FHA funding for condos is changing big time - times will be tough for condo buildings in a price range that appeals to first-time buyers using FHA financing

Quoted: The spot approval process will be eliminated for all case numbers on or after Feb. 1, 2010 under the new guidelines. The FHA created the process, allowing consumers to purchase a unit in a non-approved condominium project that has limited FHA involvement.

Lending professionals are continuously trying to predict trends. This past summer, the belief was that rates were definitely headed to 6%+ territory. Now, we've actually reversed the trend and gone lower.

Word is that the Fed will keep rates low until the end of spring 10, which should, theoretically, bolster monetary supply and allow banks to continuet to transact in commercial and residential lending. Since there's an extension of the home buyer credits, rates probably won't stray too far from the 5-6% range for the near-term.

The FHA helps homebuyers who often cannot qualify for a loan otherwise. The problem is that there is usually a very good reason for why a potential buyer doesn't qualify for a conventional loan - poor/limited credit history is one, lack of funds is another. The result is that the FHA lends money to a pool of higher-risk borrowers (that is, a higher chance of default). It's no surprise, then, that as of this past summer, about 17% of FHA borrowers were behind on at least 1 payment.

I don't see anyway around a bailout of the FHA by taxpayers within the next few years.

Quoted: The Federal Housing Administration says its financial cushion has dipped to a dangerously low level but should remain above zero under "most economic scenarios." The agency, a major source of funds for first-time homebuyers, faces mounting concerns that it will eventually need a taxpayer bailout as losses grow from homeowners who lose their jobs and can't pay their mortgages.

CIT did a lot of lending during the heydey of the market, but their presence up here in the PNW was limited.

Tough news to swallow for a company that is over 100 years old.

Quoted: The bankruptcy of CIT is likely to hand the Treasury Department its biggest loss to date under the Troubled Asset Relief Program. It invested $2.3 billion in CIT last December.

Interesting analysis from the Royal Bank of Scotland that prices are stabilizing ahead of schedule. Recent reports have shown a consistent month to month trend of slowed pricing decreases. However, the US consumer confidence report for last month just came out and said that confidence dipped significantly more than analysts had anticipated. Spending, as this article suggests, may have been stable for the period examined, but it appears that there is still some instability ahead.

Quoted: The US economy and housing market in particular are recovering well ahead of the schedule previously anticipated by analysts and market observers, according to commentary by Royal Bank of Scotland (RBS) economists. RBS raised its near-term gross domestic product (GDP) forecasts “significantly” in response to positive economic data. Risks of a second economic dip are diminishing as post-Cash for Clunkers consumer spending remains stronger than analysts expected.

California still leads the way in housing fraud

Quoted: The Property Valuation Fraud Risk Index is up 25% from the previous quarter and up 46% from the year-ago quarter, indicating a shift toward fraudulent schemes involving short sales, real estate-owned inventories and refinancings by borrowers with equity impaired by falling property values

Yah, that makes sense - I'd think the number would be even higher. The key to the statement is that Federally backed loans are in high use for sales with a loan-to-value of 96.5% to 100%. FHA loans, for example, require 3.5% down - not many other types of loans will allow a buyer to come in with such little money.

Quoted: Federally backed mortgages account for 59% of new home sales transactions with 96.5% to 100% loan-to-value (LTV) so far in 2009, according to the latest ...