The Federal Housing Administration says it will publish new ceilings for the Fannie Mae and Freddie Mac mortgages it insures in mid-March. Its current cap on loans is $417,000. The elevated ceilings, which are to remain in effect for one year, will vary across the nation, based on each area's median home price.
For five years, housing industry groups argued that the loan ceilings for such mortgages were too low in markets with skyrocketing home prices such as the Inland area. Then, home values tumbled.
Now that private mortgage investors have fled, scared by rising defaults and foreclosures, legislation enacted earlier this month will permit Fannie Mae and Freddie Mac, both government-sponsored purchasers of mortgages, and FHA to play a bigger role.
Mortgage lenders are hoping that Fannie Mae and Freddie Mac will provide an alternative to the borrowers with so-called "jumbo mortgages." Since last summer, they have had to pay very high interest rates -- about 1.5 percentage points higher than those on smaller loans.
Saturday, February 23, 2008
Wednesday, February 20, 2008
different markets experiencing different situations
A half-dozen MLS executives around the country were asked to tell us how median prices are fairing in their neck of the woods, what’s happening to their membership numbers, and how inventories are running at the beginning of the year.
Their insights provide several valuable impressions. Whether it was someone we spoke to in California or Connecticut, New Jersey or Nevada, one consistent theme was that the picture painted by the media portrayed conditions on every block in America in the blackest possible terms. The reality is that different regions-and different markets within those regions-are experiencing different situations.
The lending practices that encouraged overreaching on the part of many buyers-many first-time buyers, and many challenged buyers in the “subprime” area-are being addressed nationally and recovery in most markets is felt to have either begun or be within sight. Some of our MLS executives believe that their market’s low point was reached as early as November 2007, and that they have leveled out and will begin to rise as early as spring 2008. Others do not expect their markets to find the bottom until mid-2008, starting to recover around the first quarter of 2009.
In the most resilient markets, median prices had barely dropped, and in some neighborhoods, continued to rise. The general worst-case scenario for 2007 was depreciation at a rate of 22-25%. MLS membership was the one universal, dropping about 10% across the board. But, in all cases, this followed record years of enrollment.
For a company like Fidelity National MLS Systems & Solutions, which must anticipate market shifts in order to have the appropriate tools for real estate professionals, the current cycle, while severe, is by no means unprecedented. We also asked our MLS panelists what products or services we have provided or could provide to ensure that their agents and brokers will not only survive, but turn these current challenges into opportunities.
As one MLS executive, who has also served as a liaison between Fidelity National MLS and colleagues in the industry, told me, “What we’re doing in 2008 as an MLS organization is really focusing on providing the best productivity tools we can and more affordable options for the members who are hanging in there and working. We are embracing quite a few of the newer products that Fidelity is offering because we can offer them affordably to our members.”
For the MLS in question, these offerings include broker/agent Websites and the Cyberhomes Websites. In both cases, the capability to “brand” their sites was the key attraction. In addition, this organization is looking at DocCentralª and the rDesk suite.
We should not whitewash what, in many areas, has been a near-devastating drop. But Realtors and brokers in those areas should take heart in news from their colleagues that are beginning to get up from the floor. The dawn of 2008 may already be streaked with the light of better days. Beverly Faull is the senior vice president and general manager of Fidelity National MLS.
Their insights provide several valuable impressions. Whether it was someone we spoke to in California or Connecticut, New Jersey or Nevada, one consistent theme was that the picture painted by the media portrayed conditions on every block in America in the blackest possible terms. The reality is that different regions-and different markets within those regions-are experiencing different situations.
The lending practices that encouraged overreaching on the part of many buyers-many first-time buyers, and many challenged buyers in the “subprime” area-are being addressed nationally and recovery in most markets is felt to have either begun or be within sight. Some of our MLS executives believe that their market’s low point was reached as early as November 2007, and that they have leveled out and will begin to rise as early as spring 2008. Others do not expect their markets to find the bottom until mid-2008, starting to recover around the first quarter of 2009.
In the most resilient markets, median prices had barely dropped, and in some neighborhoods, continued to rise. The general worst-case scenario for 2007 was depreciation at a rate of 22-25%. MLS membership was the one universal, dropping about 10% across the board. But, in all cases, this followed record years of enrollment.
For a company like Fidelity National MLS Systems & Solutions, which must anticipate market shifts in order to have the appropriate tools for real estate professionals, the current cycle, while severe, is by no means unprecedented. We also asked our MLS panelists what products or services we have provided or could provide to ensure that their agents and brokers will not only survive, but turn these current challenges into opportunities.
As one MLS executive, who has also served as a liaison between Fidelity National MLS and colleagues in the industry, told me, “What we’re doing in 2008 as an MLS organization is really focusing on providing the best productivity tools we can and more affordable options for the members who are hanging in there and working. We are embracing quite a few of the newer products that Fidelity is offering because we can offer them affordably to our members.”
For the MLS in question, these offerings include broker/agent Websites and the Cyberhomes Websites. In both cases, the capability to “brand” their sites was the key attraction. In addition, this organization is looking at DocCentralª and the rDesk suite.
We should not whitewash what, in many areas, has been a near-devastating drop. But Realtors and brokers in those areas should take heart in news from their colleagues that are beginning to get up from the floor. The dawn of 2008 may already be streaked with the light of better days. Beverly Faull is the senior vice president and general manager of Fidelity National MLS.
Tuesday, February 19, 2008
cooperative to negotiate a group health care plan
On Tuesday, Governor Sanford will sign into law S.588, legislation that would allow small businesses and independent contractors to pool together as a cooperative to negotiate a group health care plan. The Governor is hosting a signing ceremony on Tuesday at 10:00 am in downtown Columbia.
South Carolina REALTORS® worked hard alongside many dediciated legislators to move the bill to the Governor's desk, and we would like to thank you for your help in making this happen. This new law will be key in providing new health insurance options to REALTORS® and small businesses in South Carolina. SCR leadership and staff are now researching the feasibility of SCR forming a health group cooperative through which members could purchase health insurance.
www.843Realtor.com
South Carolina REALTORS® worked hard alongside many dediciated legislators to move the bill to the Governor's desk, and we would like to thank you for your help in making this happen. This new law will be key in providing new health insurance options to REALTORS® and small businesses in South Carolina. SCR leadership and staff are now researching the feasibility of SCR forming a health group cooperative through which members could purchase health insurance.
www.843Realtor.com
South Carolina highway safety laws
The report is out on how South Carolina stacks up to the rest of the country in highway safety laws and this time, it's good news although there are areas our state needs to work on.
South Carolina ranks in the top ten in the nation.
The score is based on 15 traffic laws recommended by safety advocates. While we are doing very well on most of them, the report says we still need to work on five.
Fewer accidents and more laws.
That's the goal of Advocates for Highway and Auto Safety which says South Carolina is off to a good start, thanks to state legislators.
Representative Thad Viers said "We have a long way to go, but I'm glad we're moving forward."
Drivers in South Carolina must follow seat belt requirements and several drunk driving laws.
State falls short in five safety advocates recommendations including an ignition interlock for first time DUI offenders and certain teen driving restrictions one dealing with passengers, the other with cell phones.
And for the state that brings in thousands of bikers a year the controversy remains over whether there should be a helmet law for all riders.
Safety advocates agree, but it's a law some legislators say will never pass.
"Educate motorcycle owners about the positive effects of wearing helmets, but I don't think we should mandate it," said Viers.
The states that ranked worst for traffic safety laws were Arkansas, South Dakota and Wyoming.
South Carolina ranks in the top ten in the nation.
The score is based on 15 traffic laws recommended by safety advocates. While we are doing very well on most of them, the report says we still need to work on five.
Fewer accidents and more laws.
That's the goal of Advocates for Highway and Auto Safety which says South Carolina is off to a good start, thanks to state legislators.
Representative Thad Viers said "We have a long way to go, but I'm glad we're moving forward."
Drivers in South Carolina must follow seat belt requirements and several drunk driving laws.
State falls short in five safety advocates recommendations including an ignition interlock for first time DUI offenders and certain teen driving restrictions one dealing with passengers, the other with cell phones.
And for the state that brings in thousands of bikers a year the controversy remains over whether there should be a helmet law for all riders.
Safety advocates agree, but it's a law some legislators say will never pass.
"Educate motorcycle owners about the positive effects of wearing helmets, but I don't think we should mandate it," said Viers.
The states that ranked worst for traffic safety laws were Arkansas, South Dakota and Wyoming.
Monday, February 18, 2008
economic rebound by the middle of the year
The combination of a fiscal stimulus package and successive interest-rate cuts should spark an economic rebound by the middle of the year, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified Thursday.
Addressing an often-testy Senate Banking Committee, both men also rejected criticism that they were slow to respond to an unfolding economic crunch.
“At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary policy and fiscal stimulus begin to be felt,” Bernanke said.
Financial institutions are sitting on capital to shore up their balance sheets and aren’t lending freely, he said. This tightened lending is beginning to affect everything from student loans to the municipal bonds that help pay for highway and bridge construction.
As a consequence, the Fed chief said, “the outlook for the economy has worsened in recent months, and the downside risks to growth have increased.”
Bernanke made it clear that the Fed could move quickly to cut interest rates again if conditions deteriorate further.
“A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated,” he said, alluding to more reductions.
In response to Wall Street volatility and a slowing economy, the Fed cut its benchmark federal funds rate by 1.25 percentage points in January-and by 2.25 percentage points since last September-bringing it down to 3%. The effects of monetary policy are slow to be noticed, so most of the benefit from lower borrowing costs won’t be felt until later in the year.
When Paulson was asked whether he thought that the nation would fall into recession, he answered: “I believe we are going to continue to grow, albeit at a slower rate.”
Recession fears have heightened on a bevy of bad economic news, including sluggish fourth-quarter economic growth, negative job growth in January, sluggish retail sales and a much sharper than expected decline in nonmanufacturing business activity.
Wall Street wasn’t impressed with the latest read by economic regulators.
The Dow Jones Industrial Average closed down 175.26 points to 12,376.98; the S&P 500 was off 18.35 points to 1348.86 and the Nasdaq finished down 41.39 points to 2332.54.
Markets shrugged off Bernanke’s optimism and focused instead on a hearing Thursday by the capital markets subcommittee of the House Financial Services Committee. There, Democratic New York Gov. Eliot Spitzer warned that a “financial tsunami” awaits if there’s a ratings downgrade of bond insurers that underwrote policies on roughly $2.4 trillion in debt, much of it mortgage bonds at the heart of today’s credit-market turmoil.
His insurance superintendent, Eric Dinallo, has led a public-private effort to shore up bond insurers in hopes of averting downgrades that would force many investors to sell off any bonds no longer considered top-rated and lead to more losses on Wall Street.
Hoping to offset some of the housing and credit-market woes, Congress last week passed a $168 billion economic stimulus package of tax rebates for consumers and tax relief for businesses. Most Americans will start to receive tax rebates of $300 to $600 in mid-May.
Bernanke said he expected that this action would make for a “more resilient” economy. Paulson described it as a “temporary boost” to help weather the housing slump.
But Alabama Republican Sen. Richard Shelby equated the rebates “to pouring a glass of water in the ocean and hoping it will make a difference.” Tennessee Sen. Bob Corker, who’s also a Republican, added, “sprinkling $160 billion around the country and asking people to spend it quickly to me was not a solution worth debating or passing.”
Democrats weren’t any friendlier.
New Jersey Sen. Robert Menendez accused the panelists of being asleep at the switch as housing woes spread to the broader economy.
“Instead of warning bells . . . we had timid responses. I think we’ve seen what the let’s wait and see approach has produced and where it’s gotten us,” he said, adding that “what we got was a snooze button. We have been behind the curve.”
Paulson responded that the Bush administration has moved aggressively, and he pushed back at senators who accused him of glossing over economic problems.
“I didn’t create this problem. I am working to do something about it,” he shot back at one point.
In response to Menendez’s bleak economic assessment, Paulson said, “If you are trying to talk up the economy, I’d hate to see you talk it down.” The senator answered: “I’m just trying not to hide my head in the sand.”
Much of what ails the U.S. economy isn’t easily addressed by a stimulus plan or interest rate cuts. An excessive run-up in home prices now is unwinding across the nation. And investors have lost confidence in the complex financial instruments that bundled mortgages into bonds for sale to investors, many overseas. This lack of confidence has extended to the companies that issued insurance policies on the difficult-to-understand financial instruments.
Addressing an often-testy Senate Banking Committee, both men also rejected criticism that they were slow to respond to an unfolding economic crunch.
“At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary policy and fiscal stimulus begin to be felt,” Bernanke said.
Financial institutions are sitting on capital to shore up their balance sheets and aren’t lending freely, he said. This tightened lending is beginning to affect everything from student loans to the municipal bonds that help pay for highway and bridge construction.
As a consequence, the Fed chief said, “the outlook for the economy has worsened in recent months, and the downside risks to growth have increased.”
Bernanke made it clear that the Fed could move quickly to cut interest rates again if conditions deteriorate further.
“A critical task for the Federal Reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated,” he said, alluding to more reductions.
In response to Wall Street volatility and a slowing economy, the Fed cut its benchmark federal funds rate by 1.25 percentage points in January-and by 2.25 percentage points since last September-bringing it down to 3%. The effects of monetary policy are slow to be noticed, so most of the benefit from lower borrowing costs won’t be felt until later in the year.
When Paulson was asked whether he thought that the nation would fall into recession, he answered: “I believe we are going to continue to grow, albeit at a slower rate.”
Recession fears have heightened on a bevy of bad economic news, including sluggish fourth-quarter economic growth, negative job growth in January, sluggish retail sales and a much sharper than expected decline in nonmanufacturing business activity.
Wall Street wasn’t impressed with the latest read by economic regulators.
The Dow Jones Industrial Average closed down 175.26 points to 12,376.98; the S&P 500 was off 18.35 points to 1348.86 and the Nasdaq finished down 41.39 points to 2332.54.
Markets shrugged off Bernanke’s optimism and focused instead on a hearing Thursday by the capital markets subcommittee of the House Financial Services Committee. There, Democratic New York Gov. Eliot Spitzer warned that a “financial tsunami” awaits if there’s a ratings downgrade of bond insurers that underwrote policies on roughly $2.4 trillion in debt, much of it mortgage bonds at the heart of today’s credit-market turmoil.
His insurance superintendent, Eric Dinallo, has led a public-private effort to shore up bond insurers in hopes of averting downgrades that would force many investors to sell off any bonds no longer considered top-rated and lead to more losses on Wall Street.
Hoping to offset some of the housing and credit-market woes, Congress last week passed a $168 billion economic stimulus package of tax rebates for consumers and tax relief for businesses. Most Americans will start to receive tax rebates of $300 to $600 in mid-May.
Bernanke said he expected that this action would make for a “more resilient” economy. Paulson described it as a “temporary boost” to help weather the housing slump.
But Alabama Republican Sen. Richard Shelby equated the rebates “to pouring a glass of water in the ocean and hoping it will make a difference.” Tennessee Sen. Bob Corker, who’s also a Republican, added, “sprinkling $160 billion around the country and asking people to spend it quickly to me was not a solution worth debating or passing.”
Democrats weren’t any friendlier.
New Jersey Sen. Robert Menendez accused the panelists of being asleep at the switch as housing woes spread to the broader economy.
“Instead of warning bells . . . we had timid responses. I think we’ve seen what the let’s wait and see approach has produced and where it’s gotten us,” he said, adding that “what we got was a snooze button. We have been behind the curve.”
Paulson responded that the Bush administration has moved aggressively, and he pushed back at senators who accused him of glossing over economic problems.
“I didn’t create this problem. I am working to do something about it,” he shot back at one point.
In response to Menendez’s bleak economic assessment, Paulson said, “If you are trying to talk up the economy, I’d hate to see you talk it down.” The senator answered: “I’m just trying not to hide my head in the sand.”
Much of what ails the U.S. economy isn’t easily addressed by a stimulus plan or interest rate cuts. An excessive run-up in home prices now is unwinding across the nation. And investors have lost confidence in the complex financial instruments that bundled mortgages into bonds for sale to investors, many overseas. This lack of confidence has extended to the companies that issued insurance policies on the difficult-to-understand financial instruments.
Sunday, February 17, 2008
Gambling in churches
Senate committee has approved a bill to allow gambling in churches.
The bill would let churches and other nonprofit groups hold card games for charity. The bill would create an exception for fundraising to the 200-year-old ban on dice and card games.
The bill spells out which games that should be allowed, including five-card draw, Texas Hold'em, and seven-card stud.
Orangeburg Senator Brad Hutto says the bill would be a money making opportunity for nonprofit organizations.
The South Carolina Association of Nonprofit Organizations says groups want to raise money through events like casino nights.
The bill would still have to go through the full Senate and the House. But a spokesman says Governor Mark Sanford generally opposes extending gambling for any purpose.
The bill would let churches and other nonprofit groups hold card games for charity. The bill would create an exception for fundraising to the 200-year-old ban on dice and card games.
The bill spells out which games that should be allowed, including five-card draw, Texas Hold'em, and seven-card stud.
Orangeburg Senator Brad Hutto says the bill would be a money making opportunity for nonprofit organizations.
The South Carolina Association of Nonprofit Organizations says groups want to raise money through events like casino nights.
The bill would still have to go through the full Senate and the House. But a spokesman says Governor Mark Sanford generally opposes extending gambling for any purpose.
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