Currently the MMI Fund’s capital reserve ratio is 0.24% [...]]]> This month the FHA has reported to Congress that the MMI Fund (Mutual Mortgage Insurance Fund), the backbone of its mortgage programs and what makes FHA mortgages possible, is going to return to its mandated capital reserve level faster than previously expected.

Currently the MMI Fund’s capital reserve ratio is 0.24% but that it would return to its mandated sooner than actuaries last predicted. “As was the case last year, the new actuarial study shows that FHA is expected to sustain significant losses from loans insured prior to 2009, and thus its capital reserve remains below the congressionally mandated threshold of 2% of total insurance-in-force,” an FHA official said. “However, the actuaries’ report concludes that, barring a further significant downturn in home prices, the MMI Fund will start to rebuild capital in 2012, and return to a level of 2% by 2014; outpacing last year’s prediction.”

“In the midst of a tough housing market the FHA MMI Fund continues to be actuarial sound.

“Because of the Obama administration’s strategy to protect the FHA Fund – tightening of risk controls, increased premiums to stabilize near-term finances and expanded loss mitigation assistance to avoid unnecessary claims – this past year’s endorsements had the highest credit quality ever recorded and will yield historically high levels of net receipts in the years ahead.”

The availability of FHA loans is a high part of our housing market and economy, both nationally and locally, and the health of the MMI Fund is also an important part of the housing market and greater economy. This is good news for both of those thing as well and, while we won’t see a more normal real estate market or economy for a while still, more and more news like this tells us the tide is turning!

~Greg

P.S. The FHA has never received any sort of taxpayer bailout! The MMI Fund keeps it solvent and without the need for any sort of congressional assistance. Truly an American success story…

Much [...]]]> The most recent report from Real Estate data reporting firm, DataQuick, shows the number of single-family homes sold in Sacramento County rose over 15% last month (August). The report also shows at least 10% gains in both Placer and El Dorado Counties, and over 9% in Yolo County as well.  

Much of the increased activity at the low-end of the housing market but not entirely, as sales across the board picked up as well. 

DataQuick’s president, John Walsh, said: “The sliver of positive news here is that, no matter how you look at it, last month’s sales beat the year-ago numbers, which were pretty lousy,” and “lower prices and mortgage rates lured some homebuyers off the sidelines last month, but too many others lacked the confidence to step into the game.” 

As we’ve been talking about for a while market trends are volatile month to month, with every slow month seeming to be followed with a month like August, but most of the data shows that things have flattened out overall, and are even picking up in some local markets (such as Roseville). I know the media has turned to selling nothing other than negativity and sensationalism for the last few years (and why not, it’s what gets people’s attention) but it’s not always the way they make it seem… 

Greg
Your Roseville Loan Guy

This data includes the index published by the Federal Housing Finance Agency and shows that [...]]]> Continued depreciation of property values in 2010 has made housing more undervalued relative to income than ever before. Using the latest Case-Shiller home price index American housing was 21% undervalued when compared with disposable income per-capita.

This data includes the index published by the Federal Housing Finance Agency and shows that housing in the 4^th quarter of 2010 was 15% undervalued as measured against American’s disposable income. The results point to the idea that housing is exceptionally undervalued, and the gap has gotten bigger.

Current low housing prices, coupled with historically low interest rates (the 20 year average is 7% but a minimum down FHA loan can be had for 4.5% today), explains why the monthly mortgage payment on a median priced house bought with a 20% down payment has fallen to an all-time low of 13% of the median income. Real estate costs now appears close to fair value when set against rents according to the numbers (and I have seen plenty of people buy for less than they were paying in rent recently).

These low prices and rates mean there is plenty of scope for housing to perform well in the near to mid-term. Also, the Sacramento market currently has MANY more buyers than there are properties to sell in this low-mid price range, so the demand is there to keep it moving.

Looking at the long term, as I have talked about a number of times recently, a sharp fall in the mortgage delinquency rate throughout 2010 means there will be fewer homes in the foreclosure pipeline, and as current foreclosure pipelines continue to shrink we should see a return to a more normal real estate market in the Sacramento region. This will not happen overnight but with less and less first payment defaults, there will be less and less foreclosures going forward.  

So, with home prices as “undervalued” as any time in history, what are you waiting for?

~Greg

Ric’s article <- click

For years we’ve been serving the greater Sacramento area real estate world in the best way any company can, with all of the products and tools anyone would possibly need to obtain the best possible financing for their homes. But we still have to act as broker for a [...]]]> Hello everyone,

For years we’ve been serving the greater Sacramento area real estate world in the best way any company can, with all of the products and tools anyone would possibly need to obtain the best possible financing for their homes. But we still have to act as broker for a few loan products that we were not able to do in-house. This is not a problem, it’s the same issue every mortgage broker has to face on every one of their loans, but we as a locally-owned mortgage banker, do not have to deal with on the vast majority of ours. One exception was VA financing. A great product that we do a lot of for our clients, but one we had to broker to another bank to close. Taking the control of turntimes, underwriting, and closing out of our hands.

In 2010 Comstock Mortgage submitted our application for authority to close VA Loan “in-house”.  After a long awaited decision, we have finally received the news that our VA application has been APPROVED.  What a great way to start 2011!!!!

Now we can turn our in-house underwriting, docs, and closing, 24 hour turntimes, as well as all the other benefits of closing loans in house that we already provide to the real estate world for Conventional, FHA, USDA/Rural, and other in-house products to VA buyers as well. All the details are just now being rolled out and we should have the Comstock Mortgage VA financing available very soon!

I’ll be keeping an eye out to see (make sure) this product can be combined with our ‘Return To Homeownership’ Down Payment Assistance Grant program, as I expect it will…

-Greg

For seven straight months mortgages delinquencies have fallen, even while the rate of homes in the foreclosure process and those repossessed by banks climbed. According to CoreLogic Systems, the firm that tracks the rate of delinquency for all homes with a [...]]]>

Good news? In this world? No way! I thought it was all doom and gloom…

For seven straight months mortgages delinquencies have fallen, even while the rate of homes in the foreclosure process and those repossessed by banks climbed. According to CoreLogic Systems, the firm that tracks the rate of delinquency for all homes with a mortgage in the four-county region, 10.47% of area homes are 90 days delinquent, including 3.21% that are in the foreclosure process and 1.04 percent that went back to the bank during August.

The foreclosure and repossession numbers were both up from July. But Sacramento’s 90-day delinquency figure of 10.47% is down from a high of 11.58% in January. The important number too look at here is that delinquencies are going down, seven straight months in a row at that. Even though foreclosures have gone up in that same time-frame, we can safely ignore that number because of how long it takes to foreclose on a home.

Those homes that were taken back by the bank in that period were from homeowners that were delinquent six months to a year before that, when delinquencies were higher. Now that delinquencies are going down, foreclosures six months to a year from now will also be lower.

This is good news for all of us, our local community, and economy. It’s not good news for those sitting on the fence about buying a home. I don’t think that home prices are going to skyrocket any time soon, not at all, but as foreclosure inventory goes down, prices will go up. If you haven’t bought a home you’re probably safe, probably safe for quite a while, but these trends show some strength for the Sacramento area real estate market down the road. Quite possibly sooner than some people think (remember the doom and gloom). With nine consecutive months of private-sector job growth, and seven straight months of mortgage delinquencies falling, I can see a more normal Sacramento market and economy. And it’s closer than I thought it would be…

~Greg