Clients are calling asking what is happening with the Mortgage business and how will it affect my home value?  Here is a brief outline of what is happening:     

We are in an unprecedented mortgage market equivalent to a category 5 hurricane if it were a storm.  For those that are "pre-approved" with a Lender, the loan program they are "pre-approved" on may no longer be available an hour later.  Many programs that were available two weeks ago are gone today, second mortgages are extremely hard to find, "Stated Income" loans are being priced so high it does not make sense, Jumbo loans (loans over $417k) are raising rates daily, & mortgage companies are struggling to keep their doors open.  The whole reason for this is really complicated but the bottom line is, the loans people received a year ago are not performing (the borrowers are not making their payments on time) so the Lenders are taking it in the shorts.

The good news is regular "conforming loans" (up to $417k) that are "Full Documentation" are still good and still have 100% financing options available as well.  The rates are on these loans are just 1.5% ish over the record lowest rates recorded in 2003.  The point I want to make is that the market is changing daily.

Here is the real question: What is this doing for my house value?  The answer is: Time will tell, and here is why...

With a record number (25k+) of homes on the MLS (Multiple Listing Service for Realtors) many people are scared & think their home value is going down every month.  The reality is, the buyers have so many homes to choose from they are not in a hurry to "pin the tail on the home".  Statistics say a normal MLS inventory should be about 1% of the population which would make it about 18k ish here in the valley.  That being said, there are just not as many people buying homes now & there are lot of people trying to sell right now.  So you ask "with so many people still moving here every month, where are the homebuyers"?  The answer to that question is: Some are looking for a deal, some don't have income to qualify, & some do not qualify since the loan guidelines have changed so much.  Fast forward that to what is getting ready to happen soon...jobs.  There is a LOT of construction & a lot of jobs going to be created by the end of next year.  With that will come more homebuyers.  My take is, give it some time, they will come.  The Lenders will loosen the guidelines after the short sale/foreclosure mess is dealt with (next 6-12 months), the people with ARM's that are adjusting will figure it out by refinancing or selling, & the renters will find out their rent is going up after their lease runs out so they will turn into a homebuyer.

I really feel the pendulum is starting to swing back.  We just need time.  The old saying is: "What goes up...Must come down".  We are down now, but the up is on its way again.  Please make sure that all of your friends & co-workers are working with a reputable Lender more than ever before.  The risk of shopping for the best rate will kill the deal in today's market.  When they find the "best deal" the loan program might just be gone.

Thanks again for being a client of ours.  I do not take your business or your trust lightly and will never take it for granted. 

Reposted here with permission from Mark Baker, of The Mark A. Baker Team also known as "The Mortgage Experts" of Meridas Capital.  Please fee freel to e-mail by clicking on his name or phone him direct @ 702-451-1040 with any of your questions.  Or, contact me and I will be happy to put you in touch with him!

www.MaryW.com  or  www.MaryWarren.com

Rates & Programs are subject to change without notice prior to locking.  Locks are eligible upon underwriting approval and are valid for 30 days.

I wanted to take a moment and provide you with a little market update since this morning has provided us with a more news tthen we probably wanted to know.   The market has had a pull back of over 500 points and fears of a cooling market not only here in the U.S. but also in China. We have seen a little rebound, however at the close the market looks like it will finish at about 400 points lower today, marking one of the largest single day declines in the history of Wall Street. The NASDAQ fared much better however with only a 96 drop from yesterday’s high.

The “GOOD” news is that the 10 year note that drives the 30 year Fixed rate dropped to 4.51% which was down .22 bases points off of yesterdays close of 4.73. Translated this means if you've got a loan in the process it's time to lock your rate tooday, or tomorrow.  Rates should be positively impacted from the activity in the market place today.

A recent increase in FHA Limits for Single Family Residences has raised the limit for Clark County as of January 1, 2007 to $304,000,  FHA loans are for Primary residence and must be a Full Doc loan.

Trying to make sense of today's economy is like trying to discern meaning in the shapes of the ever-shifting clouds. Which is another way of saying that mortgage rates fell again this week, but they conceivably could have gone up. The benchmark 30-year fixed-rate mortgage fell for the fifth week in a row, this time by 5 basis points, to 6.17%, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.3 discount and origination points. The 30-year rate dropped to its lowest level since Jan. 25, when it was also 6.17%. One year ago, the mortgage index was 6.36%; four weeks ago, it was 6.31%. (Source: Bankrate.com) Full Story . . .