This is a tough article to read, http://online.wsj.com/article/SB10001424052748704723604575379463676740680.html very dreary outlook on the housing market. I say, let's make lemonade from this historic time in our economic outlook. This is the time to buy, buy, buy but only if you have the ability. No one should buy just for the sake of buying, there are bargains to be had and avenues to make this the opportunity of your lifetime. Sure qualifying for a home loan has gotten tougher sometimes even grueling, but choose a Lender wisely; someone service oriented. Someone that will drive across town to meet with you and will go the extra mile to show you that you are worth the effort and you'll fair just fine.

I got this article from Mortgage Market Guide: Former Federal Reserve Chairman Alan Greenspan wrote an op-ed piece in the Wall Street Journal titled "US Debt and the Greece Analogy," where he warns that the present path of government debt accumulation is unsustainable. “Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity,” said Greenspan. He also added that the present low inflation and low long-term interest rate environment has fostered a "sense of complacency (within the government) that can have dire consequences." What Mr. Greenspan is saying is that government, rather than cut budget deficits and show fiscal restraint - is taking advantage of this low interest rate and low inflation environment to accumulate more debt - and the consequences can be very bad...just look at Greece. Mr. Greenspan also said that Treasury yields could spike, and in a hurry. “I grant that low long-term interest rates could continue for months, or even well into next year. But just as easily, long-term rate increases can emerge with unexpected suddenness. Between early October 1979 and late February 1980, for example, the yield on the 10-year note rose almost four percentage points.” Mr. Greenspan’s sobering comments should not be taken lightly. There is no fundamental reasons why interest rates – and more importantly to us, mortgage rates – should be this low. The confluence of factors all coming together at the same time have made for an incredible low interest rate opportunity, but it won’t last long, and can change very quickly. Borrowers have temporarily been given this gift of historically low rates. It’s our job to help them see and capitalize on this opportunity, before it is gone.

Is Small Beautiful?

Does the fact that the median size of a new home being built is smaller suggest that Americans want greater simplicity in their living conditions, or does it suggest a need to buy a less expensive home? Are there lasting trends here, or will home sizes become larger again when the economy improves? And what does this mean to the marketing and selling of your home? In a 2007 survey, the National Association of Home Builders found that 42% of home buyers wanted a bigger home with fewer amenities, but 58% wanted a smaller house with “high quality products and amenities.” The same question in a 2000 survey found that 51% wanted the bigger home with fewer amenities. But this doesn’t necessarily mean our nation’s housing tastes are changing, even as we pay more attention to energy bills and efficient home design. There is an identifiable downsizing trend today, attributable in part to several trends among homeowners and home buyers. Baby boomers (those born between 1944 and 1964) expect to live longer and more independently, and they seek more manageable (that is, smaller) homes that provide the amenities they want. Housing sales and trends are regional, what is selling in Atlanta may not sell in San Diego. First time home buyers have changed the flavor of the market too. I personally think small is beautiful because I don't have to clean the bigger house, but hey, that's just me. Whether, smaller or bigger may be a personal preference the trend is definitely towards smaller more affordable homes.

Fixer Upper Loan Option

You could take advantage of a fixer-upper home and make repairs with an FHA 203(k) rehabilitation mortgage loan. The 203(k) is one mortgage loan that combines the cost of buying the home with the cost of making repairs. The 203(k) could be ideal for qualified buyers interested in purchasing a home that needs repairs or updating. Advantages to using a 203(k) loan are qualifying with as little as 3.5% down, the cost needed for repairs is built into the loan amount, the loan amount is based on the subject to home improvement value. This is a wonderful option if the home needs only limited repairs. You do have to qualify for the 203(k) just as you would any home loan. There are two options: Streamline or Full. The FHA Streamline 203(k) has all of the advantages of the Full 203(k), except it is limited to $35,000 of loan proceeds being applied toward repair or rehabilitation. Of course, I'm available to explain the details so you can select a loan that suits your needs.

Following the Almanac

I don't know why but I love the Farmers Almanac. I read it from cover to cover. It makes me laugh, it makes me think. It makes sense of weather and obscure things like what to do with vinegar. It advertises unusual products that you won't find anywhere. Right now I'm reading about Mark Twain, 10 Curious Facts about Mark Twain. Very interesting, and lots of fun.

Mortgage Note: Creative financing is gone. It really is time to purchase a home with prices down and rates down. But there is no humor in the market for needing to be creative.

New Programs for Home Owners

Over the last 18 months with the National Homeownership Retention Program, it seemed that only those that had gotten themselves into trouble one way or another were refinanced and given relief. Well today in a news release, Bank of America announced a Earned Principle Forgiveness program which should be rolling out in May. This program is tied to homeowners performance. If you make the payments on time, that performance is going to be "rewarded". This is an innovative approach: An interest-free forbearance of principal that the homeowner can turn into forgiven principal over five years resulting in a maximum 30% decrease in the loan principal balance to as low as 100 percent LTV (loan to value); in each of the first five years, up to 20 percent of the forborne amount will be forgiven annually for borrowers that remain in good standing on their mortgage payments; forgiveness installments for the first three years set at the 20 percent level; in the fourth and fifth years, the amount of forgiveness will be dependent upon the updated value of the property, so that the LTV will not be reduced below 100 percent through principal forgiveness. This sounds like a move in the right direction for those seeing themselves in certain Pay Option ARMs (adjustable rate mortgage) or 2 yr hybrid ARMs set to adjust.

Cash Assistance for Home Purchase

I talked about the CHFA program earlier and thought you might want to know the major highlights of the program:

Program 1: First Step Program Highlights
First Time Homebuyer or Eligible Veteran
Income limits and Purchase Price Limits apply
$1000 minimum financial investment
No CoSigners
ReCapture Tax Applies
Minimum Credit Score 580
Max DTI 45% on manual underwrite
Buydowns allowed
Count all household income regardless if everyone is on the loan
Homebuyer Education required

Program 2: HomeOpener Program Highlights
No First Time Homebuyer requirement
Income limits apply, but no Purchase Price limits
$1000 minimum financial investment
Accepts CoSigners
Not subject to ReCapture Tax
Minimum Credit Score 580
Max DTI 45% on manual underwrite
Buydowns allowed
Count all household income regardless if anyone is on the loan
Homebuyers Education required