Who is Mel Watt? He is the one which is going to keep the rates low , thats who? Mel Watt the Incoming director of the Federal Housing Finance Agency

WASHINGTON (Reuters) - Congressman Mel Watt, the incoming director of the Federal Housing Finance Agency, said he plans to delay the increase in fees on government-backed loans that the agency announced this month.

The North Carolina Democrat was nominated by President Barack Obama in May and confirmed on December 10 by the Senate to head the agency that oversees Fannie Mae and Freddie Mac.

Watt said in an email late on Friday he expected to be sworn into office on January 6. He replaces Edward DeMarco, a career civil servant who has led the FHFA in an acting capacity since 2009.

"Upon being sworn in ... I intend to announce that the FHFA will delay implementation" of the mortgage-fee increases "until such time as I have had the opportunity to evaluate fully the rationale for the plan and the plan's impact," Watt said.

Fannie Mae and Freddie Mac, the two taxpayer-owned mortgage finance companies, are set to increase their guarantee fees in 2014. Such fees are typically passed along to borrowers, resulting in higher mortgage rates.

The FHFA signaled it would raise the fees in the days leading up to Watt's Senate confirmation vote. The move to reduce Fannie Mae and Freddie Mac's footprint in the mortgage market by raising prices was part of DeMarco's plans to gradually shrink the companies' operations.

A spokesman for the FHFA was unavailable for comment outside of normal business hours.

Fannie Mae and Freddie Mac buy mortgages from lenders, which they either keep on their books or bundle into securities that they offer to investors with a guarantee. They do not make loans, but provide liquidity to the mortgage market by taking mortgages off the books of lenders, freeing them to make more loans.

The companies currently back more than half of all U.S. home mortgages and are sweeping their profits from the housing recovery to the U.S. Treasury. Taxpayers have propped up Fannie and Freddie to the tune of $187.5 billion in bailout funds since they were seized by the government in 2008, but they have paid $185.2 billion to the Treasury in dividends for that support.

 

 

This was a article forwarded from

Ty Laffoon

Federal government favors high-income households over low-income ones in housing benefits

           

 

 

The Center for Budget Policy Priorities released a number of charts today that shows how much the federal government favors high-income households over low-income ones in housing benefits.

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This largely results from the fact that homeowners receive significantly more aid than renters and high-income Americans are much more likely to be homeowners.

In 2012, the federal government gave out $240 billion in housing aid. Income data is not available for all of it, but of what is available, more than half went to those with incomes greater than $100,000 ($81.6 billion). Only $40 billion went to those with incomes less than $50,000.

Overall, high income households receive four times as much in housing aid as low-income ones.

The main reason for this is the majority of federal housing aid flows to homeowners, not renters. The mortgage interest deduction is the most well-known program that subsidizes homeownership. That deduction alone is larger than all federal rental aid combined.

The federal government gave out about $60 billion in housing benefits to renters in 2012. It gave out more than three times that much to homeowners. Low-income households receive the vast majority of that rental aid, but the opposite is true of aid to homeowners. That flows primarily to high-income households. 

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Center on Budget and Policy Priorities

This comes at a time when renters are struggling to keep pace with rising housing costs . Fifty percent of renters now spend more than 30% of their income on housing. This has forced renters to cut back on other household necessities or live in inadequate units.

[Click here to check home loan rates in your area.]
Renters are more likely to face a severe cost burden (defined as spending at least 50% of income on housing) than homeowners are. This is a result of rising median gross rent and falling media income over the past 15 years.
For both renters and homeowners, the percentage of households that have a severe affordability problem with their housing has increased since 2001.

These problems are only going to get worse as millions of seniors find themselves in need of rental housing in the coming decades. 

Yet, while this silent crisis continues, the majority of the money that the federal government spends on housing flows to homeowners, not renters.

Ty Laffoon

Fed will cut bond purchases by $10B in January. Next the rates are going to go up and soon . 5% will be the new 4%

NEW YORK -- U.S. stocks soared even though the Federal Reserve announced that it would begin dialing back on its market-friendly bond-buying program in January, a decision that marks the start of a long-awaited shift back to more normalized monetary policy.
The Dow Jones industrial average surged more than 200 points after the Fed decision, as markets were soothed by the Fed's dovish comments overall, which suggests a still-easy Fed going forward.
The Standard & Poor's 500 index jumped 19 points to 1,800 and the Nasdaq composite index added 18 points to 4,042.
The Fed said it would reduce its current $85 billion in monthly purchases of Treasury bonds and mortgage-backed bonds slowly, trimming its purchases by a total of $10 billion per month. They said they would trim purchases of Treasuries by $5 billion per month, and mortgage-backed bonds by $5 billion, too.
More important, the Fed said it would keep short-rates low "well after" the unemployment rate, now 7%, hit 6.5%, which was a change in guidance that points to longer policy accomodation from the Fed.

The Fed's move was dubbed "Taper Lite," by Thomas Tzitzouris, an analyst at Strategas Research Partners.
In a statement, in explaining its decision, the Fed said it "sees improvement in economic activity and labor market conditions" that are consistent with growing underlying strength in the broader economy." It also said it would continue to monitor incoming economic data and continue its asset purchases "until the outlook for the labor market has improved substantially."

The Fed also stressed that it would continue to reduce asset purchases in "measured steps" if the job market continues to heal and inflation starts to move closer to 2%. Tapering, the Fed stressed, is not on a "preset course."
In explaining the market's positive response to what was viewed as a market negative, Paul Hickey, co-founder of Bespoke Investment Group said: "The market has been cognizant of the fact that this was going to happen at some point in the near future, so now that it has happened it is one less thing to worry about. Additionally, the rest of the statement was dovish as they said that the current rate environment would remain in place even after the unemployment rate dropped below 6.5%."
In the prior session, the Dow declined 0.1% to 15,875.26. The Nasdaq composite edged lower 0.1% to 4,023. 68. The S&P 500 dipped 0.3% to 1,781.

European markets were higher as Germany's DAX index gained 1.1% to 9,181.75. France's CAC 40 jumped 1% to 4,109.51 and Britain's FTSE 100 index rose 0.1% to 6,492.08.
Asian stock markets were mostly higher. Japan's Nikkei 225 index rose 2% to 15,587.80. Hong Kong's Hang Seng index climbed 0.3% at 23,143.99. The major European benchmarks advanced.
In energy markets, benchmark crude for January delivery gained 23 cents to $97.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 26 cents, or 0.3% to $97.22 a barrel on Tuesday

The Federal Reserve will rise rates and it will happen soon

The Federal Reserve is likely to keep the economy on a full dose of stimulus after this week's meeting but begin dialing it down by next month,

That would mark the Fed's first significant step in winding down the extraordinary easy-money programs it has put in place since the 2008 financial crisis and Great Recession, and signify that the economy should soon be strong enough to stand on its own.

The drama over whether the Fed will announce the tapering after a two-day meeting that concludes Wednesday has intensified recently, following a flurry of better-than-expected economic developments.

Just a handful of the 34 economists surveyed Dec. 12-13 predict the Fed this week will agree to pare its $85 billion in monthly bond purchases, but a slight majority say the tapering will begin by January. The purchases have held down interest rates and buoyed stocks, and trimming them is expected to gradually push up borrowing costs for consumers and businesses.

Yet that may do little to slow an accelerating economy. Monthly job growth has averaged about 200,000 the past four months, despite the federal government shutdown, and the unemployment rate fell to 7% last month from 7.4% in July.

Meanwhile, the Commerce Department this month estimated that the economy grew at a solid 3.6% annual rate in the third quarter, and consumer spending in the current quarter has exceeded forecasts.

This week, the House of Representatives passed a two-year budget deal that now awaits Senate action. If passed, it would remove much of the uncertainty about federal tax and spending policy that has clouded the economy.

"How long do you want to wait" before reducing the purchases? asks Paul Ashworth, chief U.S. economist of Capital Economics. He says the labor market's cumulative gains since the bond-buying began in September 2012 and recent momentum meet the Fed's standard of "substantial" improvement.

Ashworth adds that the risks of the bond-buying, such as eventual high inflation, are rising as the Fed continues to pump money into the economy.

Stuart Hoffman, chief economist of PNC Financial Services, generally agrees but says policymakers will wait until January to assess holiday retail sales and fourth-quarter economic growth. Like other economists, he thinks the Fed this week will signal that tapering is imminent by upgrading its economic outlook in its post-meeting statement.

But Barclays Capital economist Michael Gapen says the Fed will stand pat until March in part because much of the decline in unemployment has been due to Americans leaving the labor force, including some discouraged with job prospects. Also, about half of last quarter's economic growth was from business stockpiling that's likely temporary. And, he says, inflation remains well below the Fed's 2% target — the hallmark of a sluggish economy.

"It's better but not strong enough," Gapen says, noting that the Fed has repeatedly said it's seeking evidence that the economy's improvement will be sustained before tapering. He also thinks the Fed is unlikely to jolt financial markets that are expecting it to stay the course.

Still, "it's a fairly close call," Gapen says. "If they (taper) in December, I wouldn't be totally surprised."

forwarded by  Ty Laffoon

New Fannie Rules say 43% Max DTI

 

As the housing market heats up again following the slowdown of the past few years, many consumers will try to buy a home for the first time or upgrade a home with a mortgage that had previously been underwater. If you fall into either camp, you should know that a new set of rules passed as part of the Dodd-Frank Act - enacted in response to the financial crisis of the late 2000s - will go into effect Jan. 10, 2014. The rules will require lenders of qualified mortgages to conduct more thorough analyses of mortgage applicants' financial information to ensure applicants can afford to repay the loan.

According to the Consumer Financial Protection Bureau, under the Ability-to-Repay rule, the lender generally must consider eight factors. These include your current income or assets, current employment status, credit history, the monthly payment for the mortgage (based on the highest interest rate if it's an adjustable rate mortgage, not an introductory teaser rate) and your monthly debt payments (including the mortgage) compared to your monthly pre-tax income, which is your debt-to-income ratio.

Under the new rules, you'll generally need a debt-to-income ratio of less than 43 percent to obtain a qualified mortgage that's underwritten based on standards considered safe for consumers. Federal rules state that the term of the loan cannot exceed 30 years, and the points and fees paid by the borrower cannot exceed 3 percent of the total loan amount (not including bona fide points or discount points used to pay down the rate of the loan). Under the new rules, qualified mortgages also cannot have risky features such as an interest-only period, when the borrower pays only interest without paying down the principal.

[See: 10 Things to Watch When Interest Rates Go Up.]

"This sets the bar higher for consumers and changes the game in terms of how people lend and how they qualify that consumer," says Cameron Findlay, chief economist at Discover Home Loans in Irvine, Calif. He estimates that roughly 10 to 15 percent of consumers will not be able to obtain a qualified mortgage and predicts that this will have the largest impact on moderate earners and minorities, especially in higher-cost real estate markets on the coasts. "You'll see some consumers in Midwest regions be in a better position where these rules won't be as impactful" because home prices aren't as expensive, he says. Consumers who do not get a qualified mortgage may pay upward of 100 basis points - 1 percent - on the loan, according to Findlay.

Other mortgage insiders predict a less dramatic impact on prospective homebuyers. "Industrywide, a lot of people [are] freaking out," says Michael Rosenbaum, a mortgage loan originator with First California Mortgage Company. "There's minor shaving of the debt-to-income ratio, but the vast majority of my borrowers are not qualifying at the upper limits. I'm just not finding that everybody wants to push their margins." He says many mortgage originators already look at the same criteria that the new rules require, and there's still some flexibility for underwriting in certain situations. For instance, a self-employed borrower may still be able to qualify with a debt-to-income ratio higher than 43 percent if his or her finances are strong in other areas.

[Read: What to Know Before Gifting a Down Payment.]

While underwriting standards for conventional loans are tightening up due to new rules, David Reyes, chief investment officer at Reyes Financial Architecture, Inc. in San Diego and a former mortgage banker, says jumbo lenders (those who lend amounts larger than a conventional conforming mortgage) are actually easing up their underwriting requirements in some cases. "The actual jumbo interest rates are almost on par with conforming loans, and you're seeing one-year tax returns with some banks," he says. "Especially the community banks are being more aggressive with income qualifications for self-employed borrowers, which is something you haven't really seen since 2005 or 2006."

Should you hustle to close on a new home in the next month if you think you might not qualify under the new rules? That's not feasible for most people, so Rosenbaum says now might be a good time to instead call a trusted lender and find out where you stand. "People tend to think a lot of things about what their numbers are, but the formula of how we calculate the debt-to-income ratio is complex," he says. "Sometimes people are surprised that they qualify for more than they expected. Or sometimes the answer might be to wait a few more months until you've filed a new tax return if, say, you're self-employed."

[Read: What to Do If Your Credit Score Is Too Low For a Mortgage.]

Your FICO score is also a big component of the mortgage underwriting process, according to Findlay. The score impacts not only your ability to qualify for a mortgage, but also the interest rate you'll ultimately pay, so you may want to work on boosting your score by making timely payments or correcting any inaccurate information.

 

Ty Laffoon

619-630-0396

AS little as 1% down payment with FHA . 5% conventional

Don’t think you can purchase a home because you don’t have the cash on hand for a 20 percent down payment? Think again. It's now possible for people to get a mortgage with a small down payment - or even no down payment at all.
"Yes. You can buy a home without a large down payment," says Est P, senior vice president at Mortgage Services, a full service mortgage lender in . "But it is imperative that you work with a knowledgeable mortgage loan originator in determining what is the right loan program and loan structure for you."
Ready to find out how you can buy a house without that 20 percent down payment? One of these loan options might just be right for you.Pre-Qualify at   http://pbsd.primemortgageloans.net

Option #1 - FHA Loan

According to the U.S. Department of Housing and Urban Development's website, FHA (Federal Housing Administration) loans have been helping people become homeowners since 1934. Currently, homeowners may get loans with as little as 3.5 percent down.
"Low-income families may find this an easier way to purchase that first home," says Dan  director of mortgage sales of M Mortgage According to , the FHA loan typically has lower interest rates than conventional loans, and an FHA loan also has looser underwriting guidelines.
For example, "[a]n FHA loan can accept a low FICO credit score of 580, as opposed to the 680 required for a conventional loan," Hsays. You can also make your down payment using borrowed or gift money, something which many conventional loans don't allow.
"This means the borrower does not need any of their own funds to purchase a home," says Phillips. "However, the loan requires both a one-time insurance premium to be paid (which can be financed into the loan amount), and monthly mortgage insurance for the life of the loan," Phillips adds. "This monthly amount is typically more expensive than private mortgage insurance, which is used for conventional loans."Pre-Qualify at   http://pbsd.primemortgageloans.net

Option #2 - Conventional 97 Loan

As you might be able to guess by the name, the Conventional 97 loan allows you to finance 97 percent of the purchase price of a home, leaving you with just a 3 percent down payment.
"That product is very interesting," says Al H, a mortgage broker with over 30 years of experience. "It's really a great option for well-qualified borrowers without a lot of money for a down payment."
Unlike the FHA loan, however, the underwriting standards for the Conventional 97 loan are much tougher. For example, gift funds are not allowed for the down payment, and you'll need to demonstrate verifiable income and a good credit history.
How good of a credit score might you need? "Higher than average," Phil says. "Usually 740 or greater."
However, because of these tougher standards, lenders aren’t risking as much when loaning you money and as a result, may not charge you as much on mortgage insurance.
But, even though you may pay less overall for mortgage insurance, you may be required to pay mortgage insurance for the life of your loan (which is also the case with an FHA loan), Hsays. And although it may be possible in some cases to get rid of mortgage insurance, it won't be easy.
"If one's home has increased in value and they wish to remove PMI, they have many hoops to jump through (paperwork and appraisal) before that will be granted if they are not refinancing the original loan," he says.
Pre-Qualify at   http://pbsd.primemortgageloans.net

Option #3 - Fannie Mae/Freddie Mac

Fannie Mae and Freddie Mac are the nation's two federally-chartered mortgage finance companies. Although they don't give loans directly to homebuyers, they purchase mortgage loans from lenders to ensure that lenders have a ready supply of funds on-hand to continue giving mortgage loans to borrowers, according to their respective websites.
Fannie and Freddie also have some great programs that lenders can utilize to help borrowers get into homes without a large down payment.
"Freddie Mac Home Possible and Fannie Mae My Community Products allow for lower down payments (5 percent and 3 percent, respectively), lower private mortgage insurance premiums, and allow for funds to be gifted," says Phillips.
The program that is right for you will depend on your specific circumstances. While both Freddie and Fannie are quasi-governmental agencies, they aren't interchangeable, so make sure to do your research to help you narrow down your options.Pre-Qualify at   http://pbsd.primemortgageloans.net

Option #4 - The Home Path Program

On a related note, Fannie Mae has a program called the Home Path program - and for the right buyer looking at the right property, this could be a great fit.
"This is a program that has been put into place by Fannie Mae to help sell off properties that Fannie has in their portfolio," Hexplains. "The program allows buyers to buy with low down payments and no mortgage insurance." The catch, though, is that the program is property specific.
That means the property you're hoping to buy needs to be one of the properties that Fannie Mae owns - typically a home that has been foreclosed upon. But, if you do find a home that qualifies, the Home Path Program might make it possible to buy a home with less than 20 percent down, according to H.
"Even individuals who might buy property for investment instead of a residence can buy with as little as 10 percent down, as long as they can qualify," Hsays.

Option #5 - State Specific Programs

"Many states have housing authorities that, through bond sales, fund loan programs for first-time homebuyers," says P. While the details of the programs will vary state by state, Phil provides one example of an excellent state-run program from Illinois.
"The Illinois Housing Development Authority (IHDA) provides first-time homebuyers financing with as little as 1 percent [down] or $1,000 of the borrower's own funds," he explains. The way this works is that the IHDA gives the borrower a mortgage loan for the amount of the home, and then the borrower takes out a second mortgage loan at 0 percent interest for the down payment and closing costs.
In addition to helping a borrower land a mortgage with as little as 1 percent down, the IHDA also offers specialty financing to veterans or active military that provides up to $10,000 in down payment assistance.

Option #6 - VA Loan

There's a great program out there for those dedicated men and women who serve in the armed forces who are now looking to buy a home.
"For qualified veterans, they can purchase a home with a 0 percent down payment," says H. "That means 100 percent of the purchase price of the home is available for them to borrow."
H goes on to explain that "[t]hey have very low interest rates, and require no mortgage insurance. They also have very relaxed underwriting standards." It's a special perk, reserved for veterans who - by their service - have earned it. So if you've served, it might benefit you to check out whether or not a VA loan might be right for you.


To learn more about as little as 1% down payment with FHA . 5% conventional . Contact

Ty Laffoon
Business Development Manager
Pre-Qualify at   http://pbsd.primemortgageloans.net

While mortgage rates have indeed risen considerably, they haven't affected new mortgages

With the recent increase in mortgage rates, which are now considerably higher than the all-time lows we have seen over the past few years, it should not be too much of a surprise that fewer people are refinancing. However, the extent to which the decline in mortgage business is impacting banks' bottom lines remains to be seen. 

How worried should investors be? What impact will the lower mortgage business have on regional banking chains such as Regions Financial (NYSE: RF  ) , larger institutions such as U.S. Bancorp (NYSE: USB  ) , and mortgage leader Wells Fargo (NYSE: WFC  ) ?Ty Laffoon  Pre-Qualify at   http://pbsd.primemortgageloans.net

The roller-coaster ride of mortgage ratesMortgage rates have been rather volatile lately, after having fallen from an average of 4.45% in 2011 (already low on a historical basis) to a low of just 3.35% at the end of 2012. Since then, rates have risen back to around the 4.5% range, where they currently stand.Pre-Qualify at   http://pbsd.primemortgageloans.net

While mortgage rates have indeed risen considerably, they haven't affected new mortgages as much as refinancing. It may surprise you to learn that approximately two-thirds of all mortgage activity in the recent past has been due to refinancing, while just one-third is a result of new purchases. 

So, why do higher rates affect refinancing more? Let's say you took out a mortgage a few years ago with a 6% interest rate, and that the original loan amount was $200,000. That makes your payment $1,199. Refinancing at 3.5%, when rates were at their lows, would produce a payment of around $898, a significant difference. At 4.5% (around where rates are now), the payment jumps to $1,013.According to Bankrate.com, the average closing costs on a $200,000 refinancing loan are $3,754, so it's easy to see why the savings on the monthly payment aren't worth it once rates climb.

How it affects the banksBecause of the rise in rates, Regions is anticipating its mortgage originations to drop by about 15% in the fourth quarter, with an additional decline in 2014. The company's mortgage income declined by $17 million from the previous quarter as a result, which may not seem significant given the company's total net income for the quarter was $1.32 billion. An extra $17 million in profits per quarter would translate to an additional $0.05 per share in annual earnings, or a 6% increase on expected earnings for 2013.

U.S. Bancorp reported an even greater impact, with the company expecting a quarterly decline of about 30% in its mortgage revenue for the fourth quarter, which had already dropped by 17.2% from the second quarter. A much larger company than Regions, U.S. Bancorp's earnings will suffer even more, as it derives about 6% of its revenue from mortgages (based on third-quarter numbers) as opposed to less than 4% for Regions.

Wells Fargo is the No. 1 mortgage originator in the U.S., so let's see how the refinancing slowdown could affect the company. Wells Fargo's mortgage income dropped 43% year over year to $1.6 billion in the most recent quarter. Even after the drop, mortgage banking still comprises 7.4% of Wells Fargo's revenue, so it stands to reason that Wells should suffer the most if the declines continue. However, if rates dipped again and the mortgage market stabilized, Wells Fargo would stand to benefit more than the other two companies mentioned.
Pre-Qualify at   http://pbsd.primemortgageloans.net

So, what does it all mean?The good news is the consensus believes these declines won't continue. Wells Fargo has publicly said it expects the mortgage market to stabilize next year, and although refinancing may not entirely recover to last year's levels, mortgages on new purchases should be a primary driver of growth going forward. Several banks (including Wells Fargo) are offering low down payment loans for the first time since before the mortgage meltdown. 

The bottom line is that these banks are very well run, and as long as the housing market continues to improve, banks will find a way to meet the mortgage needs of the market. So, any weakness in share price that results from bad mortgage news is likely to be an excellent buying opportunity, taking advantage of what is likely to be a temporary problem.

Ty Laffoon

Business Development Manager

Prime Mortgage Loans

Payoff your mortgage faster

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Ty Laffoon

Little-known methods to pay off your mortgage faster

If you want to pay down your mortgage at a faster rate, here are some tips to help you speed the payment process.

By Tony Moton November 1, 2013 1:30 PM

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Ways to pay your mortgage fast

If you want to speed up the rate you pay off your mortgage, you could find the results financially-gratifying.
"Any way you want to get money to pay down your mortgage is great," says Los Angeles-based mortgage broker Bill Rayman.
But how you apply your financial resources to pay down your mortgage can be very relevant to the success of speeding up the repayment process.
According to Tony Yousif, a senior loan consultant with American Capital Corporation, based in El Segundo, California, putting together a solid plan to make faster home loan payments can pay off handsomely in the loan run.
Are you interested in speeding up your mortgage payments? Keep your eyes on the following little-known tips we've found to help you pay down on your home loan at a faster rate.

Tip #1: Keep an Eye on April 15th

Tax Day traditionally comes once a year on April 15th. And if you're a borrower with a house note, it also can become the day you - ceremonially speaking - speed up your mortgage payments.
"Using a tax refund might be a good practice for the average borrower to help pay down their mortgage," Yousif says. "A lot of times when the refund comes, the government wants you to buy a new car or furniture."
But instead of splurging on those new wheels or living room sets, homeowners might do well to earmark tax refunds for an additional principal payment on their mortgages.
For the average taxpayer/homeowner who gets a refund, the amount might equal a couple of extra house payments a year.
In fact, according to the Internal Revenue Service, the 2012 end-of-year filing season statistics showed the average refund was $2,803 in 2012.

Tip #2: Use Your Credit Card for Mortgage Rewards

From vacations, to cash back, to prizes, it seems you can get almost anything nowadays as a reward for using your credit card. But did you know you could also use those rewards to pay your mortgage off faster?

It's true - this type of reward program does exist. One example of it is the Home Rebate Card through Wells Fargo. For this particular card, you can earn 1 percent cash back on all of your purchases, and that money is automatically transferred to your mortgage principal each month. 

Another program is Citibank's ThankYou™ Rewards, which allows participating credit-card holders to earn points towards various rewards, including gift cards, travel, and mortgage payments.
According to Citibank's website, members who choose a mortgage payment reward option "will receive a letter with a check issued on behalf of ThankYou Network made out to the financial lending institution to be used towards their monthly mortgage payment."
Have a good cash back rewards card already? You could have the same end result by simply adding that cash back amount to your mortgage principal each month.
[Click to compare mortgage interest rates from multiple lenders now.]

Tip #3: Try to Make Large Mortgage Payments Early On

To pay down a mortgage faster, it might be a good - and little-known - idea to get a speedy start right out of the gate.
Valerie Saunders, the former president of the Florida Association of Mortgage Professionals, says that with a 30-year mortgage, it takes a good number of years before the emphasis of the mortgage payments shifts from paying the interest to paying the principal balance. Thus, one of the best strategies for paying down the loan might involve making larger payments from the beginning. This can be an especially good strategy for those who have extra income, and have minimal expenses - like if you have no children yet, for example.
"You pay the highest amount of money toward interest when the loan is at its starting point, but as you get closer to maturity, and even around 10 to 15 years, more of the payment goes toward the principal balance," Saunders says. "If you do have the capability, try applying funds toward the principal as early as possible."
In this regard, first-time homebuyers or people transitioning into a new home loan should consider front-loading principal payments to get ahead or - as one might say - pay it forward.

Tip #4: Split up Your Payments

The old Neil Sedaka song suggests that, in romance, "Breaking Up Is Hard to Do." But if you want a chance at paying off your mortgage faster, breaking up your payments is a little-known strategy that can make the process easier than you might imagine.
"Making multiple payments each month does save a little bit of interest and time on your payments because you are technically borrowing less money on a daily basis and your interest is lower," Rayman says.
For example, let's say your monthly mortgage payment is $2,000. Instead of paying $2,000 each month though, you could pay $1,000 every 14 days.
"If you pay every 14 days, you are making 26 (half) payments or giving the bank two extra payments a year," Rayman says. That equals one extra monthly payment per year, and "[t]hat will help you in the sense of paying your mortgage down faster," Rayman says.

Fed keeps easy money flowing

From USA TODAY

The Federal Reserve agreed Wednesday not to pare back its extraordinary stimulus, citing a recent slowdown in the housing recovery and federal spending cuts.
In a statement after a two-day meeting, the Fed said it would continue to purchase $85 billion a month in Treasury bonds and mortgage-backed securities to hold down long-term interest rates and stimulate economic growth.
WEDNESDAY STOCKS: How markets are doing
Full text: The Fed's statement
First Take: Two sentences that stand out
The move was widely expected after Fed policymakers stunned financial markets last month by putting off a reduction in purchases amid only modest improvement in employment and a budget battle in Congress.
The Fed said Wednesday that "the housing sector slowed somewhat in recent months." Mortgage rates have risen from 3.35% in May, when the Fed first signaled that it may soon rein in its bond-buying, to 4.13% recently. A report this week showed pending home sales dipped recently.
The Fed also tempered its view of the labor market, saying it has shown "some further improvement." In September, it simply cited "further improvement." And Fed policymakers reiterated Wednesday that federal budget cuts are "restraining economic growth."
In the end, the Fed said, it "decided to await more evidence that (economic) progress will be sustained before adjusting the pace of its purchases."
The state of the economy has become more precarious since the Fed's last meeting in September. The budget debate led to a 16-day government shutdown that some economists say cut fourth-quarter economic growth by about half a percentage point. A standoff over raising the nation's borrowing authority spawned uncertainty among businesses that further dampened capital investment and growth.
The specter of another budget deadlock looms in two months because Congress voted to fund the government only until mid-January and raise the debt ceiling until early February.
Meanwhile, the shutdown dried up the flow of economic data on which the Fed relies to make policy decisions. The reports released since it ended generally have been weak. Employers added a disappointing 148,000 jobs in September, though the unemployment rate fell to a five-year low of 7.2% from 7.3%.
And while construction spending rose solidly in August, consumer confidence fell sharply this month and a key measure of business orders for durable goods such as cars and appliances fell in September.
The Fed on Wednesday also restated its intention to keep its benchmark short-term interest rate near zero at least until the unemployment rate falls to 6.5%, as long as the longer-term outlook for inflation is no higher than 2.5%.

Ty Laffoon

Why No Tapering by Fed?

The Fed spit the bit. But then, it kind of had to.
Surprising nearly all Wall Street economists, the Federal Reserve postponed from its long-awaited, much-debated move to pull back on buying $85 billion a month of bonds to stimulate the economy. The Fed pulled its punch at the last minute, announcing Wednesday that it will keep up its purchases — after a mere hint of new policy spiked mortgage rates enough to add $120 a month, or 16%, to the monthly payment on the median-priced U.S. house.
The premise for "tapering,'' or beginning the long process of unwinding several years of central bank policy that opened new frontiers in cheaper and easier credit, has been that a strengthening recovery doesn't need so much stimulus any more. Trouble is, the recovery — especially in housing — began to crack almost as soon as Fed chairman Ben Bernanke began hinting about tightening in May.
FED: Central bank delays taper, surprising markets
MARKETS: S&P 500, Dow hit record highs as Fed says 'No Taper'
Housing is, as it has been since 2007, the linchpin on which this economic cycle now turns.
The gap between the economy we have, with 7.3% unemployment, and the sub-6% unemployment rate we want can be explained almost entirely by the continued sluggishness of housing construction. Housing starts this year have averaged an annual pace of 906,000 new homes and apartments. At the same point in the 1983 and 2002 recoveries, the comparable number was about 1.7 million, big builder Hovnanian Enterprises says.
At more than 4 jobs per new single-family home, that means a normal recovery in housing — not a 2005-like bubble — would add 3 million jobs, including both construction and spinoffs in housing-related retailers (think Home Depot) and manufacturing, Moody's Analytics says.
Quick arithmetic tells you that 3 million new jobs would take 1.9 percentage points off the unemployment rate. Voila, 5.4%. Even if the population grows before we get there, and some discouraged workers begin to look for work again, we would still be under 6%.

Ty Laffoon

NO TAPERING BY THE FEDS.... SO WHEN WILL THE RATES DROP AGAIN

In a surprise move, the Federal Reserve on Wednesday decided not to pare back the extraordinary stimulus it has pumped into the economy since the 2008 financial crisis, saying it wants to see more evidence that the economy's recent improvement will be sustained.
In a statement after a two-day meeting, the Fed's policymaking committee said it agreed to continue buying $85 billion a month in Treasury bonds and mortgage-backed securities. Most economists surveyed by USA TODAY expected the Fed to reduce the purchases by $6 billion to $15 billion.
Full text: The Fed's statement
First Take: Why Fed isn't tapering yet
The Fed noted that mortgage rates have risen recently and federal spending cuts are "restraining economic growth.
"The committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with underlying strength in the economy," the Fed said. "However, the committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases."
The Fed also agreed to keep its benchmark short-term interest rate near zero at least until the unemployment rate falls to 6.5%, as long as inflation remains below 2.5%.
Begun a year ago, the Fed's bond purchases are credited with helping lift stocks and holding down long-term interest rates with the aim of stimulating the economy and job growth.
The Fed on Wednesday also slightly downgraded its economic forecast. It said it now expects economic growth of 2.3% to 2.6% this year, down from its June projection of 2.3% to 2.8%. For 2014, growth of 2.9% to 3.1% is expected, vs. its prediction of 3.0% to 3.5% in June.
The Fed sees a slightly improved jobs picture. It projects that unemployment, now 7.3%, will be 7.1% to 7.3% by the end of the year and 6.4% to 6.8% by the end of 2014. It previously expected unemployment of 6.5% to 6.8% at the end of next year. By 2016, U.S. should be near full employment, with the jobless rate falling to 5.4% to 5.9% by the end of the year, according to its forecast.
The Fed also expects inflation to be slightly tamer, running 1.3% to 1.8% next year. In June it forecast inflation of 1.4% to 2% in 2014.
Fed explainer: What is quantitative easing?
Markets: Reaction to Fed announcement
Most Fed officials still expect the first hike in the Fed's target short-term interest rate in 2015, and most say the target, now 0 to 0.25%, will rise to as high as 1% in 2015 and as high as 2% in 2016.
But many economists say the program's benefits have steadily diminished while risks such as eventual high inflation have grown. Fed Chairman Ben Bernanke has said policymakers likely would begin to taper the bond purchases this year and end them by mid-2014, assuming the economy improves and the unemployment rate, now 7.3%, falls to 7% by then.
Economic data have been mixed lately. Measures of manufacturing and service sector activity have been strong, but job growth has slowed the past three months and the housing recovery has lost some steam.
Still, some economists have said the Fed likely would assess the job market's cumulative progress since the bond buying began. Over the past year, for example, unemployment has fallen to 7.3% from 8.1% and monthly job growth has averaged 183,000, vs. 128,000 in the five months prior to the launch of the bond-buying.
Also, the economy is expected to pick up late this year as the effects of federal spending cuts and a payroll tax increase fade.
Since Bernanke began signaling in May that the bond purchases would soon be scaled back, 10-year Treasury yields have risen a percentage point to about 2.85% and 30 year fixed mortgage rates have jumped to 4.57% from 3.51%, damping mortgage applications.

Ty Laffoon

Paying off your mortgage faster

Paying off your mortgage in just six years seems impossible, doesn't it? It's definitely not easy, but one Texas couple was able to do it.

And the biggest benefit of doing so is perhaps the savings, says abc a licensed real estate broker with acc,  Florida.

a says that many consumers don't realize the true cost of a mortgage. Depending on your interest rate and the amount you took a mortgage out for, you could end up paying more than double the amount of your mortgage in just interest over time, she says.

"That alone should be enough motivation to pay the mortgage earlier," a explains. 

And that was enough motivation for and her husband, Len, who paid off their mortgage in only six years.
How did they do it?

says finding a low-priced, $114,000 foreclosed home in April 2007 was key to their success. The low initial price of their home, which was a 1,750 square feet, two-story property near Houston, Texas, allowed them to put 20 percent down, and get a 15-year mortgage at 5.375 percent for a $91,200 loan, she explains. That meant their monthly payment was just $740 a month. At that time, worked in an office and earned $32,500 a year. Her husband, a public school science teacher, earned a salary of $42,500.

But the couple was driven to pay off their mortgage early, and they took every action necessary to do so.

To start, "We started the process by overpaying from day one," explains Sr. Even though their mortgage payment was $740 per month, they paid $900 total from their very first payment, with the extra $160 going towards the principal.

[Thinking about refinancing your mortgage? Click to compare interest rates from multiple lenders now.]
Another key to the couple's success was that they weren't afraid to refinance.
In March 2011, less than four years after getting the original mortgage, er and her husband refinanced their remaining loan amount of $66,000 to another 15-year mortgage.

"Chase offered us a no-cost refinance to a 4.5 percent interest rate," she says. This allowed them to save money by getting a lower interest rate, without having to pay closing costs for the new loan. Refinancing also allowed them to lower their monthly mortgage payment to $505.

But because the couple was determined to pay off their mortgage quickly, they decided to continue paying $900 a month, an extra $395 more than necessary. They were able to do this because of her husband’s new job as a school librarian, and the success of an online business that ger launched. In 2012 for example, their gross income totaled $120,000 for the year.
Another thing that helped the couple pay off their mortgage faster was renting out a spare bedroom for $500 a month. They used this strategy on and off for a total of two and half years.
And while this might not be an option for everybody, ger says it "helped us pay off our principal even faster."
They also made larger payments towards the principal whenever they had enough money saved up.
And it was all worth it when they finally paid off their home just a few months ago in April 2013.
"We ended up paying off our [entire] mortgage in about six years on the dot," she explains. "That was an amazingly happy day."

California Housing Recovery Continues Full Throttle

Home sales in California surged by 17.3 percent in July DataQuick said today, rising from 41,027 sales of new and existing houses in June to 48,118 in July. The San Diego based company reported that July sales were 21.7 percent higher than 12 months earlier and were the highest for any month since August 2006.
There were also the highest for any July since 66,929 homes sold in July 2005 and were 3.8 percent above the July average, which dates back to 1988, of 44,364 units. DataQuick said it was the first time sales had beaten an average for any moth since September 2006.
Foreclosure resales represented 8.4 percent of all sales during the month, the lowest level since July 2007. Such sales peaked at 58.8 percent of the market in February 2009. Short sales also fell to a 14.6 percent share, down from 15.7 percent in June and 26.0 percent in July 2012.
The median price paid for a home in California in July was $363,000, 3.1 percent above the June median of $352,000 and up 29.2 percent from 12 months earlier when the median was $281,000. July marked the 17^th consecutive month in which the median price rose on an annual basis. The highest median in the state was recorded in March, April, and May of 2007 at $484,000, The post-peak trough was $221,000 in April 2009.

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How to Get a Mortgage With Bad Credit

Today, there is still a general consensus that to buy a home you need to have 20% down and a good-to-excellent credit history. The good news is you actually don't need a large down payment or great credit in order to purchase a home with competitive market terms.

Let's look at the characteristics of what a mortgage lender deems to be bad credit when it comes time to qualify for a mortgage loan.

Credit Score Scale
740-800	Outstanding
720-740	Great
700-720	Good
680-700	Mediocre
*620-680	Less than perfect, but approvable

A mortgage company's definition of bad credit might not be what a consumer considers to be bad credit. A credit score of 620 or higher is required to successfully obtain a mortgage. By the same token, a 620 credit score is considered by a lender to be less than perfect, but it's still possible to get a mortgage with that score.
Your credit score determines two major things for a mortgage company:

1. Loan program — whether it's a conventional or FHA-type mortgage
2. Pricing — this includes your interest rate and any additional charges indicative of the credit score (the lower the credit score, the higher the interest rate and/or potential charges)

Your credit history is the next factor in determining whether or not your loan will be approved. Is there a pattern of previous credit delinquencies? Are there balances on closed-out accounts? It's common for a consumer to have a 620 credit score, and have a consistent historical pattern of derogatory credit. Interestingly, this person would have a more difficult time obtaining mortgage loan approval than someone with a 640 credit score with no history of delinquencies other than a foreclosure from a couple of years before.
In order of priority, lenders will look at the credit score to determine which home loan you're eligible for. Next, the complete credit overview will be taken into consideration to determine what questions may or may not arise in the underwriting decision process. The underwriting process will be looking for "what happened," "why it happened" and the future "likelihood of continuance or repeat non-repayment."
[Has your credit score improved? Click to compare mortgage interest rates from multiple lenders now.]
Common Credit Red Flags for Lenders
Pattern of Delinquencies — A record of late payments is possible to work around, but more lender scrutiny will be given to the size of your down payment and your debt-to-income percentage.

Student Loan Late Payments — If you had a late payment on your student loans within the past 12 months, you may be more likely to be approved for conventional financing. Government financing — like FHA — does not take kindly to delinquent federal debt.

Mortgage Late Payments -- One late payment in the past 12 months is permitted, so long as it can be explained and, if necessary, fully documented.

Foreclosure – 36 months from the date of the foreclosure you'll become eligible for a 3.5% down FHA loan; for a VA loan, 48 months and no money down required; conventional loans require seven years no matter the down payment.

Short sale – It takes 36 months from the date of the short sale until you're eligible using a 3.5% down payment FHA loan; 24 months with the VA loan; 24 months on a conventional loan with a minimum down payment of 20%.

Bankruptcy – With Chapter 7 (Chapter 13 is less common), you have 24 months from the date of discharge until you're eligible using a 3.5% down FHA loan; 48 months on VA loans (still no money down required); and 48 months on conventional loans, no matter the down payment.

Why You Can Get a Mortgage With Bad Credit
There's a thing called investor overlays, which are adjustments to guidelines and/or pricing created in favor of the lender. This is precisely why one lender can do a loan for someone with bad credit and minimal (or no) down payment, and another lender cannot do the loan in some instances.
Overlays further protect lenders against potential future losses from the home loans they originate, preserving profit margins and buyback risk (an event in which the originating lender is forced to buy back from the investor if the loan they made was not fully documented). Investor overlays tighten the screws on borrowers' ability to borrow. Put another way, it shifts risk — which translates to cost — on to the consumer by means of limiting the ability to borrow via higher loan fees, reduced purchase price, or lower debt ratio, to name a few.

Note: Every mortgage lender has investor overlays, it's the nature of how mortgage companies operate, the key is to work with a lender whose overlays are minimal.

Homebuyer Homework

1. Know your credit score, first and foremost (you can monitor your score for free using a service like Credit.com's Credit Report Card). Obtain a copy of your credit report (which you can do for free through AnnualCreditReport.com), this will aid you in selecting the appropriate lender.
2. Get as much supporting documentation as possible surrounding your credit challenges so the story can be explained from A to Z.
3. When speaking with a potential lender, be very specific. Do not be afraid to share every detail of your needs and concerns, giving the most complete description possible. Find out upfront if they have any additional conditions with regard to credit history, as doing so could save you considerable time and money

For more info and apply for a loan in California
Call Ty Laffoon      
619-767-8687

Obama promotes housing policies, speaks to troops

President Obama says he could "save some money" by refinancing the mortgage on his house in Chicago, thanks to still-low interest rates.
"I would probably benefit from refinancing right now," Obama said during an Internet chat on the real estate site Zillow.com.
He hasn't taken advantage because "when you're president you have to be a little careful about these transactions," Obama added.
He also made clear he was referring to his home in Chicago, not the White House.
"That's a rental," Obama said.
In a follow-up to his housing speech Tuesday in Phoenix, Obama encouraged viewers to explore government programs to assist with refinancing. He also promoted new proposals, including a plan to wind down government-backed mortgage giants Fannie Mae and Freddie Mac.
Later, Obama wrapped up a two-day western swing with a speech to troops and their families at the Marine base at Camp Pendleton, Calif.
Obama thanked the troops for bearing the burden of war since the terrorist attacks of Sept. 11, 2001, and he spoke of ending combat operations in Iraq as well as the ongoing transition of responsibility in Afghanistan. Obama said that, "by the end of next year -- in just 17 months -- the transition will be complete."
He alluded to the temporary closing of U.S. embassies in the Middle East, telling the Marines that the terrorist threat remains and, "we've been reminded of this again in recent days."
Obama said: "The United States is never going to retreat from the world. We don't get terrorized. We're going to keep standing up for our interests."
The commander-in-chief also pledged to keep the military strong despite the specter of budget cuts to reduce deficits.
The problem of sexual assault in the military will also be addressed, Obama said, telling the Marines "that message is coming all the way from the top."
Before his speech, Obama met with wounded warriors and Gold Star families. He also spoke with local lawmakers, including U.S. Rep. (and frequent administration critic) Darrell Issa, R-Calif.
Earlier, during the Internet chat on Zillow.com, the president said he would like to push a housing package through Congress by the end of the year.
Obama also argued that other policies will help the nation fully recover from the recent housing crisis. He touted plans to lower the costs of college, revamp the immigration system and authorize new infrastructure projects.

Ty Laffoon

Average 30-year mortgage rate up to 4.46% .....BUT THEY WILL COME BACK DOWN!!!

Here is what they are saying on USATODAY:

U.S. mortgage rates surged this week, reaching their highest level in two years and threatening to slow the housing industry's steady recovery.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed loan jumped to 4.46% this week, the highest level since June 2011. That's up from 3.93% from the previous week.
It was the largest weekly increase in the 30-year rate since April 1987, Freddie Mac said.
The average rate on the 15-year mortgage jumped to 3.50% from 3.04%. That's the highest since August 2011. A year ago, the rate on the 15-year mortgage was at 2.94%.
The increases follow rising yields on the 10-year Treasury bond in the wake of Federal Reserve Chairman Ben Bernanke's comments last week that the Fed could start trimming its stimulus policies later this year if the economy continues to improve. Mortgage rates track the 10-year Treasury rate, which is at a two-year high.
Higher rates caused mortgage applications to fall 3% from last week, according to the Mortgage Bankers Association. Refinancing applications also fell to their lowest level since late 2011. But the purchasing index increased 2% and is up 16% from a year ago, according to the MBA.

I believe they drop back down in 1 to 2 months

Rates are going above 4% . Will they stay up there?

WASHINGTON (AP) — The average U.S. rate on a 15-year fixed mortgage rose above 3% this week for the first time in a year, while the rate on the 30-year fixed loan approached 4%.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan jumped to 3.91% from 3.81% last week. That's the highest since March 2012.
The rate on the 15-year loan rose to 3.03% from 2.98%. That's the highest since last May.
Concerns that the Federal Reserve may scale back its bond purchases have pushed rates higher over the last month. Still, mortgage rates remain low by historical standards. The 30-year loan hit a record 3.31% rate in November. The 15-year loan fell to its low of 2.56% a month ago.
Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield on the 10-year note climbed as high as 2.2% last week, its highest level in more than two years. It has since slipped to 2.1% in early trading Thursday. That compares with 1.63% at the beginning of May.
The Fed's $85-billion-a-month in Treasury and mortgage bond purchases have pushed down long-term interest rates. As speculation has grown that the Fed will slow those purchases, interest rates have ticked up. That has decreased the value of bonds with lower yields.
The rise in mortgage rates has slowed mortgages applications. They dropped 11.5% in the week ended May 31 from the previous week, the Mortgage Bankers Association said Wednesday.
Still, cheaper mortgages have helped boost home sales and prices this year, strengthening a housing recovery that began in 2012.
Both home prices and sales increased throughout the country from April through late May, according to a Fed survey released Wednesday, and several regional districts noted that sellers were receiving multiple offers.
Data provider CoreLogic said Tuesday that home prices soared 12.1% in April from a year earlier, the biggest gain since February 2006.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.
The average fee for 30-year mortgages dipped to 0.7 point from 0.8 point last week. The fee for 15-year loans was unchanged at 0.7 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.58% from 2.54%. The fee for one-year adjustable-rate loans declined to 0.4 point from 0.5.
The average rate on a five-year adjustable-rate mortgage jumped to 2.74% from 2.66%. The fee held steady at 0.5.

Which fix rate hit a all-time low this week 4/25

The average rate on a 30-year fixed mortgage fell to 3.4% the week ended April 25, according to a Freddie Mac survey out Thursday. That's down from 3.41% the prior week and headed toward the record low of 3.31% hit in late November. The same week last year, 30-year fixed mortgage rates averaged 3.88%.
Even better, for those who qualify, the average rate on a 15-year fixed-rate mortgage hit a record low of 2.61% this week, down from 2.64% in the prior week. Freddie Mac began keeping nationwide average records in 1971.
"The housing market is getting a boost with mortgage rates hovering at or near record lows," said Frank Nothaft, a vice president and chief economist at Freddie Mac.
Nothaft cited:
• Existing home sales averaged an annualized pace of 4.9 million the first three months of the year, the most since the fourth quarter of 2009.
• New home sales topped 424,000 during the first quarter, the strongest showing since the third quarter of 2008.
• February marked the thirteenth consecutive month the Federal Housing Finance Agency has recorded an annual rise in its U.S. house price index, which rose by 7.1% in the twelve months through February, the most since May 2006.
MORE: Zillow says home values rising more slowly
However, despite the gains, Nothaft added, FIFA's home price index is still 13.6% below its peak set in April 2007.
In its weekly survey of mortgage lenders nationwide, Freddie Mac said a key adjustable rate mortgages also hit a record low this week. The average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell to an all-time low of 2.58% from 2.6% a week earlier. That type of mortgage has been available nationwide since 2005.
And the 1-year Treasury-indexed ARM ticked down to 2.62% in the latest week from 2.63% a week earlier, Freddie Mac said.

Is Wall Street setting up another housing crash?

"If I had a way of buying a couple-hundred-thous​and single-family homes, I would load up on them," famed investor Warren Buffett said on CNBC last year. "It’s a very attractive asset class now. I could buy them at distressed prices and find renters."

Well, the market is apparently acting on the Oracle of Omaha's words.

The Washington Post reports that Wall Street investors and others are currently putting "unprecedented amounts of money" into real estate. And while that cascade of funds is apparently helping to revive the real estate sector, especially in states like Florida that were hardest hit from the recession, some analysts are concerned about deja vu -- the possibility of another unsustainable, speculation-fueled housing bubble.

"I don’t know whether things are as good as they seem to be," Scott Kranz, co-principal with Title Capital Management in Florida, told the newspaper.

"The end-user would need to see a great increase in jobs, availability of mortgage money and a loosening of the reins that have been holding them back," he noted. "But all the economic indicators ... are not at that point."

And while the Street, the well-to-do and some financial institutions are likely to benefit from this uptick, it will also push hopes of home ownership that much further away from financially struggling U.S. families.

"The investors are making it hard for a regular homeowner to buy a property," Robert Russotto, a broker with Better Homes and Gardens Real Estate in Fort Lauderdale, Fla., said in an interview with the Post. "They are getting outbid by people with cash."

Global investment management firm PIMCO is forecasting an 8% to 12% appreciation in housing over the next two years, as the economic recovery gathers momentum.

Meanwhile, low interest rates and depressed housing prices are creating a perfect storm of enthusiasm from investors. "Residential property is an on-fire asset class," said Kranz to the Washington Post. He also noted that his firm has put more than $100 million into residential real estate for investors in the past 12 months.

But all this movement is frightening some analysts. "At some point the music stops," Dean Baker, co-director of the Center for Economic and Policy Research told the Post. "The investors, if they get hurt, that is their problem. But invariably a lot of other people will get caught up in that."

Ty Laffoon