New Loan Limits Official & Best Time To Buy - Week In Review: March 2-9, 2008

Number One Office Again! - RE/MAX of Valencia has once again earned the award for the NUMBER ONE OFFICE, 2007 - HIGHEST TOTAL TRANSACTIONS (LARGE MARKET) FOR RE/MAX, IN THE STATE OF CALIFORNIA. #1 OFFICE IN THE WHOLE STATE, WAY TO GO !!! We will be sure everyone gets a color copy of the congratulatory letter we received from RE/MAX of California Regional Vice President Adam Contos. (Broker/Owners of RE/MAX of Valencia, 3/6)

The federal government officially raised limits on conforming loans temporarily from $417,000 to as high as $729,750 in fourteen counties in California for loans originated between July 1, 2007 and Dec. 31, 2008. These are loans that may be sold to Fannie Mae or Freddie Mac. (CAR, 3/7)

Also, the government raised FHA conforming loan limits to a maximum limit of $729,750 for 14 California counties, up from $362,790, for loans originated between now and Dec. 31, 2008. (CAR, 3/7)

Best time to buy in four years - Home values have declined across the country, giving homebuyers the best buys they've had since 2004. (CNNMoney 3/4)

Mortgage Rates Drop This Week - Freddie Mac says the 30-year fixed mortgage rate fell to 6.03 percent during the week ended March 6, from 6.24 percent the prior week. Interest on 15-year, fixed-rate mortgages also declined, falling to 5.47 percent from 5.72 percent over the same period. The five-year adjustable mortgage rate dipped to 5.34 percent from 5.43 percent, while the one-year ARM dropped to 4.94 percent from 5.11 percent. (San Diego Union-Tribune, 3/7; CNNMoney, 3/6)

Fed: Rates May Remain Low for Awhile - The Federal Reserve may need to keep a lid on interest rates for a significant length of time if the financial markets continue to be under duress, New York Fed President Timothy Geithner told the Council on Foreign Relations. (Reuters, 3/6)

Mortgage applications up slightly – Refinance and purchase volume increased in latest week as fixed-rate mortgage rates tumbled. Mortgage application volume increased 3% for the week ending Feb. 29, according to a weekly application survey by the Mortgage Bankers Association. Refinance volume increased 4.5% during the week, while purchase volume grew 1.4%. Refinance applications accounted for 52.4% of all mortgage applications during the week ending Feb. 29. (MBA via CNNMoney, 3/6)

FBI begins investigation of Countrywide – Calabasas-based mortgage lender being investigated for possible securities fraud. (KNX-AM, CBS Radio, 3/9)

Home Equity Falls to Record Low – The percentage of equity Americans with mortgages have in their homes fell below 50 percent in the second quarter of 2007 and declined further through the fourth quarter to 47.9 percent, the Federal Reserve reported yesterday. This is the first time that home owners’ debt exceeds their equity since the Federal Reserve first began keeping records in 1945. Economists expect this figure to drop even further as home prices continue to decline. (AP, NY Times, 3/7)

Moody's Economy.com estimates that 8.8 million U.S. home owners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be "upside down" if prices fall 20 percent from their peak. (3/8)

The Mortgage Bankers Association also reported Thursday that loans past due or in foreclosure hit 7.9 percent of the total in the fourth quarter of 2007, up from 6.1 percent in December 2006. While defaults were scattered across the country, 21 percent came from California and Florida. Nevada, Arizona, Michigan, and Ohio also had high default rates. (3/8)

Jobs plunge by 63,000, worst since 2003; Fed steps in - Employers slashed jobs for the second month in February prompting the Fed to raise auctions of short-term loans to aid lenders. (USA Today, 3/7)

Foreclosures hit all-time high - Over 900,000 borrowers are losing their homes, up 71% from a year ago, and a record number of home owners are behind on payments. (CNNMoney, 3/6)

Home sales stay weak in Realtors' report - Homes under contract flat in January but remain near record low, showing continued weakness in market. (CNNMoney, 3/6)
Flat Existing-Home Sales Likely Before Gradual Recovery - The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery in the second half of the year. (NAR, 3/6)

This Week:
* Monday – Wholesale Inventories: expected to rise
* Tuesday – International Trade Deficit: expected to widen slightly to $59.5 billion after shrinking to $58.8 billion in December
* Thursday – February Retail Sales Report: expect slight rise in sales (0.2%)
* Thursday – January Business Inventories
* Friday – February Consumer Price Index: expect rise of 0.2% in the core index. (translating to slight inflation)
* Friday – preliminary March consumer sentiment
(AP, 3/9)

Last week - Wall Street balked at the February jobs loss, banks' requests to hedge funds and other borrowers for loan paybacks, and a plan for the troubled bond insurer Ambac Financial Group Inc. that many considered insufficient. (AP, 3/9)

Ending in Foreign News:
Australian Foreclosures Set to Rise as Interest Rates Reach 12-Year High Foreclosures in New South Wales, Australia's biggest state, are set to rise to a record this year after the central bank increased rates twice in the past two months to a 12-year high. (Bloomberg, 3/10)

New Zealand House Prices Rose at Slowest Pace in Three Years in February New Zealand's house prices rose at the slowest pace in three years in February as higher interest rates curbed demand for property. (Bloomberg, 3/10)


Sources: Bloomberg, San Diego Union-Tribune, California Association of REALTORS, National Association of REALTORS, CNNMoney, Reuters, Associated Press, Moody’s Economy.com, New York Times, Mortgage Bankers Association.

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