Countrywide, the Prince and Ben Bernanke
January 13th, 2008 Categories: Real Estate News, San Diego county Real Estate News
Wow, what a week!!! The pieces are coming together that could help get 
the real estate market steadied. Those pieces are cash back to the financial institution that do the lending and lower interest rates to help keep rates down which will help new buyers and those with adjustable loans.
It all started with the proposed purchase of Countrywide by Bank of America this week. Then there is plenty of talk of more buy outs of financial institutions and lastly, the FED made comments leading everyone to believe there are deep rate cuts coming. The FED needs to do this to limit the impact of the real estate downturn on the overall economy.
I wrote a blog article about other ways to make money from the real estate market and buying stock in some of these mortgage companies may be one way. I was watching Countrywide closely as I found it hard to believe that the nation’s largest mortgage lender was going to be allowed to go under. The company, in my opinion, to watch now is Citigroup(C) which is looking at getting an infusion of capital from Saudi Prince Alwaleed bin Talal. It is trading near it’s 52 week low at $28.56.
Now the fed. The current Fed rate sits at 4.75. The speculation of the market is that the fed will be lowering the rate .75%. Will this translate directly to mortgage rates, probably not. But it will help those that have adjustable rates directly tied to the fed rate, which should slow down the pending foreclosure storm so much written about.
As I write this, the current 30 year fix rate is 5.54% with no points. This is a great time to get into your first home. I have a client in escrow right now in the Westwood townhomes. It is a 2 bedroom 2 bath with a 2 car garage and a yard. It has had significant remodel work done, the kitchen is awesome, to it by the former owner. I can not at this point say what the purchase price becuase of 
confidentiality issues, but lets say that the payment, hoa fess and taxes wil add up to less than $1800/month. That’s a tax write of of abou $22,000 a year. Once these tax benefits are realized, you could not rent for this much.
Call me and let’s find your first home!!!!
