Primary Residential Mortgage is in the finishing stages of establishing a correspondent relationship with PennyMac in hopes to offer financing for condo developments that might not otherwise fit agency guidelines. We also now allow borrowers with VA loans to refinance without an appraisal if the current loan is serviced by Wells Fargo.
Financial Markets
The Dow posted another strong week, rising nearly 2.5% and landing at 12,720. Bank of America’s Q4 earnings surpassed expectations as losses for the banking behemoth were not as bad as forecasters anticipated. National home sales for the year were tallied and reported at 4.26 million sales for 2011. Economists agree that a healthy housing market should post roughly 6 million sales. Approximately 33% of all sales nationwide were distressed sales.
A tame Consumer Price Index report (0%) helped keep mortgage rates in check. The Core Consumer Price Index, which excludes energy costs such as volatile oil prices, finished the year at 2.2%, which is within the Fed’s tolerance level. The reading supports the Fed’s decision to leave rates where they are.
Last, talks of a widespread principal write down for non-Fannie Mae and Freddie Mac loans might actually become a reality, according to the article below. There are little details as to who would qualify. It discusses that the settlement is tied to the “robo-signing scandal” many banks have been accused of participating in and that it would go towards roughly 1 million homeowners.
Southern Nevada Real Estate and Economy
Larry Murphy held his crystal ball seminar this past week, and his crystal ball wasn’t as optimistic as in years past. He predicts an additional 10% decline in home values and an additional 100,000 homes to be foreclosed on in the next 4 years. With that I decided to crunch numbers to see how an increase in rates + a decrease in loan amount would affect monthly payment. Basically, a 10% decrease in loan amount is equivalent to about ½% increase in interest rate to offset the payment. Meaning, if the price and thereby the loan amount drops by 10%, but mortgage rates go from say 4% to 4.5%, the monthly payment actually remains the same.
http://www.lvrj.com/business/another-rough-year-forecast-for-las-vegas-housing-137779633.html
