Mortgage Rates At 4.7%???

That’s what Zillow reports, trolling (and rightfully so) for customers. Yo, local mortgage brokers, what are the rates in Dallas today? Is 4.7 fixed for thirty years, conforming or non-conforming? Points? Homestead or second/investment property? Does the Fed want us all to refinance?

Mortgage Rates: What’s The Story, Glory Or Gory?

My prediction: glorious low rates in 6 months. Today was my last full day of class at Champion School of Real Estate before my elective and then — I take the state exam! I am getting my real estate license to be a better real estate reporter for the D Empire and our forthcoming new website. Learned a ton – have TOTAL new respect for agents and brokers. From remembering intermediary to sub agent to IABS forms always need to be in size 10 type to HB 489 to independent contractor status to TRELA and TREC, ostensible authority and agency by estoppel, MLS to agent with appointment, without appointment, all I know is HOW DO YOU AGENTS DO IT? And I need an appointment with a glass of wine!

But, while I was ensconced in academia, history was made in the interest-rate realm. Here a couple of takes on that, jump for one from Philip Walker, one of my favorite agents at Keller Williams Turtle Creek, who brought lunch to recruit the A-plus students. Mortgage rate comments are on and the meter is running:

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NAR Week, 2008 Sales Downgraded

The National Association of Realtors is meeting in Orlando — believe Catherine is there — and the trade group reports altered sales expectations for the rest of this year. Of note is how powerful housing is to our entire nation’s economy — at least according to NAR economist Lawrence Yun:

“The depth of the recession depends entirely on housing — with sufficient housing stimulus, the recession will be shallow. If government actions stay focused on housing, the cost to the Treasury would be much less that the potential losses in the nation’s output and income in a severe recession.”

Jim Landers: Blame The Credit Rating Agencies

Oh yes, oh yes! Standard and Poor’s and Moody’s hired financial engineers who cooked the computer assessment of securities and tweaked until they got the answers they liked, then gave them to the rating agencies for AAA ratings. Not only does this sound like Enron, it also reminds me of those studies the government pays millions of dollars to figure out something we all know, like how children get better grades when they do homework in a quiet room without the distraction of televison.

Republicans Tried To Warn: Fannie Mae And Freddie Mac Were Cheating On Us

Now they are playing hard-ball: The Mortgage Insider says that, beginning December 13, 2008, Fannie Mae and Freddie Mac have a bunch of guideline changes that will make it harder for people to obtain mortgages–  basically ”No home equity, no down-payment, no dice.” Primary refi’s will be limited to 85% loan to value ratio, 75% for second homes and you’ll have to have a 25% equity stake in investment props for refi’s.

As a stock holder — or whatever I am now — I say too little, too late, baby. Loved this report depicting how a group of  Republican Senators led by Chuck Hagel from Nebraska wanted to regulate FM/FM back in 2005 because they were smelling trouble. FM secretly paid a Republican consulting firm $2 million (of stockholder’s money) to lobby against this legislation: “If effective regulatory reform legislation… is not enacted…American taxpayers continue to be exposed to the enormous risk that FM/FM pose to the housing market, the overall financial system and the economy as a whole.”

Anyone else sick and tired and not wanting to take it anymore?

Today, Tomorrow, May Be A Great Time To Get A Mortgage

Because rates are falling. No zero-down loans and if your credit is a mess, wait. But 5, 10, 20 percent down loans are out there at great rates like 6%. The good folks at Keller Williams Turtle Creek told me so this morning, as did the good people from Shelter Mortgage. Now the Mortgage Reports Blog is saying ditto.

$700 Billion Bail Out Hammered Out… WaMu Execs Make Out Like Bandits?

They say it all started with housing: low interest rates that were supposed to help more people buy homes. But it wasn’t just low interest rates. It was mortgage brokers and others who saw gaping loopholes in the system and ways to make instant money. Over the weekend I spoke with a Real Estate investor who built condos on the Gulf coast. He told me something I’ve heard whispered at many a cocktail party: mortgage brokers were making upwards of $400K and $500K/year in commissions a year pushing mortgages. (Do you recall, about five years ago, how every other spam email you received was from a mortage broker trying to sell you a new loan or re-fi an existing?) Of course they tried to get everyone “qualified” — that was how they got paid. What a racquet! Stated income loans, no money down loans, 110% equity loans, all around 6% interest rates or lower teaser rates. Everyone with a pulse got a loan regardless of whether they could pay it back or not. Then these shaky, shot-gun loans were “bundled” (whatever that means) and sold as Wall Street “securities” to unsuspecting investors. Us. Now we’ve got to bail out the idiots who conceived this. But wait, they are not idiots: most have MBAs from places like Wharton and Northwestern. And the CEO’s negotiated mega salaries and bonuses and giant severances even if the companies failed! At Washington Mutual,  it appears that the departing execs are going to make out like bandits:

“The WaMu executive with the biggest termination package is Stephen Rotella, president and chief operating officer, who is entitled under his current employment agreement to a cash severance of $12.7 million if he is terminated or quits with “good reason.”

Is anyone else as agitated as I am about this? Bad enough when people get stiffed, worse when the “stiffer” flees with millions in tote. Why don’t the shareholders revolt? Where in the bejesus has Barney Frank been, he is chairman of the House Financial Services Committee? His office sent this press release in July… it should have been out three years ago! (more…)

Fannie Mae Securities Litigation — Calling Glenn Close from DAMAGES

Just received my first of those all-too-familiar-looking, bar-coded notices notifying me of the class-action lawsuit against Fannie Mae: Franklin Raines, Timothy Howard, and Leanne G. Spencer as well as Fannie Mae’s former auditor KPMG LLP. Alleged violations: Sections 10(b) and 20 (a) of the Securities Exchange Act of 1934 and Rule 10b-6 by the SEC. Gretchen Morgenson at the NYT puts it the best way yet, but this graph really got my blood boiling:

“And, in another twist, we may also be asked to cover the legal bills of Franklin D. Raines, the former chief executive of Fannie Mae, who was ousted after that company’s accounting scandal in 2004. Under the terms of his separation agreement, Fannie Mae paid these bills.”

I hope Glenn Close is considering taking on this case.

The Day The Housing Market Turns Up

We will have much to celebrate this New Year’s Eve, when the national housing market might be close to being wheeled out of ICU and into a regular HMO hospital room. (No private suites – too many ailing roommates on that policy – Bear Stearn, Lehman Brothers.) Alan Greenspan tells us we have to wait until 2009 for the national housing market to stabilize — stabilize meaning the patient is no longer on death’s doorstep, not meaning patient is jogging across the ICU floor. An article by James J. Cramer, co-founder of TheStreet.com. in last week’s issue of New York Magazine, targets the market-pick-up date as June 30, 2009. Personally, I think they are both taking Happy Pills.

Greenspan gets a lot of heat for the mess we are in, but I think he tried to make homes affordable for more Americans, particularly the influx of immigrants that our nation needs, immigrants the current administration has tried to keep out. (Cramer says it doesn’t matter who wins the election, both Obama and McCain will be more immigrant friendly than Bush has been. As the grandchild of immigrants, I have always thought it was dumb to try and “close the door”. We need immigrants, we just need to screen for terrorists better than we do. But illegal immigrants do overload our healthcare system, the next ICU patient.) It is not Greenspan’s fault that greedy mortgage brokers and even greedier Wall Street financiers made slippery loans, pocketed their fees, and then sold the packages to the next unsuspecting investor. Like a game of hot potatoe, these were passed to the last person holding the bag with the most subprime loans. 

How Mr. Cramer can decide on a specific date is interesting. I hope he’s right: since Dallas hasn’t been hurt as much as other parts of the nation, that is only good news for us. June 30 will be the time next year’s spring market starts revving up, the key turning over about March. Maybe he means people will dip their toes in the water in April, May and June and find out the water’s not too bad. So everyone will dive in, much like they did five years ago. Some folks trusting enough to get back in the mortgage business would help. June 30, 2009? Let’s see what happens this week as more poo poo comes down… enough poo poo perhaps to maybe push interest rates down further?

(Cannot wait for New Year’s Eve!) 

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