Real estate buyers that have solid credit and some money for a down payment are in a better position than a couple of months ago. According to MyConsultant.com loan officers the 30 year fixed rate has dropped again to a three-month low. The real estate home prices in may areas of Arizona have dropped also.

In the non-conforming loans such as Jumbo Loans (loans $ 417 k and up) the rates have risen. So if you want to move up or by a bigger house, and you have the credit with the qualifications to do it, Manny Caballero of Encompass Realty® states this is the time to buy.

The falling home prices Nationwide has the median home prices fell 1.5% in the second quarter according to the National Association of REALTORS.
Given the real state buyers with the good credit that is a lot of bargaining power with new home building and sellers. For example a house in Phoenix listed for $ 350,000 actually sold for $ 288,000 but on the other hand real estate in Tempe, which is land lock, are getting pretty much full price and in some cases, multiple offers.

So if you are in the market and don’t know a good loan officer, you could try MyConsultant.com where the minimum experience for each real estate loan officer is at least 3 years and verified they are licensed in the states they offer real estate mortgages.

Encompass Realty®, registered mark, www.encompassrealty.com

he outlook for homeowners who are having trouble keeping up with their mortgage payments took a turn for the worse last month.

U.S. home foreclosures continued to rise in July — up 9 percent from June and up 93 percent from a year ago, according to the latest monthly numbers released Tuesday by RealtyTrac, an a Web site that tracks foreclosed properties.

Nearly 180,000 fillings — including default notices, auction sale notices and bank repossessions — were reported during the month. That means that one in every 693 U.S. households was hit with foreclosure in July.

The new foreclosure data, along with ongoing turmoil in the financial markets, renewed debate in Washington Tuesday over whether the government has responded adequately to the meltdown of the mortgage market. Caught in the middle are borrowers who may qualify for better terms, but remain at risk of losing their homes because they can’t refinance their existing mortgages.

Lawmakers on Capitol Hill are considering various measures to restore a mortgage market now in disarray. Some are suggesting that lenders and borrowers involved in the risky loans that are now going bad should simply suffer the consequences. But supporters of more aggressive measures argue that the government may need to step in before the current mortgage mayhem threatens the wider economy.

Sen Banking Committee chairman Chris Dodd (D-Conn.) urged the administration Tuesday to raise limits on the portfolios of mortgages held by federally-backed agencies, Freddie Mac and Fannie Mae.

“The power exists today with regulators to lift those caps,” Dodd told a press conference following the meeting following a meeting with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Brenanke. “That does not require statutory language or new laws.”

But Dodd, a Democratic presidential candidate, said Paulson indicated the Treasury was “not likely to move in that direction.”

“I’m still concerned Treasury does not appreciate the importance of this issue,” said Dodd.

Earlier, Paulson told CNBC that the Treasury is “talking to a wide variety of participants in that market, including Fannie Mae and Freddie Mac, and we’re thinking through options to reduce the strain in the mortgage market.”

Paulson said that the turmoil in the credit markets would take time to unravel, but stressed that the underlying U.S. economy remains in good shape.

“This will play out over time and liquidity will return to normal when the market has a better understanding, when investors have a better understanding, of the risk return trade-off,” Paulson said.

But while investors cope with the turmoil in the finanical markets, millions of homeowners remain a risk of losing their homes. Like everything else involving real estate, the impact of the mortgage mess and the ongoing wave of foreclosures has been felt unevenly across the country. Much of the damage has occurred in the states like California and Florida where the housing boom — combined with rampant speculation and easy-money lending — grew the fastest.

Other hard hit states such as Michigan were already battered by weak economic conditions before the recent credit storm hit. Detroit posted a 70 percent month-over-month increase in foreclosures in July, pushing the city’s foreclosure rate to one filing for every 97 households — more than seven times the national average.

Though 43 states have seen higher year-over-year foreclosure rates, more than half of the total has been concentrated in just five states — California, Florida, Michigan, Ohio and Georgia.

Nevada topped the list with highest state foreclosure rate with one filing for every 199 households — more than three times the national average. Georgia, with one foreclosure for every 299 households, ranked second. Michigan’s foreclosure rate of one filing for every 320 households ranked third. Other states with foreclosure rates in the top 10 included Colorado, Ohio, Arizona, Massachusetts and Indiana.

As foreclosures were rising, the flow of new money into the mortgage market has slowed sharply. Hardest hit were buyers applying for so-called “jumbo” loans (more than $ $417,000 for a single-family home) which have become much harder to come by — and more expensive when available — in just the past few weeks. Some borrowers with good credit looking for so-called “conforming” loans below that limit are also having a hard time getting mortgages approved.

The worry is that a slowdown in the availability of new mortgages could deal yet another blow to a housing industry already suffering its worst downturn in more than a decade.

“The reduction in credit availability to the broader mortgage market in recent days represents a new and potentially more damaging phase to the housing correction,” Credit Suisse’s chief economist Neal Soss wrote in a research note Friday. “We have sharply lowered our residential investment forecast accordingly.”

oss figures that home sales “could register huge declines over the next several months” which could, in turn, set off a new round of construction cutbacks. Credit Suisse now forecasts a 33 percent drop in residential real estate investment from the last year’s peak. That would be bigger than the 24 percent decline in the late ’80s and early ’90s, but not as big as the 45 percent drop in the early ’80s, according to Soss.

Both of those housing pullbacks sent the U.S. economy into recession. But Soss, among others, believe that the current strength in the U.S. job market, strong consumer spending, and a rapidly expanding global economy could limit the impact of the current mortgage mayhem on the broader economy.

“Whether or not the current financial episode devolves into a more significant storm for the business expansion remains to be seen, but history suggests that financial crises on Wall Street are often treated as a spectator sport by Main Street, with little impact on the real economy,” he wrote.

Despite last week’s efforts by the Federal Reserve to put out the fire, some lawmakers on Capitol Hill are working on broader measures to try to stem the ongoing wave of foreclosures and calm the mortgage markets.

“We’ve got a serious problem, with a lot of potential foreclosures out there. How can we keep people in their homes?” Sen. Dodd told CNBC Monday. “That’s an ongoing problem here in addition to trying to change the regulatory environment that allowed this to happen in the first place.”

A key issue under discussion in Congress is whether government-backed mortgage finance companies, like Fannie Mae and Freddie Mac, should be given more leeway to expand their reach in the mortgage market.

As the housing market boomed earlier in the decade and subprime lending took off, these federally-backed mortgage agencies lost market share to more lenient lenders with easier terms like no-money down or little or no documentation. (Along the way, they also lost friends in Congress following disclosure of a series of accounting problems.)

Now, backers of these government-backed mortgage agencies are pushing a series of reforms to help them gain back mortgage market share. Because they are federally insured, these loans typically charge lower interest rates because the risk to investors who buy them is lower. The hope is that homeowners now at risk of foreclosure — because of pricier terms offered by subprime lenders — could avoid default by converting to cheaper, government-backed loans.

“(Fannie Mae) checked on subprime mortgage issuance out there, and they say roughly up to half of the holders of subprime mortgages would qualify on a credit basis for a Fannie Mae conventional conforming loan,” said Sam Lieber, president of the Alpine Mutual Fund Group.

In April, Sen. Charles Schumer, D-N.Y., proposed spending hundreds of millions of dollars of government funds to help troubled borrowers avoid losing their homes. In May, the House passed a bill that would raise current limits on the size of mortgages that can be insured by the Federal Housing Administration.

But the bill would also allow FHA to insure loans with no money down and charge higher premiums to riskier borrowers. Critics of those moves, including Sen. Richard Shelby, R-Ala., and other Senate Republicans, say the changes that eased lending standards could expose the FHA — and taxpayers — to the kinds of risks that got subprime borrowers and lenders into trouble to begin with.

“We have to be very careful going down this road,” said Michael Darda, chief economist at MKM Partners. “Longer term, we’re going to have a problem with risks being mis-priced. That is how we got into this situation in the first place. So I think we need to be very wary about federal government actions.”

Though the details of any reform package have yet to be worked out, the recent turmoil in the mortgage markets has provided momentum to legislation that has been stalled for months. Last week, President Bush indicated general support for giving federal housing agencies enough “flexibility” to help try to avert more foreclosures.

It remains to be seen how far Congress and the White House will go to use taxpayer dollars to help bail out homeowners facing foreclosure. But some see a significant shift in the political wind in the past few weeks.

“I do smell a federal bailout,” said Darda. “We have a Democratically controlled Congress and a Republican president with a disastrous international situation and a plummeting approval rating. So this could be irresistible.” John W. Schoen

Encompass Realty®, ‘Registered Mark‘, Encompass Realty REO Department increases its staff to handle the needs of National and Local Lenders.

he stock market is going crazy. Hedge funds are going under. But for the average American looking for a home loan, the crisis in the subprime mortgage market may actually be good news.

“Not only is it nothing to worry about, it’s an absolute positive,” said Loni Graiver, president of the Maine-based Cumberland County Mortgage. “Not only have [home] valuations come down, but [interest rates] are still historically low.”

Rates on 30-year fixed loans dipped last week, to 6.41 percent, according to the Mortgage Banker’s Association.

In addition, tightened lending standards stemming from the subprime crisis likely mean fewer buyers, pushing down home prices.

The one catch is this: You’ve got to be a buyer with good credit, a low debt to income ratio, a healthy down payment, verifiable income, and looking to finance less than $417,000 (the cutoff for so-called jumbo loans).

Those characteristics basically define someone who qualifies for a loan through a government program like Fannie Mae, which makes up about 50 percent of all outstanding mortgages, according to Guy Cecala, publisher of the industry newsletter Inside Mortgage Finance.

Graiver said to expect to pay a down payment of at least 10 percent, and have a FICO credit score of 620 or higher in order to get a rate between 6.2 and 7.5 percent. Perhaps 90 percent of home buyers qualify for that prime rate, although if you want a rate below 7 percent you probably need a FICO score above 660.

To get the best deal, “plan on coming to my office with your tax returns and a down payment,” said Bob Mouton, President of the Long Island-based American Mortgage Group.

If you’re among the 10 percent of people with credit scores below 620 who need a subprime mortgage, things could get tricky.

“To a large extent, they are going to find that no one wants to lend to them,” said Steve Habetz, president of Threshold Mortgage in Westport, Conn. “Those loans are being eliminated from the marketplace.”

Someone with a credit score of 600 might have to pay as much as 9.5 percent, according to FICO, which provides lenders with borrowers’ credit ratings.

You could also run into trouble if your loan is for more than $417,00, the maximum amount that can be channeled through a government lender. Loans over $417,000 are considered “jumbo” mortgages, which have recently seen rates jump due to a perceived increase in risk.

Mouton said money for subprime loans is still there, but be prepared to pay interest rates of 8 or 9 percent on them, compared to just over 7 up until recently.

Eugene Choi and Rich Bouchner, owners of Commodore Mortgage Group, say they’ve had to scramble to get loans for clients in the New York area that didn’t meet the traditional criteria.

One was a waitress who made decent money at a high end restaurant, but couldn’t prove it because so much of her pay was in cash tips.

Another was a young lawyer, making nearly $200,000 in the city but who didn’t have the money saved for the down payment on a $800,000 Manhattan condo.

“A lot of people who should have qualified for credit are getting squeezed out of the market,” said Bouchner. “Our lenders are turning off the spigot so quickly, these loans might not be here tomorrow.” Steve Hargreaves

Encompass Realty®, registered Mark