Weak Market & Inflation Spike Rates

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Weak market and the fear of inflation, in Braselton / Hoschton and the rest of the country, are among the reasons for Spike in Mortgage Rates this Week
Freddie Mac today released the results of its Primary Mortgage Market Survey® in which the 30-year fixed-rate mortgage (FRM) averaged 6.63 percent with an average 0.6 point for the week ending July 24, 2008, up from last week when it averaged 6.26 percent. Last year at this time, the 30-year FRM averaged 6.69 percent.

Help for Fannie and Freddie

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Treasury Secretary Henry Paulson Tuesday urged Congress to quickly approve support for Fannie Mae and Freddie Mac, calling it "central to the speed with which we emerge in the Braselton, Hoschton and North Georgia areas from this housing correction."

Meanwhile, Treasury officials confirmed that bank examiners from both the Federal Reserve and the Office of the Comptroller are currently inspecting the books at both Fannie and Freddie. Paulson said in an interview published Tuesday in the New York Times that he believed the results of those examinations will give Congress confidence.

Paulson said that Fannie and Freddie have issued $5 trillion in debt and mortgage backed securities. Of that amount, more than $3 trillion is held by U.S. financial institutions and over $1.5 trillion is held by foreign institutions, making the stabilization of the two companies essential to the global economy.

Sheree Garrison joins Select's Team

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Select Brokers Realty is pleased to welcome Sheree Garrison to our Braselton / Hoschton "Home Town Team" of professional realtors. Sheree has 14 years of experience in Georgia as a licensed real estate agent. Call Sheree at 678.227.1402 for help with any of your real estate needs.

Win $380,000 House and Pay $170,000 in Taxes

A man from Hagerstown, Md., who won a four-bedroom house in a charity raffle is having trouble selling it for enough to pay the taxes on the prize.

Dennis Weaver paid $100 for a ticket in a raffle to benefit the San Mar Children’s Home. He won a restored farmhouse in nearby Big Pool, Md., appraised at $380,000.

Income taxes on the prize plus property taxes totaled $170,000. To pay them, Weaver took out a mortgage. This week he put the house up for auction to get enough money to pay off the mortgage, but there were no bidders, according to a news story in the Hagerstown Herald-Mail.

Weaver is giving up his apartment in Hagerstown and moving into the farmhouse to avoid paying rent on top of his mortgage.

He’s given up on the idea of selling. He says he’ll just wait until the market improves.

Is This The Housing of the Future

Builders in many parts of the country are turning to building tract houses that are half the size of the average U.S. home and cost a lot more per square foot. What's surprising is how quickly they sell them. Many homeowners are leaving their larger homes and seeking smaller, easy to care for and maintain, homes.

Retail Developments Slowing

Construction of retail-property is also slowing as consumer spending wanes. Portfolio & Property Research forecasts that in 2009, retail-space construction in the top 54 U.S. markets will drop 48%, to 71 million square feet, from this year. Existing properties are hurting, too. Vacancy rates at U.S. malls and shopping centers have climbed to 7.4% this year, the highest level this decade, according to market-research firm Reis Inc.

Bush Calls on Congress to Pass Housing and Energy Bills

President Bush said Tuesday the nation's troubled financial system is "basically sound" and urged lawmakers to quickly enact legislation to prop up mortgage giants Fannie Mae and Freddie Mac.

He also called on the Democratic-run Congress to follow his example and lift a ban on offshore drilling to help increase domestic oil production.

"I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology," Bush told a White House news conference - his first since late April.

Bush said the two troubled mortgage companies play a central role in the nation's housing-finance system and that government action to help them were not bailouts because the two would remain shareholder-owned companies.

"I don't think the government ought to be involved in bailing out companies," Bush said.

Amid soaring gas prices, the toughest real estate market in decades, falling home prices and financing that's harder to come by, Bush said: "It's been a difficult time for many American families." But he also said that the nation's economy continues to grow, if slowly.

Feds Help Fannie Mae and Freddie Mac

The Federal Reserve and U.S. Treasury step in to help bolster mortgage giants Fannie Mae and Freddie Mac as losses from their mortgage holdings threaten their survival. The two housing companies either hold or back $5.3 trillion of mortgage debt, which is about half of the outstanding mortgages in the U.S.

Senate Housing Bill Still Not Put To A Vote

WASHINGTON -- The Senate failed to pass a huge housing package on Thursday, continuing a legislative process that has been repeatedly bogged down by procedural hurdles, even as the housing market worsens.

The multifaceted bill, likely Congress's biggest response to the housing mess, would revamp oversight of the struggling mortgage giants Fannie Mae and Freddie Mac, a measure that Treasury Secretary Henry Paulson has said is vital to restore confidence in the U.S. housing market. The bill would also allow the government to insure up to $300 billion in refinanced mortgages, which Democrats say could help up to 500,000 people avoid foreclosure.

A final vote could still occur Friday, but other attempts to pass the bill have slipped during the past two weeks. The holdup Thursday was an objection to the legislation by Sen. Jim DeMint (R., S.C.), who has called the package a "bailout" and demanded more time for debate. Lawmakers can pass the bill without his support, but it takes longer under Senate rules.

"We've been close, but close doesn't count on Senate business," Senate Majority Leader Harry Reid (D., Nev.) said. The chamber now plans to vote on the measure late Friday afternoon.

Lawmakers from both parties have begun to express frustration at how long the process was taking. The bill is expected to pass easily once a final vote is called.

Sen. Johnny Isakson, a Georgia Republican who supports the bill, said he is pushing to have the package completed by the end of the month.

"We're almost at the point where what we're doing is too late," Sen. Isakson said. "You reach a point where what you are doing may stop the bleeding but doesn't turn the market around."

RealtyTrac Inc., an online foreclosure marketplace based in California, said 252,363 people entered foreclosure during the month of June, up 53% from 2007

Vote Next Tuesday July 15

Just a friendly reminder to hit the polls on July 15 for the primary! Historically voter turnout in Jackson County has been fewer than 20 percent. This means that only one in five citizens are helping make the decisions that effect them, their parents, children, and grandchildren. Be sure your voice is heard this go-round: Don't forget to vote!Learn about the candidates at www.JacksonCountyDecision2008.com And while you're at it, contact them directly - our local candidates are real people just like you and me!

McCain & Obama Seek To Fix Housing Problems

Which candidate would do a better job of handling housing prices? According to a recent AP-Yahoo News poll, 25 percent of those surveyed said Barack Obama and 17 percent thought John McCain. But nearly 30 percent said neither. Both Obama and McCain envision the Federal Housing Administration providing new, cheaper mortgages to distressed home owners.
Obama wants to create a $10 billion fund to counsel distressed home owners before they slide into foreclosure; help people sell homes they bought but could not afford; and team with state governments, community groups, and lenders to ensure loans can be modified in a timely manner to avoid foreclosure or bankruptcy.
McCain sees a more limited government role. "In some cases, lenders and borrowers alike were caught up in the speculative frenzy that has harmed the housing market," the Arizona senator said. "It is not the responsibility of the American public to spare them from the consequences of their own bad judgment."

Scarecrow website

Everyone knows by now that Hoschton is seeking a spot in the Guinness World Records with the most scarecrows in one location - they now have a website www.scarecrowstampede.com.

Do You Have A Real Estate Question

Have a Real Estate question? Wondering about buying, selling, financing, refinancing or renting? Send your inquiry to ray@selectbrokersrealty.com

Braselton Road Project Still Moving Forward

The Board of Commissioners approved development agreements with property owners for the Zion Church Rd. project. The county will realign Zion Church Rd. at the intersection of Josh Pirkle Rd. on Hwy 124 to Hwy. 53 in Braselton. Construction is slated to begin in the summer of 2009.

Tax Benefits of Owning Your Home

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest) & $2,700 = Property taxes (at 1.5 percent on $180,000 assessed value) - Total deduction =$12,577
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Worry Over Inflation Causes Interest Rate To Go Up

Fixed-rate mortgage rates continued to climb this week to the highest point in nearly nine months following the release of May's consumer- and producer-price indexes, both of which showed stronger levels of inflation.
The 30-year fixed-rate mortgage averaged 6.42% in the week ended Thursday, up from 6.32% last week. The mortgage averaged 6.69% a year ago; the last time it was this high was the week ended Sept. 27, when it also averaged 6.42%.
The 15-year fixed-rate mortgage averaged 6.02%, up from 5.93% last week. The mortgage averaged 6.37% a year ago, and hasn't been higher since the week ended Oct. 18, when it averaged 6.08%.

Insurers are Attempting to Stop Forecloures

Mortgage insurers are stepping up their efforts to prevent foreclosures, considering that they have to reimburse lenders if they lose money after a foreclosure . Some mortgage insurers are writing checks so borrowers can catch up on their payments, calling borrowers directly to work out payment plans and modifications.

Greenspan Predicts Rise in Interest Rates

The credit crisis is under control, but with inflation now the top concern, higher interest rates can be expected, said former Federal Reserve Chief Alan Greenspan said last week.Greenspan said he thought the credit crisis had peaked in March. "I think the worst is over (for the U.S. economy) if the financial crisis is over," Greenspan said via video link to an event in Mexico.But to keep inflation under control, Greenspan said the fed will have to tighten monetary policy and that will drive up interest rates

DON'TS For First Time Home Buyers

DON'T get taken by the first house or neighborhood you see. Keep an open mind and spend sufficient time finding the right fit in a house and neighborhood for your needs.
DON'T buy more than you can afford. Lenders will often loan you as much as your financial condition warrants, but that may not be what you can comfortably afford. It's better to live with a comfortable mortgage on a smaller home than to struggle every month paying a mortgage on a house with more room than you really need. The down payment, closing costs, monthly expenses and taxes must in total all be within your income and savings range

Mortgages With No Down Payment Still Available

Despite the bursting of the housing bubble, it’s still possible to buy homes with no money down. Freddie Mac says its “HomePossible” mortgages can help buyers with limited credit or savings, including teachers, firefighters and members of the military. Although borrowers are sometimes required to show they have money in the bank to draw upon in a crunch, Freddie Mac said people can qualify for its no-money-down purchases with no cash reserves. However, borrowers must undergo homeownership education. Such programs can reduce delinquency rates by about 34%, the company said. Freddie Mac allows home buyers to borrow more than the purchase price if they use a second loan, sometimes called a piggyback, from special lenders such as government housing agencies, nonprofit groups and employers. Fannie Mae typically applies a similar requirement when home buyers borrow more than 97% of the price. Both companies are required to devote certain percentages of their funding to affordable housing, and no-money-down or low-downpayment loans can help the companies meet those quotas. One reason buyers borrow more than the purchase price is to cover transaction costs. However, it isn’t clear how many of these no-money-down purchases are taking place these days.