“Mortgage borrowers continue to refinance their mortgages at a higher frequency than historically would have occurred given the rise in mortgage rates over this year,” said Frank Nothaft, Freddie Mac vice president and chief economist. 

 “But the wide proliferation of adjustable-rate mortgages (ARMs) originated in the past few years that are nearing their first interest-rate adjustment provides borrowers an incentive to refinance into a lower-cost ARM or fixed-rate mortgage.  In addition, borrowers who might have considered a prime rate home equity loan for a home improvement or other need are turning to cash-out refinance options now that the prime rate is above 8 percent.

The Cash-Out Refinance Report also revealed that properties refinanced during the third quarter of 2006 experienced a median house-price appreciation of 33 percent during the time since the original loan was made, down from a revised 34 percent in second quarter 2006.  For loans refinanced in the third quarter of 2006, the median age of the original loan was 3.4 years, about two months older than the median age of loans refinanced during the second quarter of 2006.

 - http://originatortimes.com

Property taxes take a beating supporting early retiring government employees. Senior employees are good for government providing they can do the job. With much of the government unionized in an archaic form, it is difficult to terminate or sideline an employee. Unlike a construction unions, where, if the worker is undesirable, the contracting firm can fire that employee. If that union member has issues that make him or her undesirable, that person simply does not get hired.

Reforming government unions should be high on the list of taxpayer reforms. A new competitive union needs to rise similar to that of the United Brotherhood of Carpenters for government employees. Benefits would accrue to the workers and hiring and firing decisions would originate with the government employer. Employees would be terminated as workplace changes dictate without penalty to the employer. Those hired would be on an as needed basis. Tenure would be replace by an apprentice program.

It is either that or some entrepreneur needs to step up to the plate and fashion a skilled workers program (similar to Manpower or other outside contracting agencies) to outsource jobs for all the categories of government workers. Naturally a mega agency would be too ambitious a start, but basic services could be outsourced.

Pressure needs to be put on government unions to reform or be replaced. Government is getting too expensive. Cost cutting reforms without cutting service has simple solutions but entail lots of political wrangling.

If employees work longer it give local, state or federal governments the benefit for having to pay fewer years of retirement. Considering many retire after 20-years service at 70% pay, the financial drain on taxpayers is enormous.

Taxpayers could get almost double the bang for the same dollar by insisting local, state or federal employees reach 65 years of age or work 40-years before they are eligible for retirement. That would put them on par with the majority of working Americans. There is no reason to treat government employees as a privileged class.

“The world is a dangerous place to live – not because of the people who are evil but because of the people who don’t do anything about it.” – Albert Einstein, scientist

Apply a property tax guide to any home or property: Get the right values and plug in the figures for your house. Don't get stuck on the learning curve scratching you head what to do next. Eliminate mistakes in property taxes and property tax appeals.

One of the largely unreported white collar crimes in the mortgage business is that loan officers inflate the income of marginal buyers so they are approved to buy a home they can not possibly qualify for.

Greed on the part of the buyer for supposedly inflated home valuation and greed on part of the mortgage lender for a juicy commission. The bank regulators looked the other way, the mortgage higher ups tacitly approved the practice and now with a declining real estate market buyers are bailing out in droves. Foreclosures are rampant.

Unsuspecting investors buy these mortgage obligations from brokers assuming they bought a sound investment. For instance Goldman Sachs , one of the top sellers of C.M.O.’s (collateral mortgage obligations) for the past few years sold about $100 billion to unsuspecting investors.

With the real estate decline, the bubble popped and everyone is looking for a scapegoat.

The real cause is the mortgage scams and lack of enforcement in inflating mortgage applications at the entry level. With the interest only mortgage obligations, greed on part of all parties involved perpetuated the fiasco.

Surprisingly, construction spending is up and Master Card purchases are on an increase. Reports show that the U.S. grew at a 3.9 percent pace in the third quarter. Even though home building activity is plunging, exports grew at the fastest rate in nearly 4 years. All this good economic news while inflation seems tame.

Oh yeah, did we mention the quarter percent rate cut? The Fed cut .25 basis point off the rate to make it 4.5%.

A Harvard study show a more upbeat view of the current housing market value correction than offered by most economists. All hinges on the course of employment growth and interest rates. The run up in housing demand over the years is buoyed by the huge increase of immigrants and their children and relatives. That trend should continue for the foreseeable future.

Both political parties are paper tigers when it comes to immigration reform. The situation is not like it was with most 2nd generation immigrants parents who had to go through strict Ellis Island immigration standards.

The number of foreclosed home returning to the market is having an effect on builders and investors. Home market values should continue a downward trend as the growing problem of affordability strengthens. The downward pressure on wages due to the large influx of immigrants is taking its toll. High housing cost and non-housing expenses leaves home ownership on a slippery slope.