Long Beach California Real Estate Loans

Long Beach, CA.  Kirk Mulhearn and Lila Feingold successfully gave a Short Sale seminar today at the Norwalk office of Mulhearn Realtors.  Over 120 agents showed up and learned how to handle the current trend in the plethora of short sale ativity. 

Economic concerns continue to impact the stock and bond markets today. Negative corporate earnings reports contributes to the markets feelings that the recession will be deeper and longer lasting than current economic predictions.  GE profits fell nearly 50%, Toyota warns of unprecedented job cuts, and bank bailouts soiled by dirty politics. Not exactly the formula for encouraging news.  But resilience is what is needed in times like this.  What do I mean?  The ability to bounce back is even more crucial in difficult business economic times.  Resilient people are able to see hardships as an opportunity and adapt to the setbacks.  Staying resilient helps limit the normal anxiousness we face with a crisis and permits clear thinking.  And we need a lot of clear thinking at this time.

The market is being additionally colored by the U.K. economy contracted the most since 1980 in the 4^th quarter; GDP fell 1.5% from the previous quarter. The Fed announced yesterday that they have purchased roughly $52B of MBS in January, about $4B-$5B per day. $144B of Treasury supply is scheduled to hit the market over the next two weeks.  We are seeing our mortgage backed bond yields continue to rise as concerns continue about who will buy these after the current 500 billion earmarked is exhausted. Rates are moving higher as a result and pressure will mount if our debt is not purchased.   30 year fixed rate mortgages are worse this AM by.125%.  Right now, the futures market is pricing in an 83% chance that the Fed keeps rates somewhere between 0 and .25% until at least April 29th, 2009. Currently, the Ten Year yield is at 2.59% (2.52% yesterday)

The Federal Open Market Committee, the Fed's policy-making arm, meets next Tuesday and Wednesday. The committee, which sets monetary policy, consists of members of the Federal Reserve Board in Washington and a rotation of five presidents from the 12 regional Fed banks. In normal times, the focus of FOMC meetings is the level of the Fed's benchmark interest rate, the federal-funds rate. At the FOMC's December meeting, the central bank said it would push the fed-funds rate to near zero. With policy makers unable to move the target lower to boost the weak economy, the focus of FOMC meetings has shifted to the wide range of new lending and asset-purchase programs the Fed has introduced. Much of the coming meeting will be spent reviewing these programs, their effectiveness and challenges the Fed will face in running them and one day unwinding them. The programs -- ranging from efforts to buy commercial paper to offering emergency loans to banks and securities firms -- are the province of the Federal Reserve Board and the New York Fed.

It appears the cramdown provision will pass and become legislation.  This effort appears to be an effort to force servicers to be more aggressive in making loan modification with existing borrowers.  And if they do not, then a bankruptcy judge will make that determination.  Besides adding to the cost of future mortgages, this limits our ability to participate with a new mortgage. House Speaker Nancy Pelosi yesterday gave her support to legislation that would allow bankruptcy judges to modify troubled mortgages, saying it is a "very high priority and should be passed as soon as possible."

Kirk Mulhearn, a professional mortgage planner and real estate broker.

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