Here's the Inman News report on the new proposal to allow underwater homeowners to refinance at today's lower interest rates. Parts of the plan need Congressional action, so don't hold your breath.

Everything, from 1-year adjustable rates to 30-year fixed rates, is lower now than it ever has been in most peoples' lifetimes. Which mortgage program is right for you?

The 15-year mortgage was recently at 3.2% while the 30-year could be obtained at 3.9%, a difference of 70 basis points. The 5-year hybrid ARM is 2.8%. The 1-year ARM is of no value since it is also being quoted at 2.8%. These rates are based on a Freddie Mac survey of lenders.

The 5-year hybrid option is best for those who are fairly sure they will be moving within the next 5 years. On a $200,000 mortgage, the 5-year hybrid monthly payment will be $822 with the remaining loan balance at $177,200 in 5 years. By contrast, the 30-year mortgage will require a $943 monthly payment with the principal balance at $180,600 in 5 years. Both of these monthly payments are lower than rent in Flagstaff.

Have a conversation with a local Flagstaff lender to find out which loan program is best for you -- whether you are buying or refinancing.

The devil is in the details on these things, so we won't know for a while who will be helped and who will be passed over. Each one of the programs so far has provided a small amount of incremental relief. There are so many different mortgages and so many different financial difficulities being experienced by homeowners (unemployment, loss of equity, adjusted rates, divorce) that no one-size-fits-all solution can be proposed.

Not surprisingly, this may never come to be because it requires Congressional approval. 

An extension of forbearance programs by Fannie Mae and Freddie Mac gives short-term aid to unemployed homeowners, but housing counselors warn of drawbacks.

Read the full article at: NY Times.

Here's a link to a video about mortgage modification -- an option if you're underwater on your mortgage. Modification may not be the best option. You may qualify for a refinance. If you don't want to keep the home, a short sale may be in order.

Start by talking with a good local Flagstaff lender.

If it's time to sell, give me a call: Ann Heitland at RE/MAX Peak Properties.

I was at a lunch presentation at Flagstaff’s High Country Conference Center today when this startling graph from CNBC popped onto the presenter’s screen (compliments of Erin Moore of Prime Lending). This reminded me to remind you that mortgage rates have never been lower. This -- combined with home price reductions we’ve seen in the last few years -- means that the median-priced Flagstaff home is more affordable to the typical home buyer than it is has been in decades.

What the graphic shows is that yield on U.S. Treasury Notes – the 10-year term variety – have never been lower in the history of the U.S. Treasury’s history except in 1945 when Europe was coming out of a devastating war. Similarly, Europe is now teetering on the brink of a collapse like the one Lehman Brothers brought onto the U.S. in 2008. So, U.S. debt is the safest place in the world for investors and they are buying U.S. Notes at such a pace that, even with the recovering economy here, interest rates are being driven down.

The 30-year fixed rate mortgage most closely tracks the 10-year U.S. Treasury yield rate. So, what’s good for the U.S. Treasury and bad for Europe is good for home buyers.

Get started to buy any Flagstaff home by contacting me: Ann Heitland at RE/MAX Peak Properties.

To search the Flagstaff MLS, click here!

Now is the time to make the hard decision: Are you going to walk away from your underwater home? Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences  as long as the lender officially releases the debt. Of course, you must meet other criteria to get the short sale done as well.

To short sell your Flagstaff home, start here: Ann Heitland at RE/MAX Peak Properties. 

Experian added a section to millions of credit reports showing on-time rent payments; two other credit-reporting companies plan to follow do the same. Is this a good thing? From this New York Times article, it looks like it may simply add more layers of difficulty for recovery of the housing market.

Mortgage rates will remain low at least through the first half of 2012, according to industry analysts. An improving economy and possible change in Federal Reserve policy in June may boost rates later in the year. Here's the link to Amy Hoak's full home mortgage market analysis for 2012.

Flipping is a pejorative term, but the practice really shouldn’t be considered bad. The alternative is often vacant homes in disrepair. Yes, I’ve been involved in several “flipped” Flagstaff homes and I can attest that the first one, done in 2008 before the FHA waiver, was a nightmare. The first-time homebuyer whom I represented waited unnecessarily while the home sat in freezing weather unattended.

So, I consider it good news that last week, in an effort to continue stabilizing home values and improve conditions in communities, Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante will extend FHA’s temporary waiver of the anti-flipping regulations.

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days.  In 2010, FHA temporarily waived this regulation through January 31, 2011, and later extended that waiver through the remainder of 2011.  The new extension will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.  The Waiver contains strict conditions and guidelines to prevent the predatory practice of property flipping, in which properties are quickly resold at inflated prices to unsuspecting borrowers.  The Waiver continues to be limited to sales meeting the following conditions:

•         All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

•         In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.

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To buy or sell any Flagstaff home, please contact me: Ann Heitland at RE/MAX Peak Properties.

To search the Flagstaff MLS, click here!