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Lee Richardson's Blog

By Lee Richardson | Mortgage Broker
or Lender in 10594
  • Let the Housing Market Normalize!

    Posted Under: Market Conditions in North Royalton  |  August 26, 2010 10:53 AM  |  3,425 views  |  No comments

    Recently there have been some encouraging signs that Congress is finally willing to admit what should have been evident two years ago. Even after a $150 billion bailout, Fannie Mae and Freddie Mac are still bankrupt and should be abolished. Indeed Rep. Barney Frank, a longtime champion of Fannie and Freddie has made a few statements alluding to this. There seems to be a growing consensus in favor of abolishing Fannie and Freddie. This is the good news.

    The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing -- that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector.

    Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to lose money on a loan, so will the taxpayers. Playing around with structures and definitions will still not deal with the root problem -- government meddling in the housing market, playing fast and loose with our tax dollars, and central planning by the Federal Reserve.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/
  • New Home Sales Fall In July

    Posted Under: Market Conditions in North Royalton  |  August 26, 2010 10:21 AM  |  3,421 views  |  No comments
    Sales of single-family homes fell 12.4 percent in July, according to estimates from the U.S. Census Bureau and the Department of Housing and Urban Development. Year-over-year, sales were down 32.4 percent. The past three months have been the worst on record for new home sales and July’s pace was the slowest since records began in 1963. An estimated 210,000 new houses were for sale at the end of July, a 9.1-month supply at the current sales pace. Six months of inventory is considered normal market conditions. More here and here.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/
  • Loan Demand Rises As Rates Set New Record Low

    Posted Under: Market Conditions in North Royalton  |  August 26, 2010 10:18 AM  |  3,416 views  |  No comments

    According to The Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage application volume, rose 4.9 percent last week. The increase was the result of another boost in refinance activity as the average contract interest rate for a 30-year fixed-rate mortgage fell from 4.60 percent to 4.55 percent, a new record low. Michael Fratantoni, MBA’s vice president of research and economics, said refi applications were up 26 percent over their level four weeks ago and set a 15-month high for the Refinance Index. More here and here.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/

  • Existing Home Sales Down 27 Percent In July

    Posted Under: Market Conditions in North Royalton  |  August 24, 2010 2:21 PM  |  353 views  |  No comments

    Existing home sales, which include single-family houses, townhomes, condominiums, and co-ops, fell 27.2 percent in July, according to The National Association of Realtors. Sales of single-family homes were at their lowest level since May 1995. Lawrence Yun, NAR’s chief economist, said the soft sales pace was largely due to the lingering effects of the homebuyer tax credit. Since the tax credit’s expiration, sales have fallen 34 percent. Yun believes sales will continue to be slow through September, but record-low mortgage rates and high affordability combined with an improvement in the job market could lead to a quick recovery. More here and here.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/
  • HAMP Dropouts Rise In July

    Posted Under: Market Conditions in North Royalton  |  August 23, 2010 11:33 AM  |  316 views  |  No comments

    The Treasury Department’s monthly report on the Home Affordable Modification Program, or HAMP, shows 48.1 percent of the 1.3 million homeowners enrolled in the government’s mortgage aid program had been dropped by the end of July. The dropout rate at the end of June was 41.2 percent. Launched in April 2009, HAMP was intended to lower mortgage payments of homeowners at risk of foreclosure. Assistant Treasury Secretary Herb Allison said the cancellations were mostly the result of servicers working through a backlog of trial modifications accepted before the program required income verification. Both borrowers and the banking industry have complained of bureaucratic and paperwork problems associated with the troubled foreclosure-prevention effort. More here, here, and here.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/
  • 15 Reasons Housing Is Going From Bad To Worse

    Posted Under: Market Conditions in North Royalton  |  August 23, 2010 8:24 AM  |  279 views  |  No comments

    1. Record low home sales- New home sales are now at their lowest on record, and existing home sales began a steep decent in July. (And this is the busy time of year. Wait until winter.)
    2. New home sale construction is also near record lows. There is already an excess of houses. (This is actually a good thing- but it does tell you how bad things are.)
    3. Demand for mortgages is at a 13 year low. (Showing that low interest rates are insufficient to stimulate demand.)
    4. Foreclosures are at record highs. (And getting worse.)
    5. Repos are at an all time high. (See #4.)
    6. Banks are writing off a massive amount of debt. (And they are going to be writing off a lot more before they are through.)
    7. Record delinquencies- more than 10% of all Americans are behind on their mortgage. (Hence #4.)
    8. Banks have significantly raised their lending standards. (Low interest rates aren’t useful to people who don’t qualify.)
    9. Home prices are still too high and out of line with what people can afford. (Especially upper end real estate. With reduced income and no “wonky” financing, the McMansion market is being killed.)
    10. With 28% of all households having one adult currently looking for employment, unemployment levels are high. (And unemployed people don’t buy homes.)
    11. Bankruptcies are on the rise. (See #10 and #15)
    12. Even Obama is bearish on housing. (Business Insider found a great “grumpy face” of the president for this one.)
    13. Tax credits pulled home sales forward- shrinking current demand. (And future demand as well.)
    14. Fannie and Freddie could be up to $5T in the hole. (You know, I doubt I’ve typed $XT more than a dozen times in my life. That’s a big number.)
    15. U.S. economy is drowning in debt. (As well as many Americans.)

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/

  • Housing Starts Down, Building Permits Up

    Posted Under: Market Conditions in North Royalton  |  July 21, 2010 8:32 AM  |  186 views  |  No comments
    Housing starts fell 5.0 percent in June, hitting their lowest level since October 2009. But though the Department of Commerce’s residential-construction statistics show the second-straight month of declines in privately owned housing starts, they also show a 2.1 percent rise in building permits. The unexpected jump in permits suggests a boost for building activity in July. Michael Gaspen, an economist at Barclays Capital, said the market is trying to find a bottom following the expiration of the tax credit but he still expects housing starts to slowly rebound in the second half of the year. More here, here, and here.

    Lee Richardson
    Senior Mortgage Advisor
    Eagle Nationwide Mortgage Company
    5740 Royalwood
    North Royalton, OH 44133
    Phone: 440-582-3200, ext. #16
    Toll Free: 800-705-5740
    Fax: 440-582-4501
    Email: lee.richardson@enmcdirect.com
    Website: http://www.enmcdirect.com
    Blog: http://leerichardsonmortgage.wordpress.com/
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