The Credit Crisis-What happened?

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Down Payment Assistance Set to Expire?

On July 30, 2008 President Bush signed The Housing & Economic Recovery Act of 2008 into law. An important piece of this legislation involves the availability of charitable gift programs that low- and middle-income families can use for downpayment and closing cost assistance.

These Downpayment Assistance Programs (DPAs) have been extended to October 1, 2008. After October 1, these programs will cease to exist. Loan applications that are originated prior to October 1 will remain unaffected even if the loan doesn't close until sometime after the October 1 deadline.

On August 1, 2008, Congress introduced H.R.6694 that would reauthorize and reform DPA programs. The Green-Miller-Waters-Shays plan would re-authorize and reform non-profit downpayment assistance and secure it as an allowable source for FHA borrowers. The bill seeks to ensure that providers of the downpayment assistance operate in a transparent manner to guard against conflicts of interest. The bill also includes language to ensure that FHA maintains its financial stability by permanently authorizing the Secretary to assess higher premiums to higher risk borrowers.

It is important that you contact your elected officials in Congress and tell them that you support downpayment assistance and urge them to support H. R. 6694. To reach your elected officials, please call the US Capitol Switchboard at 202.224.3121.

To learn how you can support it, visit www.supporthomeownership.com.

Providence Ranks 6th on Forbes "Increasingly Affordable US Housing Markets" List

Forbes recently took a look at the number of homes sold in the last quarter in the 50 largest real estate markets and compared the cost of those homes to the median household income in those areas.  This rating, called the National Association of Home Builders' (NAHB) Housing Opportunity Index (HOI) incorporates income data from HUD, transaction data from court records provided by a leading real estate marketing company, and prevailing interest rates as reported by Wells Fargo. 

The declining nature of the national real estate market means that houses in nearly all areas are becoming more affordable, but this measure identifies those areas where prices are declining the fastest while the local economy is staying about the same or is declining more slowly than the real estate market--that is those areas where affordability is changing the fastest.

Providence ranked #6 on the list, and has a HOI of 50% meaning that half of all homes sold in the last quarter were affordable to the median-earning family.  The study found that home prices fell an average of 8.1% since 2007 when the median home price was $293,400 and affordability was at 33% (1/3 of homes sold were "affordable" to the median-earning family).  

With interest rates still at historic lows, and prices continuing to decline, now is the perfect time to buy in the Greater Providence area.  Special financing for qualified buyers, including no money down gift programs through FHA, is still available.  Contact me for more information on Providence area real estate and financing programs.

Bank of America Agrees to Acquire Countrywide Financial

Bank of America agreed on Friday to purchase Countrywide Financial, the leading mortgage lender in the US, for $4.1 billion in stock. This follows a $2 billion investment by Bank of America in August 2007 which was intended to ease pressures on Countrywide from mounting foreclosures and delinquencies. The deal, already approved by both boards, is now in the hands of regulators who will determine if the acquisition violates any antitrust laws.

The buyout answers the big question about who will assume responsibility for collecting payments and servicing the more than 9 million U.S home loans serviced by Countrywide Financial. BOA is no stranger to the mortgage industry. In the first 9 months of 2007, the lender was the top mortgage originator whose focus has been to increase share of mortgages to borrowers who have solid credit as opposed to the subprime loans currently being scrutinized as part of the mortgage industry meltdown.

The merger will take approximately 2 years to complete, but in the meantime BOA will continue to operate Countrywide operations under the Countrywide Financial brand name.

The jury is still out on whether or not this deal will make a dent in the problems caused by the subprime lending practices at Countrywide, but it seems to be a step in the right direction. We'll have to keep an eye on Bank of America in the coming months to see whether or not there will be a significant ease in the mortgage crisis as a result of the merger.

The Parrish Family is Growing

It's been awhile since I've posted on my blog--something I swore to myself I wouldn't allow to happen. It's been a very busy fall for me. And in addition to working a lot, I've been trying to stay in touch with my growing family back in N.C.

On October 3, 2007, we welcomed my 1st nephew, Noah James, into the world. He's the first child for my twin sister and my first nephew. He was about 8 pounds and 21 inches long and he, mom, dad, and grandparents are all doing well!

Fed Lowers Federal Funds Rate

On Wednesday last week, the Fed lowered the federal funds rate by a quarter point which prompted several commercial banks to lower their prime lending rate--the rate charged on credit card, home equity lines, and other types of loans--to 7.5%.

The prime lending rate typically has implications for rates on first mortgages and refinancing rates. A decline in one usually signals a decline in the other. We will have to watch mortgage rates closely over the next several months to see if banks reduce those rates as well.

Based on statements made by the Fed, this will likely be the last reduction in the federal funds rate for this year.

A New Way to Look at Golf

About a year ago, my best friend of 14 years was diagnosed with Non-Hodgkin's Lymphoma and the prognosis didn't look good. Thankfully, he pulled through. In the last year, I've become more involved with the Leukemia & Lymphoma Society and I've met some pretty interesting people--survivors, like my best friend. So headlines like the one about Miles Levin, an 18-year old who has had to grow up fast over the last 2 years and who died this past Sunday, always grab my attention. I was reading his blog online and stumbled across this entry. I really touched me. I know this has nothing to do with real estate, but it is a poignant message and I felt compelled to share it.


From the blog of Miles Levin, aged 18.

I went to the driving range the other day and I was thinking...

I was thinking how you start out with a big bucket full of golf balls, and you just start hitting away carelessly. You have dozens of them, each individual ball means nothing so you just hit, hit, hit. One ball gone is practically inconsequential when subtracted from your bottomless bucket. There are no practice swings or technique re-evaluations after a bad shot, because so many more tries remain. Yet eventually you start to have to reach down towards the bottom of the bucket to scavenge for another shot and you realize that tries are running out. Now with just a handful left, each swing becomes more meaningful. The right technique becomes more crucial, so between each shot you take a couple practice swings and a few deep breaths. There is a very strong need to end on a good note, even if every preceeding shot was horrible, getting it right at the end means a lot. You know as you tee up your last ball, "This is my final shot, I want to crush this with perfection; I must make this count." Limited quantities or limited time brings a new, precious value and signficance to anything you do. Live every day shooting as if its your last shot, I know I have to.