Breaking Georgia Mortgage Jumbo FHA VA USDA Rates and News: January 2010

1.29.2010

Mortgage Recap for Janurary

01/28/2010 American Banker: Respa Rules Delay Many Mortgages, Torpedoes Others http://www.americanbanker.com/issues/175_17/respa-rule-delays-mortgages-1006463-1.html

01/28/2010
ABCNEWS/Politics: State of Union President Obama’s Speech
http://abcnews.go.com/Politics/State_of_the_Union/state-of-the-union-2010-president-obama-speech-transcript/story?id=9678572&page=4

01/28/2010
MSNBC.COM: Fed vows low rates for an ‘extended period’
http://www.msnbc.msn.com/id/35098235/

01/27/2010
MSNBC.COM: Flaws plague Foreclosure relief program
http://www.msnbc.msn.com/id/35062033/ns/business-answer_desk/

01/20/2010
HUD Flushes Out Plan to Clean FHA
http://www.americanbanker.com/issues/175_14/hud-fleshes-out-plan-1006340-1.html

01/20/2010
FoxBusiness.com: FHA Ups Loan Requirements Riskier Borrower’s http://www.foxbusiness.com/story/markets/industries/real-estate/fha-ups-loan-requirements/

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Home Values Rose In November 2009 By Another 0.7 Percent

Posted: 29 Jan 2010 06:45 AM PST

Home Price Index April 2007 to November 2009

Reporting on a two-month lag, the government said home values rose 0.7 percent in November.

National home prices are at their highest point since February 2009.

But before we look too much into the FHFA's Home Price Index, it's important that we're cognizant of its shortcomings; the most important of which is its lack of real-time reporting.

According to the National Association of Realtors™, 80% of purchases close within 60 days. As a result, because of its two-month delay, the Home Price Index report actually trails today's market data by an entire sales cycle.

This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month. The home valuation report is using data from November; the sales reports are using data from December.

The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.

The same is true for the Case-Shiller Index. It, too, operates on a 2-month lag.

All of that said, however, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months. In many markets, home sales are up, home supplies are down, and values have increased. This trend should continue into the early part of 2010, at least.

If you're wondering whether now is a good time to buy a home , consider low prices, cheap mortgages and an available tax credit as three good incentives. By May, none of them will likely be available.

1.28.2010

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A Simple Explanation Of The Federal Reserve Statement (January 27, 2010 Edition)

Posted: 27 Jan 2010 12:30 PM PST

Putting the FOMC statement in plain English The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy “has continued to strengthen”, that the jobs markets is getting better, and that financial markets are supportive of growth.

There was no mention of the housing market's strength. The last 3 statements from the Fed included that specific verbiage.

It’s the fifth straight statement in which the Fed spoke about the economy with optimism. This should signal to markets that 2008-2009 recession is over and that economic growth is returning to U.S. economy.

The economy isn’t without threats, however, and the Fed identified several in its press release, including:

Credit remains tight for consumers
Businesses are reluctant to hire new workers
Housing wealth is down

The message’s overall tone, however, remained positive and inflation appears is still within tolerance.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to wind down its $1.25 trillion commitment to the mortgage market by March 31, 2010. This is noteworthy because Fed insiders estimate that the bond-buying program suppressed mortgage rates by 1 percent through 2009.

Mortgage market reaction to the Fed press release is, in general, negative. Mortgage rates are rising this afternoon.

The FOMC’s next scheduled meeting is March 16, 2010.

1.27.2010

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A Rate-Locking Strategy Ahead Of The Fed's Meeting Today

Posted: 27 Jan 2010 06:45 AM PST

Fed Funds Rate (Jan 2007 - Jan 2010) The Federal Open Market Committee ends a scheduled, 2-day meeting today in Washington. It's the first of 8 scheduled meetings for the policy-setting group in 2010.

The group adjourns at 2:15 PM ET.

As is customary, upon adjournment, the Fed will issue a press release to the markets recapping its views of the country's current economic condition, and the outlook for the near-term future.

The post-meeting statements from the Fed are brief but comprehensive. And Wall Street eats them up. Every word, sentence and phrase is carefully disected in the hope of gaining an investment edge over other active traders.

It's for this reason that mortgage rates tend to be jittery on days the FOMC adjourns. Wall Street is frantically rebalancing its bets.

Today should be no different.

The FOMC is expected to leave the Fed Funds Rate within its target range of 0.000-0.250 percent — the lowest it's been in history. However, it's what the Fed says Wednesday that will matter more than what it does.

After the Fed's last meeting in December, it made several observations:

The jobs market is getting "less worse"
The housing sector is making improvements
Financial markets are stabilizing further

The economy is gradually improving, the Fed told us, but there are still risks to the economy ahead. Furthermore, inflation remains in check.

As compared to December's press release, today’s FOMC statement will be closely watched. If the Fed changes its verbiage in any way that alludes to strong growth and/or inflation in 2010, expect mortgage rates to rise as Wall Street moves its money from bonds to stocks.

Conversely, reference to slower growth in 2010 should lead rates lower.

We can't know what the Fed will say so if you’re floating a mortgage rate right now or wondering whether the time is right to lock, the safe approach would be to lock prior to 2:15 PM ET Wednesday. After that, what happens to rates is anyone's guess.

1.26.2010

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Existing Home Sales Plummet In December, But It Was Expected

Posted: 26 Jan 2010 06:45 AM PST

Existing Home Sales Dec 2008-Dec 2009 Just one month after from blowing away Wall Street, December's Existing Home Sales hit the skids, shedding nearly 17 percent and falling to a 4-month low.

Don't be alarmed, though. The plunge was expected. And not just because Pending Home Sales cratered last month.

When November's Existing Home Sales surged, it was clear to observers that an expiring $8,000 federal tax credit was the catalyst. At the time, the tax program was slated to expire November 30 and the looming deadline pushed a lot of would-be buyers from a December time frame into November.

The expiration date has a cannibalizing effect on December's sales figures. It was only later that Congress extended the tax credit to June 30, 2010.

So, with home sales plunging in December, it's no surprise that home supplies rose for the first time in 9 months. Home Supply is calculating by dividing the number of homes for sale by the current sales pace.

The national housing supply now rests at 7.2 months.

Despite December's Existing Home Sales report appearing shaky, it's actually terrific new for home buyers.

See, for the past few months, as housing has been improving, sellers nationwide have been bombarded by messages of "hot markets" and rising home prices by the media. Psychologically, a seller is more likely to hold firm on price if he believes the housing market is improving and now December's data is deflating that argument.

This is why we say there's always two sides to a housing story -- the buyers' side and the sellers' side. And, usually, what's good for one party is bad for the other. It's what we're seeing now.

Because of soft data like December's Existing Home Sales, buyers may retake some negotiation leverage that's been lost since Spring 2009, helping to improve home affordability and, perhaps, spur more sales.

1.25.2010

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Whatâ€™s Ahead For Mortgage Rates This Week : January 25, 2010

Posted: 25 Jan 2010 06:45 AM PST

The FOMC meets this week -- mortgage rates will be volatile Conforming and FHA mortgage rates improved last week on the combination of weaker-than-expected economic data and new anti-banking rhetoric from the White House.

The S&P 500 shed nearly 4 percent in its worst weekly showing since October 2009 as all 10 sectors fell. As the money left stock markets, it made its way to bonds -- including the mortgage-backed variety.

As a result, mortgage rates fell for the third straight week.

Since shedding 300 basis points in December, mortgage bond pricing has recovered a bit more than half of those losses. It's helping with home affordability and opening new refinance opportunities around the country.

This week, though, mortgage rates could rise back up. There's a lot going on.

First, on Monday, the December Existing Homes Sales report will be released. The report is expected to be extremely weak as compared to November. This is because of a combination of factors including:

The initial tax credit expiration date of November 30, 2009
Sharply rising mortgage rates throughout the month of December
A general slowdown from the holidays and from the weather

Therefore, don't be surprised by the newspaper headlines you see Tuesday morning.

Other data this week includes the Case-Shiller Index -- a measure of home prices nationwide -- and the New Home Sales report. The Case-Shiller Index has registered mild home price improvement over the past 8 months and its latest report is expected to show the same. New Home Sales should be similarly strong.

But, the biggest news of the week is the first Federal Open Market Committee meeting of 2010.

The Fed meets Tuesday and Wednesday this week and Wall Street will be watching closely. The Fed is not expected to change the Fed Funds Rate from its current target range of 0.000-0.250 percent, so, instead, markets will watching for the Fed's post-meeting press release.

What the Fed says about the economy will be much more important that what it specifically does about the economy for now. If the Fed says the economy is growing as expected, look for mortgage rates to rise. Conversely, if the Fed says the economy is at risk, expect mortgage rates to fall.

The safest rate lock strategy this week is to lock your mortgage rate before the Fed's 2:15 PM ET adjournment Wednesday. Rates will be bouncy all week, but once the Fed's press release hits the wires, it's anyone's guess what will happen.

1.22.2010

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Housing Permits Spike For The Second Straight Month

Posted: 22 Jan 2010 06:45 AM PST

Housing Starts Jan 2008-Dec 2009 A "Housing Start" is a privately-owned home on which construction has started. It's an important gauge of housing health because it tracks new housing stock nationwide.

In December 2009, starts fell by nearly 7 percent.

The news is mildly disappointing but not too bad. The likely cause for the Housing Starts drop is December's rough weather conditions. It's tough to break ground when Mother Nature won't coordinate and last month was especially hazardous in a lot of parts of the country.

More cheery, however, is that for the second straight month, Housing Permits exploded.

A housing permit is an certification from local government that authorizes construction. After posting a 7 percent gain in November, permits rose by another 8 percent in December.

It's a signal that housing is, indeed, in recovery -- despite the falling number of actual starts. More permits mean that builders plan to bring more homes on the market for what's expected to be a very busy spring home-shopping season.

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Therefore, Housing Starts should start rising soon anyway.

For home buyers, the news couldn't be better.

With more homes coming online, competition among home sellers should increase, and that will suppress the rise in home prices nationwide.

It's basic economics. When home supplies grow faster than home demand, prices fall.

Spring 2010 FHA Guidelines Make Borrowing Tougher And More Expensive

Posted: 21 Jan 2010 08:45 AM PST

New FHA guidelines Securing an FHA mortgage is about to get more expensive.

In a statement issued Wednesday, the Federal Housing Authority outlined policy changes to its mortgage assistance program. The shift is meant to both reduce the government group's portfolio risk while strengthening its overall financials.

For consumers, the changes mean higher costs.

As listed in the official announcement, there are 3 major guideline updates for the FHA:

Upfront mortgage insurance premiums are increasing to 2.25% from 1.75%
Minimum downpayments for applicants with sub-580 FICOs are rising to 10 percent
Seller concessions are being limited to 3%, down from today's allowable 6%

Furthermore, the FHA has appealed to Congress to raise an FHA borrowers' monthly mortgage insurance premiums.

To read the FHA's statement, it's clear what the group is trying to balance. On one side, the FHA wants to provide affordable financing to families that need it. That's its mission statement. On the other side, though, the FHA must manage the risk that comes with insuring lesser-quality loans.

To that end, the FHA is stepping up its enforcement of "bad lenders" in hopes of stopping problems where they start.

Also in its new policies, the FHA is introducing a "termination clause". If banks or loan officers that produce more than their fair share of bad loans, they lose their right to originate FHA mortgages.

As a result, homebuyers should expect tougher FHA underwriting in 2010. Not because the FHA says so, necessarily, but because banks don't want to do "bad loans". Lenders are incented to turn down at-risk applicants and, already, we're seeing examples of this. Despite FHA allowing 580 FICOs and lower, many banks have made 620 their minimum.

Some have other guideline overlays, too.

The FHA's new guidelines don't go into effect until spring. So, between now and then, the old guidelines will apply. Therefore, if you know you're going to need an FHA home loan in the next few months, consider moving up your time-frame.

If nothing else, you'll save some money at closing.

1.20.2010

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from www.Atlrates.com

There's 100 Days Left To Claim The Homebuyer Tax Credit

Posted: 20 Jan 2010 06:45 AM PST

100 days remain for the Home Buyer Tax Credit Expiration November 6, 2009, Congress voted to extend and expand the First-Time Home Buyer Tax Credit program. There's 100 days left to claim it.

The expiration date of the up-to-$8,000 tax credit has been pushed forward to spring, requiring homebuyers to be under contract for a home no later than April 30, 2010, and to be closed no later than June 30, 2010.

In addition, "move-up" buyers were also added to the program's eligibility list meaning you don't have to be a first-time home buyer to be eligible for the tax credit. If you've lived in your home for 5 of the last 8 years, you meet the IRS requirements.

Move-up buyers are capped at a total tax credit of $6,500.

The tax credit's basic eligibility requirements remain the same:

You can't purchase the home from a parent, spouse, or child
You can't purchase the home from an entity in which they're a majority owner
You can't acquire the home by gift or inheritance
All parties to the purchase must meet eligibility requirements

The new law includes some notable updates, however.

First, the subject property's sales price may not exceed $800,000. Homes sold for more than $800,000 are ineligible. And, also, household income thresholds have been raised to $125,000 for single-filers and $225,500 for joint-filers.

And lastly, don't forget that the program is a true tax credit -- not a deduction. This means that a tax filer who's eligible for the full $8,00 credit and whose "normal" tax liability totals $5,000 would receive a $3,000 refund from the U.S. Treasury at tax time.

The complete list of qualifying criteria is posted on the IRS website. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010.

There's just 100 days to go.

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There's 100 Days Left To Claim The Homebuyer Tax Credit

Posted: 20 Jan 2010 06:45 AM PST

100 days remain for the Home Buyer Tax Credit Expiration November 6, 2009, Congress voted to extend and expand the First-Time Home Buyer Tax Credit program. There's 100 days left to claim it.

Move-up buyers are capped at a total tax credit of $6,500.

The tax credit's basic eligibility requirements remain the same:

You can't purchase the home from a parent, spouse, or child
You can't purchase the home from an entity in which they're a majority owner
You can't acquire the home by gift or inheritance
All parties to the purchase must meet eligibility requirements

The new law includes some notable updates, however.

The complete list of qualifying criteria is posted on the IRS website. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010.

There's just 100 days to go.

1.19.2010

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What's Ahead For Mortgage Rates This Week : January 19, 2010

Posted: 19 Jan 2010 06:45 AM PST

Inflation squeezes mortgage rates Mortgage markets showed little conviction last week, carving out just a narrow trading channel. There was very little data on which for markets to move, leaving mortgage rates momentum-bound.

Luckily for rate shoppers, mortgage rate momentum was favorable. Rates were slightly lower Monday through Thursday before breaking downward Friday afternoon. Home shoppers this past weekend caught a nice break.

Last week marked the second straight week in which mortgage rates fell.

This week, in holiday-shortened trading and with little economic data set for release, expect mortgage rates to again move on momentum. The biggest report of the week is Wednesday's Producer Price Index.

Producer Price Index is important to mortgage rates because of its role in inflation. PPI is akin to a Cost of Living-type measurement, but for business. As business costs rise, the thought goes, it's not long before consumer costs rise, too. Businesses eventually pass on costs, after all.

In this manner, a rising Producer Price Index can foreshadow rising consumer prices, and, therefore, inflation.

Inflation is awful for mortgage rates.

PPI expectations have revised downward this month, especially because last week's data showed a deceleration in consumer prices nationwide. If PPI isn't as weak as expected, mortgage rates will rise.

Other influential data this week includes Housing Starts, Consumer Confidence and Initial Jobless Claims.

So far, 2010 has been for mortgage rates around the country. If you're in need of a rate lock, this week may be a good time to take one.

1.15.2010

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Let’s set up a time soon to talk about evolving your community and association.

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Capital City Properties, Inc.

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Atlanta, GA 30312

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THOUGHT OF THE WEEK "Don't stumble into Your Future. Create it"

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RealtyTrac's 2009 Foreclosure Report Gives Reason For Optimism

Posted: 14 Jan 2010 06:45 AM PST

Foreclosure deltas for the ten most foreclosure-heavy states of 2009

Like real estate, it appears that foreclosure activity is a local phenomenon, too.

As reported by RealtyTrac.com, more than half of all foreclosure-related activity in 2009 came from just 4 states:

California
Florida
Arizona
Illinois

More than 1.4 million filings made in 2009 are attributed to the above states. Furthermore, each ranks in the Top 10 for 2009 Foreclosures Per Capita.

The other states are Nevada, Utah, Georgia, Idaho, Michigan and Colorado.

Versus 2008, foreclosures are up 21 percent nationwide and that's a big number, but a deeper look at RealtyTrac's annual reports reveals a more positive undertone on the housing market.

40 states fell below the national Foreclosures Per Capita average in 2009
Foreclosure activity fell on an annual basis in 10 states as compared to 2008

Foreclosures are still prevalent, though, and buying homes in foreclosure continues to be big business. First-time buyers, move-up buyers, and real estate investors each are bidding aggressively.

Distressed homes account for one-third of home resale activity, according to an industry trade group.

That said, buying foreclosures can be tricky.

First, properties are often sold "as-is" and the cost of repairs may unwind the home's status as a "value buy". Furthermore, a lender may require specific fixes to be made prior to closing and that, too, costs money.

Second, buying a foreclosed home isn't as streamlined as buying a "normal" home. Closing on a foreclosure can be a 120-day process or longer. A 4-month time-frame may not fit your schedule.

And, third, finding foreclosures can be difficult. Despite the growth in foreclosure search engines, it still takes a good real estate agent to uncover the best homes at the best prices.

Read the complete foreclosure report and take a peek at RealtyTrac's foreclosure heat maps. If you like what you see, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market -- you just have to know where to find them

Retail Sales Dropped In December And Now So Are Mortgage Rates

Posted: 14 Jan 2010 07:45 AM PST

Retail Sales December 2009

Mortgage rates are dropping this morning on weaker-than-expected Retail Sales data from December. Lower rates means more bang for your home-buying buck.

Excluding motor vehicles and parts, December's "ex-auto" sales receipts were down roughly $500 million from November. Analysts had expected receipts to grow.

The relevance of Retail Sales to home affordability isn't obvious, but it's definitely logical.

Retail Sales is directly related to consumer spending and consumer spending accounts for the majority of the U.S. economy. When consumer spending slows, the economy often does, too. It leads investors to seek out "safe" investments.

It's the reason why stock markets often drop on weak economic data -- stocks are among the riskiest investment classes available.

Conversely, the best place to find safety is in the market of government-backed bonds. This world includes products like U.S. Treasuries and many of the mortgage-backed bonds that help set mortgage rates. Weak economic data puts mortgage bonds in demand.

For rate shopper, this is good news. More demand for mortgage bonds causes mortgage rates to fall. Mortgage rates are lower this morning because Wall Street is shedding some risk.

December's Retail Sales report closes out a year of generally-weak data. 2009 marks just the second time that Retail Sales fell year-over-year since the government started tracking it 40 years ago. The other year was 2008.

For home buyers around the country, though, today may represent an opportune time to lock a mortgage rate. Housing data is still improving and other economic indicators are showing strength. Soon, Wall Street will shift from a "safe" mentality and move toward risk.

When it does, mortgage rates will rise.

1.14.2010

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10 Cities For Home Bargains

Posted: 13 Jan 2010 07:45 AM PST

As the housing market improves across the country, certain cities are emerging as relative bargains. Some areas, like Miami, were hit hard by the recession, and other areas are buoyed by good school systems and strong labor markets.

In this 5-minute video from The Today Show, 10 cities are highlighted for their home prices. And they're not "small towns", either.

Among the featured cities:

Miami, Florida
Akron, Ohio
Tuscon, Arizona
Minneapolis, Minnesota
Trenton, New Jersey

Now, this piece is about finding gems on a national scale. They exist locally , too. You just need to know what to look for.

With mortgage rates low and tax credits available, it's not likely that bargains will last.

1.12.2010

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The Bad Jobs Report Wasn't All Bad -- Mortgage Rates Fell

Posted: 12 Jan 2010 06:45 AM PST

Unemployment Rate 2007-2009 Despite the headlines, it's important to remember that December's jobs report wasn't all bad news.

Sure, the economy shed 85,000 jobs last month and the Unemployment Rate failed to dip below 10%, but for home buyers and rate shoppers , the news was just fine.

The soft employment data led mortgage rates lower, making homes more affordable for buyers.

There is two sides to every economic coin.

Since early-2008, the U.S workforce has been closely tied to home financing. As the economy slowed and jobs were lost, Wall Streeters pulled money from the risky stock markets and moved it to of the relative safety of bond markets, instead.

Safe haven buying led mortgage bond prices higher which, in turn, caused rates to fall. Mortgage rates fell to 6 all-time lows in 2009. In a related statistic, 4.2 million jobs were lost last year.

And this is why Friday's non-farm payrolls report was so good for buyers.

See, in November, the economy added new jobs for the first time since 2007, housing looked strong, consumer confidence was growing. The safe haven buying reversed and mortgage rates took off. Analysts believed the nation's economic turnaround was complete.

But now, after December's jobs report returned to the red, Wall Street is forced to rethink its position. Safe haven buying is back and mortgage rates are lower because of it.

Over the next few months, expect a lot of this back-and-forth action in rates. In general, positive news for the economy will be met with higher mortgage rates and negative economic news will be met with lower mortgage rates. There will be exceptions, but the general rule should hold.

1.11.2010

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What's Ahead For Mortgage Rates This Week : January 11, 2010

Posted: 11 Jan 2010 06:45 AM PST

Retail Sales data shapes mortgage rates Data was sparse through 2010's first trading week last week, setting the stage for a week of momentum trading.

In up-and-down trading, mortgage pricing improved overall but the best rates of the week didn't last long.

Rates improved Monday and Tuesday as an oversold market corrected itself to better price points. Then, in anticipation of the December jobs report, rates worsened Wednesday and Thursday. Friday, after the jobs report was released, pricing proceeded to carve out a huge range before settling unchanged.

On average, lenders issued new rate sheets every few hours last week. It was a difficult week to shop for mortgages.

Unfortunately, this week doesn't figure to be much better.

For the second straight week, the economic calendar is bare. Traders -- like last week -- will be forced to rely on "gut feel" to make their trades. That rarely bodes well for shoppers. Especially because traders are facing a mortgage market in the midst of a terrible losing streak.

Since reaching an all-time low December 1, 2009, 30-year fixed rate mortgages have worsened by 300 basis points, or 3 percent.

To a homeowner or rate shopper , the math of 300 basis points looks like this:

5 weeks ago, a 4.625 percent mortgage rate required 0 points
Today, the same 4.625 percent mortgage rate requires 3 points

1 point is equal to 1 percent of your loan size.

Last month's worsening is the worst 1-month deterioration in consumer mortgage rates from all of 2009.

If you're hoping for rates to fall back to early-December levels, know that it is possible. For this week, here's some things that could push rates in the right direction:

3 Fed members are speaking. Each mention of economic under-performance in 2010 will be good for rates.
Retail Sales data is released Thursday. If the numbers are weak, mortgage rates should improve.
Consumer confidence surveys are released Friday. Lower confidence levels should help rates fall.

Be ready to lock at a moment's notice this week. Rates may rise or fall, but markets are positioned toward the former.That's where momentum is pointing as of the Market Open today.

Keep an eye on rates and your loan officer on speed dial. Once the mortgage market starts breaking, it's expected to break quickly.

1.08.2010

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2010 FHA Loan Limits Released

Posted: 08 Jan 2010 06:45 AM PST

2010 FHA Loan Limits FHA home loans are federal assistance mortgages made by lenders, and backed by the government. The FHA doesn't make loans to homeowners by federally-qualified lenders.

By all accounts, FHA home loans are surging in popularity.

2006, FHA insured 3.3% of all mortgages made
Q2 2009, FHA insured 19.2% of all mortgages made

A major reason for the increase can be tied to guidelines.

As compared to its conforming mortgage cousins Fannie Mae and Freddie Mac, FHA home loans have lower downpayment requirements and looser credit standards. The FHA allows downpayments of 3.5 percent and Fannie Mae and Freddie Mac do not, as an example.

Another reason is that FHA home loans aren't subject to credit score fees the way that conforming mortgages are. Through Fannie or Freddie, a home buyer with a 650 FICO and 20% down is subject to 3% in risk fees. Via the FHA, the fee is zero, making FHA the better "deal".

The FHA published its 2010 loan limits. There's no change from 2009.

The base 2010 FHA loan limits are:

1-unit : $271,050
2-unit : $347,000
3-unit : $419,400
4-unit : $521,250

We say "base" because these loan limits don't apply to all areas equally. Higher-cost regions get higher loan limits, based on typical home values. Homes in Los Angeles County, for example, can be FHA-insured up to $729,750 in 2010, and there are special exceptions made for Alaska and Hawaii.

The official FHA announcement included a complete, county-by-county FHA loan limit list. The first spreadsheet shows each county at or above the $729,750 maximum; the second list is everyone else.

If your home's county is on neither list, use the "base" numbers above.

1.07.2010

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Upon Closer Inspection, The Federal Reserve Isn't 100% Positive About The Future Of The Economy

Posted: 07 Jan 2010 06:45 AM PST

FOMC December 2009 Minutes Both mortgage rates and home affordability took a turn for the better Wednesday after the Federal Reserve released its December 15-16, 2009 meeting minutes.

The Fed Minutes is a follow-up piece to the post-FOMC meeting press release. But whereas the press release is succinct and to-the-point, the minutes are lengthy and often meandering.

As a comparison, December's press release contained 535 words. December's minutes had 6,260.

But these "extra words" aren't superfluous. They're actually very important to homeowners. Because the Federal Reserve's internal debates help to shape Wall Street expectations, it doesn't take much for those conversations to have a trickle-down effect on Main Street.

For example, after the December meeting, the Fed said that economic growth is steady, inflation is in check, and an orderly wind-down of mortgage market support was underway. A look at the minutes, though, showed some disconnect.

Some Fed members believe rising commodity prices could lead to stronger-than-expected, and others think that improvement is housing could be "undercut" by a pull-back in government stimulus.

Overall, the Fed appears optimistic about the economy, but not as optimistic as on December 16. Mortgage markets responded favorably to the minutes and mortgage pricing improved.

Although rates remain higher as compared to early-December, pricing has been on a good run this week. If you're under contract for a home or just looking to refinance, now may be a good time to lock.