Wall Street Indexes continue to be volatile based on bull
market trends in commodities but the S & P index has officially
entered a “bear market” (declining values). Today
trading has continued its swings with the DOW up one
minute and down the next. Mortgage rates today are improved
from yesterday and are fairly flat so far this month.

Bernanke stated that the Fed will be issuing new rules
next week with several important changes to mortgage
lending. According to the new rules pre-payment penalty
loans will cease to be made. He also says that stated
income loans will be removed from the market entirely…
and this is cause for concern in California because one
reason our property prices have appreciated so well is because
stated income loans made it possible for many self
employed borrowers to get the homes they wanted using
these loans. This will make it essential to have borrowers
pre qualified by loan agents who are can truly pre-underwrite
loans in order for these folks to get mortgages.

Bernanke also announced that the Fed will continue to
lend to Wall Street investment banks into 2009. This is an
unprecedented move that has drawn criticism from many
who believe that tax dollars should not be used to shore
up failing investment houses, many of whom helped to
create the current credit crisis. Indy Mac, the 2nd largest
wholesale lender in the US closed its wholesale division
yesterday, sad news for mortgage brokers.

California home sales in May were up 6% from April!
Pending home sales nationwide fell 4.7% in May, a larger
than expected drop that signals that the housing market is
still not as stable as we’d like nationally. In Marin and the
Bay Area however, While volume is still down in Marin,
square foot median prices were up in almost every zip
code in Marin!

Local pending sales seem to be gathering momentum. Using
the information above to help sellers price their homes
reasonably may be helpful. To help your sales be sure
to get your buyers pre-qualified according to “full doc”
guidelines. Financial strategy becomes ever more crucial
to getting sales finalized. But the good news is that there
are still winning loan strategies available for most buyers.