New mortgage form a grand idea

By Marcie Geffner - Inman News
It's easy to complain about government paperwork, but sometimes something as seemingly simple as a new form can be worth much more than the paper it's printed on. Such is the new standardized and borrower-friendly Good Faith Estimate that has been proposed by the U.S. Department of Housing and Urban Development.
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Can Fed rate cut benefit borrowers?

By Marcie Geffner -

The Federal Reserve made a substantial cut in a key interest rate Tuesday, March 18. The federal funds rate was lowered three-quarters of one percent, referred to as "75 basis points," from an already-low 3 percent to just 2.25 percent.

The rate cut may be good news for borrowers, even though the Fed’s decision doesn’t directly reduce interest rates on consumer or home loans. Instead, the rate cut can influence short-term interest rates on home equity lines of credit, adjustable-rate mortgages tied to the prime rate, car loans and credit cards. Longer-term loans like 30-year fixed-rate mortgages are less likely to benefit from the Fed’s rate cut.

The Fed decided to cut the interest rate due to slower growth in the economy and consumer spending, softer job markets and "considerable stress" in the financial markets.

The lower rate should "promote moderate growth over time" and "mitigate the risks to economic activity," the Fed said in a statement. "The tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters," the Fed observed.

Inflation is also a concern. Price increases are expected to "moderate" this year, but the outlook for inflation has become more uncertain and will need to be carefully monitored, the Fed said.

Copyright 1998 - 2008 LendingTree, LLC. All rights reserved. This story, "Can Fed Rate Cut Benefit Borrowers?" is reprinted by the author with permission from LendingTree.

Overseas Buyers Stake Claim in California Real Estate

A new pond is emerging in which to fish for home buyers--overseas.
As home sales have stalled and home prices have slumped in Southern California, realty agents have geared up to help sellers tap into an international market of property buyers.
Some local agents have adapted their websites for foreign buyers by adding multiple language translation options. Others have joined professional organizations to give themselves an international reach. One local agent has even offered to reimburse buyer travel expenses should a sale close.
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International real estate on the Internet:

Should bankruptcy courts modify mortgages?

By Marcie Geffner -
Federal bankruptcy courts currently offer only scant relief to homeowners who can't afford to pay their mortgages. That could change, if supporters of legislation that would allow bankruptcy judges to modify mortgages can muster enough votes in Congress to override a threatened presidential veto.
Giving bankruptcy courts the authority to modify home loans would be a palatable way to accommodate both borrowers and lenders, says Jack Williams, a bankruptcy professor at Georgia State University College of Law. Borrowers would "get to keep a major asset with significant upside potential" and avoid the emotional wound of losing their homes, while lenders would be placed in "a position based on the fair market value of the property," which would be better than a foreclosure, Williams says.
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Can Real Estate Still Be Fun?

By Marcie Geffner - Inman News
Remember the good old days when home sales were off the charts? Prices were cut from their kite-strings? Open houses were packed with people -- or even cancelled because the sellers had received multiple better-than-asking offers the first day on the market?
Today, the harsh realities seem to pile on like linesmen after the quarterback has been sacked. Home sales have slid to new lows. Values have plummeted back to earth, and appraisals come in lower than asking prices. Mortgage defaults are up, short sales are back in vogue, and foreclosures are up too. Homeowners are walking away and sending jingle mail. Buyers are anxious. Sellers are angry. Legions of I-told-you-so renters are downright gleeful.
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Fed's Actions May Or May Not Aid Mortgage Borrowers

By Marcie Geffner (
Last week was a busy one at the Federal Reserve. The central bank's efforts to improve the flow of money through the nation's gridlocked financial system should help large banks and investment companies, but any immediate benefits for homeowners and homebuyers are far less likely, according to Jeff DerGurahian, senior vice president of capital markets at Metrocities Mortgage in Sherman Oaks, Calif.
"This (action by the Fed) is really more just to help primary dealers and their larger clients work their way through the liquidity crisis that we are in right now," he says. "It does not have that much effect for homebuyers."
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Mortgage Woes Aren't All Alike

By Marcie Geffner - Inman News
In the rampant finger-pointing that has characterized the country's current mortgage crisis, homeowners have come in for their share of the blame. Indeed, much of the punditry and backyard-fence gossip has focused on the misguided financial decisions that landed so many people in troubles seemingly of their own devise.
But absent from the debate has the underlying and undeniable reality that not all of today's troubled homeowners landed in dire straits through the same poor choices. Rather, the degree of bad fortune versus self-inflicted misery varies just as much as the individual stories do.
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Interest rates may drop on 'jumbo' mortgages

By Marcie Geffner,
If you need to borrow more than $417,000 to buy a home or refinance your existing mortgage, you may be in luck. That's because the economic stimulus package, passed by Congress and signed by President Bush, contains a hefty hike in the size of mortgages that two government-sponsored mortgage-finance corporations, Fannie Mae and Freddie Mac, can buy from lenders.
Currently, Fannie Mae and Freddie Mac aren't allowed to buy these so-called "jumbo" loans, even in most areas where housing is very expensive. That means lenders can't sell loans that exceed the $417,000 conforming loan limit to investors as easily as they can sell smaller loans. As a result, these larger loans tend to have higher interest rates.
Now, though, Fannie Mae and Freddie Mac will be allowed to buy loans potentially as high as $729,750, and that could result in lower interest rates. If you live in a high-cost housing area, you might be able to save hundreds of dollars each month on your mortgage payment.
Nothing is ever certain with respect to interest rates. But if you want to buy a home in a high-priced market, the higher loan limits may enable you to borrow more money at a lower interest rate. Or if you want to refinance an existing jumbo mortgage, you may be able to do so more easily and, again, at a lower interest rate. What’s more, if you want to sell a costly home, more buyers may be able to borrow enough money to buy it.
The stimulus package also raises the limits on loans that can be insured by the Federal Housing Administration. The current maximum FHA limit is $362,790.
None of the new loan limits has been announced yet because the calculations are complicated and the amounts will vary based on geographical areas. In some high-cost housing markets, the loan limit may be as high as $729,750.
But no matter where you live, be prepared to act quickly since the higher amounts are set to expire at the end of 2008, unless Congress extends that cutoff date.
This story, "Interest Rates May Drop on 'Jumbo' Mortgages," is reprinted by the author with permission from LendingTree.