Mortgage Bankers Weekly Update: Mortgage Applications Decrease

Mortgage Bankers Association for the week of 3/30/2010

Market Composite Index: (loan application volume) a measure of mortgage loan application volume,decreased 7.5 percent on a seasonally adjusted basis from one week earlier 

Refinance Index:
 decreased 10.1 percent from the previous week.  The seasonally adjusted Purchase Index decreased 1.7 percent from one week earlier.

Purchase Index:
decreased 1.5 percent compared with the previous week and was 21.9 percent lower than the same week one year ago. 

Refinance Share of Mortgage Activity:
  decreased 10.1 percent from the previous week  
Arm Share:  
decreased to 5.7 percent from 5.9 percent of total applications from the previous week. 
MBA outlook: (Excerpted from
MBAA makes some interesting observations amid a general optimism.  The world economy,  has been growing fast boosting boost to US growth through gains in exports. Last quarters  growth was just revised upward. True, housing is a laggard, but even here MBAA expressed optimism and sees growth patterns, in stark contrast to Dr. Shiller of Case Shiller.  
Treasury and mortgage rates increased towards the end of last week, as global markets calmed following the recent crises in Japan and the Middle East.  Refinance volume predictably fell in response to these rate increases.  As rates climb back to 5 percent, fewer homeowners have both the incentive and the ability to refinance, said Michael Fratantoni, MBAs Vice President of Research and Economics
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Freddie Mac Weekly Update: 30-Year Mortgage Up Slightly for Second Week

30-year fixed-rate mortgage:
averaged 4.86 percent with an average 0.7 point for the week ending March 31, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.08 percent.  

The 15-year fixed-rate mortgage:  this week averaged 4.09 percent with an average 0.7 point, up  from last week when it averaged 4.04 percent.  A year ago at this time, the 15-year FRM averaged 4.39 percent. 

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.70 percent this week, with an average 0.7 point, up from last week when it averaged 3.62 percent. A year ago, the 5-year ARM averaged 4.10 percent . 
One-year Treasury-indexed ARMs: averaged 3.26 percent this week with an average 0.6 point, upfrom last week when it averaged 3.21 percent. At this time last year, the 1-year ARM averaged 4.05 percent.  
Freddie Sayz

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac
Fixed mortgage rates rose slightly for a second week in a row, but continue to remain quite low.  Low rates have benefited from relatively benign inflation reports. Inflation as measured by the 12 month growth in the core price index for  consumer spending, a metric preferred by the Federal Reserve, is hovering near the lowest pace since 1960 when this data series began.
Sales of distressed properties continue to place downward pressure on house prices. In January, these homes accounted for 37 percent of existing home sales and rose to 39 percent in February, based on figures from the  National Association of Realtors. House prices were down 3.1 percent in January from the same month last year according to the  S&P/Case-Shiller Home Price Indices
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Wells and Quicken reduce Loan Requirements

just a short FYI..

They are among the largest FHA approved lenders. Both lenders announced that they would overlay more stringent requirements than the FHA demanded. They have recently announced that they would once again lend to applicants with 580 FICOs and 3.5 percent down payments.

Their revised standards are back in line with the FHA's own minimums. Hopeful home buyers will once again be open to so many that have lost top credit ratings in this economic decline.

Wells Fargo is the largest originator of FHA-insured mortgages with Quicken coming in third. If you have been having trouble getting a loan recently you may want to revisit...

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Multi Family: A Recovering Market

Multi Family
A Recovering Market

We all know whats happening to the single family home markets. Over supply and shadow inventory and the subsequent price declines will continue until fear is overcome andCase Shiller Price Slide inventory is soaked up. 

The kinds of issues that led to a boom bust in housing did not take place with multi family. There was no build out leading to over supply and the lender market was much more rationlized. Little of the kind of lending that led to so many foreclosures, ultimately driving home prices down. 

Lack Of Supply In The Rental Market
From 1997 to 2006, multifamily construction was about 342,000 new units per year, but by 2010 they new construction declined 66%. Government estimates indicate we will need 1.5 million additional units annually just to keep up with population growth. Quite a shortfall, indeed

Lack Of Lender Interest In Funding Any Real Estate
Adding to a undersupply is a real lack of lender interest in more housing of any kind. Although this appears to be a negative, it protected the sector from the boom mania and has kept the multi family market on a sound footing.

Realty Trac reports annual foreclosure filings spiked from 1 million in 2006 to 3.9 million in 2009, and were about the same number in 2010. Finally, the huge foreclosure debacle is making renters out of all of us.

The combination of immigration, retirees moving back in and a new generation up will equal the size of the boomers,creating a large pool of new renters. Now thats huge!

A Solid Market
The national vacancy rate for rentals fell 17% last year to 6.6%, according to Reis. And rents jumped. In New York, up 9% on average in the last five years; in San Jose, they're up 8% San Francisco, one of the best rental markets in the country has seen its vacancy rates drop as rentals in all neighborhoods post new highs.

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Green Landlording: Getting Tenants To Go Green

Getting Tenants to Go Green.
As property managers, we can't insist on behavioral changes. Going green can be a  tough sell to a renter. After all, a building is only as green as the people who manage and live in it. Managers are key players and can encourage  activities that reduce consumption and waste. The catalyst is education.

We Are All Stakeholders
You need to demonstrate the benefits. Tenants can be inspired to go green by emphasizing a better living environment and eco citizenship. Getting to that point, begins at the leasing process.  Educate tenants on easy, cost effective ways to help the environment. Tips such as using compact fluorescent lights, unplugging electrical devices or recycling. That way both tenants and owner/managers can capture the benefits of saving money and natural resourcesGo for the easy things.

Its Good Business
An study reports found tenants want to live a more sustainable lifestyle. More than 25% said they would pay more in rent to save money on energy costs. So set the tone for sustainability by making environmentally-friendly choices. Here are some easy,  inexpensive ways that go a long ways towards a more sustainable healthier environment. For more energy saving ideas go here

Low Flow Toilets - Cost - $150-1500.00
If you decide that it is time for a toilet replacement, you reduce water use and bank teh savings. Replacing a 18 litre per flush toilet with an ultra-low-volume 6 litre flush model represents a 70% savings in water flushed. You can save as much as 7500 gallons of clean, fresh water annually

Shower Heads - Cost - $15-100.00
Conventional showerheads have flow rates up to 4 to 5 gallons per minute. A good low-flow showerhead can reduce water use by 50% and still provide a good shower

Faucets - 
Leaky Faucet: One drop per second can waste as much as 10 gallons of water each week. Deferring basic maintenance can be costly.

Faucets Aerators - Cost - Less than $5.00
Conventional faucets have an average flow rate of almost 4 gallons per minute. Faucet aerators can reduce your home water consumption as much as 50%, and reduce your heating costs as a bonus.

Programmable Thermostats - Cost - $50-150.00
Tenants save up to 20% of total energy costs using a programmable thermostat by reducing temperature 5 degrees at night and 10 degrees during the day, whenever possible.
Start small and do the easy things first. Talk up green living at the lease signing and be a partner in creating a safer and healthier living environment. There is no better way to change behavior then by setting a good example. And by the way, reducing operating costs is good business. Save money and do well by doing good.

REsourced from
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Fannie and Freddie To Fade Away: Your Costs Rise

The White House has a strategy to close shop. Fannie and Freddie will go away quietly and permanently. They are hoping to phase out the two GSE's within about seevn years. The Obama admiministration proposed three
 approaches to wind down the two agencies. This is a  delicate decision because they now control about 90% of the housing market and the private markets are virtually gone. So, tehy have to receed without creating a funding gap
Weening Us Off The Federal
The administartion will take baby steps designed to begin to turn us away from Government help. The politics that had treatd home ownerships as a right has learned its lesson.
1. To shrink the Government mortgage portfolio by at least 10 percent a year.
2. Create an insurance fund for mortgages supported by premiums paid by lenders, just like bank deposit insurance.
3. Getting out of government subsidies of mortgages by raising fees charged to cover the risk of defaults
4. Limiting the government’s role in housing finance to FHA backed mortgages, turning most of the market over to the private sector.
5. Phasing in a 10% down payment requirement for government guaranteed loans.
The Future For Real Estate Markets
more costly transactions
Right now, the private markets cant compete with cheap Govt money and so that market barely exisits. Increasing the private sector means allowing it to charge more for risk than Govt programs do.
Creating a government-run mortgage guarantee fund similar to bank deposit insurance, paid for by lenders does get the Government out of the susidy business, but that cost to lenders will likely be passed onto buyers, making homes more costly
Eliminating all government guarantees against default would also raise the cost of borrowing, potentially depressing the housing market. Higher borrowing costs will likely put pressure on lower priced markets including first-time buyers. Read higher costs to borrow making it more difficult to buy. And when willing buyers cant, its generally price that comes down to meet demand.
The Winner
The Government wants to increase federal subsidies for rental housing. Shaun Donovan, the secretary of the Department of Housing and Urban Development, said Friday that half of renters spend more than one-third of their income on housing, and one-quarter of renters devoted more than half, according to HUD research.

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San Francisco Transbay Terminal Goes Green

WIKI: San Francisco Transbay Terminal served long distance and transbay buses from SFrancisco north to Marin County, East Bay, and south to San Mateo County. It was located roughly by Mission Street and Howard Street, and east–west by Beale Street and 2nd Street. This is one area that needed some help. The new 4 billion dollar Transbay Transit Center broke ground on August of 2010 and secheduled for completion in August 2017.

Transbay Goes Green
The Terminal project has just recieved $171 million to go ahead and replace the current Transbay blight.It will brings Caltrains into the center of the financial district. It will sport a new 51/2 acre green rooftop urban park an amphitheater for music performances and movie screenings and 2,600 new homes.
San Francisco chose to tear down and rebuild rather than rehabilitate. the center aims to be a cultural force as well — a representative of the West. So while down go the deco columns, it will be replaced by an enviromentally sustainbable, cultural center that will rise to re invigorate the downtown center as a statement of smart, even necessary, urban environment.
A new cultural center on Turk and Eddy, hopefully Twitter relocating to mid market, this city is marching forward and downtown SF is getting better and better

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