As investors’ fears that the Federal Reserve would soon tighten credit policy to stall inflation lessened, mortgage rates fell this week: 30-year mortgage rates averaged 6.26 percent, the lowest level in six weeks, according to Freddie Mac.
A handful of states are suing Countrywide Financial Corp. for misleading borrowers, and Florida initiated its case on July 1. Yesterday, however, California added another charge to its roster, claiming Countrywide paid higher commissions to agents who put borrowers into loans they weren’t qualified to receive.
Builders in the Tampa Bay area and across Florida are turning to smaller homes to spur sales, figuring out how to cut down on construction costs and offer more affordable prices. They note that smaller homes are popular for first-time buyers, seasonal residents, those wanting to downsize and people who just don’t want to stretch their budgets too much.
Divosta’s Village Walk in Bonita Springs is also seeing cut backs on construction costs on their various models. The Divosta subsidiary or division of Pulte homes, is changing from its popular poured concrete with reinforcing rebar to concrete block construction.
FANNIE AND FREDDIE
Treasury officials and senior lawmakers huddled behind closed doors yesterday, searching for a way the Treasury Department might safely invest in mortgage finance giants Fannie Mae and Freddie Mac without exposing taxpayers to massive losses.
Florida Attorney General Bill McCollum filed a lawsuit against Countrywide Financial Corp. Monday for misleading and unfair trade practices. “It is unthinkable a company would try to take advantage of someone’s dream of homeownership,” says McCollum. Meanwhile, Bank of America’s purchase of Countrywide Financial Corp. is expected to become official today.
With a growing number of elderly and disabled people who would like to continue living in their own homes, a smart development trend would be “build it and they will stay,” according to a new University of Florida study.
No downpayment mortgages have largely disappeared as a financing option from private lenders. But they are still available – and growing more popular – using existing Federal Housing Administration programs in conjunction with nonprofit groups’ downpayment assistance programs – Nehemiah Corporation and AmeriDream.
FLORIDA CONSUMER CONFIDENCE
Higher gas and food prices, continued declines in housing prices and last month’s large increase in unemployment caused Florida’s consumer confidence to fall six points in June to 57. The University of Florida survey notes, however, that housing prices seem to have hit bottom in some areas of the state.
The federal mortgage rescue plan could pass the Senate as soon as today; however, President Bush is threatening a veto and Democrats are fighting each other over key details, which will probably delay any final deal until mid-July.
Bank of America Corp.’s takeover of Countrywide Financial Corp. could be wrapped up as early as next week, but first it must clear one last hurdle – getting the OK from the struggling mortgage lender’s shareholders, though approval is widely expected today.
NEW HOME SALES
New home sales fell nationwide for the sixth time in seven months, according to the United States Commerce Department. But while sales fell 11.6 in the West and 7.9 percent in the Northeast, they rose 5.1 percent in the Midwest and 0.4 percent in the South. This is an example of how real estate is local and the national picture can misconstrue local market conditions.