US Federal Reserve – courtesy Wikipedia

Last month Bankrate released their most recent forecast on mortgage rates, which outlined the Federal Reserve’s continued vestment in mortgage backed securities. The moves, aimed at reducing the burden of unemployment on the economy, also has positive effects for those interested in buying homes, as well as those interested in refinancing for gain. Barring a slowed economy for whatever reason, very low interest rates are here to stay for the near future.

We spoke earlier today with McBride (below right) about the Fed, the so called fiscal cliff (the effects of the Budget Control Act of 2011), and the overall economy. McBride offered this with regard to the generalities of Bankrate’s position:

“2013 will be favorable to home buyers and refinancers alike, with 30-year fixed mortgage rates staying between 3.5% and 4% for much of the year owing to the slow growth economy, high unemployment, and active Federal Reserve.”

A “go to” analyst who has appeared on hundreds of financial broadcasts including NBC “Nightly News,” CBS “Evening News,” and ABC’s “World News Tonight,” Greg McBride provides not only in-depth commentary, but practical advice for consumers.

According to many experts, interest rate stability and the overall economy depends greatly on how well Congress deals with the potential negatives that can arise via the “fiscal cliff” harbinger. On top of these concerns, I spoke with the Bankrate analyst about overall economic issues, for one, consumer confidence and spending. Even despite these continual low interest rates, the seeming inability of the administration and lawmakers to instill confidence seems at the core of America’s economic conundrum.

Regardless of actions by the Fed, which McBride pointed out at simply re-instituted past policies, investor and consumer confidences have to be shored up. In short, the biggest reason for the lukewarm economic recovery resides in infirmities from the problem solvers themselves, namely our own lack of confidence in decision-makers in Washington. Be that as it may, Bankrate and other analytics companies understand the public’s purse strings (corporate too) remain very tight. But in ending our conversation this afternoon, McBride pointedly suggested those with the wherewithal to buy a home, needn’t hurry to closing, he say’s these rates are with us for a while (6 months out).

Even as I write this, various financial reporting entities are announcing both concern and tentative actions being considered by the FOMC where this bond buying actions are concerned. The minutes of the meetings back in December can be read here, and the video below of the press conference with FOMC Chairman Ben S. Bernanke, offer more insight into what Bankrate and McBride partially project from.

Meanwhile, from the BBC to the Wall Street Cheat Sheet reports suggest these same FOMC board members have concerns that spending upwards of $85 billion dollars a month buying these bonds may kindle an inflationary fire America and the world does not need. A last note, McBride actually commented on the basic physics of the economic situation in our conversation, the point of our discussion being how action on the part of the Fed or other regulators always leading to a counterpoint elsewhere. The take away here should probably be, the Fed using “same old” tactics, will not likely affect a big fiscal change.

We’ll keep you updated.

1301 Thomas Circle is a 292-unit luxury apartment community in the Logan Circle neighborhood, which is less than a mile from the White House. It is a ten-story building with a 24-hour concierge service, 256-space parking garage, rooftop pool, fitness center, clubhouse, business center, private courtyard, and outdoor kitchen.

All apartments include high-quality appliances, large bay windows, nine-foot ceilings, and full-sized, stacked washers and dryers. The apartments average 852 square feet and have an average monthly rent of $2,740. The building is also in walking distance to UDR’s other apartment communities, namely Andover House and View 14.

KFH will contribute a 70% equity investment of $44 million, while UDR will contribute $19.2 million, a 30% equity investment. The remaining funding will come from a $90 million loan from Fannie Mae. This is the third acquisition by this joint venture, which has secured $281 million is Washington, DC real estate, a total of 660 homes.

UDR is a multifamily real estate investment trust that owns approximately 62,000 apartment homes in locations around the U.S., including California, Virginia, Florida, Oregon, Texas, and Washington. Its headquarters are in Highlands Ranch, CO.

Kuwait Finance House was the first Islamic bank established in State of Kuwait, and it specializes in Sharia’ compliant banking, which operates on a shared risk model of investment. KFH’s services include banking, investment, trade finance, and real estate. 

On November 30, Home Properties purchased The Courts at Dulles, an A-class property located in Fairfax County in Virginia, just off Sunset Valley Drive. The 411-unit apartment community is 26 miles west of Washington, D.C. and only a mile from Dulles International Airport. It consists of 12 four-story garden-style buildings, which hold 193 single-bedroom, 179 two-bedroom, and 39 three-bedroom apartments, with an average unit size of 968 square feet. At the time of closing, the apartment units were 95.6% occupied with an average rent of $1,539.

The Courts at Dulles

Renovated in 2008, The Gates of Deer Grove is a 204-unit apartment community with six three-story garden-style buildings. These include 116 one-bedroom units and 82 two-bedroom units with an average unit size of 896 square feet. Part of the renovation included new kitchen counter tops, kitchen cabinets, appliances, fixtures, bathroom cabinets, counter tops, and fixtures. At the time of closing, the apartment units were 98% occupied with an average rent of $1,030. The Gates of Deer Grove is located on Dundee Road in the northwest suburbs of Chicago, IL. It is situated near a shopping center as well as the Deer Grove Forest Preserve.

The Gates of Deer Grove

Home Properties Inc. is an apartment real estate investment trust (REIT) with 124 apartment communities containing 41,909 units. Home Properties specializes in acquiring, rehabilitating, developing, and operating apartment communities in several U.S. states, primarily along the east coast.

US Capitol building in Washington, D.C.

The homeowners, Congresswoman Waters argues, are not suddenly all better, no longer needing government programs such as the NSP, which President George W. Bush signed into law in three years ago. With unemployment rates still abysmal and foreclosures still occuring at an alarming rate, Waters today questioned whether the Republicans who voted against the NSP are working for the people or the corporations who are capitalizing at the people’s expense.

“Republicans – just like Democrats – are hearing from constituents and communities that are really struggling, and yet they choose to kill these programs with no alternatives. It’s upsetting and it’s astonishing,” expressed the Congresswoman.

In addition to the NSP, Congress also recently voted to cease the Federal Housing Administration (FHA) Short Refinance Program and Emergency Homeowners Relief Program (EHRP), both of which Congresswoman Waters says they did not give time to fully mature and make an impact.

Congresswoman Maxine Waters

At the end of March, Congress will take aim at the Home Affordible Modification Program (HAMP), which the Obama Administration implemented to help keep homeowners in their homes through loan modifications. As of yet, it is not clear if the plan is to replace these programs or simply let struggling homeowners sink.

““Terminating HAMP without a credible and stronger alternative would be contrary to our goal of helping homeowners stay in their homes, despite some of the program’s flaws.”

David H. Stevens

The current housing crisis has hit the once-powerful trade association hard. The MBA has been distressed with once powerful lenders failing and others being swallowed by healthier rivals at low valuations. Indication of the times, last year the MBA sold its Washington, D.C., headquarters for a loss — after it struggled to attract tenants. The 10-story glass building bought at the height of the real estate bubble, depicts the current situation of the housing market: boom turned bust. The MBA has been forced to cut down its staff and it has seen its lobbying clout recede on Capital Hill.

In the WSJ Mr. Stevens said in an interview on Tuesday, “This is an opportunity to provide leadership and a clear vision, a renewed sense of direction for the MBA and its members.” That membership has stabilized over the last year, but is far from where it wants to be.

Now given the current climate, Mr. Stevens must reaffirm the group’s relationships with its largest members, some of which are growing dissatisfied with the MBA’s weakening influence in Washington. As important, he must also balance the tensions amongst the smaller banks that have a growing concern on the playing field they believe to be heavily tilted in bigger banks favor.

Mr Stevens won’t personally be allowed to lobby any former colleagues for at least two years under the administration’s ethics rules — we will also be forced to take additional steps to recuse himself from any contact with the MBA or its members on government business until he departs the FHA at the end of the month, according to a parsed statement from a spokesman for the Department of Housing and Urban Development. “We think it’s important to ensure that there’s not even an appearance of conflict of interest,” the spokesman said.

David H. Stevens of the Federal Housing Administration

The 54 year old Stevens formerly held top positions at Wells Fargo & Co. and Freddie Mac. At the FHA, he had a first person view of key debates about the future of Fannie Mae and Freddie Mac and the construction of various mortgage-modification programs.

Mr. Stevens warns MBA’s members that they face a “trust deficit” and that it is imperative that they do more to help troubled homeowners and accept greater regulation from federal and state officials. At the FHA, Stevens inherited a government agency that was facing a theatrical rise in market share and loans. He urged to eject lenders that were not meeting the agency’s lending standards and raised fees borrowers must pay in order to rebuild the agency’s dwindling reserves. However, he resisted more sensational steps to increase borrowing costs for home buyers.

The theater in Stevens new position is that he most likely is going to contend with his former administration on a number of critical policy debates. A glaring example is “cramdown”, which is efforts backed by the Democrats and the Obama administration that allows judges to restructure mortgage debt through bankruptcy protection. As it currently stands, the industry is staunchly against efforts that could require banks to write down mortgages as part of any settlement over foreclosure abuses.

Proof positive affordable housing can be beautiful - Parkview Terraces SF

In the first round of the funding competition in 2010, FHLBank San Francisco provided $32.5 million in AHP grants, bringing the total for 2010 to $69.1 million.  Some of the projects include the building of single-family homes, duplexes, multifamily rental communities, senior communities, transitional housing, and many others.

The Affordable Housing Program (AHP) is FHLBank’s assistance program that provides grants for constructing, purchasing, or rehabilitating housing for lower-income individuals and families.  The applicants compete for grants, and winners are announced twice a year.

“AHP funds, which are generated directly by our core business—lending to our members—are a valuable tool that members use to make a difference in the communities they serve,” said Dean Schultz, FHLBank San Francisco President and Chief Executive Officer. “

Ironhorse at Central Station - pushing the envelope of the possible in low income solutions

The Federal Home Loan Bank of San Francisco specializes in providing low-cost financial options for financial institutions that offer mortgages to a diverse range of income levels.  FHLBank San Francisco members include industrial loan companies, savings institutions, commercial banks, credit unions, and insurance companies.  Among its other services are community investment programs to help its members promote economic growth in communities and provide affordable housing to people from diverse economic backgrounds.

More information (PDF) about the projects that received funding are available at the bank’s website.