Our Prayers are with Haiti and the Haitian People
By · CommentsAs we witness with horror an unprecedented human tragedy unfold in Haiti, our prayers go out to the victims as well as to the responders. We pray that the people of Haiti may see restoration, and that conditions in the country, far from ideal even prior to the earthquake that struck on January 12th, may improve with this surge of international attention. Please see Hank Hanegraaff’s post for a terrific Christian reaction to the tragedy.
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This is a great cause to support. I have been contributing about $25 per month for the past six months. I figure it’s only fair, since I use their resources quite frequently.
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Unemployment/Underemployment Rate is Now at 17.5%
By · CommentsThe New York Times ran an article on Friday that reciting a Department of Labor statiistc that adds the rate of underemployed to the unemployed. This rate is an ominous 17.5 %, or one out of every six workers. The NYT believes that this is the highest rate that we have seen since the Great Depression. Toward the end of the article, the author observes a strange characteristic of our present-day severe recession, making it oddly different from the Great Depression — the fact that workers who remain fully employed are doing better than in other recent recessions.
Read the source article here: http://www.nytimes.com/2009/11/07/business/economy/07econ.html?_r=2
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A Friendfeed Conversation about Foreclosure and Credit
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Helping hand extended to those struggling in Berks County because of the recession
(Source: Reading Eagle)
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Home Prices since 1890
By · CommentsA chart which shows the activity of home prices in the United States since 1890 shows that prices may still have some room for decline, unfortunately. Attorney Gene Melchionne of Connecticut brought this chart to my attention.
The chart was authored by Yale economist Robert Schiller and is based on the Schiller’s 1890 benchmark of “100″. This means that, adjusted for inflation, a home worth $100,000 in 1890 would be worth $199,000 based on the housing market in 2006.
Chart of Housing Prices
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Recent Television Appearance on KDKA on Youtube
By · CommentsLaw Office Principal Stephen Otto recently appeared on KDKA to discuss the impact of securitization and mortgage note negotiation on the growing trend of mortgage foreclosures.
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Congratulations to the Pittsburgh Steelers!
By · CommentsCongratulations to the Pittsburgh Steelers as the 2009 NFL Champions and victors of Super Bowl XLIII.
As many of you know, our firm serves much of eastern Pennsylvania in addition to Western PA. It is unfortunate that the Philadelphia Eagles did not make it to the big game — nonetheless, I think all of us in Pennsylvania can be very proud of this Steeler team. I think it was a win-win for everyone — those who did not have a direct stake in the outcome of the game won in the sense that it was a very exciting game to the end, and the NFL certainly won in terms of viewer ratings.
We send a special congratulations to Santonio Holmes, a man who personally has an inspiring story to tell. He is evidence of the fact that destinies can be changed, from something that may have been very negative to something that is obviously extremely positive.
Photo Courtesy of USA Today
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Wealthy Homeowners Grow Increasingly Delinquent
By · CommentsToday, the Wall Street Journal reported that homeowners with “jumbo” mortgage loans are becoming delinquent at alarming rates. According to the WSJ, 6.9% of loans in the jumbo category were at least 90 days delinquent as of December 2008.
In lending vernacular, residential mortgage loans are categorized as “conforming” loans if they conform to the underwriting guidelines prescribed by Fannie Mae and Freddie Mac. The most important guideline for loans in this category is that their principal amounts not exceed the prescribed FMA/FNA limit. FMA/FNA limits vary by geographical location. A current list is attached to this post below:
A loan that is not a “conforming” loan due to the fact that it exceeds the lending limits is known as a “jumbo” loan. The average jumbo loan is approximately $750,000. It is normally considered disadvantageous to the consumer for their loan to be classified as “jumbo” due to the fact that these loans are subject far more stringent underwriting standards. Lenders tend to demand down payments of 30% to 40%, and interest rates are higher than for conforming loans. According to the WSJ, rates on 30 year fixed jumbo mortgages were 6.87% last week, compared to 5.34% for conforming loans.
The crippled credit markets have had a drastic impact on the availability of jumbo loans. As a result, homeowners require refinancing in the jumbo loan market have been sorely out of luck. Compounding the problem, the lack of credit to fund jumbo loans has caused the values of the subject properties to drop more than originally anticipated. Robert Franks, author of the Wall Street Journal’s Wealth Report blog, points to yet another problem in this market:
FEWER BUYERS. When everyone was getting richer, selling a high-end home was a plus, since there was a rising number of buyers. Now, with Richistan evacuating faster than Malibu in a mudslide, the number of potential buyers for big, $1 million-plus homes is on the decline. At least on the middle and lower end of the housing market, there is a crowd of first-time buyers and discount-seekers ready to take up the slack. At the top, well, it is getting much more lonely among buyers.
Source: Wall Street Journal
Additional Resources regarding jumbo loans:
Jumbo Loans and the Current Market
Why Luxury Housing Could Be Hit Hardest
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A new era dawns in Pennsylvania - MONTGOMERY COUNTY (PA), Part of the Red County Network
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