It happens in the insurance industry all the time.  You have a car accident, then boom…your insurance company raises your auto insurance premiums.  The greater the risk…the more you pay for your insurance.  In the wake of the subprime mortgage crisis, that is exactly what is happening in the mortgage lending business.
Mortgage Lenders Move to Risk-based Pricing
Most borrowers looking to finance loans for new homes in 2008 will end up paying higher prices.  How much more?  A fee, amounting to about $250 for every $100,000 borrowed will be charged to home buyers across the board.  Fannie Mae calls this fee the “adverse market delivery charge.”  Freddie Mac refers to it as a “market condition delivery fee.” 

From there, more fees will be tacked on for buyers depending on their credit scores, the loan-to-value ratio and whether there is another loan piggy-backed onto the mortgage.  With a credit score below 620, those needing to borrow more than 70 percent of their home value will pay about 2 percent of the loan amount more (about $2,000 for every $100,000).  If the score is in the 640 - 659 range, the fee would be a bit lower, about 1.25 percent of the loan amount.  Less risk…lower fees.

Need a piggy-back loan with 10 percent down-payment? Regardless of your credit score, if you can even get such a loan, you will pay a quarter-point fee for it.

With borrowers already facing tougher credit restrictions, why are Fannie and Freddie charging higher fees?  As government-sponsored enterprises (GSE’s), they must collect fees to guarantee the …

The first economic news for 2008 did not bring good tidings for the new year.
Market and Economic Recap
Business Week Ending January 4, 2008

Stocks tumbled in early trading after several economic reports and key economic indicators for December came in below analyst’s expectations.

December job growth numbers were weak, with non-farm payroll employment adding only 18,000 jobs - down from 115,000 in November and well below the 70,000 economists forecast for the month.  In fact, job growth figures haven’t been this weak since August 2003. 

The jobless rate in December rose higher than expected to 5 percent, the highest it has been in two years.  Since September, unemployment had held at 4.7 percent, and analysts had expected it would edge up slightly to 4.8 percent for last month.

Oil prices, which had surged higher than a record $100 a barrel earlier this week, eased up a bit after the glum jobs report.
Are We Heading Toward a Recession - Or Not?
Some economists predicted a recession would hit the U.S. in the fourth quarter, with consumers impacted by falling home values and rising energy costs pulling in their household purse strings.  But it didn’t happen.  At least not yet.

The question is, will the drag from housing sales and construction of new homes, and the “credit crunch” from the subprime lending crisis ultimately send us into recession?  Analysts still disagree if recession is impending or not.

Many forecasts with the recession scenario are based on the premise that large losses from subprime mortgage debt will force banks to reduce lending in a big way.  This credit crunch, …

Last week, after the Federal Reserve announced it would cut the fed funds target rate and discount rates by 25 basis points each, equity prices plunged, with the Standard & Poors dropping 2.5% on the day.  Investors and many analysts, worried that the Fed needs to do more to stem the threat of recession, hoped the Fed would cut the discount rate by 50 basis points.  The markets ultimately reflected their disappointment.  When the stock market shows this kind of volatility, how does it impact the overall financial picture?  And will it affect mortgage interest rates for potential borrowers in the market for new homes?
How Does the Stock Market Affect Mortgage Rates?
A fluctuating stock market may cause many new home buyers and borrowers to feel anxious about the housing market and the mortgage industry.  Will interest rates soar and monthly mortgage payments rise?  Not necessarily.  The relationship between the stock market and mortgage interest rates are not as directly correlated as one might think.  To understand the relationship between the two, let’s first look at how interest rates are determined.
How are interest rates determined?
Many different economic factors and reports can impact whether mortgage interest rates will rise or fall.  Economic data on unemployment percentages, consumer confidence and spending, the movement and relationship of stocks and bonds and the ratio of buyers to sellers and the flow of money in and out of the stock market (and much more) can all affect interest rates.  Basically, if the data shows tentativeness or caution about the economy, mortgage rates may fall.  If reports indicate a strong …

No one likes to hear about people losing their homes in foreclosure, but industry analysts predict that real estate markets across the country will see a rash of home foreclosures through 2008 and into 2009.  Many homeowners with sub-prime adjustable-rate mortgages may find themselves in this predicament when their loans reset to a higher interest rate, increasing their monthly mortgage payments beyond what they can afford.  When banks foreclose, the properties will go back on the market, and buyers ready to purchase new homes will be able to find some good deals out there.
Mortgage and Renovation Costs Bundled into One Loan Package
So what happens if you find a home in the perfect location that meets your family’s basic needs but requires major improvements or repairs?  The answer for that fixer-upper may lie in a renovation mortgage - a lender program that allows home buyers to finance the mortgage and fix-up or construction costs together in the same loan. 

How do renovation mortgages work?  There are several options available for renovation financing. 

In a program available through the Federal Housing Administration, when new home buyers finds a house in need of renovation, they contact a lender that handles 203(k) mortgages.  The buyer contracts with a HUD-approved contractor who evaluates the property and determines which improvement projects are most critical.  The lender hires an appraiser to determine the value of the home after improvements, and the loan amount is then based on this post-renovation value.  For example, if the purchase price of a home …

After a rally on Wall Street, pretty good news on the job front, and the announcement by the Bush administration that the HOPE NOW coalition of mortgage lenders will freeze interest rates for some homeowners with subprime adjustable-rate mortgages, it was a busy week for market and economic news.
Market and Economic Recap
Business Week Ending December 7, 2007
News from the Labor Department

Up>–Job Growth: The U.S. added another 94,000 jobs in November, slightly better than than 70,000 expected by economists.
Hold>–The unemployment rate held at 4.7% in November, also slightly better than the 4.8% expected by analysts.
Down>–Construction lost another 24,000 jobs in November as the building industry continues its pullback in construction of new homes.

The Stock Market
After a “robust rally” over the last eight trading days that sent the Dow Jones up 876 points, the market took pause Friday in anticipation of the Federal Reserve’s upcoming meeting on Tuesday. As reported on Forbes.com, Paul Nolte, director of investments at Hindale Associates, described Friday’s market as paralyzed and indicated investors weren’t going to make any “bold moves” until after the Fed announces their decision on future cuts in the federal funds and discount rates.
Consumer Confidence
The preliminary read on the University of Michigan’s consumer confidence index shows consumers are concerned with the price of gasoline and the credit crunch. The index dropped off slightly from 76.1 to 74.5.
Will the Fed Cut Rates Again? How Far?
Analysts and investors alike believe that Federal Reserve chair Ben Bernanke will announce …

On Friday, the Wall Street Journal reported that the Bush administration is working with some of the big mortgage lenders on a plan to reduce foreclosures and loan defaults by freezing interest rates on subprime adjustable-rate mortgages (ARMs).  Treasury Secretary Henry Paulson and the lenders consortium, including Countrywide, Citigroup, Washington Mutual and Wells Fargo, hope to hash out a detailed plan before the end of this year.
Freezing Interest Rates on Subprime Adjustable Rate Mortgages
With a 2/28 subprime mortgage, the introductory rate holds steady for two years, then adjusts (up or down) in the remaining 28 years of the loan.  Many borrowers purchasing new homes got these subprime mortgage loans because they had less than stellar credit.  Those who took out a $200,000 ARM in early 2006 when rates were 8.25 percent or higher will be facing interest rates of 10 percent or higher when the loans reset in early 2008.  To look at the impact in dollars, if the rate adjusted up 2 percent to 10.25 percent, the monthly payment (principal plus interest) on that $200,000 loan would jump $289.    Current estimates are that between 2 million and 2.5 million homeowners have subprime loans that are due to reset within the next two years.

With a flood of foreclosures looming ahead, lenders and regulators are adopting a more pro-active stance in an attempt to help borrowers who could afford their mortgage payments at the introductory rates keep their homes.  According to press reports, the two major points to be worked out are:

How long will the temporary freeze on ARMs be in effect?
What are the criteria to determine eligibility of …

The city of Slidell, Louisiana, situated on the north shore of Lake Pontchartrain is home to about 28,000 residents, and part of a larger community of 200,000 in St. Tammany Parish.  Though New Orleans is just 30 miles to the southwest, with Lake Ponchartrain separating the suburbs of Slidell from the Big Easy, the small town community can enjoy all the big city amenities and avoid many big city problems.
Relocate to the Northshore in Slidell, Louisiana
Recovery of Slidell and St. Tammany Parish
Slidell is still recovering from the havoc wreaked by Hurricane Katrina in August of 2005, when 12-foot storm surges and 18 inches of rainfall engulfed St. Tammany Parish.  Of the nearly $13-billion of flood-insured damages statewide, about 10 percent of the damages impacted St. Tammany.  But 2007 has been a positive year for Slidell; with President Bush lifting the requirement that local governments match 10 percent of the cost for cleanup and some reconstruction projects, and the Federal Emergency Management Agency providing reimbursement funding for Slidell, the city is moving forward with several major rebuilding projects.

Under the current mayor, the coalition “Keep Slidell Beautiful” spearheads city-wide cleanups, beautification efforts and special projects.  A movement is now underway to establish Olde Towne Slidell as a Main Street USA community.  This National Trust for Historic Preservation program aids in the revitalization of older commercial districts across the nation.

In a Slidell real estate boom that goes beyond the town’s rebuilding projects, construction permits for new homes for fiscal year 2006-2007  jumped from $37.8 million to nearly …

When you’re buying a new home, you have an endless array or questions to go along with the anxiety and the stress and worries about the unknown. So calm down and we’ll give you a few tips that will help you determine what you need to do, what you let the professionals do and how else you can make buying a home for sale a little smoother and more pleasant.
Buying a New Home a Real Estate Adventure
Whether you have bought many homes or you’re a first-time home buyer, completing a real estate transaction successfully and to your satisfaction should be your goal. Although all real estate transactions are unique, there is an established protocol that you should be aware of which can help make your new home purchase proceed quickly and smoothly.
Home Buyer’s Responsibilities
What are the home buyer’s responsibilities?

Communicate thoroughly and definitively with the buyer’s agent to help the agent identify the right neighborhoods, home styles and particular amenities needed and desired
Once a new home is targeted, take an active role in investigating and inspecting the property, asking questions
Verify verbal statements in writing
Carefully review the seller’s disclosures to identify potential problems or areas of concern
Hire a professional home inspector, attend the inspection and carefully review the inspector’s report and overall recommendations
Arrange for financing and prepare accordingly
Be aware of all contractual obligations

Home Buyer’s Agent Duties
Home buyers should expect professionalism from their real estate agents. Agents should:

Always be prompt, courteous and available (at least by …

Dressing a festive dinner table for your Thanksgiving feast incorporates the same principles used to create a tablescape.  The goal is to fashion a table setting that will enhance (not overwhelm) the presentation of the food and help to create a unique dining experience.
  
How to Create a Thanksgiving Tablescape
Creating an arrangement for your dining table is easy as 1-2-3!  Just follow these steps for a custom display that will add an air of sophistication to your Thanksgiving feast:

Lay the foundation for your Thanksgiving tablescape with fabric.
Using a fall-inspired table-runner or rich textiles to form the base of your table display will anchor the grouping and provide additional color, texture and dimension to your tablescape.
Choose a vessel (or vessels) to give height to your arrangement.  Combine vessels of varying heights to create highs and lows in the arrangement and create movement.  Just use vessels that have a similar aesthetic for a simple and unified display, like all glass footed bowls and candle votives, or wood bowls with wooden trays or woven baskets.
Select elements with varied colors, textures, shapes and forms to create an interesting arrangement or tablescape.

Step 1: Lay Down the Fabric Foundation
Quick, No-Sew Table Runner Ideas:

Measure the length of your dining room table (don’t forget to add the leaves if you’ll need them to seat all your Thanksgiving guests).  Visit your local fabric store and have a piece of gold or light tan colored felt cut to your table dimension. Using a pair of …

The home real estate market is expected to begin a modest recovery in 2008, according to the National Association of REALTORS® — a group that welcomes the good news about homes for sale — but there are other indications that NAR has solid reasons for its optimism.
Sales of New Homes Fuel National Economy
The Federal Reserve Bank has repeatedly lowered interest rates, the President got involved and paved the way to relief for troubled homeowners who are at risk of losing their homes to get special refinancing and avoid foreclosure, banks have adjusted their lending restrictions to better help qualified borrowers and home values recently showed a rise in most states, all signs that the housing market may indeed be slowly turning around for the better.

Nearly 6.5 million homes will be sold nationwide in 2007. New home sales will account for more than $193 billion in 2007, while sales of existing homes — about seven out of every eight home sales — will be $1.237 trillion. So you get an idea of how much a robust housing market can sustain and dictate the direction of the U.S. economy.
New Homes For Sale
2008 will be a year of consolidation and recovery in the new home market. Home builders admittedly overbuilt and must now liquidate excess inventories of brand new homes, sometimes at below-market prices. NAR predicts that 796,000 new homes will be sold in the U.S. in 2007, with the number dipping to 693,000 in 2007. New home sales topped 1 million units in 2006.

Housing starts are …