Rates

Well Greece got their $119B in EU funds on Monday.  This just put a small band aid on a broker arm.  Solves it for now, but wait for it to come around again.

Now the next focus will be on Portugal and Ireland, and let's not forget about Italy.

So rates should have gone up this week, you would of thunk, but economic news out of Europe is not in the front headlines, always something.

Looks like Europe could go back into a recession,  are they out of their first? 

So rates are still focusing on Europe, because if they were to focus on the US economic numbers, we would definitely be seeing higher interest rates:

January existing home sales increased 4.3% from Decepmber, on a forecast of 1.6%.

Weekly jobless claims continue to be low at 355K, lowest in 3 years.

FHFA housing price index showed that prices increased 0.7%, over last month! and YR/YR only down 0.8%.

Michigan Consumer Sentiment expected to be 73.5 was actually 75.3.  Which is a REALLY good number.

But we do have OIL which is at $108/barrel, and the fears that we could see $5/gallon gas soon than later has taken some of the steam out of all this good economic news.

So overall, rates stayed flat this week , thinking to watch for:

Next Friday we will get another Unemployment Numbers, always volatility trading on that.   Watch OIL, if we continue to see it spike, we will again watch the economy drag down.

 B of A

News came out today that B of A (the evil empire as I like to call them) is no longer going to offer any Fannie Mae loans, for some reason they don't like each other.

Well this isn't surprising, considering it is anticipated that B of A might get out of the mortgage market all together:

They no longer allow mortgage brokers to do loans with them.

They no longer allow corresponding lending.

They have shut down tons of retail branches.

And from friends that have recently worked for them and no longer do, they have told me that Bof A really doesn't care about mortgages.

So I am guessing this is what is going to happen, B of A will close it's mortgage department, but a new company will form, a subsidiary, they will probably call it CountryWide or something like that.

Remember GMAC and all of their banking problems, where did they go.  No where, they just call themselves Ally now.

Mortgage Debt Relief Act

Congress passed this law in 2007 and it was re-upped in 2008.  And basically what it did is forgave any of the tax consequences which may occur on a short.

If a borrower does short sale or foreclose on a home, and the lender forgives you for the deficiency, normally that forgiveness of debt is taxable income, up to 35%.

But Congress passed a law making that forgiveness of debt NOT taxable.  Well that law will expire on 12/31/2012.  And based on who you are listening to, it may or may not be extended.

So I would encourage people out there, that if they are sitting on the fence post on doing a short sale, they need to consult a CPA on their tax ramification if this law is NOT extended.  QUICKLY.

Reason for that is Short Sale and Foreclosures are taking time.  And if the law isn't extended, and you close after 1/1/2013, you may owe Uncle Sam quite a bit of money.

Disclosure:  I am not a licensed CPA in the state of Idaho, you NEED to speak with one, soon!

And for all you RE agents out there looking for work, this might put a sense of urgency in some people to get a RE agent to get this done!