Happy Halloween!

Kids are back in school, we’re getting a little edge on the morning weather and everyone is talking about the MORTGAGE MELTDOWN (cue Halloween type music). Seems like old times, doesn’t it?
Cutting right to the chase, how does the mortgage issue, and the resultant decrease in property values, impact most people? Nada- nothing, zilch, zero. In Santa Cruz County we are averaging around 100 homes sold each 4 weeks. This number doesn’t include new homes or condos. Most people aren’t concerned about selling their homes currently, so the price softening really doesn’t affect them currently; and most people are in mortgages that aren’t going to cause them to miss a payment or head into foreclosure. Even when those payments start adjusting. Yes, some of the adjustables are ugly and could be refinanced into a fixed rate; but most people can continue to make their payments.
What we are seeing is the telemarketers getting more and more aggressive on trying to sell loans. From what we are hearing from our clients is that these telemarketers/ loan brokers are still trying to sell neg-am loans and failing to accurately disclose what the closing costs are and what the resultant APR is. If you have received one of these “offers” and want to know what some of the other questions you should be asking, give us a call and we’ll help educate you.
IMPORTANT ALERT! I know that this may be hard for many to believe, but California isn’t considered to be a high-cost area by Freddie or Fannie. This may be on the change, though, as a bill has passed the US House and is out of the Senate banking committee to raise the conforming loan limit in California to $625,000 from the current $417,000. With the current jumbo mortgage market being almost a full percentage point higher then conforming this will be a huge relief for many looking for a larger loan. If this happens, I expect it to change in early December. I will put an announcement on our web site, www.mountaincoast.com, once I hear anything.

Fixed Rates for Conforming Loans under $417,000 as of 10/22/07 (a.m.) are:
(Rates quoted are for 0 point loans, subtract about half point in rate for 2 points in fee)
30 year fixed: 6.375% (APR 6.44%), payments are $2,601.54/mo.
15 year fixed: 5.875% (APR 5.98%), payments are $3,490.78/mo.