February 2006



Welcome to our newsletter. Our goal is to bring you the latest trends and important changes affecting the mortgage industry as it relates to the consumer. Please feel free to call with any questions regarding the contents of this newsletter.

Market Conditions for Fullerton, CA
as of 02/24/2006 (Realty Times)

Note: A strong Buyer's Market does not necessarily mean that it is not a good time to sell your home. Likewise, a strong Seller's Market does not necessarily mean it is a bad time to buy a home. We suggest contacting a Real Estate Professional for advice.

NAR: Price Gains Strong, but Cooling

House prices posted double-digit gains in half of the covered metropolitan statistical areas in 2005, but "the overall pace of growth has cooled slightly," according to the National Association of Realtors. The NAR's fourth-quarter metro area home price report shows that 72 of 145 MSAs had double-digit annual increases in median existing-home prices, setting a new record. The previous record was 69 MSAs in the third quarter of 2004. The NAR also reported that the national median resale price stood at $213,000 in the fourth quarter, up 13.6% from $187,500 a year earlier. "Although home sales have eased, the tremendous momentum in price appreciation was sustained in the fourth quarter because tight inventories still favored sellers," NAR chief economist David Lereah said. "The good news is that the supply of homes on the market has been trending up, and we are entering a period of a more normal balance in supply and demand." The NAR can be found on the Web at http:/www./

Fannie Eyes Streamlined ARM Refi

Fannie Mae is working with lenders to develop a streamlined refinancing process for borrowers who want to bail out of adjustable-rate mortgages. Rising short-term interest rates and borrower awareness of the risks associated with interest-only and option-payment ARMs is creating the potential for a major shift to fixed-rate loans or safer hybrid ARMs, according to Fannie Mae executive vice president Tom Lund. "A lot of our largest partners are talking about trying to create a streamlined capability to take some of these ARM borrowers back into a fixed-rate or longer-term hybrids, maybe with an IO feature," Mr. Lund told a Morgan Stanley housing conference. "They see that as the next big trend." He noted that Fannie Mae might not be able to purchase some of the newly refinanced loans. But the secondary-market agency is working with its customers to try to make such refinancings easier for lenders and consumers. Fannie Mae can be found online at

4Q Resales Rise / 3rd-Highest Level

Total existing-home sales -- including condominiums and co-operatives -- set the third-highest pace on record in the fourth quarter, rising in 24 states from the levels recorded a year earlier, according to the National Association of Realtors. The seasonally adjusted annual resales rate was 6.90 million units in the fourth quarter, up 0.3% from 6.88 million in the fourth quarter of 2004. (The record high of 7.24 million units was set in the third quarter of 2005, the NAR reported.) The biggest year-over-year gains were recorded in Arkansas, where the resale rate was up 29.8%; Alaska, up 28.4%; and Louisiana, up 28.1%.

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