September 2010

Cook County Tax Bills Won’t be Out Until Thanksgiving – TI Collections Mean More Cash at Closing For Borrowers

If you are buying a home or refinancing your mortgage in Cook County, expect to pay some extra cash at closing to set up your tax escrows. Real estate tax bills come out twice a year. The first installment (which pays for the first 6 months of the previous year) was due in March and the second installment (for the second half of last year) was supposed to come out in September. But in Cook County these dates are suggestions, not real deadlines. I can’t remember the Cook County tax bills ever coming out when they were supposed to, and this year it looks like they will be out later than usual. Cook County Treasurer Maria Pappas says that she expects tax bills will be mailed out the week of November 22nd – almost Thanksgiving. The reason the bills are extra late this year may be political. Even though home…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 09/24/2010

Mortgage rates are holding in the same low range we have been in over the last few months. The reports released this week showed some signs of improvement, mixed in with the more down beat news. The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose 0.3% in August after a 0.1% increase in July, a better than expected improvement. Orders for durable goods — items expected to last three or more years — fell 1.3% in August after increasing a revised 0.7% in July. Excluding volatile transportation-related goods, orders posted a monthly increase of 2%. New home sales were unchanged in August at a seasonally adjusted annual rate of 288,000 and existing home sales were slightly better than expected (though still very low). But the big news had nothing to do with any of the reports issued, it…

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Fed Meeting Results – Prepared to Provide Additional Stimulus, Rates Will Remain Low

When the Fed talks, people listen. The FOMC (Federal Reserve Open market Committee) met yesterday, and announced that they will continue to keep the rates they offer to their best clients (the big banks) at or close to zero and will keep rates low for an extended period of time. This part was expected. The Fed has kept similar wording in their statement for over a year now. What was new was the wording suggesting that the economy has softened over the last several months and the pace of recovery is likely to be “modest” in the near term. They go on to say that the measure of inflation is at levels below what is needed for price stability. In plain English, this means that the Fed is more concerned about deflation (prices spiraling downward), than a return of inflation (prices moving higher). The Fed will continue to reinvest principal…

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It’s official – the Worst is Over and the Real Estate Market is About to Rebound

The real estate market is a mess. Almost every day I talk with people fighting to save their homes. I have daily conversations with homeowners who want to refinance their mortgages, but can’t because their home values are too low. I know too many good Realtors who are looking for full time jobs, because they can’t support themselves and their families doing what they are so well suited for. I get it. The economy is in a recession, but the real estate market is in a depression. Time magazine gets it too. Their recent cover story, Rethinking Homeownership, talks about all the problems in the real estate market. It notes the problems of foreclosures and short sales and how trillions of dollars of home equity have evaporated over the last few years. But Time takes this a step further. The point of the article is that with things so tough…

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FHA is Changing Their Mortgage Insurance in October – How will this Change Your Borrowing Power?

FHA is now the big dog in the mortgage market. FHA allows a low 3.5% down payment, and with conventional guidelines ratcheting consistently tighter, more and more home buyers are choosing FHA as the way to buy. But over the last few years, as FHA has increased their market share, a chorus of doubters have been crying about how FHA is the next subprime, and with the low down payment the program is a ticking time bomb waiting to explode. I’ve pointed out before that though it is a government program, FHA has been self supportive since it started way back in the 1930s. While Fannie Mae and Freddie Mac and all the big banks have required bailouts to stay in business, FHA has kept on chugging along. FHA doesn’t make loans directly. It acts more like a mortgage insurance company guaranteeing loans made to their guidelines and covering losses…

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Chicago Illinois Mortgage Rates week in Review for the Week Ending 09/10/2010

Mortgage rates moved higher this week as bond investors chose to look at the bright side of the news. Markets run on emotion and this means swings in prices based on the mood of the moment. Mortgage rates had dropped to their all time lows over the last few weeks as fear of a double dip recession took hold. With gloom in the air, investors bought treasury bonds for safety, and mortgages went along for the ride. When you buy bonds, whether they are treasury bonds or mortgage bonds, you are locking in a fixed return for a long period of time. With fear the dominant emotion, investors were locking in low, low returns. If the economy turns lower or deflation takes hold, these low returns will still mean that investors aren’t losing, and it will be a positive trade. But if the gloomy consensus is wrong and the economy…

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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 09/03/2010

The flavor of the week last week in the mortgage market was recovery. Signs of an uptick in the economy helped the stock market regain some steam, and caused mortgage bonds to drop from their all time best levels. Mortgage rates are still in the best range they have ever been, but with optimism in the air (ban news is good news for mortgage rates) mortgage rates are likely to be under pressure. The reason for this optimism boils down to a few reports released last week. The ISM (Institute for Supply Management) Purchasing Managers Index showed some growth in manufacturing for the past month, beating expectations. The bigger news though, was the release of the jobs report which showed a loss of 54,000 jobs for the previous month and an increase in the unemployment rate from 9.5% to 9.6%. This was spun into good news that 114,000 of those…

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