Southold

East Quogue

Woodbury

“To support a crippled mortgage-finance market in 2008, Congress increased the conforming loan limit for Fannie Mae, Freddie Mac, and Federal Housing Administration loans to a local cap of 125% of median home prices along with the overall ceiling of $729,000 in the most expensive neighborhoods.

On Oct. 1, those limits dropped to 115% of local medians despite a major push from the industry and several lawmakers in the Senate and the House of Representatives.”

In Nassau County alone, there are 18 zip codes that have a median sales price greater than $725,000 which could be affected by this change in policy. As a result, loans made at this new level will not be eligible for Fannie Mae/Freddie Mac financing and will need to be held by the secondary market which includes portfolio lenders.

Long Island appears to be lagging behind much of the region when it comes to economic recovery, at least based on the latest employment numbers released by the New York State Department of Labor.

Both New York state and the nation added private-sector jobs over the past year as of June, while Long Island lost 1,400 private-sector jobs or 0.1 percent, the first time the region has shown a decline in nearly a year, according to statistics released today by the New York State Labor Department.

Total employment, including government and private industry, shed 6,800 jobs since last June, a -0.5 percent decline and the second consecutive month of job losses.

The statistics indicated the loss of manufacturing jobs was flat compared to a year ago, while the natural resources, mining and construction lost only 700 jobs, “the first time the sector has lost as few jobs since October 2008,” according to the department.

“June’s private sector decline brings an end to 11 straight months of over-the-year private sector job gains on Long Island dating back to July 2010,” according to a written statement from the department of labor. “Almost every sector also showed a decline in the rate of job growth or an increase in the rate of job losses in June.”

The poor showing for Long Island came as the number of private sector jobs in the state over the prior 12 months increased by 113,600, or 1.6 percent, while the nation’s private sector job count increased by 1.7 percent.

The state’s unemployment rate increased from 7.8 percent in May to 8 percent in June, still down from 8.6 percent a year ago.

The nation’s employment rate increased to 9.2 percent in June from 9.1 percent in May, still down from 9.5 percent last year.

The state didn’t release the Nassau-Suffolk employment rate as part of today’s statistics. It plans to release Long Island’s unemployment rate along with other additional regional data on Tuesday.

While many private sectors continued to see their numbers dwindle slightly, the biggest drop came in the public sector.

Government continued to downsize on Long Island, losing 5,400 jobs in total. That included 800 at the local level, comprised of 1,400 jobs lost at school districts and gains in some other local government. Long Island lost another 1,200 state government jobs and 3,400 federal jobs, largely due to the temporary hiring of U.S. Census staff last year.

New York state has the nation’s highest mortgage closing costs for the second consecutive year, according to a study by Bankrate.com.

The organization found that New York led the nation with an average fee of $6,183, followed by Texas, Utah, San Francisco and Idaho. Arkansas was the least expensive area with an average fee of $3,378.

The study found New York closing costs average $2,210 in origination fees and another $3,972 in title and closing costs.

Nationwide, the average origination and title fees on a $200,000 mortgage were $4,070, 8.8 percent higher than a year ago, according to Bankrate’s “2011 Closing Costs Survey.”

“Interest rates get a lot of attention, and rightfully so,” Greg McBride, a senior financial analyst for Bankrate, said in a written statement. “But it’s also important for consumers to compare lender fees when shopping for a loan.”

Bankrate, which based its data on surveys of lenders in each state in June 2011, obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20 percent downpayment.

Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance, but excludes taxes, property insurance, association fees, interest and other prepaid items.

The following is a repost from the Wall Street Journal -

Government may be forced to stay in mortgage businessJune 20, 2011 02:30PM A dicey start to the spring housing season has raised the prospect that the government will remain dominant in the mortgage market for longer than intended, the Wall Street Journal reported. The fragility of the market, falling prices and reduced consumer confidence are making it difficult for Washington to pull back its support.

Government-sponsored organizations Fannie Mae and Freddie Mac must try to return to sound lending standards without cutting off access to mortgages completely, according to the Journal. Taxpayers are on the hook for $138 billion since Washington took over control of the organizations in 2008, a loss that it cannot walk away from. “We’re not going to get a recovery in housing until the average borrower can get a mortgage,” said Kenneth Rosen, a California-based economist. Some experts are championing the return of private investment as a means to curb the government’s role. Obama administration officials are pushing to increase fees to lenders and reduce the maximum loan size eligible for government backing. Those limits are set for a minor decline in September.

There are flaws to this rationale, however. “I’m sort of a champion of private capital, but I’m also not naïve,” said Lewis Ranieri, a pioneer of the home mortgage bond market. “At this point, it really doesn’t work because we don’t have fundamental issues resolved.” [WSJ]

At some point, the smart investors will return and bring liquidity to the market place.  This time, I hope that the investors look to the credible mortgage industry professionals to provide due diligence before they buy another pool of mortgages.  In the last go-around, the investor relied too much on their macro-data and never “cracked the tape” to investigate the loans that they were buying.  Caveat-emptor!!!

In the 1st-qtr-2010, there were 1763 sales with a average median sales price of $338,333 – during the first quarter of 2011, there were 1131 sales with an average median sales price of $366.888.

In looking deeper at the number, the southern side of Brookhaven township posted the greatest gain with a year over year increase of 17.8 percent.  The median sales price in this region jumped from $242,000 to $285,000.

Sales activity declined with an average of 27% less sales during the 1st-qtr-2011 as compared to the 1st-qtr-2010.   During the 1st quarter of 2010, there were 1542 sales in Nassau County with an average price of $406,200 – compare that to 2011 when there were 1129 sales with an average sales price of $415,200.

LOOKING DEEPER

Of the five (%) defined areas of Nassau County, four showed either a positive gain or no change at all.

The northwestern section of Nassau County (including Great Neck, Glen Cove, etc..) posted the most significant gain of nine (9) percent year/year.  Similarly, the median sales price of luxury homes in this area also saw an increase of 15.4%.

On the other end of the spectrum, the Southeastern section (including Merrick and Massapequa) showed a loss of 5.4 percent year/year.