Ricardo Bueno's Blog

Cramer says: "Don't you dare buy a home now - you will lose money."

(Click on the link above to see the video!)

Hmmm...what do you make of that?

Lenn Harley has an excellent rebuttal! Read her post:

JIM CRAMER, REAL ESTATE, THE STOCK MARKET, and SOME PERSPECTIVE

Additional Article(s) of Interest:

Waiting for the Bottom? Don't Bother!

Recapitulemos:

La hipoteca de tarifa fija 30-year hizo un promedio de 6.34%, encima a partir del 6.31% la semana pasada.

La hipoteca de tarifa fija 15-year hizo un promedio de 5.98%, encima de levemente a partir del 5.97% la semana pasada.

La hipoteca de tarifa ajustable de un añ0 hizo un promedio de 5.65%, abajo levemente a partir del 5.66% la semana pasada.

Los tipos de interés se levantaron siempre tan levemente esta semana en medio de preocupaciones levemente disminuidas de la liquidez y aumentaron expectativas de la inflación; estos dos traídos encendido por esta semana’s alimentaron el corte de la tarifa de fondos.

La Tarifa De Fondos Del Fed:
Con esta decisión’de la semana s del comité federal del mercado abierto para cortar los puntos de base de la tarifa de fondos del fed 50 (50%), la nueva tarifa está parada en 4.75%.

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Let’s Recap:
The 30-year fixed rate mortgage averaged 6.34%, up from 6.31% last week.

The 15-year fixed rate mortgage averaged 5.98%, up slightly from 5.97% last week.

The 1-year adjustable rate mortgage averaged 5.65%, down slightly from 5.66% last week.

Interest rates rose ever so slightly this week amidst slightly diminished liquidity concerns and increased expectations of inflation; both of these brought on by this week’s Fed Funds Rate cut.

The Fed Funds Rate:
With this week’s decision by the Federal Open Market Committee to cut the Fed Funds Rate 50 basis points (.50%), the new rate stands at 4.75%.

The next scheduled meeting is on October 31st at which point we expect the Fed to yet again cut the Fed Funds Rate by an anticipated 25 basis points (.25%) in a continuing effort to loosen up credit markets and keep economic expansion on track.

The Week Ahead:
Continued inflation concerns and dollar exchange rate will continue to heavily impact the bond market so watch for daily rate changes. At this point it is highly recommended that you float with caution but consult with your Mortgage Advisor to anticipate any reversal in strategy to lock-in your note rate.

Up ahead on the Economic Calendar we have: Home Sales, Consumer Confidence, and Durable Goods Orders. For a clearer view of the week ahead please visit www.bloomberg.com or visit Ana Connell'sThe Weak Ahead.
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Recommendation:
I would...
1. Float with caution but consult your Mortgage Advisor daily to anticipate any reversal in strategy to lock-in your note rate.
2. Double-app. your loan with different institutions.
3. Obtain a FORMAL loan approval prior to making an offer on a home as the credit landscape has changed drastically.

Jumbo Mortgage Rates:
Rates on 30-year jumbo mortgages increased 3 basis points to 7%.
Rates on 15-year jumbo mortgages increased 6 basis points to 6.75%.

A jumbo mortgage is a home loan that exceeds the loan limits set by Fannie Mae and Feddie Mac. These types of mortgages generally have a slightly higher interest rate than their smaller “conventional/conforming” counterparts.

I think it's safe to say that we all know Inman News! Well, they've just released their report on the 100 Most Influential People In Real Estate. And guess what? Some bloggers made the cut too!

 *Note: You can download the report at The Industry Report blog by CLICKING HERE.

And now, some of Ricardo Bueno's most influential people; we've shared knowledge, ideas, and inspiration. It's this kind of influence that makes us better professionals...it's this kind of influence that is the most valuable.

                                                                                                              See you at the top! 

"HSBC Holdings, Europe's biggest bank, said on Friday that it would close its U.S. subprime mortgage unit, cutting 750 jobs and taking an $880 million writedown, because the business is no longer sustainable...

It was the latest blow from the meltdown in the U.S. market for loans to home buyers with poor credit histories."

This brings the mortgage lender "death" toll to a whopping 159 since late 2006 (per the Mortgage Lender Implode-O-Meter).

The Problem:

Investors drive the capital markets, in this case the bond markets, that ultimately determine the types of loans that are financed. In this case, the investor for Subprime or Alt-A loans will charge a premium for taking on a pool of these loans because they are aware that traditionally speaking, these pools will have a higher rate of default and delinquent payments.

But lately, default and foreclosures have been on the dramatic rise which forces investors to demand a higher "risk premium" -or- simply cease purchasing these types of loans.

If investors aren't repurchasing loans, lenders aren't financing them and if they have financed them, then they face liquidity trouble because they're not sale-able in the secondary market and boom...here comes the bankruptcy filing.

CLICK TO CONTINUE

Additional Articles of Interest:

Bush Says "NO" to A Raise In the Loan Limits Past $417,000 

Loan Foreclosures At New High 

The Mortgage Dilemma: whose fault is it? 

Now to the good part, the Fed announced a rate cut today in a Federal Reserve Press Release:

    "The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4-3/4 percent.

    Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."

This action will hopefully inject some much needed confidence into the economy. Furthermore, it will help 2nd mortgages and adjustable rate mortgages by lowering the indexes on which they are priced.

Mortgage Rates In Past Weeks: 

Weekly Mortgage Update - September 10

Weekly Mortgage Update - September 4

Weekly Mortgage Update - August 27

Weekly Mortgage Update - August 20

Weekly Mortgage Update - August 13

Financing Solutions:

The HOME POSSIBLE Financing Program

The New FHASecure Plan 

The Fed Funds Rate:

It is expected that the Fed will cut the Fed Funds Rate by approximately 25 basis points (.25%) at their next Federal Open Market Committee (FOMC) which is scheduled for tomorrow, September 18th.

The Week Ahead:

This week is a particularly big week given that everyone is focusing their attention on the upcoming FOMC meeting, tomorrow September 18th. Everyone will be closely watching the Fed as they take their next steps in helping to ease the credit crunch.

But also of particular importance this week are the producer and consumer price index reports.

For a view of the Economic Calendar, you can visit www.bloomberg.com or visit Ana Connell's version of the Week Ahead for a clearer description of what to expect.

Recommendation:
I would continue to...

1. Lock-In rates and programs with different institutions
2. Proceed forward with a transaction only after seeing a formal loan approval, since as we know, loan pre-qualifications mean NOTHING today.

Furthermore, I would recommend clients/home owners undergo:

• Credit Reviews - the credit landscape has changed. FICO standards have changed and higher FICOs are law of the land.
• Recast Reviews - it's important that you know when your mortgage adjusts because you want to be prepared and anticipate what your new payment is going to be. You also want to anticipate any refinancing options. If you don't know what they are, NOW is the time to pick up the phone and call your local broker, ME (Ricardo Bueno - Mortgage Planner | 323.810.2175)

• Freedom Point Reviews - are you living within your means? Does your monthly mortgage payment allow you to lead the kind of lifestyle ideally desired? Is your mortgage a part of a greater mortgage plan?

If your answer is "No" to any of these questions, guess what? A mortgage is no longer a transaction done in isolation to help a borrower obtain a home or refinance their current mortgage to lower their interest rate. Instead, a mortgage is a financial instrument utilized to safely, conservatively, and consistently build wealth. And especially in today's market, you need to understand the complexities of your mortgage and what that means for you as a home owner and for your future.

• Equity Review - not that each area has suffered but many areas have experienced a declining market. Home appreciation rates are not what they were in yesterday's market. If you want to be pro-active about your home ownership, you need to obtain a clear indication of what your home is valued at in TODAY'S market. But remember, Real Estate is a localized market so talk to your local Realtor; you can find them here at the Realtors Corner.

La Tarifa De Fondos Del Fed:

Se espera que el fed corte la tarifa de fondos del fed por aproximadamente 25 puntos de base (25%) en su comité federal siguiente del mercado abierto (FOMC) que programar para la man¢ana, de septiembre el 18.

La Semana A continuación:

Esta semana es una semana particularmente grande dado que cada una se está centrando su atención en la reunión próxima de FOMC, mañana de septiembre el 18. Cada uno mirará de cerca a fed como llevan sus medidas siguientes en ayudar la facilidad al crujido de crédito.

Pero también de la importancia particular esta semana es los informes del índice de precio del productor y de consumo.

Para una vista del calendario económico, usted puede visitar www.bloomberg.com o visitar la versión de Ana Connell de la semana a continuación para una descripción más clara qué esperar.

Recomendación:
Continuaría...

1. Cerradura-En tarifas y programas con diversas instituciones
2. Procede adelante con una transacción solamente después de considerar una aprobación de préstamo formal, puesto que como sabemos, el medio de las pre-calificaciones del préstamo NADA hoy.

Además, recomendaría a dueños de clients/home experimento:

• Revisiones de crédito - el paisaje del crédito ha cambiado. Los estándares de FICO han cambiado y FICOs más altos son ley de la tierra.
• Revisiones modificadas - es importante que usted sabe cuándo su hipoteca ajusta porque usted desea ser preparado y anticipa lo que va su nuevo pago a ser. Usted también desea anticipar cualquier opción de refinanciación. Si usted no sabe cuáles son, AHORA está la época de tomar el teléfono y de llamar a su corredor local, YO (Ricardo Bueno - hipoteque a planificador | 323.810.2175)

• ¿Las revisiones del punto de la libertad - usted está viviendo dentro de sus medios? ¿Su pago de hipoteca mensual permite que usted conduzca la clase de forma de vida deseada idealmente? ¿Es su hipoteca a la parte de un mayor plan de la hipoteca?

¿Si su respuesta está "no" a cualesquiera de estas preguntas, conjeture lo que? Una hipoteca es no más larga una transacción hecha en el aislamiento para ayudar a un prestatario a obtener un hogar o a financiar de nuevo su hipoteca actual para bajar su tipo de interés. En lugar, una hipoteca es un instrumento financiero utilizado con seguridad, conservador, y constantemente abundancia de la estructura. Y especialmente en mercado de hoy, usted necesita entender las complejidades de su hipoteca y qué ese los medios para usted como dueño casero y para su futuro.

• Revisión de la equidad - no que cada área ha sufrido solamente muchas áreas han experimentado un mercado que declinaba. Las tarifas caseras del aprecio no son cuáles eran en mercado de ayer. Si usted desea ser pro-active sobre su propiedad casera, usted necesita obtener una indicación clara de lo que se valora su hogar en en el mercado DE HOY. Pero recuerde, las propiedades inmobiliarias es un mercado localizado así que charla a su realtor local; usted puede encontrarlos aquí en la esquina de los realtors.

If you read my previous article, "Pointing the Finger At Who Is To Blame," you know that the Federal Reserve is often criticized for not having stepped in to resolve our credit problem earlier on. To be more specific, the Fed and Alan Greenspan are criticized for having kept interest rates low for far too long a period of time.

In an article by Jeannine Aversa, AP Economics Writer, she writes about prior Fed Chairman Alan Greenspan and his omission to having been aware of our mortgage dilemma. Here's an excerpt from the article:

"'While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,' he said in a CBS "60 Minutes" interview to be broadcast Sunday. 'I really didn't get it until very late in 2005 and 2006,' Greenspan said."

"The Greenspan Fed from early 2001 to the summer of 2003 had slashed interest rates to their lowest level in decades. It was done to rescue the economy from the blows of the bursting of the stock market bubble, the 2001 recession, the terror attacks and a wave of accounting scandals that shook Wall Street.

Critics say the Fed kept rates too low for too long, encouraging a Wild West mentality in housing."

What are your thoughts? Was the Fed, under the guidance of Alan Greenspan, the sole perpetrator behind the credit problem that we face today?

My Opinion:

I think everyone should be held accountable to a certain extent.

--> A manipulation of the capital markets made the risk/reward incentive enticing enough for investors to back the lenders.

        --> The lenders then pushed the envelope by continuing to open up loan programs

                --> The brokers on the street level pushed these loan programs with some help from their comrades, the appraisers

                        --> then borrowers jumped at owning as much property as they could with hopes of "flipping" their investment and in the process took the lowest teaser rate bid being offered by the pool of brokers.

I think the source of the problem in it's simplistic form was: "Easy Money" being issued.

And it was perpetuated by everyone!

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Recent Articles: 

Pointing the Finger At Who Is To Blame

The HOME POSSIBLE Financing Program

Loan Foreclosures At New High

How many of you are guilty of playing the Blame Game? You point the finger at someone else and you say,

        "it's their fault! Not mine." 

Well CNNmoney.com has compiled their top list of who is to blame for our credit fiasco.

But before you see it, who do YOU think is to blame?  

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