MARKET UPDATE - AUGUST 2010

INTEREST RATES REMAIN AT HISTORIC LOWS


Mortgage Type         Interest Rate          APR

30 Year Fixed          4.125%                 4.255%
15 Year Fixed          3.750%                 3.977%
5/1 ARM                 3.000%                 3.326%

Interest rates as of 07/29/10. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to values not to exceed 80%. 720+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.

FHA STREAMLINES SURGE

If you currently have an FHA mortgage with a rate of 5.250% or higher, you may be able to refinance with no appraisal, and little or no closing costs. The recent drop in interest rates have caused an influx of borrowers refinancing to take advantage of the FHA Streamline refinance option.

CONSUMER PROTECTION - FINANCIAL REFORM BILL PASSES

President Obama signed into law the most sweeping regulatory financial reform bill since the Great Depression. The Bill will take months, if not years to decipher and implement; and it will be even longer before all of the ramifications of the Bill are truly felt, by Wall Street, and the public. With news headlines that read “Wall Street Rejoices, Financial Reform Bill Passes,” you can only imagine who is going to control the implementation of the bill, and who will ultimately benefit from it. What is now known is that the Bill fails to address some of the most pressing concerns regarding the prevention of future financial crisis; and the consumer is likely to pay a dear price for government protection.

The bill does not address CEO and executive compensation. “Data shows that these are leading causes of the Great Recession.” – fortune.com

Reform of the two powerhouse institutions, Fannie Mae & Freddie Mac, both seized by the Federal Government, who are responsible for nearly half of all mortgages originated in the United States where not addressed in the bill.

Financial reform will likely further tighten credit requirements for consumers and increase costs on mortgage loans. If you thought that the mortgage process is difficult now, wait until this bill sets in. Added disclosures and more red tape is surely an outcome of the bill. The up to 50 page current loan application will not likely be deemed enough disclosure for the consumer. Added disclosures do not make a more informed consumer; it generally means the consumer will be less likely to read it.

“Consumers will see "safer" mortgages, but fewer of them will qualify. They will have fewer choices of mortgage lenders as concentration of mortgage lending by a few big banks accelerates. And virtually all mortgages will be government backed for the foreseeable future, with little chance of unwinding federal support. Uncle Sam will be the nation's mortgage lender for most of the next decade.” – The Huffington Post

Although it will take some time for the bill to be implemented, one thing is for certain. Consumer protection will come at a cost, and Wall Street will not be the one paying for it.

We will be closely following the Financial Reform Bill and its fallout. Please stay tuned.

HOMES SALES IN PHOENIX – UP IN JUNE

“Home sales in the Phoenix Metro Statistical Area (MSA) rose 11% from May, but fell short of a year ago for the second consecutive month. A total of 10,430 new and resale houses and condos closed escrow last month in the Maricopa-Pinal counties metropolitan area, up 11.2% from May, but down 2.8% from a year ago, according to MDA DataQuick.” – housingwire.com

NATIONALLY EXISTING HOME SALES SLIDE AGAIN

Existing home sales were down just over 5% in June. Existing home sales were up 9.8% from June of last year according to the National Association of Realtors.

NATIONALLY NEW HOME SALES SPIKE UP

The sale of new homes spiked up nearly 24% in June over May figures. New home sales are down 17% from June of last year. New home sale prices did drop 1.4% in June.

“An estimated 210,000 new homes were for sale at the end of June, the lowest inventory level in nearly 42 years. At the current sales pace, the government expects it will take 7.6 months to sell through that inventory, down from 9.6 months in May. Six months of inventory is considered normal market conditions.” – cnnmoney.com

BANK BAILOUT 2010

As of July 27th, 2010, 103 FDIC insured banks have been seized by the Federal Government year to date. 140 failed in 2009. 25 failed in 2008. 11 failed between 2003-2007. – fdic.gov

Looks like we are on pace for a record setting year.

HOME OWNERSHIP LOWEST IN OVER A DECADE

“The Census Bureau said the home ownership rate fell to 66.9% in the second quarter of 2010, down half a percentage point from the previous year. The home ownership rate was 67.1% in the first quarter of the year.” – cnnmoney. This is the lowest home ownership has been since 1990.

MARKET UPDATE brought to you by:

Aaron VanTrojen

PRESIDENT
GENEVA FINANCIAL, LLC.
Mortgage Banker licensed in:
AZ: BK-0910215, CA: 603G564, ID: MBL6976, NV: 3195, OR: ML4799, WA: 510-MB-49323
Geneva Financial, LLC NMLS License: 42056
Loan Officer NMLS License:15420
http://www.genevafi.com/

PARTNER
GENEVA REAL ESTATE & INVESTMENTS, LLC.
Real Estate Brokerage licensed in: AZ, CA, WA.
http://www.genevare.com/

Office: 480-368-2000
Cell: 602-793-6383
Email: aaron@genevafi.com
Facebook: www.facebook.com/vantrojen