Friday, May 21st, 2010
It appears the black cloud over California is being lifted by the PMI (Private Mortgage Insurance) companies. When the housing market started to decline, the PMI companies retreated from the “sand” states (California, Florida, Arizona, and Nevada), or at least pulled back on the maximum loan-tovalue (LTV) they would guarantee. They still have a lot of areas they are avoiding (flips, non-owner occupied and condos – just to name a few).
April was the first month mortgage rates were not artificially stimulated by the Fed. (The Federal government bought $1.25 trillion of mortgagebacked securities (MBS) over the past 15 months.) Rates initially jumped up mainly due to the long Easter weekend after a shortened trading day on Good Friday.
Rates settled down the following week mainly attributed to the safer mortgages being produced now than were before. (Meaning that the quality is better and the risk of default is less.) Hopefully the appetite will continue. The Mortgage Bankers Association believes the 30 year mortgage rate will increase to 5.5% by mid-to-late summer and then possibly 6% by year end.
Kudos to the SAR Housing Opportunities Committee for hosting the “Show Me the Money” seminar held on April 29. There is an amazing amount of money being allotted to energy upgrades in the form of rebates, tax breaks and incentives. The REALTOR® community needs to stay current with this information in order to effectively educate clients on how to utilize the available programs.
On April 15, Congress reauthorized and the President signed into law an act that includes reauthorization of the National Flood Insurance Program (NFIP) through May 31, 2010. This temporary measure is retroactive to March 28, 2010, the date the NFIP’s authority expired, and provides the NFIP the ability to issue new and renewal flood insurance policies and increased coverage on existing policies.
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