Columbia Apartment Association

A couple of weeks ago I was asked to speak at the Columbia Apartment Association, with a resounding yes I accepted their invitation. It seems recently I have been asked to give several interviews/opinions on the current state of the housing and mortgage market both from a national and local perspective. Below is an outline of what will be addressed or commented on at this meeting.



Since late 2006' over 161 lenders are out of business including 5 out of the top ten. Below is a small list on some of the larger players no longer originating or funding loans.

1) Wells Fargo (Wholesale sub-prime division)

2) New Century Mortgage

3) First Magnus

4) Decision One (A division of HSBC)

5) American Home Mortgage

6) NovaStar Mortgage

7) Ameriquest Mortgage

8) H&R Block Mortgage



Foreclosures & Delinquency:

- .65% of 1-4 unit properties have entered into foreclosure according

to MBA that is a record high since it started keeping track 55 years ago.

- Foreclosures for August are up 115% from a year ago 244,947 v. 113,300

- WAMU reported an income reduction approaching 75%

- HELOC delinquency is at a 5 1/2 year high

- The delinquency rate is currently at 5.12% as of the second quarter 2007'

up 73 basis points from last year



Home Sales:

- Existing home sales are down 12.8% nationally from a year ago

- Inventory is up 14% over last year and 77% from August of 2004'

- Inventory of new homes is at 8.2 months or 180,000 down from

182,000 seen as a record in May of 2007'

- Sales of new homes are down 21.2% from a year ago.

- National Association of Realtors was expecting a 2.1% decrease and

received a decline of 6.5%





Home Prices:

- Just 2.6% appreciation nationally

- California, Nevada, New York, Florida, New England and the Mid-west

showed price declines

- Median price of new homes fell 7.4% to $225,700



Key Rates:

- Federal Funds Rate: 5.25% 1 Year ago, 5.25% 1 Mos ago, 4.75% this week

- Discount Rate: 6.25% 1 Year ago, 5.75% 1 Mos ago, 5.25% this week

- 10 Yr T-Bill: 4.638 (close of business Monday 10/8/2007)

- Prime Rate: 8.25% 1 Year ago, 8.25% 1 Mos ago, 7.75% this week



Miscellaneous:

- 2007' will see anywhere from 400-500 Billion ARM resets

- 2008' could potentially see over 1.5 Trillion Arm resets

- In 1994' $35B in sub-prime origination's took place vs. $640 Billion in

2006' a ridiculous 185% increase

- Sub-prime mortgages make up anywhere from 10-14% of mortgage

origination's

- Mortgage Brokers make up 50% of all mortgage ordinations and 70% of

all sub-prime loans

- The peak ARM resets will be seen between March and June

2008'



WHAT DOES ALL OF THIS MEAN FOR A LANDLORD / MANAGEMENT COMPANY?



- More people will rent and for a longer period of time!!!!!



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Your Columbia Missouri Mortgage Broker