Monday, January 4, 2016

  • The Fed raised target interest rates last week and the sky did not fall. Without boosting anxiety or draining much liquidity from the system it moved rates to within the higher target range. Yet interest rates still remain historically low; the median projected target for short-term rates in 2016 is 1.375%. 
  • Long –term interest rates remained stable as markets avoid risk by piling into US Treasury and agency-backed mortgage securities due to the oil price collapse. And remember that the Fed will likely maintain the current size of its securities portfolio for at least 6-12 more months, keeping a lid on mortgage rates.
  • Wednesday, August 18, 2010

    Future of Housing Conference

    Yesterday the Treasury Department held its "Future of Housing Conference" on Capitol Hill with the main theme focusing on some type of limited government assistance in the housing market, but a scaled back version.

    Bill Gross, who oversees the world's largest bond fund called for a huge refinance program to slash home loan rates to current levels, which would boost consumer spending by $50 to 60 billion and could lift home prices by 5% to 10%.

    Part of the plan he proposed was to have Fanny May and Freddy Mac lower interest rates on their borrowers that are in good standings to a 4% interest rate. This would be helpful to borrowers that can not refinance do to equity or other reasons.

    Monday, August 16, 2010

    Today"s Economic News

    Japan said today that its Gross Domestic Product (GDP) expanded much less than expected and has now slipped to third place behind China to become the world's 3rd largest economy. Economists said today that China could overtake the U.S. by 2027 to become the world's largest economy.

    The New York State Manufacturing report for August was released today coming in at 7.1 and was slightly below the 7.5 that was expected. The employment measure within the report was positive rising to 14.3 from 7.9, while the new orders gauge decreased to 2.7 for the first decline since June 2009.

    Mortgage Bonds rose on the news, keeping home loan rates at record lows. Stock markets are trading lower after falling the end of last week after the Fed said that economic growth is slowing.

    China's holdings of US government debt dropped to the lowest level in at least a year, according to a report released today by the Treasury today. The holdings fell to $843.7 billion, down from $915.8 billion a year ago.

    The National Association of Home Builders (NAHB) reported that it's Housing Market Index for June came in at 13, below the 14 expected and down from May's reading of 14.

    Friday, July 30, 2010

    Five Smart Reasons to Buy a Home Now

    The economy is stabilizing. Home prices are holding. It's not just as good a time as ever to buy a house. It's one of the best times ever.

    1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.

    2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.

    3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.

    4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines...again. Now that appraisers have more flexibility to set values that reflect the current market, today's deals will make it over the finish line.

    5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by "workforce housing" programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.

    Tuesday, April 13, 2010

    State will no longer tax on forgiven debt!


    Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

    "Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

    The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

    Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

    For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at

    Wednesday, March 17, 2010

    Mortgage Protection Program!

    Due to the popularity of this program, the qualifying period has been extended to June 30, 2010 or until allocated funds have depleted, whichever occurs first.
    On April 2, 2009 the Housing Affordability Fund launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations. Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage.

    Funding for this program was made possible by the generous contributions of REALTORS® and supporters of the Housing Affordability Fund. Contributions to the Housing Affordability Fund
    are tax-deductible. To show your support of this and other programs developed by H.A.F.,
    click here to make your charitable contribution.

    · Be a first-time home buyer – someone who has not owned property in the last three
    years. (includes co-buyer).

    · Open escrow April 2, 2009, or later, and close on or before June 30, 2010
    (purchase agreement cannot be dated before April 2, 2009)

    · Use a California REALTOR® in the transaction (fee for referral does not qualify)

    · Be a W-2 employee (cannot be self-employed)

    · Purchase the property in California

    To qualify for the program applications must be received within 30 days of closing escrow

    Contact me for more information on this program and other mortgage protection programs.

    Thursday, March 11, 2010

    Nab a real estate deal – while you still can
    The combination of affordable home prices, low interest rates, and the federal tax credit for home buyers have created an opportune time for many buyers to purchase a home. Many real estate analysts also believe that most housing markets have stabilized, but that some markets may decline further.
    • Buyers should keep in mind that housing markets are local and can vary greatly from one neighborhood to the next. Working with a REALTOR® familiar with the area in which the buyer is searching can help the buyer select a house that best suits their needs.
    • California’s housing market has shown signs of stabilization since early last year. Sales of existing, single-family homes bottomed out in August 2007, and the median home price reached its trough in February 2009. In January, California’s median home price was 17.2 percent above the low for the current cycle.
    • The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500. Visit,,id=187935,00.html for more information about the federal tax credit for home buyers, including eligibility requirements.
    • The Federal Reserve has helped maintain low interest rates, which, in turn, has assisted home buyers. However, the agency plans to stop purchasing mortgage-backed securities at the end of this month, which likely will increase rates on 30-year fixed mortgages. Buyers may be able to lock in a low interest rate by working with their lender.
    To read the full story, please click here: