Will the increase in mortgage rates motivate you to buy a house?

Mortgage rates increased this week averaging 5.29%, highest of the year according to Freddie Mac. Will this increase in the interest rate be the motivation you were waiting for in order to jump into the real estate market?

Back in the Day

Back in the day we use to say rising mortgage rates acted as a stimulus that would move homebuyers off the fence. However few things we are experiencing in today’s real estate market resembles anything from “back in the day”. Concerned that a rise in interest rate would reduce the buying power of the home buyer or that in order to obtain a better rate the buyer may have to pay a point or two would result in the buyer signing on the dotted line.

Back to today

I guess we will see over the next few weeks/months if the rising interest rate has an impact on home buying. For rates to have a serious impact they may have to reach levels not seen in sometime. Maybe if start hitting 2000 levels of 8% we will see buyers jumping off the fence. Right now for someone wanting to buy a home there are plenty of reasons to do so that have nothing to do with interest rates. Banks owned & short sale transactions have attracted buyers & investors who could no longer sit back and watch these great deals come and go. Government help in the way of the first time homebuyer tax credit also works as a motivating factor to new buyers.

Perhaps none of the reasons mentioned are why you are thinking of buying a home. Whatever the reason, there are plenty of homes in all prices for you to choose from. Give me a call to discuss your situation. 407-304-0255

Florida vs Countrywide. Lawsuit filed.

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UPDATE October 7, 2008

Please read the following blogs for new information:

Countrywide and Florida reach agreement

Countrywide may help Florida homeowners avoid foreclosure

TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against Countrywide Financial, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade practices. The Attorney General’s lawsuit claims Countrywide put borrowers into mortgages they couldn't afford or loans with rates and penalties that were misleading. Chief Executive Angelo Mozilo was also named in the lawsuit.

Read complete press release


Related Florida real estate views:

Countrywide wants to help troubled home owners

Poor underwriting help fuel subprime mortgage mess

In a news release from the Mortgage Bankers Association, poor underwriting practices contributed to the increase in defaults and foreclosures of loans originated in 2006 and 2007.

A report by Fitch Ratings made several observations regarding the current mortgage situation the country is facing.

In addition to the inherent risk of these products, evidence is mounting that in
many instances these risks were not controlled through sound underwriting practices.

Moreover, in the absence of effective underwriting, products such as “no
money down” and “stated income” mortgages appear to have
become vehicles for misrepresentation or fraud by participants
throughout the origination process.

Fitch believes that much of the poor underwriting and fraud associated
with the increases in affordability products was masked by the ability
of the borrower to refinance or quickly re-sell the property prior to the
loan defaulting, due to rapidly rising home prices.

Homeowners who have very little or nothing invested in their homes would seem more likely to walk away when times are tough.

The effort should be in finding those honest hard working homeowners who wish to keep their homes and helping them find solutions to avoid default and foreclosure.


Related Florida real estate views:

Mortgage fraud in Florida

Impact of foreclosure on families

Florida vs Countrywide. Lawsuit filed.


- Greg Staker - Watson Realty Corp. - 407-304-0255

Orlando and the country may get Federal help with home mortgages

Forbes magazine is reporting that the Bush Administration is trying to resolve some of the mortgage issues brought on by adjustable rate increases that are making it impossible for some home owners to make their payments. The information can be found in the link below:

WASHINGTON -
The Bush administration is working with industry on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels.


Related Florida real estate views:

President Bush not completely happy with housing bill

Florida Senators vote in favor of foreclosure bill HR 3221

How does President Bush pick a real estate agent?


- Greg Staker - Watson Realty Corp. - 407-304-0255

FDIC offers suggestions to obtain the best mortgage terms

A recent press release regarding the fall 2007 FDIC Consumer News came out on November 16th.

The press release can be read in its entirety here.

Highlights of the release include:

‘While it may be tougher to get mortgages because of recent problems in the
housing market, the latest issue of the Federal Deposit Insurance Corporation's
quarterly newsletter for consumers says that "many good loan programs are still
available" and offers tips to help people shop for and negotiate the right
deal.’

‘The main article, entitled "The New Climate for Mortgage Borrowers," features a
variety of suggestions for obtaining a new mortgage or refinancing an existing
one. Among them: Try to raise your credit score in the months before you apply
for a mortgage, such as by paying off much or all of what you owe on credit
cards. Contact several lenders, let them know you are comparison shopping, and
then try to negotiate the best deal. Compare fixed-rate and adjustable-rate
mortgages (ARMs), even if the latter carries a lower initial interest rate,
because a fixed-rate loan may be cheaper in the long run. Be wary of a loan with
payments that can increase substantially, such as mortgages with low monthly
payments in the early years in exchange for the deferred repayment of principal
and/or interest. And, watch out for unfair and deceptive sales practices that
lure people into costly or inappropriate loans.’

Comparing rates and terms is especially important in today's market. Watson Mortgage offers a free loan comparison to anyone who is thinking of buying a home and would like to compare mortgage rates.


Related Florida real estate views:

Buyers are choosing fixed rate mortgages

FDIC – Home ownership declines with income levels

FDIC Chairman, Sheila C. Bair sees no end to housing woes


- Greg Staker - Watson Realty Corp. - 407-304-0255