The Dilemma for the CEO of Freddie Mac

With talk of shutting down Freddie Mac, there is a lot of pressure on their employees. The CEO has a lot on his plate, and that is not a position that I would want to be in. With 6,000 employees that is a lot of job loss, and the feeling that it gives Americans is one of uneasiness. Why? Because Freddie Mac has been blamed as a big cause of default in the mortgage industry. CEO, Charles Haldeman Jr. says that the true default rate of those mortgages funded by Freddie Mac is only 3.8%, which pales in comparison to the larger numbers flashed out there in the industry. 

Has Freddie Mac Been Profitable? 

Haldeman says that Freddie Mac was profitable in the third quarter, but it did play dividends on the money that it received from the government. This is referring to the bailout money which sent torrents of opinions and critical statements among Americans. So, while there is talk about shutting Freddie Mac down, it goes about its business each day, and everyone waits with anxiety about what is going to happen to their jobs. As always, I am still looking for the positive in all of this. 

For more information on how to get your FHA loan today, you can go to my website at www.fhaloansnow.net, or you can call me at 310-498-2700.

-Mayer Dallal

Recent Drop in FHA Applications

While it was expected that mortgage applications would fall due to an increase in the FHA premiums, it wasn’t expected to drop nearly 30%. This is why I had urged many to get their applications in for their purchase loans rather than waiting. Anytime that you know that it is going to cost you more in the future, you need to make it a point to get busy and move on. It’s important that you heed to your experts that provide you with knowledge, but it is only in your best interest; of course that is if you are ready to do so. 

What’s Next for FHA? 

While the insurance premiums increased, there aren’t any other changes right now which is good. Any changes that would occur I would believe to be for the better, but I can’t predict the future. I can say that an increase was expected in premiums due to the economy, but it could have been worse. I would urge anyone who is on the fence regarding buying a home to get moving before there are any more changes. Rates are going to go up, so I am telling you now to make decisions and get moving. Why pay more than you have to? Don't wait another minute, go to www.fhaloansnow.net to apply for your FHA loan today! 

-Mayer Dallal

The Demands of Rent Increase, and So Does the Price

The new wave is renting, and that is because of the level of foreclosures. I am sad to say that it seems our housing market is working opposite of what it should be. The sad part? Those who were unable to stay in their homes are now going to be paying someone else’s mortgage rather than their own, and they aren’t going to be saving a heck of a whole lot. The demand on renting is going up and therefore the affordability of renting is going down. 

Why Rent is Going Up 

Rent is going up for complexes and for those who are renting out houses, simply because they know they can increase the prices and many are seeking shelter now that they can no longer stay with their relatives. Houses are getting cramped with family members taking people in, and as modifications don’t get approved. Families have been planning to look for apartments as they see their foreclosure under way, meaning they had to go and start looking quickly, so they could get everything moved out. Renting will be more expensive than in the past, but with so many foreclosures being lined up families just don’t have a choice.

Government Foreclosure Program Ideas ?

It is amazing that after all that our country has been through, and everything that we have seen that we are now hearing about a program that was established long ago and is effective! So, what is this program called? The Pennsylvania Homeowners Emergency Mortgage Assistance Program was established in 1984, and the way it is structured makes sense. The program creates bridge loans for those who have lost their jobs, and there is no interest accruing until they are once again gainfully employed. Hmmm, so what now? 

Our Books Show That Pennsylvania Program Works Smarter not Harder 

Isn’t working smarter the whole idea with anything in life? You bet it is, and this is how the Pennsylvania program works. Yes, it is effective, and yes it costs much less than our $30 billion dollar program! The Home Affordable Modification Program has not been so successful, in fact it has been shown that only 9% of those who apply get approved. Those numbers aren’t strong, so maybe we can follow the Penn state model? I am thinking that it sounds like it is worth a shot at least. What are your thoughts? The numbers speak; Pennsylvania had the 26^th highest unemployment rate, but yet the 37^th highest foreclosure rating. I think Pennsylvania might be onto something folks. 

-Mayer Dallal

What the FHFA Has to Say Now About Housing Prices

Those of you who are not familiar with the FHFA should know that they are not the same as FHA. FHFA stands for Federal Housing Finance Agency, which is close but somewhat different. This agency reports on timely information as it relates to the housing market, and recently released some interesting information. Their most recent observation is that home prices are down 18.6% since April of 2007. This isn’t great news, but it would be untruthful to say that it wasn’t expected. 

What is Next Regarding Housing Prices? 

Housing prices have been on an interesting trend, from good to bad, and then even worse. I won’t tell you that it has all been halos and good times because that just isn’t the truth. The truth is also that we can something bad and make it turn out for the better. There are plenty of homes in inventory that can be purchased when people find the right professionals. I am a professional, and my goal is to get you into a home and have a piece of the American dream. Investors are buying and rehabbing homes, and the market is primed for first time homebuyers, or those that have been renting for years on end.

Are We Facing the End of the Mortgage Interest Tax Deduction?

This issue came up awhile back, but then it quieted down and we didn’t hear anymore about it. Now, the issue has come up again and everyone is arguing about it. Economists have said that our mortgage interest tax deduction doesn’t work properly, but what do the American people say about this? Naturally, more than 60% of Americans don’t agree with that opinion, and what is also worth noting is that most Americans were reluctant to agree with any tax deductions; period. 

Who Truly Benefits from the Tax Deductions Anyhow? 

The battle behind the tax deductions is that it only benefits high income earners, and that by eliminating we can reduce the overall tax rate. The way it works, is that if you are in the 35% tax bracket, then you only get $35 back for every $100 that you paid in mortgage interest. When you are in the 15% tax bracket, then you save only $15 per $100 of mortgage interest. This is the truth which is hard to contest, but there are people that look forward to getting a tax return because they are in need of money. It’s hard to take something away from those who don’t have anything else right now. I can tell you that this year; there were many people who were counting on their return to get them through for just a short while before the next moment of desperation hit.

New Construction is on the Rise

Some new figures were released which make me feel good; the figures on new construction. This is not necessarily in regards to construction loans, but in regards to new homes being built all around. Some of these numbers may be a big developer and others might be from homes built on spec by contractors. There hasn’t been a lot of building going on, and for some time things were just dragging along. Building a home was more costly because it could be custom, unless of course it was part of a development and was already done.

The number of new homes being built went up 7.2% in the month of March, and the number of units that went up was around 540,000. This is significant in a time when housing prices have dropped. There are different dynamics when it comes to determining the number of new homes being built, because there are some people who believe that is the only way to get a home they love. There are plenty of homes in the inventory to choose from now, and it gives homebuyers the chance to find a majority of the features they love, while having some room to customize their home or add on later.

There was also an increase in the number of permits that went out; an increase of 11% from February to March. That is significant and show progress from last year as well. Builders were folding, and everything was getting stagnant, but look how far it has come. This should be a sign of better things to come. We remain hopeful-always.

-Mayer Dallal