First the good news: The larger U.S. banks are coming back, and the banking system as a whole is slowly getting healthier.

According to  FDIC’s latest report.  81% of banks were profitable in the third quarter — the highest percentage since the middle of 2008, before Lehman went bust and everything fell apart.

Now the bad news: The number of banks on the FDIC’s “problem bank” list continued to rise — to 860, the highest number since the early 1990s. Most on the list are small to medium size banks.

Click on real estate banking chart to enlarge.

The big question: What impact will the rise in “problem small banks” have on Boston real estate buyers obtaining a mortgage?

Boston real estate agents in my office, are telling me that several of their buyers are jumping through hoops to obtain their mortgage approval. What do you see out there?

If you are a Boston apartment renter you may find this week’s Forbes magazine of interest. Forbes on 10 cities to go from renting to buying:

Whether to rent or buy is a complex decision, but timing is important. In many U.S. cities, the premium to buy–the difference between what you’d pay monthly to own a home, rather than rent–has dropped dramatically. If that’s the case in your metro, the next thing to consider is whether your home will appreciate. In these 10 cities the step up from renting to buying is a much smaller one than usual, according to data from Dallas-based Witten Advisors, an apartment market consulting firm, and the five-year S&P/Case Shiller home price outlook is particularly good. If you’ve been considering trading in your lease for a deed, click ahead for some cities where it might be a good idea to take the plunge.

Yes, Boston made the list. Any Boston renters looking to buy!

File Under: Good nabes.

One of the more interesting numbers to come out yesterday was the cost per marginal homeowner of the $8000 first time homebuyer tax credit. It’s a rather astounding $43,000 per new homeowner. That’s what it costs to lure those that wouldn’t have bought into the housing market.

A couple sites in the blogosphere talked about this, one example is Calculated Risk. From that blog here is how the numbers shake out:

With regards to the tax credit, what really matters is the cost per additional home sold. And as I pointed out earlier today, even using the NAR numbers, the cost per additional home sold is $43.4 thousand.

Here is the math: 1.9 million buyers qualify for the credit (the NAR estimates between 1.8 and 2.0 million) = $15.2 billion.

The NAR estimates the tax credit resulted in 350 thousand additional purchases. So divide $15.2 billion by 350 thousand = $43,000 per additional home. And the numbers will get worse if the program is extended.

Source: Calculated Risk

Click here for a larger version

The Mortgage Bankers Association just released its weekly index of applications to buy a home or refinance a loan, and the numbers aren’t good: it fell last week by 19 percent — the biggest plummet since February. As you can see from the above chart, applications have fallen by over 50 percent since April. The data suggests that the Obama administration’s plans to help out the housing market aren’t entirely working yet.

If your one of the few still buying a Boston condo visit our Boston real estate web site for today’s new listings.

Source: NPR

After all the mortgage fraud, foreclosures and Countrywide did you know that if you go to a mortgage broker he is not bound to work in the best interests of the Borrower? It’s is hard to believe but there you have it. Senator Schuemer of New York has for several years tried make fiduciary part of the mortgage brokers role – but so far it is not.

Just to distinguish Real Estate Agents/Salespeople and Brokers are required to take a fiduciary role with their clients and work in their clients best interests, but Mortgage Brokers do not.

“Chase won’t lend to brokers’ clients anymore. The PMI Group, one of the biggest companies in the mortgage insurance business, flat out refuses to underwrite any policies on loans that started with a broker.

Mortgage brokers work for themselves, not for you. They do not provide a personal shopping service and may compare only a handful of lenders on your behalf. If you want to be sure you’re getting the best rate and the lowest costs, the only way to come close to succeeding is to hunt extensively on your own.”

Some of the best advice about regarding mortgage brokers and bankers is in this article from the New York Times yesterday,
to read more, here.