Today’s News Synopsis:
Freddie Mac predicts ARMs will represent 10% of all mortgages issued by the end of the year. A national budget has been propposed that will cut the federal deficit from 10% of the overall economy to 3% in a decade. Fannie Mae and Freddie Mac will cost $73 billion through 2021, according to the Treasury Department. Freddie Mac claims mortgage rates are likely to remain in the low-to-mid 5% range throughout the rest of the year.
In The News:
NPR - “Buyers Face Gamble With Rising Mortgage Rates” (2-13-11)
“In November, the average rate slipped to a 40-year low of 4.17 percent. Today, it’s just over 5 percent, and concerns are growing that rates will keep rising — enough to scare away potential buyers. It’s at least enough to make those buyers rethink the advantages of homeownership.”
The Atlantic – “Is Obama’s Strong Housing Finance Stand for Real or a Political Play?” (2-13-11)
“On Friday, the Obama administration released a surprisingly strong housing finance policy report. It explains a general process to wind down Fannie Mae and Freddie Mac, and offers three alternatives for how to conduct housing finance policy without them. Each option has pros and cons, but put together they lean firmly towards free-market ideals”
CNN - “ARMs helped sink the economy – now they’re back!” (2-14-11)
“After accounting for nearly 70% of all mortgages issued during the boom, ARMs vanished during the bust, totaling just 3% of the market in 2009. Now they make up 5% of all mortgages issued, and Freddie Mac predicts 10% by December.”
Housing Wire – “Fed’s Raskin: Economic recovery depends on mortgage servicers” (2-14-11)
“Federal Reserve Governor Sarah Bloom Raskin said Friday the residential mortgage market will not rebound until loan servicing practices at large financial institutions are improved.”
Housing Wire – “Obama budget includes $1.1 trillion in cuts” (2-14-11)
“the White House is proposing a budget that will cut the federal deficit from making up roughly 10% of the overall economy to 3% of the economy in a decade, according to Jack Lew, director of the White House’s Office of Management and Budget.”
Housing Wire – “Budget: Fannie, Freddie to cost taxpayers $73 billion” (2-14-11)
“Fannie Mae and Freddie Mac will cost taxpayers $73 billion through 2021, nearly half of what they’ve pulled from the Treasury Department so far, according to President Obama’s 2012 budget released Monday.”
Housing Wire – “Freddie Mac: Low mortgage rates to remain throughout 2011″ (2-14-11)
“Researchers at the government-sponsored enterprise say 30-year, fixed-rate mortgages are likely to remain in the low-to-mid 5% range throughout the rest of the year, which is low when compared to historic benchmarks.”
Housing Wire – “Mortgage interest tax deduction may be in danger” (2-14-11)
“President Obama’s 2012 budget proposes an across-the-board 30% cut to itemized deductions for high-income taxpayers. This includes the mortgage interest tax deduction.”
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