Interest Rate Update
The end of the government’s purchase program –on March 31st—of mortgage-backed securities, was widely heralded as the precursor of a steep rise in mortgage interest rates. However, after an initial steep decline in MBS prices (pushing rates up) rates have improved and stabilized for the time being. Scott Simon, managing director of PIMCO says “We are unlikely to see a significant market disruption in the agency market stemming from the Fed’s retreat.” Translation: he doesn’t think rates are going to rise. Much.
30 year fixed rates are currently ranging from the high 4’s to the low 5’s depending on loan size, fico score, property type, loan purpose and loan-to-value. FHA rates are in the same range and go up to 96.5% loan-to-value (3.5% down.)
There is a new purchase program called HomePath requiring only 5% down on properties currently owned by Fannie Mae. The rates are a bit higher, but there is no requirement for mortgage insurance which is a big plus.
The BIG news is that true “jumbo” financing is returning to the market place. We are suddenly seeing very competitive rates from Chase, US Bank, Wells Fargo and GMAC. Great news for those with loan balances over the current high-balance Agency limit of $729,000. However, be warned, these programs are very conservative in terms of credit, personal liquidity, and loan-to value.
Foreclosure Activity Report
8.33% of all mortgages in Orange County are more than 90 days late. The national average is 8.78% and the California average is at 11.68%. Government programs to prevent foreclosures are slowing foreclosure rates…but most of these homes will likely convert to “short sales.”
My clientele’s purchases this year have primarily been short sales requiring bank approval…which is hard to come by, and can takes months to achieve. Then, when they finally agree to a price, they typically want to close the purchase within 15 to 21 days making for a mad dash at the end! Banks are not easy to deal with!
The highest percentage of distressed sales in the U.S. is in the Riverside SMSA, then Las Vegas and Sacramento.
Happy Hour at BeachFire
Friday evening I went to the BeachFire Bar & Grill in San Clemente. BeachFire opened in 2002 and is credited with the revitalization of downtown San Clemente.
They host a regular Friday evening Happy Hour all night, if you show up in “island” attire…whatever that means. I wore my yellow shell necklace from Maui and it did the trick. I had an aloha shirt in my purse as a back-up though. Drinks are $4 to $5 each, and appetizers range from $4 to $6. What a deal! Any time it rains, they also offer Happy Hour prices….otherwise known as “When it rains we pour.”
In addition to great drinks and appetizers at discounted prices, they have live Reggae music every Friday. We were rockin’… or whining, rather! (Jamaican-style dancing) The band manager treated my friends and I to Jaeger shots which was a hoot. See, you can still have fun over 50. http://beachfire.com/home.asp
My favorite Reggae band had performed the prior week…Smoothie Jones and the RedX. Now they play authentic Jamaican Reggae! I was sorry we missed them. http://www.myspace.com/smoothiejones
They used to play regularly in Dana Point, on the summer cocktail harbor cruises.
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