The Federal Open Market Committee begins a scheduled, 2-day meeting today to discuss the country's monetary policy. As is custom, the groupwill issue a press release to the markets upon adjournment. There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year. It's not the Fed's actual policy changes that causes fortunes to be won or lost, though. These changes can predicted and traded -- and, therefore, hedged -- on Wall Street using Fed Funds Rate Futures.  For example, Wall Street predicts with 97% certainty that the Federal Reserve will not make a policy change at this time. As opposed to than policy change, it's the verbiage of the FOMC's press release that can really move markets.  This is becaus... 03/17/2009

Visit msnbc.com for Breaking News, World News, and News about the Economy "Most of the biggest real estate fortunes were not made in good times, but in bad times like this" Barbara Corcoran reminds us in this talk with NBC. It's important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating. In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing, "Everyone who loses their shirt loses it somewhere else." "Every big shark started small." "The house on the corner sets the tone for the block." She also lends some personal perspective to rent rolls, the cost of losing a tenant, and finding a good business partner. Banks are anxious to sell their foreclosed homes and that makes... 03/16/2009

You know you're in the middle of an economic crisis when an accounting issue become Front Page News, and that's exactly where we're at today. Mark-to-market accounting is having its day in the sun and people in need of mortgage sometime soon would do well to pay attention.  If you've never heard of mark-to-market accounting, don't worry. Not many people have.  Mark-to-market is a method of valuing an asset based on its what-if-it-was-sold-today value.  Mark-to-market is officially known as FASB Statement 157. Mark-to-market is one reason why bank balance sheets look so awful right now.  Banks have to assign firesale-like values to their mortgage-backed assets even if those loans are performing, and even if there's no plans to sell them.  Assigning low values to assets, then, in turn, fo... 03/16/2009

If you asked an economist why home prices have broadly fallen over the past 2 years, you'd get a short lesson in Supply and Demand. Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached. Looking at the chart at right, that balance point may be fast approaching. According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets.  This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season.  Since 1982, February home inventory has been up 3 percent on average. Last month, it fell. So, in support of the Supply and Demand Theory, we shouldn't be surprised that the rate of price declin... 03/13/2009

Mortgage markets improved last week with investors' renewed aversion to risk.  To the benefit of home buyers, as major stock indices touch 12-year lows, investors are moving investible cash to the bond market. For only second time this year, mortgage rates ended the week lower than where they opened. Some of the bigger stories that caused mortgage rates to fall last week included: Unemployment reaching 8.1 percent nationwide. The Fed reducingits economic outlook for 2009. Investor concerns for blue chip General Electric. In addition, US Bank and Wells Fargo cut dividends by roughly 85 percent each.  Both banks are considered well-run and positioned their respective cuts as a way to bolster balance sheets.  Markets took it as a negative instead. This week, there isn't much economic news... 03/12/2009

    USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading. According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press.  However, as the heatmap plainly shows, in stripping out just 35 of the nation's 3,232 counties, we can decrease the number of foreclosures nationally by half.  In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In your neighborhood, though, the ratio is likely much, much lower.  Real estate is a local phenomenon.  National statistics rarely apply   03/12/2009

The basis of most mortgage lending is credit scoring.  In general, the higher a person's credit score, the lower his offered mortgage interest rate. Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners: The Equifax BEACON® score. The Experian Fair Isaac Risk Model. The TransUnion EMPIRICA.® Generically, these scoring models generate what are commonly known as "FICO" scores. FICO scores are measurements of probability.  The higher a person's credit score, by definition, the less likely a person is to default on his home loan.  This is one reason why credit scoring has added importance lately -- mortgage lenders are very careful about what they're lending and to whom. Notably, minimum FICO thresholds have been added to all types of mortg... 03/12/2009

Yesterday, the U.S. Department of the Treasury released details on their new "Making Home Affordable" program, which is expected to aide up to 9 million homeowners.  Below is an excerpt from their new website, www.FinancialStability.gov: "The deep contraction in the economy and in the housing market has created devastating consequences for homeowners and communities throughout the country. Millions of responsible families who make their monthly payments and fulfill their obligations have seen their property values fall, and are now unable to refinance to lower mortgage rates. Meanwhile, millions of workers have lost their jobs or had their hours cut, and are now struggling to stay current on their mortgage payments... "The Obama Administration's Making Home Affordable program will offer... 03/05/2009

As a result of the American Recovery and Reinvestment Act of 2009 (ARRA), which was signed into law on February 17, 2009, the Federal Housing Administration (FHA) has increased their loan limits for 2009!  To read the most recent Mortgagee Letter released on February 24th (along with Mortgagee Letters from previous years), please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ Also, for a complete schedule of FHA loan limits in your current area, please click below: FHA Mortgage Limits For the 7 county metro area of Minneapolis and St. Paul, including Hennepin County, the FHA loan limit has been increased back up to $365,000 (up from $318,550).  This means with a 3.5% down payment (required by FHA in most cases), you could purchase a $378,000 home!  This is going to h... 02/27/2009

There was an interesting editorial on CNNMoney.com today titled, "Why I Hate Facebook" by Paul R. LaMonica.  He ranted a bit about a few "annoying" aspects of the social media website.  One of his arguments was Facebook's Popularity vs. Profitability: While it's impressive that it took Facebook only 5 years compared with 7 years for Apple to "sell" 150 million iPods, who has the better business model? Facebook merely signed up people to use their service...for free. Apple sold a product...and a pretty pricey one at that. What's more, Apple (AAPL, Fortune 500) makes money when people buy music from iTunes for their iPod. Now, whether you agree with Facebook's business model or not, be sure to understand that you can make money on Facebook, even if Facebook itself is not making money.  I ... 02/20/2009

    Everything old is new again. Conforming mortgages are limited by loan size, based on "typical" housing costs around the country.  The current conforming limit on a single-unit property is $417,000. In 2008, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increases in "high-cost" areas around the country.  In Los Angeles County, for example, a mortgage could be as large as $729,750 and still be considered "conforming". Those temporary increases rolled back effective January 1, 2009, to a maximum of $625,500. However, as part of the American Recovery and Reinvestment Act of 2009 signed into law this week, conforming loan limits in high-cost areas have been returned to their elevated levels of 2008.  You can see the text on the bottom of page 11... 02/20/2009

The chart below was forwarded to me by a colleague.  It lays out the primary differences between the original $7,500 Tax Credit for First-Time Homebuyers, which was created on July 2008, and the new $8,000 First-Time Homebuyer Tax Credit.  I hope this helps to clarify how the new Stimulus Package will affect First-Time Home Buyers.  Please call me if you have further questions regarding these new changes. Ben Olson, Minnesota Mortgage Specialist, Mortgages Unlimited, Maple Grove, MN 763-416-2620 02/17/2009

CNN Money had a great article breaking down the new $8,000 tax credit for first-time homebuyers.  It is expected to be signed into law today by President Obama. Author, Les Christie, addressed the benefits and some very common questions regarding this provision for first-time homebuyers: A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. The scenarios can change slightly from buyer to buyer.  So, be sure to consult a CPA or tax expert regarding your specific situation.  Click here to read the full article. ... 02/17/2009

In these times of economic turmoil, it seems like even the experts don't know exactly what to do, or even how effective any action will be. Vox Day's article, "Stimulus Spelled Out", from World Net Daily does a wonderful job of simplifying the arguments: Should the Fed lower rates?  Should the government fill in the spending gap?  Should we do anything at all?  In his very simplified analogy, Vox makes it easy to understand how our economy works, as he proposes a clear solution to the problem. Here's an excerpt: Consider a hypothetical example of an economy in which there are 100 cars. Because a car lasts for 10 years, every year 10 cars wear out and are replaced. But things have been going well and people are getting wealthier, so five of them buy second cars. The three car makers each... 02/16/2009

  Northwest Community Television and Channel: 12 includes daily community news, sports and events programming.    Channel. 16:     Provides access to government information on public meetings including: City of Maple Grove Report. community events. cablecasting of Maple Grove City Council and Planning Commission meetingsView schedule. Channel. 18:     Is an electronic program guide which highlights: public access programming. Community Television information. local weather information and the current time and date. Channels 19: & 20:     Resident volunteers produce a variety of programming ranging from: concerts. sports. talk shows. live call-in programs. educational programs. dance recitals. music and more.   02/13/2009

$8,000 With No Repayment! In the final moments of negotiation, the first-time homebuyer credit of $7,500 has been increased to $8,000... and it no longer needs to be repaid!  Details are still coming so stay tuned. The $787 billion stimulus plan is expected to pass within days. Ben Olson - Minnesota Mortgage Specialist, Mortgages Unlimited, Maple Grove, MN 763-416-2620 02/13/2009

NO MORE $15,000 TAX CREDIT!! The House and the Senate agreed upon a compromise stimulus plan totaling $789 billion.  One of the major spending cuts that will effect the real estate industry is the proposed $15,000 tax credit for home buyers.  Instead, the current $7,500 tax credit for first-time homebuyers will be increased to $8,000.  Another positive change is that the $8,000 no longer needs to be repaid! Ben Olson - Minnesota Mortgage Specialist, Mortgages Unlimited, 763-416-2620 02/13/2009

Perspective is everything in life, and considering where most of us in the Real Estate market have come from over the last 12-18 months, a little perspective is due.  I've heard many clients and colleagues complaining recently about the "high" rates.  Since when is 5.0%, or 4-point anything a "high" rate for home financing?! The truth is, there is an argument for the "high" rates claim.  The national average for a 30-Year Fixed Rate is currently 5.12%, while the 10-Year Treasury note has a yield of 2.62%, a "spread" of 250bps (5.12 - 2.62 = 2.50).  Though we know that the 10-Year Treasury does not have a direct impact on mortgage rates, they do tend to have a symbiotic relationship.  Since 2000 the difference between the two has averaged 186bps.  So all things being equal, the national ... 01/27/2009

Maple Grove / Osseo, Hennepin Co. MN 2008 2007 Δ Change # Homes Sold 970 996 -2.68% Average Price $315,366 $323,728 -2.65% Median Price $247,000 $251,500 -1.82% Total Volume $305,905,859 $322,139,213 -5.31%    Based on information from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC.  For the period of January 1, 2007 thru December 31, 2008    Buyers: Receive a CASH BONUS of 2% of the sale price up to a maximum of $10,000.00 after closing when you purchase a home through me.To find out more, call Patti Ann Kasper  at 763-548-1418 today!Sellers: Your home SOLD in 39 days or less GUARANTEED, or I'll pay you up to $10,000 after closing!*National Real Estate Stimulus Program* ParticipantTo view my interactive on-line real estate magazine with listings, select the banner below:Touch... 01/26/2009

4.5% as a 30-year fixed rate could be here sooner than later!  Yes we've touched the mid-to-high 4's for moments here and there, but we haven't seen those rates sustain themselves for more than a few hours at a time. Today, the Fed began purchasing Mortgage Backed Securities under a program that they announced on November 25th.  The Fed will buy as much as $500 billion of MBS by the end of the second quarter.  Never before has the Fed had direct control over mortgage rates.  The rates they do control are short-term rates that typically affect credit cards, auto loans and home equity loans.  But now, with the ability to buy (and eventually sell) Mortgage Backed Securities, we are treading further into uncharted territory. Like you, I'll take as much advantage of the lower rates as possib... 01/05/2009