DAILY BRIEFING Thursday, September 18, 2008

MORTGAGE RATES

The ongoing crisis in the financial markets continues to create a series of good news/bad news scenarios for consumers who either already own their own home or would like to buy one. So how does it affect mortgage rates?

TAX CREDIT

Signed into law last month by President Bush as part of a bigger housing bill, the $7,500 federal tax credit for first-time homebuyers is aimed at luring those on the fence back into the real estate market. Realtors have been learning more about the tax credit to answer questions from buyers.

SHORT SALES

Short sales are supposed to be a win-win that gets the seller out of a tight spot, a buyer a good deal and the bank off the hook. But they can turn into a minefield of frustration for sellers, potential buyers, real estate agents and lenders. According to David Knight, vice president for Wells Fargo & Co.'s default and retention division, the key to a successful short sale is: "First thing is to contact your servicer and let them know you intend to sell."

COMMERCIAL

Activity is slowing in commercial real estate sectors in response to tightening credit and slow economic growth, according to NAR's latest commercial outlook. "As a result, there's been a slowdown in the net absorption of space, which is leading to higher vacancies and more modest rent growth," says NAR Chief Economist Lawrence Yun.

FLOOD INSURANCE

Florida is the No. 1 state for the national flood insurance program, which fills the void left by standard insurance policies that don't cover damage from rising water. The state accounted for 2.2 million, or 40 percent of the federal program's policies in 2007. To avoid paying too much for their premiums, homeowners should review their flood insurance polices with their agents to be sure they're in the right risk category.