Archive for September, 2009


Mortgage Rate Trends For Week of September 28th 2009

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Mortgage rates include co-ops

Fed Extends MBS Purchase Program

Favorable news from the Fed, weaker than expected economic data, and strong demand for a record $112 billion in Treasury auctions helped mortgage markets this week. While the daily price movements were often large, mortgage rates ended the week just a little lower.

As expected, the Fed made no change in the fed funds rate on Wednesday. Although there was much disagreement about what the statement would say, in general it contained the minimum number of surprises. The Fed offered its most optimistic view on the economy since the recession began, yet officials believe that slack in the economy will keep inflation low. Fed officials continue to expect the fed funds rate to remain at exceptionally low levels “for an extended period.”

Of particular significance for the mortgage industry, the end date for the $1.25 trillion mortgage-backed securities (MBS) purchase program was moved from the end of this year to the end of the first quarter of next year. The total quantity of purchases will not change, and the Fed will gradually scale back the level of weekly purchases to minimize disruptions to mortgage markets. Investors had been concerned that the Fed statement might contain less favorable news, and mortgage rates improved after its release. Longer-term, the decrease in demand from the Fed is expected to move mortgage rates higher, and it might lead to greater daily volatility.

This week’s housing data was mixed. After four months of increases, August Existing Home Sales fell 3%. Inventories of unsold homes fell to an 8.5-month supply from a 9.3-month supply in July. First-time homebuyers accounted for 30% of total sales. August New Home Sales rose slightly, and inventories dropped moderately.

Mortgage trend information provided by Larry Weinstein Senior Loan Officers at Preferred Empire Mortgage Company, a sister company of Prudential Douglas Elliman. Chart: New York Times Mortgage Column 9/25/2009.

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Market musings at 55 Vestry Street-Maisonette

Market musings in a Tribeca maisonette-55 Vestry Street

Wednesday evening I went to a state-of-the-market update meeting held in a duplex maisonette in the Fairchild, at 55 Vestry Street in Tribeca.  Speakers included Howard Lorber - Chairman and President of Prudential Douglas Elliman, Jonathan Miller - co-founder of residential real estate appraisal firm Miller Samual (real estate market guru,  blogger extraordinaire and podcaster),  and Raphael DeNiro Executive Vice President; Associate Broker Prudential Douglas Elliman-Exclusive Marketing Broker for The Fairchild.

Here’s some of their thoughts and market insights:

  • Real estate in Manhattan “had a run of fantastic years so if you compare everything moving forward to 2006 or 2007 you’re bound to be disappointed”.
  • As the stock market goes up for a few days the phones begin to ring but when  the market has a few losing  days the phones become silent.
  • Contract activity usually peaks in May, but because of the Lehman closing, the market took a “time out” and is 3 months out of synch-we’ve seen the peak happen in August.
  • NYC traditionally lags the rest of the country in real estate downturns. This particular cycle is reminiscent of 911 when all sales dropped off then began to pick up again in January/February 2002
  • Lots of all cash purchases-37% cash (usually 5-10%) 63% financed. This is a good sign that the market is turning the corner
  • Inventory is down about 23% in lock-step to where it has been for the last 10 years. There is concern of “shadow inventory” being injected into the market both form new developments and sellers thinking this is the time to sell.
  • First time buyers activity make the entire market feel more confident.
  • Most of the “action” is weighted in the low end of the market.
  • Lots of contracts below $1million have helped to erode inventory levels and prop up sales prices in that piece of the market.

More and more people are talking about the importance of an excellent credit score,  so if  your credit score is low or just downright bad, there are proactive steps to take that will not only improve your credit score , but increase it enough to turn it into a good credit score.

  1. Check for accuracy. Remember that your credit report is based on information from the three credit reporting companies: Equifax, TransUnion and Experian and you can download a free report from each of them by accessing (this is the site with the really annoying TV commercials).   On each of the reports, make sure all credit accounts listed under your name belong to you and make sure that all balances and payment histories are correct. Immediately contact-in writing – the reporting company and the information provider if you see inaccurate or incomplete information.
  2. Lower your debt ratio. When using credit cards or other credit lines, keep your balances low rather than maxing the line out. If your credit card balances are high, pay them down or pay them off to bring the outstanding debt ratio down. Use some of your savings, apply extra payments each month, or get a second job to lower your debt ratio. As you lower your debt ratio, you’ll see your credit score gradually improve.
  3. Make your payments on time. Always make sure that your payments reach your creditors on or before the due date. Making your payments on time is the number one way to increase or improve your credit score. As you continuously do this you’ll gradually see your credit score increase.
  4. Keep accounts open. Many New Yorkers think if they close credit accounts they’re not using their credit scores will automatically improve.  The opposite is true. One of the factors used to calculate your credit score is the longevity of your relationship with your creditors. If you have a credit card or home equity line of credit that you’re not using, the longer you have the relationship established with the creditor, the more of a boost it can give to your credit score. Closing long-term accounts can cause a decrease in your score so only close credit accounts if absolutely necessary.

If you have a low credit score (a score of 760 or higher is considered high by co-op and condo mortgage lenders) or bad credit, use one or all three of these steps to transform your bad credit into good credit. It’ll increase your chance of getting loan approval—helping you to achieve your goal of being a New York City condo or co-op owner.


Mortgage Rate Trends For Week of September 21st 2009

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New York Times Mprtgage Section 9/18/2009
New York Times Mprtgage Section 9/18/2009

The “recession is very likely over,” announced Fed Chair Ben Bernanke last week. While this may be technically true, markets did not react with the usual leap upward in interest rates. Instead, mortgage rates continued their very slow downward decent. While we may finally be in a period of economic growth, we may be far from a reasonable economic recovery. As long as unemployment remains elevated, we may see inflationary pressures held in check. This combined with a slow unwinding of federal intervention in financial markets may lead to a lengthy period of low rates. However, markets may react with rapidly increasing rates if significantly better-than-expected data is released, or if rumors of termination of certain government programs circulate.

The direction that mortgage rates move this week is very likely to be dependent on the Fed’s policy announcement on Wednesday. If the Fed issues any surprises for the market, such as the termination of any support programs, we could see rates rise. Otherwise, they should stay fairly level.

Mortgage trend information provided by Larry Weinstein Senior Loan Officers at Preferred Empire Mortgage Company, a sister company of Prudential Douglas Elliman. Chart: New York Times Mortgage Column 9-18-2009.

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Your credit score plays the starring role in whether or not you qualify for almost any loan, mortgage or consumer credit you apply for. Other factors are taken into consideration when you’re applying but your credit score is one of the most important factors—especially in current hard economic times when lending requirements are stricter than ever.

Did you know, for example, that when you apply for a mortgage to finance a NYC co-op or condo, to get the best rate, lenders today are requiring your score is at least 760? This means that if your credit score isn’t this high, it may hold you back from your dream of being the owner of a Manhattan condo or co-op. Low credit scores can also mean higher interest rates or less favorable lending terms than applicants with high credit scores.

What affects your credit score

There are several factors that go into the calculation of your credit score . While each factor is weighted differently, payment history, the amount of debt you have, the length of credit history, the variety of credit, as well as how much new credit you’ve established are all used to calculate your score. Since higher interest rates on an approved loan or getting turned down for the loan completely are outcomes directly related to low credit scores, it is important to check your credit report and score for accuracy and to keep your credit score as high as possible.

Resources for monitoring your score

Since your credit score is so important to almost any lending decision, you need to monitor it and be aware of anything on your credit report that may bring it down. You should pull your credit report and credit score at least twice a year. There are a number of resources available to pull your credit score and/or full credit report.

Check out  Credit Karma to receive your free credit score. To supplement that, get your free full credit reports from This site accesses the three credit reporting agencies TransUnion , Experian and Equifax Almost as annoying as the commercials, is the fact that you will have to pay each of them to receive your score!

Mortgage rates include co-ops 9-11-09

Mortgage rates held mostly steady last week with little influential economic news or data released. The Federal Reserve’s Beige Book reiterated the prevailing sentiment that economic activity is beginning to firm during the last two months of the summer.
This week has some significant data points due, including both the Producer and Consumer Price Indices, along with retail sales data and industrial production numbers. The market appears to have priced in inflation as a future concern, as increasing price pressures have not flared in many months.

If both indices come in anywhere near expectations, we’ll see inflationary concerns continue to be pushed off into the future. Industrial Production is expected to tic upward again as we have ample evidence that manufacturing and other industrial issues are moving toward some level of recovery.

Retail sales may have the biggest influence this week as consumer spending is expected to remain in check for some time. If sales leap unexpectedly, we could see mortgage rates pushing upward.

Mortgage trend information provided by Larry Weinstein Senior Loan Officers at Preferred Empire Mortgage Company, a sister company of Prudential Douglas Elliman. Chart: New York Times Mortgage Column 9-11-2009.

If you are planning to buy or thinking about buying an apartment in New York City, it’s smart to get expert help from the beginning. Touring apartments is just the beginning; buying one is more complicated.

If you tour open houses, you’ll meet real estate agents, virtually always the seller’s agents.  There are several different kinds of agents and it’s important to know the how they work.

Listing Agents

Listing (or seller’s) agents are the ones with whom the seller has listed his or her property. A seller’s agent promises to take reasonable care, provide undivided loyalty, confidentiality, full disclosure, obedience and duty to the seller. That means their top priority is to show the property in its most favorable light and negotiate the highest price and terms for the seller. In other words, the listing agent owes complete fiduciary responsibility to the seller.

Buyer’s Agent

Conversely, the buyer’s agent is engaged by the buyer to represent his or her interests.  The buyer’s agent is completely motivated to make sure that you get the best possible deal.  He or she negotiates the purchase of the home you want at a price and on terms most favorable to you.  A buyer’s agent promises to take reasonable care, provide undivided loyalty, confidentiality, full disclosure, obedience and duty to the buyer.  In other words, he owes complete fiduciary responsibility to the buyer.

Dual Agent

A real estate broker may represent both the buyer and seller if both buyer and seller give their informed consent in writing.  For example, if you visit an open house, you might meet the seller’s agent as you tour the home.  Should you decide to buy – or make an offer on – the property, you might ask that agent to represent you.  In that case, the agent will not be able to provide the full range of fiduciary duties to both buyer and seller.  The agent must explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are both giving up their right to undivided loyalty.  A buyer should carefully consider the possible consequences of a dual agency relationship before agreeing.

Dual Agent with Designated Sales Agents

If the buyer and seller provide informed consent in writing, the real estate brokerage firm may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of the property.  A designated sales agent cannot provide the full range of fiduciary duties to the buyer or seller.  The designated agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty.

So if you are a buyer, a listing or seller’s agent can not advocate for the best deal you can get.  If the seller has an agent totally dedicated to their interest, buyers should strongly consider working with agents who are totally dedicated to ensuring that they get the best possible deal.

New York State law is crystal clear and requires disclosure regarding real estate agency relationships and the rights and obligations it creates.

As always, if you need legal, tax or other advice you should always consult with a professional in that field.