Taos Real Estate Mortgage Report from TLT

Hello Everyone,

Before reporting the weekly update I want to thank all of you for your wonderful feedback and support regarding the updates!  I know Jason did a great job for us because of the feedback received at the time and I wasn’t sure how my format would be received so I truly thank you all!

It is also important to note that when you refer a client to our office, if we are unable to help the client or do our best for them, we always refer them to someone who can help. Whether or not that means sending them to someone else locally or in other NM areas depending on the specifics of the program that will best suit their needs.

TLT is Taos’ only ‘certified’ mortgage broker by the National and NM Association of Mortgage Brokers.

Rates are Still Fabulous
30 year  4.875%
15 year  4.625%
5/1        4. 25%
FHA       5.00%
Prime     3.25%

Lenders are still out up to 60 days before closing loans given the refinance rush. They have not caught up yet and boy oh boy are they scrutinizing appraisals!  I realize in the past market updates I did not note that all lenders give purchases top priority over refinances. If you are getting the feedback that your refinance is taking longer to obtain lender feedback it is most likely because the purchases that continue to make their way into the lender systems are kicking the refinance turn times back further and further. Be patient, if your brokers are providing 60 day locks on your rates you should be fine.

Appraisal HVCC update

This will probably by the last time I comment on the new HVCC regulations since I have talked about it for the past 3 or so weeks. IT is now in place as of May 1st and all clients are required to provide a credit card number in order to place the appraisal orders. In the past we collected checks and the brokers reimbursed the appraisers from the brokers account but this is no longer do-able as it is considered a conflict of interest. If you have any questions or concerns about this feel free to email me and I will be happy to provide further information.

Obama Mortgage Payment Assistance Plan

Wow, I had no idea the type of feedback I would get about this information! You are all very welcome and remember to contact your current mortgage lender to obtain the most recent information to assist you. Let’s face it; any of us in the real estate and/or mortgage industry most likely made less income last year (if any) and therefore qualify to refinance our primary residences under this plan…take advantage of it while you can! 2% fixed interest rate for 5 years is pretty fantastic!!!!

Market Place Updates

No Stress on Mortgage Rates

According to the latest issue of HSH’s Market Trends Newsletter, “No ‘Stress’ on Mortgage Rates,” as the economy slowly pieces together the components of a recovery; mortgage rates remain relatively stable at their current historic low.

Everyone keeps scanning the horizon, hoping to see the good ship Economic Recovery that’s surely out there somewhere. There’s still no indication of just when our ship will come in, but some market watchers think they’re seeing, just maybe, the merest glimpse of that elusive vessel.

Home mortgage rates offer such a glimpse. We’d remind you that despite their ups and downs, it’s important to remember that they’re definitely in the “historic low” range. For example, the 30-year FRM, as measured by HSH’s Fixed-Rate Mortgage Indicator, settled at 5.48%, up a scant five basis points (0.05%). That all-inclusive figure averages the prices of conforming, jumbo and expanded conforming products. The 30-year conforming FRM for the week averaged 5.04%, meaning that mortgage shoppers can find some very attractive rates in their area.

Not to sound like a skipping CD, but there isn’t much reason for rates to move just yet. To be sure, next week brings us a couple of potentially market-moving indicators including import/export prices, Retail Sales, and the PPI and the CPI, but it’s not likely they’ll surprise us.”

“Maybe it’s just us, but there does seem to be a bit more optimism in the news this week. Here’s hoping it spreads.”

Fannie Mae: We need a few billion more

May 12th, 2009 Posted in News by Paul Havemann

The bleeding among the secondary market entities goes on. Fannie Mae lost another $23 billion in the first quarter of the year, and is back asking for more money:

Fannie Mae, operating under a federal conservatorship, asked the U.S. Treasury for a $19 billion capital investment and raised the possibility that its long-term survival may be dependent on continued government funding.

Fannie Mae, which took $15.2 billion in aid on March 31, cited the “unprecedented” housing market slump and government-mandated programs that are creating “conflicts in strategic and day-to-day decision making,” according to company filings today with the Securities and Exchange Commission.

The first-quarter net loss widened to $23.2 billion, or $4.09 a share, pushing Fannie Mae’s net worth below zero for the second time. The credit quality of loans and mortgage bonds that Fannie Mae owns or guarantees deteriorated amid the yearlong economic recession and as the government forced the company to help struggling homeowners refinance or modify their loans.

“Future activities that our regulators, other U.S. government agencies or Congress may request or require us to take to support the mortgage market and help borrowers may contribute to further deterioration in our results of operations and financial condition,” Fannie Mae said in the filing.

Just a few months ago, the government doubled its capital commitment for Fannie Mae and Freddie Mac to $200 billion; now we’re committed to ‘investing’ up to $400 billion into the two entities. And note well Fannie’s warning that “its long-term survival may be dependent on continued government funding” due to its obligation to pay dividends to the Treasury. In short, the money comes out of one pocket and goes into the other.

Doesn’t that sound as though Fannie (and, ostensibly, Freddie) is being forced to lose money?

U.S. Stocks Rise as Oil Climbs, Bernanke Encouraged by Banks www.bloomberg.com

May 12 (Bloomberg) — U.S. stocks rose as higher oil prices lifted energy producers and Federal Reserve Chairman Ben S. Bernanke said efforts by banks to raise capital are “encouraging,” overshadowing concern the economy may weaken further.

ConocoPhillips and Schlumberger Ltd. gained as crude oil reached $60 a barrel for the first time since November. MBIA Inc., the largest bond insurer by outstanding guarantees, surged 7.6 percent after posting its second profit in seven quarters. Ford Motor Co. dropped 8.6 percent as the automaker said it will offer 300 million shares to the public.

The Standard & Poor’s 500 Index added 0.5 percent to 913.32 at 9:36 a.m. in New York. The Dow Jones Industrial Average gained 59.74 points, or 0.7 percent, to 8,478.51. European shares advanced, while Asian stocks declined.

“There’s a general sense that things are improving,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “The government is suggesting that banks can raise capital quite easily. Earnings reports continue to be pretty decent and the economy is probably bottoming.”

The S&P 500 last week rose 5.9 percent, erasing this year’s loss, as results from the government’s stress tests of banks reassured investors and the pace of job cuts slowed in April. The measure’s 37 percent jump from March 9 through May 8 is the most over similar spans since the 1930s.

‘The two-month rally in global equity markets has been based on expectations of a rapid economic recovery that is “extremely unlikely” to materialize, according to Nobel Prize-winning economist Paul Krugman, who spoke at a forum in Shanghai today.

Economists downgraded their projections for a recovery from the deepest U.S. recession in half a century, now seeing the jobless rate exceeding 8 percent through 2011, a Bloomberg News survey showed.

Unemployment will average 8.5 percent in 2011 after a 9.6 percent rate next year, higher than previously expected, according to the median forecast in the survey taken from May 4 to May 11. The economy may expand 2.8 percent in 2011, less than estimated last month, after a 1.9 percent rise in 2010.

Citigroup rose 1.6 percent to $3.92. Banks, especially those with “trading and investment banking businesses,” should keep monitoring “operational, liquidity and reputational risks,” which weren’t addressed by the exam concluded last week, Bernanke said in a speech yesterday at a Fed conference in Jekyll Island, Georgia. The Fed-led tests of the 19 largest U.S. banks showed last week that 10 firms need to raise a total of $74.6 billion in capital.

Bank of America climbed 2.1 percent to $13.21. The biggest U.S. lender by assets sold a 5.8 percent stake in China Construction Bank Corp. for about $7.3 billion, said two people with knowledge of the matter. The sale brings Bank of America closer to the $33.9 billion regulators say it needs to raise following stress tests. Bank of America spokesman Robert Stickler declined to comment.

MBIA added 7.6 percent to $7.49. The first-quarter net profit of $696.7 million, or $3.34 a share, compared with a loss of $2.4 billion, or $12.92 a share, a year earlier, the company said.

ConocoPhillips, the second-biggest U.S. refiner, gained 2 percent to $46.04. Schlumberger, the world’s largest oilfield- services provider, rose 1.5 percent to $55.60.

Ford sank 8.6 percent to $5.56. The second-largest U.S. automaker said it will issue 300 million shares of common stock in a public offering and use at least some of the money for a union-run medical trust.

The shares will price today, according to Bloomberg data. Ford had 2.8 billion shares outstanding as of May 1, so the new stock would be an 11 percent increase and raise more than $1.8 billion at yesterday’s closing price.

Advanced Micro Devices Inc. climbed 3.8 percent to $4.38. The chipmaker had 22.3 percent of the market for personal- computer processors in the first quarter, up 4.6 percentage points, while larger rival Intel Corp. lost 4.7 percentage points to capture 77.3 percent, researcher IDC said.

The S&P 500 is up about 1.3 percent in 2009 after tumbling 38 percent last year, its worst annual tumble since the Great Depression.

“We’re in a bottom formation,” said Gregor Mast, an equity strategist at Clariden Leu in Zurich, which oversees about $88 billion. “Economic data and earnings are less bad and sentiment has improved but that’s not enough for a lasting upward trend. We’ll see backlashes.”


While news seems to be slightly better in some economic sectors, the true bottom line is trying to plan your business life in a proactive manner still seems almost impossible. The name of the game for 2008 and now it seems 2009 is definitely ‘learn to go with the flow and make the best of it.”

Thank you for your time.

Elisabeth Guillemin

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