Prices/Values have Stabilized

For the past year (and in some markets over the last two years!!), we have been satiated with reports of falling real estate values and general weakness in the marketplace.  So many buyers decided not to purchase because of their fear of a further decline in real estate prices or made incredibly low offers on homes they DID like, thinking that their incredibly low offer was the true value.  

Over and over again, I have been suggesting to all of my potential customers that New York and Brooklyn are simply NOT representative of the nation as a whole.   I am not so naïve to think that we’re not experiencing quite a significant market re-adjustment and recession.  At the same time, though, it’s been clear to me that we are (thankfully!!) not suffering as dramatic a deduction in prices as much as the rest of the nation.  Put simply, when the media discusses general trends in home prices, we MUST take a look at the local indices rather than national ones. Each state, city and even neighborhoods within each city are clearly defined markets of their own and need to be treated as such.  Housing prices in Park Slope, as an example, simply can not be put into the same category as housing prices in Miami. 

In light of the above, it appears that even though the rest of the nation may still be having some challenges with falling prices/values, we may have turned the corner.  I am quoting, WORD FOR WORD, the analysis from an appraisal that I just received late last week on a property here in Brownstone Brooklyn.  Since the deal hasn’t closed yet, I am not at liberty to give the address. The message directly from the bank’s own appraiser is clear:  prices have stabilized in our area. Here is the quote:

“While prices have declined an average of 2% to 5% over the past 1.5 years, there is evidence that that the market is stabilized and no longer declining. First, according to the active listings in the neighborhood, the sales prices over the past 2-3 months are lower than the list prices and the list prices have not continued to be lowered. Second, the pending sales are also correlating to similar prices levels with the closed sales over the past 2-3 months. Third, there has been a decrease in the number of listings within the subject neighborhood and there are more contracts pending closing currently than in prior months. All of these tend to support the basis that prices have stabilized over the past 2-3 months. As a result, we are indicating that the prices have stabilized and inventory levels are showing signs of improvements.”

The appraiser then goes on to state categorically that while national trends may be different (and still falling), he is required to report local neighborhood trends and that these have stabilized.  

It’s interesting to note that I witnessed the same stabilization of our local marketplace in 1991, just at the tail end of the last major recession.   Thankfully, our marketplace is truly one of the strongest in the nation and I believe will continue to strengthen and improve even further over the rest of this year. 

Interest Rates Move Upward A Little

I was quoted in a Bloomberg News article out today that discusses rising interest rates (link below). The article infers people may have missed the boat on the low interest rates. Just to offer some perspective from our experience, while rates may be going up a bit, it hasn’t been as bad as people think. It's just that everyone sees these 'magical' low four percent rates, but the reality is these rates aren't available for most people – many factors need to align to get these rates. That said, we have experienced a huge uptick in loan applications in the last few months and continue to close virtually all of our loans.

The factors that make up what rate a buyer ultimately receives are many, and having all your ducks in a row and good consultation to maneuver through the maze and details of the current situation is critical.

www.Bloomberg.com

An important note from a very satisfied customer

I just wanted to share with you a note of thanks from one of our customers, David & Naama Bloom. Their confidence in us as mortgage brokers, despite going directly to a lender in the past, is not only flattering but also shows the advantages of using mortgage brokers over banks. With new restrictions, guidelines, and programs changing daily, we can help you get the very best financing options for your own unique situation. We take pride on being a valuable service to the Blooms, and we hope we can be just as valuable to any of you.

Recognized in Top 200 BY Mortgage Originator Magazine

Great news! I was recognized as one of the top 200 loan originators in the United States by Mortgage Originator Magazine. I ranked 50 out of the top 200 in loan volume of loans closed.

The 13th annual list announced in the April 2009 issue acknowledges loan originators from throughout the country, appearing in the Top 200 loans/volume and FHA/VA originator categories. A loan originator had to personally close at least $30 million and/or 175 loans of personal, residential volume in 2008 to meet the criteria for this award.

I am not only happy to have made this list, but delighted that two others on the list trained under my tutelage. Service in this industry is critical and I attribute our continued success to our unsurpassed level of customer service. I hope to push even further in the 2009 year- we are already at a great start! Thank you to all who made this possible.

Norman

Streamline Refinancing Fannie Mae and Freddie Mac

For homeowners looking to refinance their mortgage, this spring the government is introducing two exciting new programs created with the recent economic stimulus program that make refinancing easier. Through Fannie Mae's DU Refi Plus program and Freddy Mac's Relief Refinance Mortgage program, banks will have the ability to be more flexible with homeowners seeking lower monthly payments. Specifically, this program will offer the following incredible parameters and leniencies:

1) In most cases a new appraisal is not required.

2) Credit scores as low as 620 will be allowed

3) Stated income/stated asset (meaning no income verification) might be allowable, although the bank still reserves the right to check with the IRS for filed returns).

4) Debt to income ratios can go up to 50% in most cases (whereas the current limit is far, far less).

5) Investment properties are allowed.

6) Second homes, co-ops, condos, and 1-4 family houses are all allowed.

Call Norman Calvo (718-210-1140) or his loan coordinator, Isaac Shalom (718-210-1147) right away to see if you will be eligible for the program.

Fed Plans Mean High Volume: Here’s How You Can Help Make it a Smooth Process

With the Feds' announcement the other day of their willingness to purchase over $750,000 billion dollars worth of mortgage securities, it is evident that interest rates will be heading lower over the next few weeks and months. All of our customers will benefit tremendously from the drop in rates.

A few things to keep in mind, though, during the upcoming several weeks and/or months:

1) Banks (and nearly everyone in the mortgage industry) will be overwhelmed with the volume of applications. This means that appraisers, credit agencies, title companies, pay off services, etc. will be completely inundated with work. Delays will be inevitable.

2) Rates never follow a straight line path. As a matter of fact, even intraday, rates can change any number of times. Over the upcoming weeks, expect rates to be a bit turbulent, but the general trend is likely to be down.

3) It is best, in this environment to NOT lock in a rate until just prior to closing. Banks are giving quite excellent rates for those who take the chance to lock in for a very short period of time. This means that loans MUST be cleared for closing in order to lock and get the best rates. Since it will take about 50 to 60 days to get to that stage, we are URGING all customers to apply right away.

4) Expect the process to be BRUTAL (!!!!) Sorry to say it this way, but it is no surprise to anyone that lenders are being ultra conservative. Although the vast majority of customers will ultimately be approved, the process will be slow, tedious and time intensive. While we will try to bear the brunt of this, expect challenges in the process and frustrations. Unfortunately, it is just the way it works in the mortgage banking world these days.

5) Not everyone qualifies for the very best of interest rates. Factors such as credit scores, appraised value verses loan amount, property type, etc. will all affect scores. Be very aware of this. We will always endeavor to place your loan with the lender that gives us the best rate.

The Elusive 4% Mortgage Rate

As many of you probably know, most of the recent news has focused on how hard it is to get a mortgage. In contrast, the following article from Bloomberg is one of the best that I've seen recently - mainly because it highlights how it is virtually impossible to get a 4% mortgage rate. While it is very true that some of our customers are closing at rates as low as 4.625%, for the most part, those rates simply don't exist.

Our major focus as mortgage brokers is consulting with our customers to find the very best bank, offering the very best rate and program that suits their needs. The factors that make up what rate a customer ultimately receives are many, and our consultation and ability to maneuver through the maze and details of the current situation is what makes us amongst the best brokers in NYC. We continue to close virtually all of the loans that apply with us at interest rates that are very favorable.

Enjoy the article: http://www.bloomberg.com/apps/news?pid=20601212&sid=aCJ._cUIv6dc&refer=h