Conventional 30 year fixed rate mortgages continue in the 5.0% and under range for well-qualified borrowers.

The consensus opinion has been that rates will climb when the Fed ceases their MBS purchases on March 31st. However, an article in the Wall Street Journal noted that several analysts surveyed believe it will only raise mortgage rates .15% (as opposed to the expected 1%). That’s good news.

In Snohomish County, there is even talk of a pending lot shortage. Many banks continue to build out the lots they’ve taken back from the builders which greatly reduces their overall loss.

In local news, City Bank lost $38.26 million for the 4th quarter of 2009. Non-performing assets total $425 million, down from $586 million in the 3rd quarter, a solid improvement. However, their Tier 1 Capital Ratio is down to 4.13% from 7.64 in the 3rd quarter. A bank is said to be well capitalized with a minimum ratio of 8%.

Frontier Bank lost $33.9 million for the 4th quarter of 2009. Non-performing assets total $878 million, down from $912 million the previous quarter. Tier 1 Capital Ratio is down to 3.42% down from 4.33%. Shareholders recently approved the expansion of shares from 10 million to 200 million to help raise capital.

The FDIC closely watches the capital positions of banks and seized Horizon Bank earlier this year after a previous warning that it was severely undercapitalized. A run off in deposits by nervous account holders can exacerbate banks’ liquidity issues.

Good News – Washington’s UDSA rural housing office has rapidly caught up on a back log of submissions. They are now only a week behind after previously being close to 60 days out for underwriting. The “Farm Home Loan” program is one of the last 0 down programs.