude oil has everyone talking about gas prices at the pump… but what about the actual oil in your engine? Are you spending too much on oil by changing it too often?
Most of us probably think a car’s oil needs to be changed every 3,000 miles. But that’s an old mechanics tale these days. Did you know that many car manuals now actually recommend changing the oil every 5,000, 7,500 or even 10,000 miles? That means you may be changing your oil twice or even three times as often as you need to! In fact, a recent study in California indicated that 73 percent of Californians change their oil more frequently than recommended by the manufacturers.
So how often should you change your oil?
The fact is, oil changes should be determined by what, how, and where you drive. If you have a newer car with little or no engine wear, you can probably go 7,500 miles between oil changes. And even if you have a slightly older car, but drive under ideal conditions such as predominantly highway, you can go a similar distance before changing.
Of course, many of us actually don’t drive under “ideal” conditions…if you make many short trips, endure lots of stop-and-go traffic, drive on gravel or dusty roads – then you might need to change your oil more frequently. So how do you know – and take advantage of saving money by only changing oil when it’s really needed?
Technology to the rescue
There are a few ways you can actually eliminate the guesswork. If you have a newer car, it may have a built-in sensor that estimates oil life based on engine running time, miles driven, outside temperature, coolant temperature and other operating conditions. When the indicator light comes on, it’s time to change the oil. It’s that simple.
Another idea is to purchase an oil monitoring sensor, such as the IntelliStick. These sensors are used in place of your car’s original dipstick and provide you with real-time, accurate information about the true condition of your oil. Better still, these sensors often have a transponder built into them so you can quickly and easily check the condition of your oil at any time using a cell phone, PDA or computer with Bluetooth connectivity…now that’s really going high tech.
Bottom line – dollars spent on oil changes add up fast. Especially with the increasing price of oil, it pays to be smart, check the manufacturer’s recommendations…and not let too-frequent oil changes cost you!
Ernest Tepman
President
The OCD Group Inc.
Los Angeles: 800-963-4623
San Diego: 877-863-4623
E-Mail: marketupdate@theocdgroup.com
FHA LOANS & DOWNPAYMENT ASSISTANCE
As you are aware, it has become very difficult to close loans today due to recent changes in the Conventional and Sub-Prime markets. Stated Income is gone, minimum credit scores have been raised and the 5% Declining Market has killed pretty much every 100% program.
Now the Mortgage Insurance Companies are pulling back! They want even higher minimum scores, lower LTV’s, and will soon be charging higher premiums.
FHA on the other hand is trying to help. They have increased the maximum loan amount to as high as $729,750! They are considering lowering Mortgage Insurance rates, and talking about lower down payment requirements from 3% down to zero!!
Currently, FHA is the only program that does not have a minimum credit score requirement, they allow for non-occupying co-borrowers, and does not require the buyer to have any money of his own invested into the property.
Additionally, you can use maximum FHA financing on SFR’s, Condo’s, PUD’s (Town Homes), Units, and Manufactured Homes. And there are no “Declining Market” reductions at all!!
FHA still allows for Down Payment Assistance Programs such as Nehemiah, HART, Ameridream, Access, Gold, and others. There are programs available that will allow the seller to contribute up to 12% for Down Payment and Closing Costs!!
Refinancing? How about 95% LTV on Cash Out, 97% on Rate and Term, and for recently listed properties you only need the home to be off the market for 1 day. And if needed, you can even add co-borrowers to help with qualifying!!
FHA may soon be the only affordable loan program above 90%!!!!!
Commissions on FHA loans are higher than any other loan program! As a Loan Officer with us you share in the Origination Fee, Rebate/Premium Pricing, and SRP (Service Release Premium). You should make up to 2% or more on your transactions!!!
We have been involved with FHA financing for over 15 years, we have the knowledge and experience to help you and your clients. Please call or email us with your questions, we look forward to hearing from you.
Thank you,
Kevin McRae
1(888) 655-5000
Kevin@homefinderscenter.com
HUD Approves Borrower Paid Counseling For Reverse Mortgages
May 16th, 2008 Published in News, Reverse Mortgage
A few reverse mortgage related headlines from the week:
The incredible shrinking nest egg (USAToday)
Could a reverse mortgage save your parents lifestyle? (TriCities.com)
Look before slamming it into reverse (ChicagoTribune)
Woman given 10 days to leave home of 40 years (KVAL)
Today the Senior Lending Network kicks off their Senior Independent Living Month which will run from May 15 through June 15. All mortgage originators affiliated with the Senior Lending Network are joining forces in a series of events to promote social responsibility and ethical treatment of seniors and discuss the positive benefits of reverse mortgages.
As part of Senior Independent Living Month, the Senior Lending Network and the National Association of Home Builders are joining forces with Rebuilding Together New Orleans to rebuild a home damaged by Hurricane Katrina. Volunteers from NAHB’s 50+ Housing Council will participate in a two-day community service project May 17-18 to help rebuild the home of displaced owners Hazel Tate, age 87, and Hilda Levy, age 67. On May 18, the three groups will host a media event featuring your favorite reverse mortgage spokesman Robert Wagner, spokesperson for the Senior Lending Network, to meet the homeowners and provide guided tours of the home and show its progress to date.
Since the overall goal of Senior Independent Living Month is to promote social responsibility, ethical treatment of seniors, and discuss the positive benefits of reverse mortgages, the Senior Lending Network is offering a FREE training session for RMD readers. The session will cover tips on how to generate positive press in the media and help grow your business. Below are just a few of the things that will be covered:
How to issue a press release to the wires
Tips for reaching out to local media, identifying prospective media contacts
Tips for creating community related campaigns in your area for seniors
Join us Thursday, May 22, 2008 at 2:00 PM (EST), space is limited so Sign Up Now!
In addition to the Free training session to RMD readers, the company is offering promotional literature about Senior Independent Living Month for its originator partners on their website.
World Alliance Financial Declares Senior Independent Living Month (Yahoo)
Mortgage Market Review
Provided to you Exclusively by President of The OCD Group Inc. Ernest Tepman
Last Week in Review
“TALENT WITHOUT DISCIPLINE IS LIKE AN OCTOPUS ON ROLLER SKATES. THERE’S PLENTY OF MOVEMENT, BUT YOU NEVER KNOW IF IT’S GOING TO BE FORWARD, BACKWARD, OR SIDEWAYS.” H Jackson Brown Jr. And just like that strange visual of an octopus on skates, so goes the volatile Bond market in recent days – and last week, Bonds and home loan rates skated around, but ultimately closed out the week very close to where they had begun.
Bonds and home loan rates ended the week on a sour note, but had spent the early part of the week moving sideways and slightly higher on a blend of mixed economic news and action in the Stock market. Grim news arrived from insurance giant American International Group (AIG), who reported an enormous first-quarter loss of $7.81 Billion or $3.09 a share, compared with earnings of $4.13 Billion just a year ago. The important part of this loss is due to write-downs on Mortgage Bonds, which tells us that the credit crisis is not yet entirely behind us. On these negative headlines, Stocks moved lower and money flowed over into Bonds, helping home loan rates improve.
By Thursday, Bonds were looking good and holding their ground above several floors of technical support, as the weekly Initial Jobless Claims numbers were reported at 365,000, slightly below expectations of 375,000. The more closely watched four-week average of Claims edged higher to 367,500. This not-so-hot read on the labor market helped Bonds and home loan rates continue to improve.
But then on Friday, Bonds gave back some gains on news of oil hitting $126 per barrel – and the inflationary effects of high oil prices is bad news for both Stocks and Bonds. Oil prices are reaching exceptionally high levels, and may get higher still. Read on for where oil prices are forecast to go in the future – and what it means for home loan rates.
AND IT’S NOT JUST FILLING UP THE TANK WHERE YOU’RE SEEING PRICE INCREASES…IT’S WHEN FILLING UP YOUR BELLY AS WELL! THAT’S RIGHT, FOOD AND DRINK PRICES ARE ON THE RISE IN A BIG WAY. CHECK OUT THIS WEEK’S MORTGAGE MARKET VIEW FOR SOME MONEY-SAVING TIPS!
Forecast for the Week
After last week’s thin economic calendar, where Stock market action and technical factors had a big impact on Bonds and home loan rates, this coming week brings a much juicier economic report agenda.
Retail Sales for April will be reported on Tuesday, followed by Wednesday’s Consumer Price Index (CPI). This widely watched measure of consumer inflation will take special significance, now that the Fed has signaled their current rate cutting cycle may be at an end. On Thursday comes a read on the new construction housing market, with Housing Starts and Building Permits. We will have to see if these reports can keep Bonds above their 50- and 100-Day Moving Averages…as seen in the chart below. If the reports are economically weak or negative, Bond prices and home loan rates should hold their ground, and perhaps even find some improvement.
Remember when Bond prices move higher, home loan rates move lower…and vice versa. And right now, there’s an important story breaking that will be very important to stay tuned in to. Last Friday, oil prices reached a lofty $126 a barrel, and Goldman Sachs is forecasting that black gold could rise even higher, perhaps as high as $150 – $200 a barrel in the next twelve months. If they are right, the inflationary effects of high oil prices could pressure Bond prices to move lower, causing home loan rates to move higher. This will be a story to watch carefully in the days and months ahead.
The Mortgage Market View…
RISING PRICES NOT JUST AT THE GAS PUMP…
If you’ve noticed your grocery bill getting bigger lately, you’re not alone – and it’s likely not because you’re eating more. According to Rising Food Prices: Policy Options and World Bank Response, global wheat prices have increased a whopping 181% over the past three years – and overall, food prices have increased by 83%!
Concerned? You’re not alone. A recent poll showed that 73% of consumers cite higher grocery bills as a concern; with nearly half saying food inflation has caused a hardship for their households. In fact, food prices ranked just below record-high gasoline prices on the list of things people are worried about.
According to Gregory Karp, author of Living Rich by Spending Smart, here are three simple ways you can save when it comes to food and drink prices:
Time your grocery shopping. With the exception of milk, eggs, and bread, most grocery store products are put on sale at least once every 12 weeks, as Karp notes, often for “20%-30% their usual price.” So instead of buying what you need every week or two, stock up on non-perishables when they go on sale. It may take a little planning ahead on your part, but the annual savings is substantial. As Karp writes, “The average American family of four spends about $8,500 on groceries each year. Trimming that bill by 20% saves $1,700.”
Make eating out a special treat. Enjoying a nice meal out is always a fun thing to do, so let it be just that, a fun thing to do rather than a solution for being too tired or too rushed to cook. When you do have the time and energy to cook, make two or three times the amount and freeze the extras. Then, when you’re rushed, a home-cooked (and probably healthier) meal will be waiting in your freezer, and will likely take less time to reheat than a night out or take-out delivery. And you will save more than time: According to Karp, “A restaurant meal for two costs $30 even at inexpensive chain restaurants. Home-cooked meals typically cost half as much, if not less. Convert two restaurant trips into two frozen homemade dinners each month, and you will save $360 per year.”
Don’t buy bottled water. Believe it or not, recent tests have shown that bottled water and tap water are pretty equal when it comes to safety and taste. For example, ABC News tested New York City tap water and bottled water for bacteria and found no difference in purity. Plus, there are environmental benefits of using less plastic. Karp estimates that people who drink one $6 case of bottled water each week can save $311 per year if they stop buying bottled water. He notes that “tap water costs five cents per gallon, or less than two cents per equivalent case – about $1 for the year.”
Hey, if you eat…rising food prices impact you. Use the above tips and suggestions to help minimize your concerns about rising food prices, and stay healthy and smart.
The Week’s Economic Indicator Calendar
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Ernest Tepman
President
The OCD Group Inc.
Los Angeles: 800-963-4623
San Diego: 877-863-4623
E-Mail: marketupdate@theocdgroup.com
REAL ESTATE MARKET CONDITION & L.A. COUNTY LATEST REAL ESTATE STATISTICS
As you may already know the Los Angeles prices of single-family homes, condos, land and, in small amount also multi-family buildings, declined in most cases approximately 20%. Real estate gurus as well as the California Association of Realtors are predicting that prices will decline a maximum of 5 more percent in the next few months. The declining real estate is/was caused by an enormous increase of foreclosures. Most of the homeowners that got into financial difficulties and fell behind with their mortgage payments have already sold or lost their properties. I started observing multiple offers on the remaining short sales, foreclosures and bank owned properties. The mortgage loan limits were increased to almost $730,000, but this is just temporary relief at this point of time. Along with other realtors, I am involved in writing letters to US Senator Dianne Feinstein. You may view her recent response that I received from her at http://www.movingtohollywoodhills.com
For your information I would also like to mention that if a home price declines 10%, it is equal to 0.5-1% mortgage interest increase. Therefore, it is my opinion that if you need/want to buy within the next few months, please start searching now. And if you are intending to sell your current home, I’d encourage you to wait if you can, until the market starts going up again.
Based on several inquiries & offers that I have been dealing with lately I am encouraging all my clients to get pre-approved, get at least the first page of the FICO score from the lender, make sure that you have enough money for down-payment on your bank account, plus a reserve for 3 months of mortgage payments, taxes and insurance. All this is a must in almost 90% of pre-foreclosures and foreclosures. Further on, it is also very helpful if I have on my hands a Buyer-Broker Agreement. If you have misplaced or never received that agreement from me, please contact me and I will re-send it. This agreement helps if I need to negotiate for example with the bank that owns the property, before we make an offer.
FREE & FREE & FREE – updated monthly
Click here for LOS ANGELES COUNTY LATEST REAL ESTATE STATISTICS
Best Hollywood Homes Team in assoc. with CLAW released another complimentary feature for our clients, associates & friends.
Forecast Positve For Second Half of 2008
WASHINGTON, D.C. – The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors®. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second hal f of the year.”
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, held at a stable level of 85.9, unchanged from December, but was 19.6 percent below the January 2007 reading of 106.8. “This additional sign of a stabilizing market is encouraging, and our members are telling us there’s been a pickup in shopping activity.” Yun said. “Our hope is that the increased traffic of buyers looking at homes will translate soon into more contract offers.” The PHSI in the West jumped 13.0 percent in January to 93.8 but remains 12.7 percent below a year ago. In the Midwest, the index rose 0.6 percent to 85.2 but is 13.3 percent lower than January 2007. The index in the Northeast declined 4.1 percent in January to 69.6 and is 28.0 percent below a year ago. In the South, the index fell 6.1 percent in January to 89.5 and is 23.8 percent below January 2 007.
Existing-home sales are forecast to remain flat around an annual level of 4.9 million in the first half of the year before improving to a 5.8-million pace in the second half. With a weak first half, total sales for 2008 are projected at 5.38 million, but are then seen to rise 3.5 percent to 5.60 million in 2009. The aggregate existing-home price is projected to decline 1.2 percent to a median of $216,300 this year, and then increase 3.5 percent to $223,800 in 2009. A pattern of disparate price performance continues around the country with a roughly even split between up and down markets. Recently released data for the fourth quarter shows strong price gains in markets such as the Kennewick-Richland-Pasco area of Washington; Topeka, Kan.; and Atlantic City, N.J. At the same time, many areas that have lost jobs are showing price declines.
“Significant price declines in some local markets have sharply and quickly improved local affordability conditions, and are inducing buyers to return to the marketplace,” Yun said. NAR’s housing affordability index is forecast to rise 14 percentage points to 127.0 in 2008. New-home sales should decline 23.7 percent to 590,000 this year before rising 7.2 percent to 633,000 in 2009. Housing starts, including multifamily units, will probably fall 25.1 percent to 1.01 million this year, and then continue to slip another 2.7 percent to 987,000 in 2009. “As builders sharply cut back production, vacant new-home inventory has consistently declined over the past year-and-a-half,” Yun said. “That will permit a quicker return to balanced market conditions in many local areas.” The median new-home price is likely to fall 6.1 perce nt to $232,200 this year, and then rise 5.1 percent in 2009. The 30-year fixed-rate mortgage, which has moved erratically in recent weeks, is expected to hover around 5.8 percent most of the year, and then rise to an average of 6.3 percent in 2009.
Growth in the U.S. gross domestic product (GDP) should be 1.5 percent this year and 2.4 percent in 2009. The unemployment rate is projected to average 5.4 percent in 2008 and 5.5 percent next year. Inflation, as measured by the Consumer Price Index, will probably be 3.2 percent this year and 1.5 percent in 2009. Inflation-adjusted disposable personal income is expected to grow 1.4 percent in 2008 and 3.1 percent next year.
source: http://nationalrealtynews.com/content/templates/standard.aspx?articleid=842&zoneid=1
U.S. Senator Dianne Feinstein responding to my message regarding home mortgages
Thank you for contacting me regarding homeownership assistance programs. I appreciate the time you took to write and welcome the opportunity to respond.
The Federal Housing Administration (FHA) plays an important role in insuring home mortgages for those in underserved communities. It is critical that FHA programs be reformed to provide more homebuyers and borrowers looking to refinance with the opportunity to obtain an FHA loan. These opportunities are especially important in states, such as California, where the cost of housing is high. For homebuyers faced with jumbo loans subject to high interest rates, raising the government-sponsored enterprise (GSE) conforming loan limit will bring more liquidity to the market and lower monthly interest rate costs.
On February 13, 2008, the President signed the Economic Stimulus Act of 2008 (H.R. 5140) into law. I strongly supported the provision of this bill which temporarily increases the FHA loan limit and GSE conforming loan limit to 125 percent of an area’s median home price, up to a maximum of $729,750. On February 5th, the U.S. Department of Housing and Urban Development published these revised limits for California. Please know that I will carefully monitor the FHA, Freddie Mac, and Fannie Mae as they implement these new loan limits. You may review the newly published FHA loan limits at http://www.HUD.gov. The GSE loan limits can be viewed at http://www.ofheo.gov.
You may be interested to know that conference negotiations to resolve the differences between the House-passed version of the FHA reform bill (H.R. 1852) and the Senate-passed version (S. 2338) are ongoing. These two bills would permanently increase the FHA loan limit, lower down payments, and increase the availability of FHA’s reverse mortgage program, among other reforms. I understand that this issue is of major importance to Californians facing high home prices and the threat of losing their home to foreclosure. Please know that I will continue to do everything I can to help on this critical issue.
Once again, thank you for writing. I hope you will continue to keep me informed on issues of importance to you. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein United States Senator
Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.
