Doing the Charleston!

The more things change, the more they remain the same, or so the cliché goes. For Fannie Mae, not much is changing, but things are remaining the same. Fannie Mae continues to rack up losses and continues to slash its dividend. On the former, it posted a $2.3 billion loss in the second quarter after reporting a $2.5 billion lost in the first quarter. On the latter, the dividend was cut 86% this quarter after being cut 30% last quarter.

Fannie is in capital-raising mode, and many of us are providing the capital. One way Fannie is raising capital is by raising fees. For instance, Fannie announced last week that it is raising the “adverse market delivery” fee, which was introduced eight months ago. The original fee was $250 per $100,000 borrowed. Now the fee will double to $500 per $100,000 borrowed, meaning borrowing costs will be roughly an eighth of a point higher.

Not that we need higher borrowing costs; we don’t. Last week, the prime 30-year fixed-rate mortgage averaged 6.74%, the prime 15-year fixed-rate mortgage averaged 6.27%, while the 5/1 adjustable-rate mortgage averaged 6.32%, according to Bankrate.com’s weekly survey.

Fortunately, the news was more upbeat in other sectors of the economy. Pending home sales rose 5.3% in June, according to the National Association of Realtors. What’s more, the rise was broad-based, occurring in all four major regions of the country. Could this be an indicator of a sustained rally off a bottom? It’s tough to say. If distressed transactions – short sales and foreclosed properties – are a lower percentage of the total, it could be.

Another positive sign for housing is falling oil prices, which dropped below $117/barrel last week. Oil prices have tumbled 30% in the past month, and gasoline prices are now well below $4/gallon in many parts of the country. Lower commuting and energy costs make houses, suburban houses in particular, more affordable, so let’s root for still lower oil prices in coming months.

*** Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval based on secondary market guidelines. The rates shown are based on average rates for the best qualified customers. Your individual rate may vary.

Above information courtesy of Melissa Breeland of Residential Mortage of SC

RISMEDIA, August 29, 2008-

This week, Freddie Mac announced that its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series registered a modest 0.4 percent annualized decline in U.S. home values during the second quarter of 2008.

Home values in some parts of the U.S. have remained stable or edged up. Most areas in the West South Central region (Arkansas, Louisiana, Oklahoma and Texas) experienced price gains over the quarter and the past year.”

The Conventional Mortgage Home Price Index (Purchase-Only) Series shows the following regional performances: (The CMHPI Purchase-Only Series excludes all refinancings in its calculation)

West South Central Division (AR, LA, OK, TX): rose 1.7 percent (7.0 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values increased 1.6 percent, and during the last five years, home values increased 27.3 percent.

Middle Atlantic Division (NJ, NY, PA): decreased 0.5 percent (-2.2 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased 2.6 percent, and during the last five years, home values increased 38.8 percent.

East South Central Division (AL, KY, MS, TN): increased 1.7 percent (7.0 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased -0.2 percent, and during the last five years, home values increased 26.7 percent.

East North Central Division (IL, IN, MI, OH, WI): increased 1.8 percent (7.5 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased 4.0 percent, and during the last five years, home values increased 8.5 percent.

Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): decreased 0.6 percent (-2.6 percent, annualized) in the second quarter of 2008. In the last 12 months, home values decreased -5.6 percent; during the last five years, home values increased 39.5 percent.

West North Central Division (IA, KS, MN, MO, ND, NE, SD): increased 1.9 percent (7.7 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values increased -2.3 percent; over the last five years, home values increased 15.8 percent.

South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): decreased 0.3 percent (-1.0 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased 5.5 percent, and during the last five years, home values increased 33.7 percent.

New England Division (CT, MA, ME, NH, RI, VT): increased 0.3 percent (1.2 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased 5.1 percent, and during the last five years, home values increased 18.1 percent.

Pacific Division (AK, CA, HI, OR, WA): decreased 5.4 percent (-19.7 percent, annualized) in the second quarter of 2008. Over the last 12 months, home values decreased 11.4 percent, and during the last five years, home values have increased 48.1 percent.

Jointly developed by Freddie Mac and Fannie Mae and first published by Freddie Mac starting in 1994, the Conventional Mortgage Home Price Index features indexes for the nine Census divisions as well as a national index.

The national index is the average of the nine divisional indexes weighted by the distribution of one-unit detached, single-family structures in each Census division.

Above article excerpts courtesy of RISMEDIA

*** Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval based on secondary market guidelines. The rates shown are based on average rates for the best qualified customers. Your individual rate may vary.

Above information is courtesy of Melissa Breeland of Residential Mortgage SC. Melissa has access to hundreds of loan programs. The programs and rates listed here are just the most popular. If you need something different please let her know and she will try to find it. She will beat or match any offer brought to her in writing from competitors for all FHA, VA and State Housing Loans.

But that's not to say the NAR won't report bad news; it will. The NAR also said that the median existing single-family home price fell 7.6% nationally in the second quarter. It blamed foreclosures and short sales -- which accounted for a third of transactions -- with pulling prices down.

It was also reported that the rate of decline is ebbing, but not from the NAR. While national price declines continue, nominal price drops have stabilized, according to housing price data released by First American CoreLogic. In fact, 883 of CoreLogic's core-based statistical areas registered no price change between June and July, according to Housingwire.com.

Good news could also be found in the consumer price index, which, at first glance, doesn't seem so good. Consumer prices rose 0.8% in July, which means the CPI is climbing at a 5.6% annual rate. The good news is that rate is unlikely to be sustained. Crude oil prices, a huge factor in rising prices, started to slide in early July, but gasoline prices didn't begin to decline until two weeks later. The big drop in energy prices in August means we should expect a significant drop in the rate of price increases in coming months.

Mortgage markets appear to agree with this assessment, for they hardly budged last week. According to Bankrate.com's weekly survey, the prime 30-year fixed-rate mortgage remained unchanged at 6.74%, while the prime 15-year fixed-rate mortgage fell 1 basis point to 6.26%.