Mississippi Home Corporation is participating in a program Congress established, the Neighborhood Stabilization Program. What this program offers is government grants of up to $39,999 which is to be used to reduce the principle of a mortgage when a person purchases a foreclosed home. The home has to be bank owned, bank holding company, government agency, or authorized real estate owned designated entitiy.
Here is how it works: A buyer can locate a foreclosed property using a local Realtor. Contract to purchse, then apply through your local lender, like
Mortgage 1st, Inc., for the loan. If you agree to live in the home for five (5) years, you can obtain a grant of $14,999, which can be applied at closing to reduce your principle owed. For example, you find a foreclosed property and you work out a contractural price of $150,000 and obtain an FHA loan with 3.5% downpayment. The loan amount would be $144,750, plus 1.75% MI added back to the loan, for a loan amount of $147,283.13. At the closing table you will be wired $14,999, which will reduce your principle to $132,284.13! That would make your monthly payment much less. The kicker is you must qualify for the $147,283.13 loan amount! You would save $92.97 per month on your payment. You don't have to live in the home for five years, but if you move before completing your occupancy period, then you will pay back a portion of the grant based on the number of months you lived in the home. The longer you live in the home, the less money you pay back. Live there the full five years, you owe nothing.
If you agree to live in the home for 10 years, you can receive another grant of up to $25,000 plus the $14,999 which adds up to $39,999. This grant is "Credit Score" driven, which means if your credit score is above 750, you can earn the full $39,999 for living there 10 years. The amount of the grant reduces the lower your credit scores are.
Income Limits.
Your income has to fall within certain ranges, depending which county you purchase the home. If you purchase a home in either Hinds, Rankin, or Madison Counties, and you are single your income cannot be above $47,650. If you are married, a family of two the amount rises to $54,450. With one child $61,250, and two children it goes to $68,050 etc. Call me for exact details. My phone number is 601-977-6228.
This appears to be a good, workable program. The catch is you must live in the home for either five (5) or ten years, which ever amount you decide to take.
Friday, October 30, 2009
Thursday, October 29, 2009
The Market and some Truth!
"Only two things are infinite: the universe and human stupidity, and I'm not sure about the former." Albert Einstein. The media is all giddy over this morning's news, and the talking heads on CNBC are clamoring that the recession is behind us. But those in the know understand that there's more to the economic data than just the headlines. While others might simply report the numbers - let's take a deeper look and see things as they really are.
The Commerce Department reported that the "Advanced" (the first of three readings) 3rd Quarter Gross Domestic Product (GDP) rose by 3.5%, higher than estimates of 3.2%. This was the first GDP gain in a year and the strongest reading in two years. "Holy Mackerel" is all they could say on CNBC...suggesting that the economy is back, and the stimulus plans have successfully bought our way out of the recession. But hold on - if we were to remove the government subsidized "Cash for Clunkers" program from last quarter's GDP, the reading would have been a lot lower...closer to the tune of 1.9%. Further - if we removed the $8,000 first time home buyer tax credit, the GDP number would have been lower still! Remember, these are temporary programs with temporary results...so once the "temporary" life support is unplugged, the numbers will be far worse, and more importantly, will be realistic.
And the euphoria continued, as a leading indicator on the health of the labor market, Initial Jobless Claims, was reported "Less Bad" than expected. Here we go again, as the media and other commentators lose their mind with excitement over these numbers. Check this out...the Initial Jobless Claims were "just" 531,000 in the latest week, slightly worse than the 525,000 that was expected. So more than half a million people each continue to get pink slips and shown the door - is this rally good news? The Continuing Jobless Claims number fell to a 7 month low, revealing that "only" 5.8 Million people are collecting unemployment benefits. The media jumped all over this dramatic drop in Continuing claims, spinning it as being an encouraging sign for the labor market. This is flat wrong - so many people have been receiving unemployment benefits for so long, that their benefits are expiring, without them having found new jobs. As I've been saying - this number is so awful, that to the inexperienced and untained eye, it actually appears to be good. And think about this - if the labor market were indeed improving, and the signs appear to be encouraging, then why the urgency to extend the unemployment benefits?
Some encouraging news on the extension of the $8,000 tax credit...while it is not a done deal, as it still must be reconciled between the House and Senate and then voted on for final approval, it's looking good. And it's not only looking good for the extension, but there are some additional enhancements to the credit in the works as well. Yesterday, the Senate reached an agreement to extend the $8,000 tax credit for first time homebuyers. They also added a $6,500 tax credit for other primary home purchasers, meaning not just limited to first time home buyers. They also raised the qualifying income limits in a very meaningful way - singles were increased from $75,000 to $125,000, and joint taxpayers from $150,000 to $250,000. Buyers must have executed purchase agreements in hand by April 30th, and then will have until June 30th to close. More details are likely to come, and changes could be made as reconciliation and voting takes place! Stay tuned...!
The Commerce Department reported that the "Advanced" (the first of three readings) 3rd Quarter Gross Domestic Product (GDP) rose by 3.5%, higher than estimates of 3.2%. This was the first GDP gain in a year and the strongest reading in two years. "Holy Mackerel" is all they could say on CNBC...suggesting that the economy is back, and the stimulus plans have successfully bought our way out of the recession. But hold on - if we were to remove the government subsidized "Cash for Clunkers" program from last quarter's GDP, the reading would have been a lot lower...closer to the tune of 1.9%. Further - if we removed the $8,000 first time home buyer tax credit, the GDP number would have been lower still! Remember, these are temporary programs with temporary results...so once the "temporary" life support is unplugged, the numbers will be far worse, and more importantly, will be realistic.
And the euphoria continued, as a leading indicator on the health of the labor market, Initial Jobless Claims, was reported "Less Bad" than expected. Here we go again, as the media and other commentators lose their mind with excitement over these numbers. Check this out...the Initial Jobless Claims were "just" 531,000 in the latest week, slightly worse than the 525,000 that was expected. So more than half a million people each continue to get pink slips and shown the door - is this rally good news? The Continuing Jobless Claims number fell to a 7 month low, revealing that "only" 5.8 Million people are collecting unemployment benefits. The media jumped all over this dramatic drop in Continuing claims, spinning it as being an encouraging sign for the labor market. This is flat wrong - so many people have been receiving unemployment benefits for so long, that their benefits are expiring, without them having found new jobs. As I've been saying - this number is so awful, that to the inexperienced and untained eye, it actually appears to be good. And think about this - if the labor market were indeed improving, and the signs appear to be encouraging, then why the urgency to extend the unemployment benefits?
Some encouraging news on the extension of the $8,000 tax credit...while it is not a done deal, as it still must be reconciled between the House and Senate and then voted on for final approval, it's looking good. And it's not only looking good for the extension, but there are some additional enhancements to the credit in the works as well. Yesterday, the Senate reached an agreement to extend the $8,000 tax credit for first time homebuyers. They also added a $6,500 tax credit for other primary home purchasers, meaning not just limited to first time home buyers. They also raised the qualifying income limits in a very meaningful way - singles were increased from $75,000 to $125,000, and joint taxpayers from $150,000 to $250,000. Buyers must have executed purchase agreements in hand by April 30th, and then will have until June 30th to close. More details are likely to come, and changes could be made as reconciliation and voting takes place! Stay tuned...!
Tuesday, October 6, 2009
Market Moving Sideways
Mortgage Bonds are trading slightly lower, but off the worst levels of the session.
The big news so far today comes from down under, where the Reserve Bank of Australia unexpctedly hiked the country's benchmark interest rate by .25%, from 3.0% to 3.25%, saying they felt it was safe to start cutting back on economic stimulus. Further...they also commentd that more hikes are likely to be coming. Stocks are higher around the globe, as Traders see this as a signal that the global economy is on better footing. And as a result of Stocks moving higher, Mortgage Bonds have been pressured lower.
The hike from Australia has also pressured the US Dollar lower, based on the perception that other nations may be poised to more rapidy raise interest rates, making heir currency more attractive against the Dollar. The weak Dollar, has pushed oil and other commodities such as precious metals higher as well. In fact, Gold hit a record high earlier this morning, reaching $1040.00/ounce!
Australia looks to be in a better position to hike rates than the US does, and one big reason is the current unemployment rate in Australia, which now stands at 5.8%. This is elevated from their last year's very lean 4.2%, but still under their 30-year average of 7.2% for the country. With our own unempoyment rate near 10% and rising...we just don't see how the Fed will be able to hike rates in the very near future.
Stocks will give us a better picture as to how well corporate America and the economy is doing, when 3rd Quarter earnings start to be released tomorrow. If earnings and/or future guidance disappoint, Stocks could lose ground in a hurry...and this could help Mortgage Bonds.
I'm looking for Congress to extend the First Time Home Buyer Tax Credit past the November 30th deadline. If this happens, home sales should remain steady through the first quarter of 2010. One way to get this economy rolling would be to eliminate the Capitol Gains Tax for two years. That would spur investors to invest and create jobs. I don't think the present administration will do anything such as that...it makes too much sense!
The big news so far today comes from down under, where the Reserve Bank of Australia unexpctedly hiked the country's benchmark interest rate by .25%, from 3.0% to 3.25%, saying they felt it was safe to start cutting back on economic stimulus. Further...they also commentd that more hikes are likely to be coming. Stocks are higher around the globe, as Traders see this as a signal that the global economy is on better footing. And as a result of Stocks moving higher, Mortgage Bonds have been pressured lower.
The hike from Australia has also pressured the US Dollar lower, based on the perception that other nations may be poised to more rapidy raise interest rates, making heir currency more attractive against the Dollar. The weak Dollar, has pushed oil and other commodities such as precious metals higher as well. In fact, Gold hit a record high earlier this morning, reaching $1040.00/ounce!
Australia looks to be in a better position to hike rates than the US does, and one big reason is the current unemployment rate in Australia, which now stands at 5.8%. This is elevated from their last year's very lean 4.2%, but still under their 30-year average of 7.2% for the country. With our own unempoyment rate near 10% and rising...we just don't see how the Fed will be able to hike rates in the very near future.
Stocks will give us a better picture as to how well corporate America and the economy is doing, when 3rd Quarter earnings start to be released tomorrow. If earnings and/or future guidance disappoint, Stocks could lose ground in a hurry...and this could help Mortgage Bonds.
I'm looking for Congress to extend the First Time Home Buyer Tax Credit past the November 30th deadline. If this happens, home sales should remain steady through the first quarter of 2010. One way to get this economy rolling would be to eliminate the Capitol Gains Tax for two years. That would spur investors to invest and create jobs. I don't think the present administration will do anything such as that...it makes too much sense!
Thursday, October 1, 2009
Mortgage Bonds Higher
Mortgage Bonds are trading higher in response to worse than expected employment data, and as a result of weakness in Stocks.
Initial Jobless Claims increased by 17,000 last week, to 551,000, which was higher than the 535,000 expected. Huge numbers of individuals filing for first time Unemployment benefits underscores the weakness in the labor market which I discussed yesterday. Just think about it - well over half a million people were let go from their jobs last week!
Thanks to the "Cash for Clunkers" program, Personal Spending for August rose at its fastest monthly pace in almost eight years. This was positive economic news, but the market is taking it with a grain of salt, as that particular stimulus has since been removed.
There is no inflation at the moment - the August Core Personal Consumption Expenditure Index was 1.3%, down from 1.4% reported the previous month. The tame level of inflation has been friendly to Bond prices, but at some point in the future, inflation will be on the rise, which will cause rates to move higher.
Some good news for housing, as Pending Home Sales were up big at 6.4%, far above expectations of a modes 1% rise. Some of the rise is likely due to folks working fast to take advantage of the First Time Homebuyer Tax Credit, currently set to expire on November 30th. I am going to predict that this program will be extended for six months...and look for an announcment to confirm this soon!
I think bond prices will remain at current levels, giving nod to interest rates staying in the low 5% range for 30 year fixed rate loans, as least for the next three to four weeks.
Initial Jobless Claims increased by 17,000 last week, to 551,000, which was higher than the 535,000 expected. Huge numbers of individuals filing for first time Unemployment benefits underscores the weakness in the labor market which I discussed yesterday. Just think about it - well over half a million people were let go from their jobs last week!
Thanks to the "Cash for Clunkers" program, Personal Spending for August rose at its fastest monthly pace in almost eight years. This was positive economic news, but the market is taking it with a grain of salt, as that particular stimulus has since been removed.
There is no inflation at the moment - the August Core Personal Consumption Expenditure Index was 1.3%, down from 1.4% reported the previous month. The tame level of inflation has been friendly to Bond prices, but at some point in the future, inflation will be on the rise, which will cause rates to move higher.
Some good news for housing, as Pending Home Sales were up big at 6.4%, far above expectations of a modes 1% rise. Some of the rise is likely due to folks working fast to take advantage of the First Time Homebuyer Tax Credit, currently set to expire on November 30th. I am going to predict that this program will be extended for six months...and look for an announcment to confirm this soon!
I think bond prices will remain at current levels, giving nod to interest rates staying in the low 5% range for 30 year fixed rate loans, as least for the next three to four weeks.
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