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Question:

My property is in the city of Los Angeles and is subject to rent control. I know that the rent increase for July 1, 2007 was 5%. Has the city decided what the increase will be for July 1, 2008?

Answer:

Yes they have. The City, in their ultimate wisdom, has decided to lower the rent increase to 3% effective July 1, 2008. This decision was made behind closed doors without any discussion from the apartment industry.

Author
~Dennis Block: Source

“The Fed just issued another cut, so mortgage rates should go down right?” That’s a question I have been getting a lot lately.

The answer is not a clear Yes or No.
Most mortgages are originated at banks, which in turn sell them to secondary markets. Therefore, the ultimate factor for what rate borrowers pay is investor demand for mortgaged-backed securities – and that demand is influenced highly by fears of long-term inflation. In simply terms, if investors think inflation will accelerate, mortgage rates (and other long-term interest rates) rise.

So what’s going on with the market right now?
Well, it’s no secret that this country is in the middle of a credit crisis. And while the Fed’s recent rate cuts may help stave off a recession, they have also increased fears of inflation. So under these conditions, more big rate cuts by the Fed could actually mean higher mortgage rates.
But it’s not all bad news. Recent actions by the government to help struggling investment banks, and its move to reduce the capital requirements of government-backed mortgage lenders Fannie Mae and Freddie Mac, has helped drive mortgage rates lower.

It’s important to keep in mind that mortgage rates are still at historical lows – and many stand to gain from falling real estate prices. Bottom line: if you are a qualified borrower, now is the time to get some great deals on real estate.
Here is a summary of multifamily rates (5+ units):
3-year fixed: 5.5%
5-year fixed: 5.7%
10-year fixed: 6.15%
$500,000 & up
30-year term/30-year amortization

~Sam Nelson, Venture West Funding: Website

On Tuesday the Federal Reserve announced a three-quarters cut to the federal funds rate. This comes just two days after a surprise weekend decision to cut the discount rate by a quarter point. Tuesday’s cut sent the stock market into a frenzy as many investors had been anticipating a decrease of a full percent. However by close of day the market had basically leveled out.

Several banks have started to implement the new conventional loan limits. As it looks now, those seeking a new higher amount “conforming” loan should expect to receive a rate anywhere from 1% to 3% higher than what is available for loans that fall under the terms for standard conventional loans.

Rates for short-term fixed multifamily loans remain extremely competitive. Currently we have access to a 3-year fixed program at 5.29%, for loans $200,000 and up. This program is amortized over 30 years and features a rate floor of 4.326% as well as low fees.

~Sam Nelson, Venture West Funding: Website

Just as banks begin to unveil their plans for implementing terms of the Economic Stimulus Package (with some banks anticipating changes as early as mid-March), we hear that this Spring could bring more good news for those seeking a subprime mortgage.

According to CNN.com, Congress is expected to pass a bill by mid-April that would expand the reach of the FHA. Highlights of the bill include making the temporary loan limit increases permanent, as well as reducing down payment requirements to as low as 0%.

Over in the multifamily sector, interest rates have remained fairly stable. I have had a lot of inquiries recently regarding long-term fixed loans. Currently we have access to 7- and 10-year fixed programs as low as 6.15%, with the option of up to 80% loan to value.

Author
~Sam Nelson, Venture West Funding: Website

Both Fannie Mae and Freddie Mac reported fourth quarter losses ($3.6 billion and $2.5 billion, respectively.) Since the two entities have sustained such large losses, they have said they may sell additional stock or need to come up with other ways to raise new capital. Until they have the extra money to buy any substantial amount of new loans, the lifted restrictions are going to have very limited impact on the mortgage market.

Bernanke’s gloom report on the state of the economy Wednesday left many predicting another .5% rate cut. The Fed’s next monetary policy meeting is on March 18.

In the multi-family sector, rates remain good. We currently have access to short term fixed programs with interest rates in as low as 5.4%.

Author
~Sam Nelson, Venture West Funding: Website