Want to know where the St Louis real estate market is headed? Check out my 2012 St Louis Real Estate market forecast here.

For a recap of the 2011 St Louis Real Estate Market click here.

Foreclosure starts down in U.S., but up in more than half the states
After three straight monthly increases, U.S. foreclosure starts decreased 4 percent from March to April. A total of 97,665 properties started the foreclosure process for the first time during the month, down 2 percent from April 2011. At the state level, 26 states had increased monthly foreclosure starts in April and 27 states saw an increase in April from the year before. States with the biggest annual increases in foreclosure starts included New Jersey (180 percent), Utah (179 percent), Indiana (49 percent), Pennsylvania (44 percent), Florida (43 percent), and Michigan (42 percent).

Bank repossessions decrease for third straight month- Nevada and Arizona see the largest drops
Bank repossessions (REOs) decreased on a monthly basis for the third straight month in April, down 7 percent from March. Lenders completed the foreclosure process on 51,415 U.S. properties during the month, down 26 percent from April 2011 — the 18th consecutive month with a year-over-year decrease in REOs.

REO activity decreased on an annual basis in 37 states and the District of Columbia, while 28 states posted monthly drops in foreclosure activity. States with the biggest year-over-year decreases in REO activity included Nevada (71 percent), Arizona (70 percent), Washington (67 percent), California (52 percent), Virginia (47 percent), and Maryland (47 percent).

11 of 20 largest metros post annual increases in foreclosure activity-Tampa and Miami post the two largest increases
Eleven of the nation’s 20 largest metro areas based on population documented annual increases in foreclosure activity, led by the Florida cities of Tampa (59 percent) and Miami (38 percent). Other cities with increases included St. Louis (29 percent), Chicago (26 percent), Philadelphia (24 percent), and Atlanta (21 percent).

Among the 20 largest metros areas, cities posting the biggest annual drops in foreclosure activity included Seattle (54 percent), Phoenix (44 percent), San Francisco (34 percent), Washington, D.C. (30 percent), Riverside-San Bernardino, Calif., (30 percent), and Los Angeles (28 percent).

The metro areas with the highest foreclosure rates among the 20 largest were Riverside-San Bernardino (one in every 213 housing units with a foreclosure filing), Miami (one in every 273 housing units), Atlanta (one in every 298 housing units), Phoenix (one in every 313 housing units), and Tampa (one in every 315 housing units).

The 11 cities with annual increases in foreclosure activity were all in the Midwest, South or on the East Coast, while six of the nine cities with annual decreases were in the western states of California, Arizona and Washington.

Foreclosure Activity in 20 Largest U.S. Metros – April 2012

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                                 April 2012
                                 Properties
                                    with     1/every X  % Change   % Change
                                Foreclosure   Housing   from Mar   from Apr
MSA Name                          Filings      Units       12         11
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Riverside-San Bernardino, CA          7,049        213     -10.81     -29.97
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Miami                                 9,031        273      -9.18      38.43
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Atlanta                               7,271        298     -11.07      21.30
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Phoenix                               5,755        313     -22.64     -44.44
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Tampa                                 4,295        315      18.19      59.02
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Chicago                              11,840        321      -7.63      25.52
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Detroit                               5,201        363       3.90   -32.22**
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San Diego                             2,960        394      -6.12     -18.68
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Los Angeles                          10,906        412     -10.85     -28.26
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San Francisco                         3,391        514     -18.88     -33.68
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Minneapolis                           2,497        543      17.29       3.44
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St. Louis                             1,793        696      -0.33      28.53
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Dallas                                3,376        741      11.68      17.84
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Houston                               2,741        842      -0.72      -2.46
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Boston                                1,961        960      46.67       2.35
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Philadelphia                          2,444        996     -11.96      24.31
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Seattle                               1,172      1,249      -8.58     -54.24
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Washington, D.C.                      1,530      1,447      -7.89     -30.23
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Baltimore                               637      1,777       9.64      20.42
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New York                              2,812      2,677      -7.62       7.25
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“In these initial years, the prime driver of recovery won’t be new home construction, but rather demand for rental properties,” said Louise Keely, Chief Research Officer at The Demand Institute and a co-author of the report. “This is a remarkable change from previous recoveries. It is a measure of just how severe the Great Recession has been that such a wide swath of Americans had to delay, scale back, or put off entirely their dreams of home ownership.”

“In the long-term, we don’t expect home ownership rates to change,” said Bart van Ark, Chief Economist at The Conference Board and co-author of the report. “Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make. What will be intriguing to watch is how their aspirations around home ownership are affected by this period of extended austerity.”

Between 2006 and 2011, some $7 trillion in American wealth was wiped out when home prices dropped 30 percent after dramatic climb in valuations during the housing bubble. Looking forward, the moderate growth expectations for coming years suggest a return to normalcy. As home prices continue to drop and interest rates fall further, first-time buyers and others who remained relatively cautious will be drawn back into the housing market. And, as the market recovers, so too will consumer spending.

“As the U.S. housing market strengthens, almost every consumer-facing industry will be impacted in the coming years,” said Mark Leiter, Chairman of The Demand Institute. “Business and government leaders will benefit by fully understanding the nature of this recovery. In doing so they will be better able to anticipate how consumer demand will evolve, and to formulate critical business and policy decisions to lead their organizations.”

Highlights from the report:

• The recovery will be led by demand from buyers for rental properties, rather than, as in previous cycles, demand from buyers acquiring new or existing properties for themselves. More than 50 percent of those planning to move in the next two years say they intend to rent.
• Young people—who were particularly hard hit by the recession—and immigrants will lead the demand for rental properties. Developers and investors will fulfill it, developers by building multifamily homes for rent (that is, buildings containing two or more units, such as apartment blocks or townhouses), and investors by buying foreclosed single-family properties for the same purpose.
• Rental demand will help to clear the huge oversupply of existing homes for sale. In 2011, some 14 percent of all housing units were vacant, while almost 13 percent of mortgages were in foreclosure or delinquent—increases of 12 and 129 percent respectively over 2005 levels. It will take two to three years for this oversupply to be cleared, and at that point home ownership rates will rise and return to historical levels.
• The housing market recovery will not be uniform across the country. Some states will see annual price gains of 5 percent or more. Others will not recover for many years. The deciding factors will include the level of foreclosed inventory and rates of unemployment.
• There will also be vast differences within states. Here, additional factors count, such as whether local amenities, including access to public transport, are within walking distance of homes. By examining seven factors that influence house prices at a local level, the report identifies four categories of cities and towns in which prices will behave differently.
• The average size of the American home will shrink. Many baby boomers who delayed retirement for financial reasons during the recession will downsize. They will not be alone. The majority of Americans have seen little or no wage increase for several years, and many will scale back their housing aspirations. The size of an average new home is expected to continue to fall, reaching mid-1990s levels by 2015.
• Consumer industries including financial services, home furnishings, home remodeling will all experience shifts in demand and new growth opportunities. Part of this spending is linked to increases in wealth from improving home valuations, while an even bigger part is tied to the “transaction” of buying or selling the home which sets in motion increased demand for a wide range of products and services.
• Despite the number of Americans who have been hurt financially by the housing crash, the desire to own a home remains strong. We do not expect to see a long-term drop in ownership rates. Indeed, one survey has revealed that more than 80 percent of Americans recently thought buying a home remained the best long-term investment they could make.

The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) issued their report on New Residential Construction for April 2012 showing an increase in single-family home building permits from the month before of 1.9 percent and a 18.5 percent increase in new home starts compared to the year before.

Highlights from the April 2012 Report:

• Building permits issued for single-family residences were at an annual rate of 475,000 homes which is a 1.9 percent increase from the prior month and an increase of 18.5 percent from a year before.
• Housing starts for single-family residences were at an annual rate of 492,000 which is a increase of 2.3 percent from the prior month and an increase of 18.8 percent from a year before.
• Homes completed were at an annual rate of 489,000 homes, which is an increase of 11.4 percent from the prior month and an increase of 14.3 percent from a year before.

As I say every month, we need to remember that all the numbers above are “seasonally adjusted” annual rates and the year over year comparisons are just comparing the numbers for the current month versus the a year before. Another way I like to look at where things stand is to simply look at the year to date data; actual numbers, not seasonally adjusted, compared to last years ytd numbers at this same time. I think this may give a little better comparison so those numbers are below:

• In April, there were 44,000 permits issued for new homes compared with 37,200 the same month of the prior year.
• In April, there were 45,800 new homes started compared with 40,200 the same month of the prior year.
• In April, there were 37,800 new homes completed compared with 33,700 the same month of the prior year

New home construction continues to slowly increase which encouraging and I expect to see the trend continue and probably increase as we move into the summer.

By committing to a mortgage loan, the borrower is entering into a financial agreement with a lender to pay back the mortgage money, with interest, over a set period of time. The borrower’s monthly mortgage payment may change over time depending on the type of loan (Fixed, ARM, Interest Only, etc.). However, for this article, we will address the typical 30 year fixed Principal and Interest loan program. So…

Once the loan closes, over the next 360 months, the borrower will pay the same amount in Principal + Interest (P + I) each payment. As each month passes and the monthly P+I payment is made, the make up of the P + I will change. As each payment that is made, a certain amount of interest is taken out to pay the lender back for the opportunity to borrow the money, and the remaining balance is applied to the principal balance; the principles reduces each month.

The monthly Principal and Interest for a $200,000.00 loan at 4% anual interest rate with a term of 30 years is $954.83. I have attached an amortization schedule for the first 12 month period of a 30 year loan as an example. An amortization chart runs chronologically through your series of payments until you get to the final payment. The loan amortization table below shows your monthly payment divided into two portions. One portion is put towards interest (interest paid), while the other portion goes towards principal (principal paid)..

The chart can also be a useful tool to determine interest paid to date, principal paid to date, or remaining principal.

Another frequent use of amortization charts is to determine how extra payments toward principal can affect and accelerate the month of final payment of the loan, as well as reduce your total interest payments.

To run your own amortization schedule, calculate payments, the benefits of pre-payments and numerous other mortgage scenarios, go to our website and click on the mortgage calculator. http://www.paramountmortgage.com/Mortgage-Calculators

St. Louis MORTGAGE INTEREST RATES for May 16, 2012:

• · Conventional 30-Year Fixed 4.00%/ 4.195% APR
• · Conventional 15-Year Fixed 3.250%/ 3.390% APR
• · Conventional 5/1 ARM 2.375%/ 3.082% APR
• · FHA/VA 30 Year Fixed 3.750%/ 3.991% APR
• · Jumbo 5/1 ARM 2.875%/ 3.445% APR
• · Jumbo 15 yr Fixed 3.375%/ 3.630% APR
• · Jumbo 30 yr Fixed 4.750%/ 5.010% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41^st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.

Highlights of Governor Duke’s speech on the housing market…

• It was only 6 years ago that the housing market was booming and the home ownership rate was at 69 percent. Total housing wealth at the time was almost $23 trillion.
• Since then, home prices have fallen by about 1/3 meaning about $7 trillion in housing wealth was lost and the home ownership rate has dropped to 66 percent.
• There are about 2.2 million home loans in the foreclosure process and another 1.7 million loans that are seriously delinquent (3 or more payments behind)
• More than 40 percent of the loans in foreclosure are more than two years delinquent.
• Encouraging is the fact that new mortgage loan delinquencies are decreasing.
• Also some encouraging news with home prices…they still continue to fall year-over-year but the pace of decline is less and the month-over-month numbers have shown improvement for 3 months.
• Over 45 percent of the cities where Corelogic tracks home prices have seen home prices rise more than 1 percent in the past 3 months…this is the most since early 2006
• Recent indicators of housing construction activity have also been somewhat encouraging. Housing starts and permits have edged up from very low levels, and the attitudes of builders and REALTORS about housing market conditions have improved.
• Demand for owner-occupied housing remains stubbornly soft. An important driver of housing demand is household formation. Although household formation typically falls during economic downturns, it has been especially weak this time around. Since 2007, household formation has been running at three-fourths of its normal rate of about 1 million households per year.
• Many potential homebuyers are delaying home purchases because they are worried about their income or employment prospects.
• Unfortunately, some buyers who would like to purchase a home are unable to do so because they are unable to obtain a mortgage. According to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices, underwriting standards for residential mortgages tightened steadily from 2007 to 2009, and they do not appear to have eased much since then.²

• Be wary of those that contact you through advertising such as flyers, radio/television or the Internet with promises to modify the terms of your mortgage; if their promises seem too good to be true, they usually are.
• Be suspicious of loan modification services that require signing a contract or paying an up-front or monthly fee. Advance fees are generally prohibited by law. Loan counseling and modification services are generally provided free from your lender and/or a Department of Housing and Urban Development (HUD) counseling center. Contact HUD’s toll-free 24 hour hotline at 888-995-HOPE (4673) to immediately speak to an expert advisor in more than 160 languages.
• Never transfer title of your property, make mortgage payments to someone other than your lender, or stop making mortgage payments altogether — these are guaranteed ways to put your financial investment at risk.
• Carefully inspect the names, seals, logos and representations made by mortgage rescue companies. They may be deliberately designed to deceive borrowers into believing an affiliation with a government agency exists. The purpose of this is to trick borrowers into believing they are entitled to the benefit of a government program rather than committing to a loan that must be repaid. A government agency will never require advance fees, or guarantee a specific result.
• Some scammers pushing reverse mortgage loans are in fact trying to unload other financial products on borrowers. Be careful to avoid brokers that want you to obtain a loan in order to buy other products such as long-term care insurance, annuities, or other investments.

And, if you believe you may have been the victim of mortgage fraud, visit www.Stopfraud.gov for more information.

Loan Delinquency Rate Improved in all but 8 States in first quarter…

All but eight states experienced decreases in their mortgage delinquency rates in the first quarter of 2012. In addition, 73 percent of metropolitan areas saw mortgage delinquency rates decline in the first quarter of 2012 as well. This is over double the rate of metro areas that saw improvement in the prior quarter when only 36 percent saw an improvement.

“To see that quarter over quarter, and year over year, more homeowners were able to make their mortgage payments is certainly welcome news,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit. “Before this, we saw two quarters of delinquency increases and while we are still about three-times above the pre-recession norm, this should mark the start of consistent improvement each quarter.”

1st Quarter 2012 Mortgage Statistics – Delinquency Rates (source: TransUnion)

Quarter over Quarter             Q4 2011   Q1 2012   Pct. Change
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USA                                6.01%     5.78%        (3.83%)
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Year over year                   Q1 2011   Q1 2012   Pct. Change
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USA                                6.19%     5.78%        (6.62%)
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Highest Mortgage Delinquency States    Q1 2012
----------------------------------------------
Florida                                 13.87%
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Nevada                                  11.16%
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New Jersey                               8.31%
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Maryland                                 7.11%
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Lowest Mortgage Delinquency States     Q1 2012
----------------------------------------------
North Dakota                             1.51%
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South Dakota                             2.11%
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Nebraska                                 2.31%
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Wyoming                                  2.43%
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Top 3 Year-over-Year Increases   Q1 2011   Q1 2012   Pct. Change
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Vermont                            2.88%     3.31%         14.93%
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New Jersey                         7.58%     8.31%          9.63%
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Arkansas                           3.51%     3.73%          6.27%
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Top 3 Year-over-Year Declines    Q1 2011   Q1 2012   Pct. Change
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Arizona                            9.14%     6.86%       (24.95%)
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Wyoming                            3.16%     2.43%       (23.10%)
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California                         8.58%     6.66%       (22.38%)
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4th Quarter 2011 Mortgage Statistics – Mortgage Debt Per Borrower (Source: TransUnion)

Quarter over Quarter             Q4 2011   Q1 2012   Pct. Change
-----------------------------------------------------------------
USA                             $188,194  $188,196          0.00%
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Year over Year                   Q1 2011   Q1 2012   Pct. Change
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USA                             $190,115  $188,196        (1.01%)
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Highest Mortgage Debt States           Q1 2012
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District of Columbia                  $378,732
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California                            $331,133
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Hawaii                                $312,324
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Maryland                              $248,878
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Lowest Mortgage Debt States            Q1 2012
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West Virginia                         $101,473
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Mississippi                           $108,558
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Oklahoma                              $114,821
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Arkansas                              $115,782
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Top 3 Year-over-Year Increases   Q1 2011   Q1 2012   Pct. Change
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Alaska                          $198,842  $203,953          2.57%
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Oklahoma                        $112,197  $114,821          2.34%
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North Dakota                    $117,874  $120,321          2.08%
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Top 3 Year-over-Year Declines    Q1 2011   Q1 2012   Pct. Change
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Nevada                          $229,457  $215,312        (6.16%)
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Arizona                         $202,931  $196,303        (3.27%)
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Florida                         $185,038  $180,294        (2.56%)
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Seven of the top ten markets are in Florida, but the number 1 turnaround town in the U.S. according to the report is Phoenix-Mesa, Arizona where the inventory of homes for sale has fallen almost 50 percent in the past year while prices increased almost 27 percent during the same period. See the complete list of top 25 towns below.

With interest rates at all time lows, it is worth the few minutes to do a mortgage check up and determine if a refinance would be beneficial to your situation. Since there are many reasons a homeowner may choose to refinance, we’ll take a look at the few most common reasons to consider a refinance.

• Mortgage Rates Drop: The most common reason that homeowners refinance their mortgage is to secure a lower interest rate (and possibly shorten the amortization). Interest rate and loan amount determines the total cost that a borrower will pay. The lower the interest rate, the less the overall cost will be.
• Lower Payments: Lowering a mortgage payment can be achieved by lowering the mortgage rate, lengthening the loan term, combining two or more loans or removing mortgage insurance.
• New Mortgage Program: Refinancing an Adjustable Rate Mortgage (ARM) to a new Fixed Rate Mortgage (FRM), combining a first and second mortgage or paying off a balloon loan are just a few possible reasons to explore a refinance.
• Debt Consolidation: If there is sufficient equity, sometimes paying off consumer debt by combining all debts into one lower monthly mortgage payment can significantly reduce the short-term deficits in a budget. However, it’s important to keep in mind the total cost of that debt by adding it into a 30 year mortgage payment.

A mortgage is generally the largest debt most homeowners have to manage. It’s a good idea to give your personal real estate finance portfolio a good review at least once a year.

St. Louis MORTGAGE INTEREST RATES for May 9, 2012:

• Conventional 30-Year Fixed 4.00%/ 4.195% APR
• Conventional 15-Year Fixed 3.250%/ 3.390% APR
• Conventional 5/1 ARM 2.375%/ 3.082% APR
• FHA/VA 30 Year Fixed 3.750%/ 3.991% APR
• Jumbo 5/1 ARM 2.875%/ 3.445% APR
• Jumbo 15 yr Fixed 3.375%/ 3.630% APR
• Jumbo 30 yr Fixed 4.750%/ 5.010% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41^st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.

A report released this morning by CoreLogic, one of the nations leading providers of property information shows that home prices in the U.S. fell in March 0.6 percent from the year before and increased by 0.6 percent from the month before.  Excluding distressed sales, month-over-month home prices increased for the third month in a row. If we take distressed sales out of the picture then the year-over-year home prices increased 0.9 percent.  According to the report, St. Louis home prices declined by 3.4 percent in March 2012 compared to March 2011. Excluding distressed sales, year-over-year prices increased by 1.7 percent in March 2012 compared to March 2011.

“This spring the housing market is responding to an improving balance between real estate supply and demand which is causing stabilization in house prices,” said Mark Fleming, chief economist for CoreLogic. “Although this has been the case in each of the last two years, the difference this year is that stabilization is occurring without the support of tax credits and in spite of a declining share of REO sales.”

National Home Price Highlights as of March 2012 Report:

• Including distressed sales, the five states with the highest appreciation were: Wyoming (+5.9 percent), West Virginia (+5.3 percent), Arizona (+5.1 percent), North Dakota (+4.7 percent) and Florida (+4.5 percent).
• Including distressed sales, the five states with the greatest depreciation were: Delaware (-10.6 percent), Illinois (-8.3 percent), Alabama (-8.0 percent), Georgia (-7.3 percent) and Nevada (-5.8 percent).
• Excluding distressed sales, the five states with the highest appreciation were: Idaho (+5.4 percent), North Dakota (+5.1 percent), South Carolina (+4.7 percent), Montana (+3.5 percent) and Kansas (+3.4 percent).
• Excluding distressed sales, the five states with the greatest depreciation were: Delaware (-7.6 percent), Alabama (-4.1 percent), Nevada (-3.9 percent), Vermont (-3.9 percent) and Rhode Island (-2.9 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to March 2012) was -33.7 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -24.5 percent.
• The five states with the largest peak-to-current declines including distressed transactions are Nevada (-59.9 percent), Arizona (-48.6 percent), Florida (-48.1 percent), Michigan (-45.1 percent) and California (-42.7 percent).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 57 are showing year-over-year declines in March, eight fewer than in February.

*February data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

March HPI for the Country’s Largest CBSAs by Population::

Source: CoreLogic.

March State and National Ranking Based on HPI Including Distressed:

Source: CoreLogic.

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     Top 10 Metros With Largest Price Increases
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     #  U.S. Metro                      Y-o-Y % Change in Asking Price
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     1  Miami, FL                                    16.1%
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     2  Phoenix, AZ                                  15.8%
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     3  Cape Coral-Fort Myers, FL                    14.1%
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     4  Pittsburgh, PA                               8.5%
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     5  West Palm Beach, FL                          7.4%
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     6  Warren-Troy-Farmington Hills, MI             6.9%
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     7  Orlando, FL                                  6.5%
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     8  Denver, CO                                   6.3%
     -----------------------------------------------------------------
     9  Bethesda-Rockville-Frederick, MD             5.2%
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     10 Little Rock, AR                              4.8%
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Do you see the value of information such as this, particularly charts and data on what is happening in the St Louis real estate market?  Do you see the benefit of this information to you as a seller, buyer or investor?  This is just a small piece of what MORE, REALTORS has available and there is no where else in St. Louis where you will find this info and the experienced, knowledgeable brokers and agents to show you how to apply it to your situation.  To avoid making a bad move in this market, contact us and we’ll help you make a good move.

As the chart below shows, St Louis Home Prices appear to have hit bottom back around April 2011 then were headed back down in the last half of the year but have been on the rise since (chart includes data through today) so, unless things change course, I would say St Louis home prices have bottomed out.  Don’t worry, if you’re one of the many, many people out there that have been waiting for the “bottom” to buy, you haven’t missed out yet…prices are still low.  Our newsletter has charts like below for each county in the St Louis area so you can see how your county is doing.  Sign up for it here.

Source: MORE, REALTORS - St. Louis, MO

Time for buyers to get off the sidelines:

According to an article published today on CNN Money “homes have never been more affordable — but it won’t stay this way for much longer.” The article also states that Stuart Hoffman, the chief economist for PNC Financial Services expects home prices to “flatten out by the third quarter and start climbing by next year.” In a press release today, Trulia’s Chief Economist, Jed Kolko, said “housing prices have already bottomed with asking prices on the rise for three straight months.” Lawrence Yun, Chief Economist for the National Association of REALTORS, said “the housing market has clearly turned the corner…..home prices will be rising in more areas as the year progresses.”

Whatever funds the borrower intends to use to close a transaction has to be sourced and seasoned. Providing proper asset documentation and the actual source of the funds is a critical element of the approval and closing process. There’s nothing worse in a real estate purchase than making it all the way through the hoops and hurdles of the approval process just to have a loan fall apart due to the borrower not using an acceptable source of funds in order to close. In other words, “Mattress Money” is no longer a legitimate source.

Seasoning of “assets to close” is just as important as the source, which is why underwriters typically require at least two months bank / asset statements in the initial mortgage approval process.

Acceptable Sources Of Down Payment/Closing Costs Include:

• Bank Accounts – checking / savings
• Investment Accounts – money market, mutual funds, stocks
• Retirement Funds – Borrowing against vs. Liquidating
• Life Insurance – Cash value and face amount
• Gifts – Family members can gift down payment funds with certain restrictions
• Inheritance / Trust Funds
• Government Grants – Many state, county and city agencies offer special down payment assistance programs

It is extremely important to make sure your loan officer is aware of the exact source of funds you anticipate using for your down payment and closing costs as early in the process as possible so that all necessary questions, documentation and explanations can be reviewed / approved by an underwriter.

St. Louis MORTGAGE INTEREST RATES for May 2, 2012:

• Conventional 30-Year Fixed 4.00%/ 4.195% APR
• Conventional 15-Year Fixed 3.250%/ 3.390% APR
• Conventional 5/1 ARM 2.375%/ 3.082% APR
• FHA/VA 30 Year Fixed 3.750%/ 3.991% APR
• Jumbo 5/1 ARM 2.875%/ 3.445% APR
• Jumbo 15 yr Fixed 3.375%/ 3.630% APR
• Jumbo 30 yr Fixed 4.750%/ 5.010% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41^st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.

The report also says that the U.S. housing market is on “solid footing” but the Midwest region is on a “slippery slope” seeing it’s fifth month of price declines and it’s year over year losses in home prices increase to 4.0 percent from 3.8 percent the month before. The Northeast region saw a year over year increase in home prices of 0.7 percent while the West and South, both of which saw year over year declines, saw improvements in the rate of decline with their losses shrinking to 1.4 percent and 0.3 percent respectively.  I hate to mention it, but St. Louis made the “15 lowest performing MSA’s” list this month…at least we were toward the end at number 12.

The 15 Highest Performing MSA’s

Source: Clear Capital

The 15 Lowest Performing MSA’s

Source: Clear Capital