Montgomery Real Estate For Sale In Capitol Heights
Montgomery Real Estate For Sale In Capitol Heights
1933 Windsor Avenue, Montgomery AL 36107
The Hat Team
Displaying blog entries 1831-1840 of 1998
Montgomery Real Estate For Sale In Capitol Heights
1933 Windsor Avenue, Montgomery AL 36107
The 'Emergency Economic Stabilization Act' failed to pass congress yesterday. the result being a 777 point drop in the stock market. Most of us are aware of the affect, but don't understand what the Act included. Below is a summary from John Herzog, Alabama's first Certified Mortgage Banker.
I. Stabilizing the Economy
The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.
II. Homeownership Preservation
EESA requires the Treasury to modify troubled loans – many the result of predatory lending practices – wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions.
IV. No Windfalls for Executives
Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits “golden parachutes” and requires that unearned bonuses be returned.
V. Strong Oversight
Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.
John Herzog CMB
Vice President/Regional Manager
New South Federal Savings Bank
[email protected]
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5 from an upwardly revised reading of 89.4 in June, which had risen 5.8 percent from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8.
Lawrence Yun, NAR chief economist, said home sales continue to edge up and down. “Pending home sales are oscillating month-to-month, with the long-term trend essentially flat,” he said. “Overly stringent lending criteria imposed by Fannie Mae and Freddie Mac in the past month no doubt held back contract signings.”
Let’s take a look at the Midtown Montgomery sales statistics for August 2008 to see how the Montgomery AL real estate market looks:
In Midtown Montgomery, pending sales decreased 24% in August 2008, compared against August 2007. Likewise, the number of sold listings dropped 22%. The average sales price decreased 11% to $162,606, and homes remained on the market for an average of 14 days longer this August.
Midtown
Montgomery |
Pending
Sales |
Sold
Listings |
Average
Market Times |
Average
Sales Price |
August 2008
|
38
|
36
|
110
|
$162,606
|
August 2007
|
50
|
46
|
96
|
$183,598
|
Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.
3. Will the government be able to work with the troubled assets (loans) it buys enough to resell them at a profit, or will this "bail out" cost the taxpayer a bundle and be a drag on the economy for decades?
Mortgage Market in Review
Week of September 22, 2008 Volume 15, Issue 39
|
Market Comment
Mortgage bond prices rose last week applying a slight downward pressure on mortgage rates. Trading in the financial markets remained in disarray. The Dow Jones index moved more than 400 points, both up and down, several times during the week. Rates fell sharply early in the week as traders fled stocks for the safety of bonds. This money flow reversed Thursday afternoon after rumors of a massive government intervention into the financial markets surfaced.
For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point.
Durable goods orders and new home sales data will be the most important events this week. The mortgage interest rate market remains volatile as US Government officials strive to bring liquidity to the financial markets.
Looking Ahead
|
|||
Economic
Indicator
|
Release
Date and Time
|
Consensus
Estimate
|
Analysis
|
Existing Home Sales
|
Wednesday, Sept. 24,
10:00 am, et
|
Down 1.4%
|
Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
|
Durable Goods Orders
|
Thursday, Sept. 25,
8:30 am, et
|
Down 1.3%
|
Important. An indication of the demand for “big ticket” items. A larger than expected decrease may lead to lower rates.
|
New Home Sales
|
Thursday, Sept. 25,
10:00 am, et
|
Up 0.5%
|
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
|
Q2 GDP final revision
|
Friday, Sept. 26,
8:30 am, et
|
Up 3.4%
|
Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
|
U of Michigan Consumer Sentiment
|
Friday, Sept. 26,
10:00 am, et
|
None
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
Durable Goods Orders Durable goods orders are generally believed to be a precursor of activity in the manufacturing sector because manufacturing must have an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to be scaled back; otherwise the manufacturer accumulates inventories, which must be financed.
Unfortunately, durable goods orders data has many drawbacks. The first problem with the orders data is that they are extremely volatile. The volatility of the data usually is attributed to the civilian aircraft and defense components of the figure. For example, if Boeing has a big order for one of its jumbo jets, the civilian aircraft category can change by $3-4 billion. The same scenario is evident when an aircraft carrier is ordered, surges in the defense category result. Keep this in mind with the current economic environment. Many sectors of the economy continue to struggle, but defense spending remains robust.
Since the data is very volatile and difficult to forecast, there is quite often a huge disparity between the actual release and the initial projections. If the durable goods report is much stronger than expected, look for mortgage interest rates to push higher. If favorable, the data may help interest rates remain steady or even push lower.
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Displaying blog entries 1831-1840 of 1998