Bay Area Mortgage Market News- Some clarity for the Stimulus Package:

“GOOD COMMUNICATION IS AS STIMULATING AS BLACK COFFEE…AND JUST AS HARD TO SLEEP AFTER.” Anne Morrow Lindbergh And communication on the new $789 Billion Stimulus Plan has been flying fierce over the past week, resulting in late nights for Congress and probably more than a few cups of coffee. President Obama is certainly hoping the new plan will wake up the struggling economy, and breathe some life back into the housing market as well.

The tax credit in the Stimulus Bill has been scaled down to $8,000 from its previous level of $15,000, or 10% of the value of the home for any first time home buyers who purchase homes from the start of the year until the end of November. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000, and buyers will have to repay the credit if they sell their homes within three years.

In addition, there’s news that the Obama administration is trying to hammer out a new program to subsidize mortgages to fight the credit crisis. The plan would seek to help homeowners before they fall into arrears on their loans, whereas current programs only assist borrowers that are already delinquent. There are no details yet on this plan, but I will be monitoring this news closely in the weeks ahead.

Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds…however, not all investors are passing on their gains recently, as so many homeowners and home buyers are taking advantage of current low interest rates and have flooded many investors to capacity. Call me to determine if the current market presents opportunity for you.

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