Specializing in Batesville Mortgages, Indiana Home Loans, Batesville Second Mortgages, Batesville Indiana Debt Consolidation

 

Welcome to L.F.S. Mortgage Market Monitor

The residential mortgage market is UNDER SIEGE and I am here to help you monitor it and guide you through it. 

First, a bit about our company relative to the current market mess.  Legacy Financial is a relatively boring mortgage company.  Well over 90% of our lending is standard, vanilla mortgages that are supported by the Federal Housing Administration (FHA) or Fannie Mae.  These loans are fully documented and have a standard loan amount vs. home value ratio.  As a Company, our default rate, or the number of our loans that have ended in foreclosure is less that 0.02 or two tenths of 1%.  We do not place people into loans that they cannot afford and will come back to bite them.  Net, our business has been largely unaffected by the recent meltdown in the mortgage market outside of dealing with changes in mortgage interest rates. 

Thanks to our experience and expertise in staying out of risky home lending, we are well positioned to help people who are struggling with out of control mortgages or simply trying to take advantage of the outstanding buying market we are experiencing.

 

 Legacy Financial Services Press Release - December 2007

New Mortgage Relief Plan is Full of Gaping Holes

Batesville, IN - Last week President Bush announced the new mortgage relief plan for borrowers trapped in high- risk adjustable rate subprime mortgages. The approval was granted last week in an effort to slow down the subprime mortgage market implosion. At first glance this new plan would appear to be a gift from the heavens for borrowers facing eye-popping interest rate increases. Truth be told, this plan serves only a small fraction of the borrowers “stuck” in these high-risk subprime loans.

First, the plan will only help homeowners who have 3% or less equity in their home. Granted, this will assist homeowners who purchased their homes recently with no down payment, otherwise known as 100% financing. What about those buyers who bought last year? In most markets nationwide, the average rate of appreciation on a home is between 3-4%. What this means is that if you have owned your home for 1 year or more, you would fall outside of this relief plan.

Secondly, borrowers will need to prove that they were able to afford their house payment before their adjustment and also prove that the interest rate increase will cause them to fall behind on their mortgage payments. This will be very tough to prove because many are already struggling to keep up with their payments because of the higher interest rates that are common with subprime loans.

Furthermore, this plan ignores the fact that many of these homeowners accumulate unwanted and dangerous credit card debt in an effort to stay afloat with their mortgage payments. So, if they do qualify for this mortgage relief plan, did they really gain anything other than a delay of the inevitable?

The best opportunity for these unfortunate homeowners is to have congress step up and vote “yes” on Bush’s second initiative to raise the government insured loan limits. Government insured loans are much more stable and have substantially lower interest rates than sub-prime loans. If congress can agree to pass this proposal, then homeowners will truly benefit by virtue of their improved cash flow.

 

CAMERON'S MORTGAGE MARKET NEWS

For my $$$, the news feed below is the BEST for UNDERSTANDING what's happening in the mortgage markets vs. just reporting "news".   News is just set of facts.  These articles put learning around these facts.

Please read the articles below so you understand why the market is moving and how best to protect yourself or profit from these moves!

Mortgage and Housing at Seeking Alpha

  • Did Economists Miss the Housing Problem?

    A reporter called Tuesday for a retrospective on my forecast of a year ago. I groaned, thinking the headline would be "Gotcha!" but the actual quotes he had weren't so bad. Apparently I said that we had overbuilt housing and that it would take a couple of years at least to work off the excess supply. Boy, that sounds right.

    Confirming that is an interesting article from the Wall Street Journal's Real Time Economics which says in 2005 there was a burst of stories about a housing bubble. Here's their chart, based on 50 major daily newspapers and how often stories refer to a housing or real estate bubble. (Hat tip to Arnold Kling at EconLog.)


    Complete Story »
  • More 'Hope for Homeowners'? GSEs Suspend Foreclosures into January 2009
    Anthony M. Freed submits:

    More “Hope for Homeowners” facing foreclosure, or just more hot-air from Washington, DOA?  Well it appears that Fannie Mae (FNM) and Freddie Mac (FRE) - the semi-defunct, quasi-government holders of trillions in mortgage debt announced yesterday, November 20, 2008, that they will suspend foreclosure proceedings into January 2009, obviously the very, very least they could do. 

    The suspension will affect as many as 16,000 families facing a Holiday heave-ho.


    Complete Story »
  • O.C. Housing Market: Sales Are Booming, Prices Are Not

    The Orange County residential real estate market—which we semi-obsess over around here because it’s so close to ground zero of the real estate crunch, and because the Orange County Register helpfully publishes copious amounts of data about it—keeps bouncing back. Home sales rose by 66.6% last month from a year ago. That compares to a 62.3% rise in September, and a 18.7% rise the month before that. Sales have now been running at pre-crackup levels for four straight months. Take a look:


    Complete Story »
  • Home Buyers in Southern California Ignore Bad Financial News
    tim plaehnTim Plaehn submits:

    October home sales data is starting to come in for the California markets and the positive trends are continuing. I had read several articles predicting that home sale would stall as buyers' fear was incited by the stock market crash.

    Southland home sales up, prices down; foreclosures now half the market.


    Complete Story »
  • Housing Market Forecast: Storm to Continue
    Money Morning submits:

    By Don Miller

    The U.S. housing market is already being pounded by the “perfect storm.” And the outlook for the New Year is for the stormy weather to continue – and probably to get worse.


    Complete Story »
  • Is the Real Estate Plunge Really That Shocking?
    IndexUniverse submits:

    By Jim Wiandt

    With the Dow down 40% this year is it really a surprise that the driver of this downturn, real estate, could end up down 30%?


    Complete Story »
  • Futures Show Home Prices Continuing To Plummet
    IndexUniverse submits:

    By Matthew Hougan

    I spent some time looking at the Chicago Mercantile Exchange's housing futures this week.  The futures are tied to the S&P Case-Shiller Home Price Indexes, and are the only liquid way to bet on where house prices are heading.


    Complete Story »
  • Homebuilder Confidence Hits Record Low: What This Means for Investors

    The National Association of Homebuilders released their survey asking homebuilders for their level of confidence in a near term recovery of the housing market. As you might imagine, the results were not good. In fact, the survey which has been conducted regularly since 1985 reflected the lowest level of confidence that it has ever recorded. During the most recent quarter, the Associated Press reports, fully 40% of all homes sold were bank sales of foreclosed properties. This contributed to a 9% decline in the median price of all homes sold during the period.

    What does this mean for the average American? If you own a house, it is probably worth less than it was a year ago. If you are planning on staying in the home, this isn’t a big deal. If you’re planning to sell, it may mean that you have much less equity, if any, than you planned. If you’re in the market to buy a house, you are negotiating from a position of strength, especially if you are considering a bank-owned property. For others, it means that we can expect the homebuilder industry to be the next in line to ask for a government bailout.


    Complete Story »
  • Why Housing Dragged Down Stocks
    Casey B. Mulligan submits:
    The housing crash is one of the fundamentals our economy inherits from the past. This is boom time for the nonresidential sector because, after a long wait, the housing sector no longer absorbs so many resources. If you are young with new business ideas -- good news: you no longer have to compete with the housing sector for funding.

    Although business capital and GDP will grow (my detailed predictions are here), old capital has to compete with the new projects. That's part of why the stock market falls when we learn that housing investment is lower than expected. The chart below (click to enlarge) is from my NBER wp "Market Responses to the Panic of 2008" showing how housing investment appears to discourage non-residential investment.


    Complete Story »
  • An Optimum Government Policy to Aid the Financial Crisis
    Harry Long submits:

    What would an optimum government policy for helping the financial crisis look like? On each side of the political spectrum, we can all agree that it should be transparent, targeted, provide patient capital to the financial markets, help with deleveraging, and minimize government payouts.

    The number one thing the government would need to do is create market incentives for investors to provide patient capital to the debt market. Otherwise, most investors may keep their wallets zipped.


    Complete Story »

 

Today is 11/21/2008

 

Mortgage Market Reports

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