Mortgage rates still below 5%

Freddie Mac's weekly survey of home loans show that rates remain under 5%, and have fallen slightly from the previous week.

The typical interest rate on a 30-year fixed mortgage was 4.82% for the week, down from 4.87% last week. Points and fees charged by lenders dropped from an average 0.7% of the loan amount to 0.6%, Freddie Mac said.

Driven down by aggressive actions at the Federal Reserve and Treasury Department, the rates dipped below 5% last month and bottomed out at 4.78% during the week that ended April 2. Last year at this time, a 30-year fixed rate loan averaged 5.88%, according to Freddie Mac.

Rates on 15-year fixed loans this week averaged 4.48% with 0.6% in average lender charges.

The survey looks at borrowers who can qualify for the loans that Freddie Mac will buy or guarantee. Obviously, jumbo loans above $729,750 are not included in this survey.

(*Source: LA Times)

Los Angeles rents are lower by 4%

The average rent in Los Angeles County fell almost 4% in 2008 as apartment occupancy rates dropped and new units came online. According to the annual USC Casden Forecast, the decline should continue this year as more renters lose their jobs.

"In L.A. County alone, 41,000 people moved out of apartments last year compared to the 29,000 people who moved in during the last five years," said forecast director Delores Conway.

To keep their units occupied, some landlords are lowering rents or offering concessions for signing a lease, such as a month of free rent or a reduced deposit, she said.

Rents should level out in 2010 as the economy recovers, the report said. The average one-bedroom apartment in Los Angeles rented for $1,397 a month at the end of last year.

The Westside remains the priciest, while Pasadena and Burbank are stable with little change in occupancy or rents. Rents in Hollywood and central neighborhoods such as downtown Los Angeles are being weakened by new condominiums that are being leased rather than occupied by owners.

(*Source: LA Times)

Montana Avenue strongly feels retail distress

Montana Avenue which has been called a "mini Rodeo Drive" and the home to high-end boutiques has fallen victim to a combination of high rent, low patronage and retail distress due to the tough economic times.

This has spelled doom for a substantial portion of the businesses on Montana Avenue. From June 2008 to the end of April, roughly 35 businesses -- representing almost 20 percent of the total merchants on Montana -- will have left the shopping district, leaving empty storefronts up and down the street, the majority of which are between Seventh and 17th streets.

The kind of conspicuous consumption that used to be done at boutiques has come to a screeching halt. Department stores, which carry similar items are discounting deeply and boutiques typically don't have the financial resources of bigger stores.

People working in many of the stores say that business has been slow for months and many shops are devoid of customers on weekends that would have been very busy a year ago.

Montana Avenue has some of the highest rents in the city, from about $6 per square feet to more than $9.

Notable store closings: Babystyle, La Partie, Saylor, KidsBiz, Starbucks, II Primo Passo, Jane Smith and Miel

(*Sources: Santa Monica Daily Press and Los Angeles Business Journal)

Speaking of loan modifications

The Federal Housing Finance Agency, said that Fannie and Freddie modified the terms of nearly 24,000 loans during the fourth quarter of 2008. That was a 76% increase over the third quarter, according to James B. Lockhart, director of the agency.

The figures were contained in a quarterly report on foreclosure prevention by the agency.

The number of foreclosures during the quarter fell by nearly 27%. But he noted that various federal and state moratoriums on repossessing homes played a big role in that statistic. Those moratoriums are now expiring, causing foreclosures to shoot higher once again.

Tips on the loan modification process

The loan modification process can easily take up to 90 days and requires careful note-taking, a calendar to mark, and a willingness to use the telephone again and again. The process is not fun but the old adage of "persistence pays off" definitely rings true when dealing with modifying a loan.

The article below by real estate agent and speaker Ralph R. Roberts advises borrowers to ask several questions upfront, whether they are dealing directly with a lender or working through a loan modification specialist.

Besides the questions he provides, Roberts also strongly counsels to not expect lenders to call you back to keep you current on your situation. They will not. If a deadline to hear something passes, get on the phone yourself, the next day, and ask why.

In addition, other options may be better than a loan modification like consulting a real estate agent about listing your home for sale or talking to a mortgage broker or loan officer about refinancing. Speaking with a bankruptcy attorney to find out whether filing bankruptcy is also a last resort option.

Roberts also advises to have all default and foreclosure actions frozen while you are trying to restructure the loan, but adds: Lenders rarely put a stop on the foreclosure process until a workout solution is fully in place.

Article: Tips on the loan modification process