Melbourne Area Blog

I am asked frequently why it is so hard to get a mortgage these days. There is no one answer for that question.

It started many years ago when Congress decided that all Americans should be able to buy a home. That is when Fannie Mae & Freddie Mac, instructed by Congress (think Chris Dodd & Barney Franks) began loosening the restrictions to qualify for a mortgage. The bubble burst in 2006 -2007 and the fall out began. No need to get into falling homes prices, short sales & foreclosures in this post.

With the number of mortgages going into default, and new regulations on mortgage companies that took effect Jan 1st of this year, the private banks became more stringent in lending money. Most loans now require at least 20% down (oh the good old days! The purpose for this has always been so the buyer does have some equity in the home).

I wanted to share a few excepts from an article I read this week. It seems that the federal government is backing most mortgages today! Interesting...

"With little fanfare, the U.S. government has rapidly become the nation’s top backer of mortgages that require little or no money down, with taxpayer guarantees on them surpassing $1 trillion earlier this year, a FOX Business analysis shows."  

"The Federal Housing Administration alone has expanded loan guarantees to $865 billion in June, including some refinancings of existing loans – almost double the 2007 level -- according to an agency report."

"The Treasury Department has already pumped $145 billion into failed mortgage giants Fannie Mae and Freddie Mac, which generally have insured traditional “prime” loans requiring a 20% down payment and which themselves own or guarantee about $5 trillion in mortgages."

"Between Fannie, Freddie and the agencies, the federal government is now guaranteeing about 95% of all new mortgages, including refinanced loans, according to Inside Mortgage Finance."

Click here to read the full article:

http://www.foxbusiness.com/markets/2010/07/26/second-housing-crisis-t-taxpayer-money-risk/

No wonder Fannie Mae & Freddie Mac were excluded from the recent Financial Reform Bill signed into law. With more regulation it is unlikely that banks will be more willing to lend, leaving the government to back even more mortgages.

Here are the June 2010 sales stats compared to June 2009:

The June 2010 numbers:

Single Family Home Sales - 681 - up -.15% compared to June 2009

Condo Sales - 99 - up - 1.02% compared to June 2009

Townhome Sales - 54- up -17.39% compared to June 2009

June 2010 Average Prices:

Single Family Homes - down -.51% compared to June 2009

Condo - down - 15% compared to June 2009

Townhomes - down -  8.94% compared to June 2009

High Sale Prices June 2010:

Single Family: $1,750,000

Condo: $517,500

Townhome: $500,000

Here are the May 2010 sales stats compared to May 2009:

The May 2010 numbers:

Single Family Home Sales - 612 - down -4.38% compared to May 2009

Condo Sales - 103 - No change compared to May 2009

Townhome Sales - 34 - up -2.94% compared to May 2009

May 2010 Average Prices:

Single Family Homes - down -4.05% compared to May 2009

Condo - down - 11.70% compared to May 2009

Townhomes - down -  5.32% compared to May 2009

High Sale Prices May 2010:

Single Family: $2,050,000

Condo: $1,100,000

Townhome: $325,000

Here are the April 2010 sales stats compared to April 2009:

The April 2010 numbers:

Single Family Home Sales - up 8.36% compared to April 2009

Condo Sales - up 25.53% compared to April 2009

Townhome Sales - down -17.39% compared to April 2009

April 2010 Average Prices:

Single Family Homes - down -7.03% compared to April 2009

Condo - down - 25.53% compared to April 2009

Townhomes - up 15.70% compared to April 2009

High Sale Prices April 2010:

Single Family: $835,000

Condo: $799,000

Townhome: $435,000

Interesting information regarding selling your home if Cap & Trade passes:

A License Required for your HOUSE?

If you own your home you really need to check this out. At the end of this 
blog is the Google link to verify.  If the country thinks the housing
market is depressed now, wait until everyone sees this; no one will be
buying homes in the future. 

A License will be required for your house...no longer just for cars and
mobile homes....Thinking about selling your house.  Take a look at H.R. 2454
(Cap and Trade bill).  

Beginning 1 year after enactment of the Cap and Trade Act, you won't be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the "Cap & Trade" bill passed by the House of Representatives, if it is also passed by the Senate, will be the largest tax increase any of us has ever experienced.

A year from now you won't be able to sell your house... The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included. In effect, this bill prevents you from selling your home without the permission of the EPA administrator. 

To get this permission,you will have to have the energy efficiency of your
home measured. Then the government will tell you what your new energy
efficiency requirement is and you will be forced to make modifications to
your home under the retrofit provisions of this Act to comply with the new
energy and water efficiency requirements.

Then you will have to get your home measured again and get a license (called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don't get a high enough rating, you can't sell. 

Read more:

Cap and Trade: A License Required for your Home
http://www.nachi.org/forum/f14/cap-and-trade-license-required-your-home-4475
0/ 
 HR2454 American Clean Energy & Security Act:
http://www.govtrack.us/congress/bill.xpd?bill=h111-2454

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Although oversall number of sales increased month over month in the past year, February saw a decrease in sales & average price compared to February 2009. This is the first time in over a year that all the numbers were in the red.

The February 2010 numbers:

Single Family Home Sales - -12.42% compared to February 2009

Condo Sales - -1.37% compared to February 2009

Townhome Sales - -10.00% compared to February 2009

February 2010 Average Prices:

Single Family Homes - -6.46% compared to February 2009

Condo - -.60% compared to February 2009

Townhomes - -8.05% compared to February 2009

Last year (2009) the number of home sales increased in 11 months out of 12 compared to sales in the comparable month of the previous year (2008).

It will be interesting to see if the market can sustain the increase in sales numbers through 2010.

The January 2010 numbers:

Single Family Home Sales - +1.76% compared to January 2009

Condo Sales - +25.86% compared to January 2009

Townhome Sales - +7.69% compared to January 2009

January 2010 Average Prices:

Single Family Homes - +1.57% compared to January 2009

Condo - +39.29% compared to January 2009

Townhomes - -10.40% compared to January 2009