PHX-EAST-VALLEY-CITIES

When it makes sense to keep an underwater home

2012-01-23T14:30:00.000-08:00

DAILY REAL ESTATE NEWS
Produced by Inman News
January 23, 2012

Sponsored by Lowe's
When it makes sense to keep an underwater home
REThink Real Estate

By Tara-Nicholle Nelson
Inman News®
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Editor's note: This is the first of a two-part series.

Q: At the top of the market, I owned three properties: my first home (in a marginal neighborhood, now about 100 percent upside down), my own residence (a big fixer in a great neighborhood), and a triplex I bought as an investment (an OK neighborhood, needed some work, fully rented, but now upside-down by about 30 percent).

When the market turned, I had a couple of bad tenants in my first home and the triplex that set me way back financially, and I was unable to borrow the money I needed to fix the house I lived in. I did a short sale on the fixer, got temporary loan mods on the other two, and moved back into my first home.

Problem is, they're both so upside-down and don't seem likely to come back up anything soon. I'm 45 years old and have a great job, but I don't like the neighborhood I live in now and I can barely ever save anything because these properties -- which I thought would help fund my retirement -- eat me alive.

Also, I just got word that my loan mod on the triplex is going to expire in January. Should I just sell everything and start over?

A: First, know this: You are not alone. More than 25 percent of home mortgages nationwide are upside-down.

While the majority of Americans have held onto homes with declining and stagnant values in the hopes that the market will recover to avoid locking in their losses, the data is clear on the fact that those who own homes worth less than they owe are the borrowers most likely to fold, short-selling, strategically defaulting or negotiating a "deed in lieu of foreclosure" with the bank.

I don't think data exists on this point, but I suspect these are the borrowers most prone to give up on the excruciating and prolonged path of home retention efforts the most easily. "Why throw good money, time, energy and emotions after bad?" they wonder.

A few years ago, I would probably have fallen into the cheerleader camp, exhorting "Hang on! Hang in there!" Now, though, going into the fifth or sixth year of this real estate recession, depending on whom you talk to, I'm more jaded and realistic.

As I see it, you have two different scenarios that make up your dilemma, and there are a couple of different ways to think about them. First, let's limit the scope of our conversation to the situation on the home you actually live in. Next week, we'll look at the broader constellation of issues you have, including both your residence and the investment property.

My advice to people in your situation is to always go through the preliminary step of getting clear on whether their personal residence still works for their lives as a personal residence.

If you own a home that works well for your life, is affordable and seems like it will continue to be a good fit for your life and your finances in the foreseeable future, I'm generally inclined to advise homeowners to avoid making market-based decisions about whether to continue to hold on to it, whether or not it happens to be upside down.

On the flip side, I've seen numerous situations in which families have expanded or shrunk or need to relocate, rendering the upside-down home a serious mismatch. In these cases, it makes sense to more seriously consider whether to divest.

I'd encourage you to ask yourself that question -- "Does this home 'fit'?" -- regarding your personal residence. You mention the neighborhood weighs against that finding of fit; you might also be thinking that the neighborhood could prolong the "value recovery" timeline.

Take a more holistic viewpoint and make a decision about whether the home overall still works for your life or not -- outside of the context of it being underwater. Whether it does or does not, this knowledge will get you started down the path of cultivating the clarity you'll need to put a full action plan and decision-making process in place. We'll discuss what the rest of that plan looks like next week.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

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Copyright 2012 Tara-Nicholle Nelson

Moving from/to in 2011

2012-01-19T08:24:00.000-08:00

This chart shows people moving from state to state in 2011:

http://www.atlasvanlines.com/migration-patterns/

Fannie Mae Raises Cost of Mortgages

2012-01-18T08:50:00.000-08:00

Here's mortgage giant Fannie Mae's sobering New Year's greeting for homebuyers in 2011: Give me more money!
If you want a loan this year, you're going to have to pay more — thousands of dollars more in some cases — even if you've got stellar credit scores and bundles of cash handy for a down payment.
Things could get much worse if your scores have been sagging with the economy and you don't have much money upfront.
In a Dec. 23 memo to lenders in its network, Fannie announced that it has decided to impose a new schedule of higher add-on fees, similar to what Freddie Mac — the other huge congressionally chartered mortgage investor — rolled out to jeers from the real-estate industry just before Thanksgiving.
Both corporations have required massive federal financial infusions — estimated at close to $150 billion — since the housing market began deteriorating, and now operate under a federal "conservatorship" arrangement.
The Obama administration plans to submit long-promised proposals to Congress this month on what to do with the two — phasing them out, restructuring them, privatizing one or both of them, or other solutions.
But meanwhile, Fannie and Freddie continue to fund or guarantee upward of two-thirds of new mortgage originations. Because of their sheer size and market dominance, they play pivotal roles in determining whether — and how fast — the housing market can rebound.
Their new fees scheduled to start this spring, however, don't appear likely to make financing a home any easier. In fact, some potential buyers who have high credit scores and hefty down payments may be surprised that even they are being targeted for higher "risk-based" fees.
Consider these examples of how Fannie's revised list of loan add-ons will affect borrowers. Say you want to buy a house that requires a $300,000 first mortgage. You have impressive FICO scores — above 800 — and cash for a down payment just under 25 percent.
Purely on the basis of your credit score and loan-to-value (LTV) ratio, Fannie now plans to charge an extra quarter of a percentage point of the loan amount — $750 — to do the deal.
During 2010, by contrast, your substantial down payment combined with your FICO score — signifying virtually no risk of default — would have cost you zero.
Now take the same loan amount, but substitute a lower score and smaller down payment. Say your FICO score is 679, and you have down-payment money just under 20 percent, Fannie will soon begin hitting you for 2 ¾ percent in add-on fees — a staggering $8,250 extra solely attributable to your FICO and LTV.

AZ Republic Article re 800 New Homes Planned

2012-01-13T16:38:00.000-08:00

DMB pursues Mesa subdivision project

800 homes planned for former General Motors Desert Proving Ground

8 comments by Gary Nelson - Jan. 11, 2012 07:00 PM
The Republic | azcentral.com
.

Primed by optimism over the region's future, DMB Associates is aggressively pursuing its development of the former General Motors Desert Proving Ground in Mesa.

DMB, based in Scottsdale, said it would break ground early next year on about 800 homes in nine subdivisions adjoining the first phase of a mile-long "great park" that will run through the center of the project.

DMB planned to roll out a new name for the project during this morning's East Valley Partnership breakfast with Gov. Jan Brewer in Mesa.

The name: Eastmark. It replaces Mesa Proving Ground, which was DMB's previous tag for its property.

"We didn't want to come up with a contrived name, a foreign-sounding name, a flowery name," said Karrin Taylor, a DMB vice president. "It needed to create an identity both geographically and as to importance."

The idea, she said, was to find a name that would resonate outside Arizona as the Gateway area grows in importance.

Eastmark is expected to evolve over the next three or four decades into a dense urban center closely tied to the Phoenix-Mesa Gateway Airport. Eventually, there could be high-rise business districts fronting the airport along Ellsworth Road.

"Eastmark aspires to be the heart and hub for homes and families, the connector for great neighborhoods, education and active centers of commerce, and a vibrant economic engine impacting the entire region," DMB board Chairman Drew Brown said in a news release.

A zoning plan approved by Mesa for the property in 2008 allows up to 15,000 dwelling units of various kinds. Dea McDonald, DMB's vice president for development, said the time had arrived to start building them.

Builders have been signaling for months that they're ready to turn dirt, McDonald said.

"The lights are back on," McDonald said.

He expects DMB and "multiple" developers to close escrow in June, and that Mesa also will approve plans for their subdivisions about that time. McDonald said he cannot reveal the builders' names until deals are finalized.

Taylor said the Gateway area is rapidly making good on the potential that was described in a 2006 Urban Land Institute study that identified the region as a likely future business hub.

Gateway is becoming a hotbed of education, health care and aerospace, she said. Roc Arnett, president of the East Valley Partnership, noted that the airport currently supports about 5,000 jobs -- more than were there during its previous life as an Air Force base.

Taylor cited other indications of southeast Valley prosperity, including Intel Corp.'s growing presence in Chandler and the enhanced tourism expected after Mesa builds a complex for the Chicago Cubs in its northwest corner.

Although the recession hit Arizona hard, she said, "The southeast Valley has weathered this storm better than most."

Because of that, she said, DMB doesn't have to start from scratch with Eastmark.

"A lot of the big master-planned communities that have developed in the last two decades -- ours and others -- you had to create something from nothing," Taylor said. "And here we don't have to create something. It's there -- the components of a great place."

Trevor Barger, who leads DMB's design team, said Eastmark is not going to be a cookie-cutter subdivision.

"Typically, it's much easier to announce that the design is going to be Spanish or Tuscan, and then everybody knows what to design," he said. "This has been taking us back a bit and saying the theme is, not a theme. It doesn't exactly fit a perfect stereotypical category. At the same time it can't be chaos. You have to hold it together."

Narrow streets, distinctive hardware such as streetlights and monument entries to subdivisions will help with that, Barger said. He calls them "memory points."

Neighborhoods will be designed to almost force people to mingle, Barger said.

"If you're moving here, you're not moving here to be alone," he said.

DMB will build and maintain a 10-acre park just west of the new homes and donate it to Mesa. It will have an "event lawn" capable of hosting 15,000 people for community events, DMB's community center and riparian wildlife habitats.

Eventually, the park will stretch north to Warner Road, encompassing 106 acres and in some places providing a direct line of sight to the towers of the still-hoped-for Gaylord resort that is on hold because of the economy.

Although the homes may stay for generations, McDonald said early phases of Eastmark's design will signal that it will always be a work in progress.

"It's difficult to understand a vision that's got a 30- or 40-year runway to it, and that evolves over time," McDonald said.

DMB, founded in 1984, is a real-estate and investment firm with an array of developments in its portfolio.

Copyright: AZ Republic

Read more: http://www.azcentral.com/arizonarepublic/business/articles/2012/01/11/20120111dmb-pursues-mesa-subdivision-project.html#ixzz1jO2zZ1KJ

New Listing

2012-01-13T16:27:00.000-08:00

We have released a new listing today.

Details may be seen at http://1511.dmarq.info/

You will find 45+ pictures of the home at that address.

Denis Marque

denis@denismarque.com

Search AZ MLS with the same software Realtors use!

2011-12-30T10:21:00.000-08:00

Search AZ MLS with the same software Realtors use!

LIVE MLS SEARCH:
http://idx.dmarq.info/

Real estate site will let sellers test the waters

2011-12-30T10:11:00.000-08:00

Real estate site will let sellers test the waters

DAILY REAL ESTATE NEWS

2011-12-12T08:35:00.000-08:00

Inman News™

December 12, 2011 From Inman News

Bank of America survey: Consumers cautious about home affordability
Most consumers still say buying a home is a good investment

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Despite continuing declines in home prices nationwide, 62 percent of surveyed consumers said buying a home in today's market is a good investment over the next 10 years, according to a survey from mortgage lender Bank of America.

Global market research firm Socratic Technologies Inc. conducted the monthly survey, called the Mortgage Index Study, on behalf of Bank of America.

Affordability did appear to be a priority for those survey respondents considering a home purchase in the next 12 months: 62 percent of those respondents had sought advice from a lender or used online tools to help them determine affordable monthly mortgage payments, Bank of America reported.

And overall, respondents' most popular piece of advice to loved ones considering buying a home? Half would warn them "to not buy more house than they can afford."

Survey respondents were more likely to have higher incomes than the general population. In 2010, the median household income was $50,046, according to the U.S. Census Bureau, while more than three out of five survey respondents (61 percent) reported a gross annual income at or above $50,000. Thirty-one percent had an income of less than $50,000 and 8 percent declined to state their income.

The firm surveyed 1,104 consumers nationwide between Sept. 1-27, 2011. To be included in the survey, respondents had to be 21 or older, a primary or joint financial decision-maker in their household, and either currently have a home loan or plan to obtain one in the next 12 months.

Respondents were about evenly split by gender; 72 percent were married; 65 percent had obtained at least a bachelor's degree; and 81 percent were white or Caucasian. Just over half, 52 percent, were employed full time; 12 percent identified as a "homemaker"; 11 percent were retired; 9 percent were employed part time; and 8 percent were self-employed. Only 6 percent were unemployed.

The vast majority of respondents (86 percent) were homeowners. Twelve percent of respondents rented and 2 percent lived with family.

Of those planning to purchase a home in the next year, 74 percent said they plan to use their personal savings for the down payment.

Contact Inman News:

Copyright 2011 Inman News

My Regrets

2011-09-15T15:41:00.000-07:00

All of the blog posted from May 10 through September 9 have disappeared, vanished, become lost. I am not sure I have offended, but it seems further effort may be a waste.

My Regrets,

Denis

Homeowners Expect Prices to Fall

2011-09-15T15:17:00.000-07:00

September 14, 2011 from Realty Times

Homeowners Expect Prices to Fall by Carla Hill

Has renewed concerns over the job market affected the way agents and homeowners feel about the market? HomeGain's nationwide third quarter 2011 home values survey found that forty-seven percent of surveyed real estate professionals nationwide expect home values to decrease over the next six months.

Additionally, an overwhelming majority of buyers feel that homes on the market are still overpriced, with 30 percent reporting they feel homes are overpriced by 10 to 20 percent.

Is this opportunism running rampant? Recent studies in affordability rates could lead us to believe so, as home values have plummeted across the nation and are already at generational highs.

Is the sentiment of overpriced homes a symptom of reduced consumer confidence in the market? Lynn Franco, Director of The Conference Board Consumer Research Center, reported late last month, "Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years. A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence."

On top of these already dismal findings, foreclosures are still a large segment of most area markets. The largest percentage (32 percent) of those surveyed see 10 to 20 percent of the market made up of foreclosed properties.

“Homeowners have joined real estate professionals and now share their dour view on the direction of home prices. Last quarter only 30 percent of homeowners expected home prices to drop in the coming six months while 50 percent of real estate professionals expected price declines. In the current survey 45 percent of homeowners and 47 percent of real estate professionals expect home price declines in the next six months,” said Louis Cammarosano, General Manager of HomeGain.

Are you curious to know which states real estate agents and homeowners think will see price increases in the next six month? HomeGain supplies us with the list.

Arizona

Florida

Texas

California

Ohio

Tennessee

Colorado

Georgia

Virginia

Washington
On the flip side are the 10 states where agents and homeowners expect to see home price declines.

New Jersey

Pennsylvania

North Carolina

Georgia

Virginia

Illinois

Massachusetts

New York

California

Ohio
It's important to point out that several states made both lists. How can this be? It's just another clue that our market is volatile and unpredictable at this time. Too much of the housing market is tied to fluctuations in the jobs and stock market. Yet, real estate is extremely localized as well. You may have a boom market on one side of Ohio while another city across the state experiences declines.

In a down national economy, such as the one currently seen in the states, it's wise to keep an eye on national economic trends in stocks, jobs, and banking. It's also wise to take a hard look at your local economy. It may be the best future indicator of where housing will go in your community in the next six months.

Copyright © 2011 Realty Times. All Rights Reserved.

Lowest Mortgage Rates

2011-05-11T08:32:00.000-07:00

May 11, 2011 from Realty Times

Slow Economic Recovery Produces Lowest Mortgage Rates by Ed Ferrara

After releasing various reports of economic data this past week, it was evident that the economic recovery is at a slower pace than anticipated which, in turn, produced the lowest mortgage rates so far for this year 2011. Towards the end of the week, Freerateupdate.com's daily survey of wholesale and direct lenders showed that conforming 30 year fixed mortgage rates had dropped .125% to a new low of 4.375%. Remaining the same at last week's lows, 15 year fixed mortgage rates are at 3.750% and 5/1 adjustable mortgage rates are at 3.000%. Conforming fixed rate mortgage loans are popular with borrowers who want the same mortgage payment for the life of the loan. Available with 0.7 to 1% origination fee, these are the lowest mortgage rates for borrowers who have good credit and can obtain lender approval.

FHA 30 year fixed mortgage rates are at 4.250%, still lower than conforming 30 year fixed mortgage rates. FHA 15 year fixed mortgage rates are at 4.000% and FHA 5/1 adjustable mortgage rates are at 3.375%, both slightly higher than the comparable conforming mortgage rates. FHA mortgage loans are often used by borrowers, especially first time home buyers, who enjoy the benefit of low down payment requirements. Borrowers who have less than perfect credit also turn to FHA for their mortgage needs. In return for these benefits, FHA closing costs (APR) are higher because of various FHA fees and the upfront mortgage insurance premium.

Holding their own, jumbo mortgage rates are still at favorable lows which is a major benefit for high end borrowers. Current jumbo 30 year fixed mortgage rates are at 5.125%, jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable rate mortgages are at 3.625%, all remaining the same this past week. Jumbo mortgage loans are necessary for mortgage financing above the conforming loan limit which is $417,000 to $729,250, depending on location of the property. These are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee to borrowers who have maintained outstanding credit.

MBS prices (mortgage backed securities) fluctuated over the past week. Mortgage rates move up and down in the opposite direction of MBS prices. With lower mortgage rates in the limelight, there has been an increase in both purchases and refinances as reported by the Mortgage Bankers Association. It was reported that private sector jobs increased which was positive news. On the other hand, jobless claims increased as well as the unemployment rate for the month of April. While the positive news indicates an economic recovery, the negative news reflects a weaker and slower recovery. These mixed reports have continued to create uncertainty for investors trying to determine which ones reflect the true state of the economy. At the end of last week, the price of crude oil dropped significantly bringing about more questions. Crude oil prices quickly rebounded today. In the end, negative economic news has been resulting in lower mortgage rates which is a plus for borrowers, especially as the home buying season is under way.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

Click here for today’s new york mortgage rates.

Copyright © 2011 Realty Times. All Rights Reserved.

Affordability Reaches Generational High

2011-05-05T08:34:00.000-07:00

May 5, 2011 from Realty Times

Affordability Reaches Generational High by Carla Hill

If you have good credit and savings, now is a great time to buy. According to Zillow.com, "Homes are more affordable than they’ve been in the past 35 years."

Not only have home values fallen in many key markets, making homeownership more accessible to the average buyer, interest rates are at historic lows, meaning that once a home is purchased, monthly payments are smaller than in our recent past.

Zillow notes that "today’s median home buyer can expect to pay about 17% of his monthly gross income on his mortgage, compared to a 25% average since 1975."

In the 1980's, when interest rates were dangerously near 20 percent, this would take up nearly 45 percent of a buyers gross monthly income. In comparison, today's rates are an extreme bargain.

The main road block to homeownership at this time is access to credit. Although nearly one-third of all home purchases in recent months have been all-cash, that leaves the majority of the market shares requiring financing.

The tightening of lending standards in recent years, though, has been in direct response to the subprime lending trend during the housing boom.

Federal Reserve research indicates that a quarter of all mortgages in 2006 were subprime. This means that these loans were made to borrowers with credit scores below 620-660 and who were unable to put down the traditional 20 percent.

Today, buyers need credit scores in the 700s, with the higher the better. According to Zillow, "Applicants with FICO scores under 620 were virtually unable to get loans at any rate, thus being effectively excluded from the home-buying market. And those with FICO scores below 620 represent almost a third of the population."

There has also been a return of the 20 percent downpayment. This is in your best interest, as it means savings when it comes to closing costs. "The difference between a 10% and 20% down payment means she now has to save up another $17,220 in addition to any closing costs." (Zillow)

So, while it is more difficult for many homeowners to get into the market in today's economy, for buyers who have good credit and adequate savings, homes may never have been more affordable.

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates Keep Going Lower

2011-05-04T09:47:00.000-07:00

May 4, 2011 from Realty Times

Mortgage Rates Keep Going Lower

Each time economic data is released or major events happen anywhere in the world, markets react in some sort of way. Lately, markets have been somewhat subdued as the reports have been mixed with both good and not so good data, although it has been positive for mortgage rates which keep going lower. Freerateupdate.com's daily survey of wholesale and direct lenders show that mortgage rates changed this past week for the better.

Conforming 30 year fixed mortgage rates started the week at 4.750%, dropped by .250% and now are at 4.500%. 15 year fixed mortgage rates also dropped by the same .250% and are at 3.750%. 5/1 adjustable mortgage rates are at 3.000%, a drop of .125%. These are the best mortgage rates available with 0.7 to 1% origination fee for well qualified borrowers. After remaining stable for some time, mortgage rates seem to be heading lower at what is usually one of the busiest seasons of the year.

FHA mortgage rates also repriced for the better. FHA 30 year fixed mortgage rates are at 4.250%, and FHA 15 year fixed mortgage rates are at 4.000%, both down .250%. FHA 5/1 adjustable mortgage rates are at 3.375%, down .275%. FHA mortgage loans offer a low down payment, but borrowers must be prepared to pay additional FHA fees and an upfront mortgage insurance premium which results in higher FHA closing costs (APR). FHA's recent increase in the annual mortgage insurance premium has resulted in a slow down of recent FHA mortgage applications.

Jumbo mortgage rates also did well this past week which should be a boost for high end home buyers. Jumbo 30 year fixed mortgage rates decreased by .250% and are at 5.125%. Jumbo 15 year fixed mortgage rates went from 5.000% in the early part of the week to 4.500% in the latter part of the week. Jumbo 5/1 adjustable mortgage rates are at 3.625% which is a decrease of .250%. With outstanding credit, borrowers can obtain these low jumbo mortgage rates with 0.7 to 1% origination fee. This week's economic data had mixed results on MBS prices (mortgage backed securities) as data continued to roll in. MBS prices affect mortgage rates which move in the opposite direction. While new home sales came in stronger, home prices continued to decline. Consumer sentiment increased and personal income rose at the same time that unemployment claims increased. With gas prices heading up, everyone will be watching to see what impact this is going to have on the already slow economic recovery.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

Copyright © 2011 Realty Times. All Rights Reserved.

Sales Across the Nation

2011-05-02T07:54:00.000-07:00

May 2, 2011 ON Realty Times

Real Estate Outlook: Sales Across the Nation by Carla Hill

It's all about sales this week, with the most recent reports coming out on existing-home, new home, and pending home sales.

According to the National Association of Realtors® (NAR), existing-home sales rose in March, up 3.7 percent. The NAR expects existing-home sale to rise around 5 to 10 percent this year, thanks to high levels of affordability, rising rent costs, and job growth.

In new homes, a segment of the market that took a big hit during the recession, sales were up a healthy 11.1 percent in March.

National Association of Home Builders' Chief Economist, David Crowe, reports, "The March pace of new-home sales more accurately reflects current market conditions than the extremely low pace we saw in the first two months of this year, when unusually poor weather likely kept buyers away. That said, the average sales pace for the first quarter of 2011 held at about the same level seen for the last half of 2010. A limiting factor is the extremely thin inventory of new homes for sale, which is now at its second-lowest level in history. Builders continue to confront major challenges in obtaining financing to build new homes, and the shortage of new product makes it that much tougher for them to compete with existing homes on the market. At the same time, tighter lending conditions are making it more difficult for qualified buyers to obtain a mortgage."

Regionally, all areas except the South saw a rise in sales of newly built homes. The Northeast led the way with a 66.7 percent gain. The West posted a distant second at a 25.9 percent gain, and the Midwest saw a still impressive rise of 12.9 percent.

The inventory of new homes for sale fell to 183,000 units in March, which is the second-lowest level on record. This represents a 7.3-month supply at the current sales pace.

Pending home sales were also on the rise. After an uneven recovery the past nine months, the NAR's Pending Home Sales Index saw contract signings rise 5.1 percent. This is still down over 11 percent from March 2010.

Lawrence Yun, NAR chief economist, said home sales activity has shown an uneven but notable improvement. “Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” he said. “The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards.”

Regionally, all regions except the Northeast saw rises, though every region is still below last year's levels. Most are between 10 and 20 percent below March 2010 levels.

The largest increase month over month was seen in the South, rising 10.3 percent.

Continued strides in the job market and economy will help to foster more growth in the housing sector. If recession recovery continues, the housing market should continue to post gains in the months ahead.

Copyright © 2011 Realty Times. All Rights Reserved.

Low Mortgage Rates

2011-04-28T07:48:00.000-07:00

April 27, 2011 from Realty Times

Low Mortgage Rates a Plus for Improving Housing Market
by Ed Ferrara

This past week's released economic data reports came from several housing market areas, all of which showed some improvement over the past month. At the same time, Freerateupdate.com's daily survey of wholesale and direct lenders show that mortgage rates have continued to remain stable and at low levels for the past week.

Conforming 30 year fixed mortgage rates are at 4.750%, 15 year fixed mortgage rates are at 4.000% and 5/1 adjustable mortgage rates are at 3.125%. Conforming mortgage loans require good credit in order to obtain lender approval and the lowest mortgage rates with 0.7 to 1% origination fee. Conforming 30 year and 15 year fixed rate mortgages are the most popular of this group because they offer security with a consistent mortgage payment over the life of the loan.

The trend with borrowers for several years continues to be FHA mortgage loans. FHA 30 year fixed mortgage rates are at 4.500%, FHA 15 year fixed mortgage rates are at 4.250% and FHA 5/1 adjustable mortgage rates are at 3.750%. For borrowers who have a limited amount of available funds, FHA mortgage loans offer a low down payment option, as well as easier credit qualifying. FHA also accepts gifts from several sources that can be used for the down payment. These benefits often override any FHA downsides, such as higher FHA closing costs (APR) due to the upfront mortgage insurance premium and other various FHA fees.

Jumbo mortgage interest rates continue to be consistently low and beneficial for the high end borrower. Jumbo 30 year fixed mortgage rates are at 5.375%, jumbo 15 year mortgage rates are at 5.000% and jumbo 5/1 adjustable mortgage rates are at 3.875%. Borrowers need jumbo mortgage loans for mortgage financing above the conforming loan limit which is $417,000 to $729,000 depending on location. In order to obtain these low jumbo mortgage rates with 0.7 to 1% origination fee, borrowers must have outstanding credit and the ability to meet approval guidelines set by lenders.

MBS prices (also known as mortgage backed securities) are dependent upon market conditions and investor sentiment. Mortgage rates move in the opposite direction of MBS prices. Recent data released showed a very necessary improvement in the sluggish housing market. For the month of March, housing starts saw a jump, existing home sales increased and home mortgages rose. Yesterday, the Census Bureau and Department of Housing and Urban Development reported that new home sales were stronger than expected. Through all of this, MBS prices fluctuated a little in both directions, but never enough to make a change in mortgage.

Copyright © 2011 Realty Times. All Rights Reserved.

Builder Confidence and Existing-Home Sales

2011-04-25T08:09:00.000-07:00

April 25, 2011 from Realty Times

Real Estate Outlook: Builder Confidence and Existing-Home Sales
by Carla Hill

The prevalence of short sales and foreclosures has prompted a new bill to be considered in Congress. According to the National Association of Realtors, this new bill could "improve the process for approving short sales" and "bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure."

The process in place now is said to be time-consuming and inefficient.

Ron Phipps, NAR President, says, "As the leading advocate for home ownership and housing issues, Realtors® want to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time. Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community."

And communities need all the help they can get. Builder confidence for newly built, single-family homes fell in March, leaving the Index almost stagnant for the last 6 months. According to the National Association of Home Builders (NAHB), the South was to largely blame, dropping 4 points on the Housing Market Index scale.

"The spring home buying season is getting off to a slow start due to persistent concerns about home values as more foreclosures seem to be hitting the market, increasingly restrictive lending requirements for home buyers and builders, and the slow pace of economic recovery," acknowledged NAHB Chief Economist David Crowe. "While pockets of improving activity are appearing in some markets, the best sales activity appears to be happening in the lower price ranges, where first-time buyers have greater flexibility than repeat buyers who must sell their current home. Consumers who can take advantage of today’s low mortgage rates and very attractive pricing are finding bargains and are buying."

The good news for builders? Nationwide housing starts rose by 7.2 percent in March, according to the U.S. Commerce Department. Bob Nielsen, chairman of the National Association of Home Builders (NAHB), says, "While the overall rate of new-home production remains quite low and is still being weighed down by significant uncertainties among both home builders and buyers, this latest report is encouraging. It means that some builders are cautiously beginning to re-stock their extremely thin inventories of new homes in anticipation of gradual improvement in consumer demand as the economy slowly inches toward recovery."

All regions except the Northeast experienced gains in March. The West led the way with a 37.1 percent gain. The Midwest and South gained 6.9 and 6.3 percent, respectively.

And the sale of existing-homes rose in March, as well. This continues the uneven recovery we've been experiencing.

Lawrence Yun, NAR chief economist, expects this improving sales pattern to continue. "Existing-home sales have risen in six of the past eight months, so we’re clearly on a recovery path," he said. "With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain – primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows."

And single-family home sales rose 4.0 percent to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5 percent below the 4.76 million level in March 2010. The median existing single-family home price was $160,500 in March, down 5.3 percent from a year ago. Median prices were down in all regions, ranging from 3.0 to 11.2 percent below year ago levels.

Regionally, existing-home sales rose 3.9 percent in the Northeast, but are 12.1 percent below March 2010. The Midwest saw just a 1.0 percent gain and is still 13.1 percent below year ago levels. The West dropped a marginal 0.8 percent and the South actually rose 8.2 percent.

Buyers are expected to return to the market, though. NAR President, Ron Phipps, reports, "As buyers gain more financial security, the advantages of home ownership become more obvious."

Copyright © 2011 Realty Times. All Rights Reserved.

The Numbers on Buying a House

2011-04-09T09:16:00.001-07:00

April 7, 2011 from Realty Times

The Numbers on Buying a House by Carla Hill

It can be a tricky question. How much home can you really afford? From employment status, to savings, downpayment, and even spending habits, there are a myriad of factors that come into play.

Here is a list of items to consider before settling on a budget.

1. Monthly Payment: Conventional wisdom tells us that your mortgage payment should be no more than 28 of your gross monthly income. This means that if you make $50,000 a year, the maximum amount you would safely want to pay each month is $1,166. How do you figure this for you own salary? Take ___ (salary) x .28 = total dollar amount for year. Then divide the total dollar amount by 12 (months in the year) and there you have it!

The National Association of Realtors also gives this simple equation for renters to use to figure out how much they can afford. Multiply your rent by 1.32 and that will equal your affordable mortgage payment.

2. Job Security: Have you just switched jobs? Is your company experiencing layoffs? In times of economic uncertainty, you may find it best to stay put. This is why many economic analysts keep saying that a housing recovery is dependent on a jobs recovery. When jobs return, so will the buyers.

3. Savings: The state of American savings is scary. According to Visual Economics.com, the average family has $117,951 worth of debt and only $3,800 in savings.

And a quarter of Americans have no savings at all! Half have nothing saved for retirement. Talk about crossing your fingers that social security will hold out for a while.

New grads are encountering an even scarier situation. The average college graduate has well over $20,000 in student loans to repay, and according to the New York Times, "Paying back student loans is likely to be especially difficult for recent graduates ... because the unemployment rate for college graduates ages 20 to 24 was 8.7 percent in 2009 — the highest annual rate on record and a substantial rise from 5.8 percent in 2008."

How does your debt-to-income ratio stack up? The Federal Reserve thinks debt adding up to more than 40% of your gross income could indicate financial distress.

The U.S. savings rate has risen steadily since the recession hit. It is now at 5.8 percent (American Express Spending & Saving Tracker). Hopefully, this rate will continue to be a trend.

4. Emergency Fund: Before you even begin to think about buying a house or moving, you must have an 8-month emergency fund in the bank. This means you need to add up your living expenses for a month. Include all the necessities and things that must be paid (rent or mortgage, car payments, insurance, food, gas money, electric, phone, tuition, day care, etc). Then multiply this number by 8. You must have this in case you or your spouse loses your job, gets sicks, or some other disaster hits your family.

5. Downpayment: This is savings in addition to your 8-month emergency fund. And a downpayment should be at least 20 percent of your purchase amount.

Look at it this way. If your monthly expenses are $2,000 a month and you want to buy a $100,000 house, you'll need a bare minimum of $36,000 in the bank to truly afford this move. That doesn't include cash needed for closing costs, repairs, moving expenses, and renovation.

6. Lifestyle and Extraneous Factors: Everyone has different wants and needs. You may be fine spending a little more for the house of your dreams in exchange for taking fewer vacations. Others abhor the statement, "house rich, cash poor," and instead would rather have funds for shopping, dining out, and travel. And don't forget about extraneous factors, such as aging parents, car repairs and maintenance. Things may come out of nowhere!

Buying a house is a fulfilling experience, but it comes with a lot of financial responsibility that shouldn't be taken lightly. Be sure to mull these items over when considering a buy.

Copyright © 2011 Realty Times. All Rights Reserved.

Discounted Home Prices

2011-03-31T09:17:00.000-07:00

March 31, 2011 from Realty Times

Spring Market Conditions Bode Well For Discounted Home Prices by Broderick Perkins

Optimism about the housing market isn't quite sweeping the nation, but Americans remain sold on the value of home ownership at a good time to be bullish about buying a home.

With home sales and prices still falling, the spring could shape up as an opportune time to make a deal.

The housing downturn hasn't shaken consumers' resolve to consider home ownership an integral part of an American Dream, even among home owners with homes that have lost value.

The eighth quarterly "Allstate-National Journal Heartland Monitor Poll: The American Dream" revealed that nearly nine out of 10 homeowners say they would buy their same homes again.

Among those with homes with lost value, the same percentage said they would buy their home again.

Also, seven of 10 Americans say they would advise a friend or family member to buy a home as a long-term asset.

The spring could be a good time to take that advice.

Existing-home sales, completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from 5.40 million in January. February 2010 sales were 2.8 percent below the pace in February 2010, according to the National Association of Realtors (NAR).

The slow sales pushed the median price down to $156,100, the lowest level since February 2002, setting the stage for spring bargains.

Some experts say the housing market is years away from a full blown recovery and the home buyer tax credit is kaput. However, improvements in employment and manufacturing and other economic sectors, bargain home prices and affordable interest rates could light a fire under buyers who've been sitting on the fence.

"Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," said Lawrence Yun NAR chief economist.

The Allstate survey of 1,000 Americans also found.

• Buying a home was the best investment among 24 percent, behind "investing in retirement savings" (38 percent), but ahead of "saving money in the bank" (20 percent), and "investing in the stock market" (6 percent).

• A majority, 58 percent of those who believe the housing crisis will remain a serious problem would still recommend buying a home.

• Americans are evenly split on whether the federal government should continue policies to encourage home ownership at the same level (46 percent) or scale them back because they cost too much (46 percent).

• More than half of Americans (52 percent) blame the housing crisis on banks and lending institutions for misleading borrowers and approving bad loans, while 32 percent blame people who bought homes and took out mortgages they couldn't afford, and only 12 percent blame government policies that encouraged too many people to try to own their own homes.

"Owning a home continues to be the bedrock of the American Dream – even as incomes are down, jobs are scarce and families struggle to make ends meet," said Thomas J. Wilson , Allstate chairman, president and chief executive officer.

"Homeownership is viewed positively by the vast majority of Americans as both a place to raise a family and a sound investment," he added.

Copyright © 2011 Realty Times. All Rights Reserved.

Fixed-Rate Mortgage Drops

2011-03-20T09:45:00.000-07:00

March 18, 2011 from Realty Times

30-Year Fixed-Rate Mortgage Drops Amid Japan Crisis

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS), which shows the 30-year fixed-rate dropping to 4.76 percent while the 15-year fixed-rate hit its lowest rate at 3.97 percent since December 2010.

30-year fixed-rate mortgage (FRM) averaged 4.76 percent with an average 0.7 point for the week ending March 17, 2011, down from last week when it averaged 4.88 percent. Last year at this time, the 30-year FRM averaged 4.96 percent.

15-year FRM this week averaged 3.97 percent with an average 0.7 point, down from last week when it averaged 4.15 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.57 percent this week, with an average 0.6 point, down from last week when it averaged 3.73 percent. A year ago, the 5-year ARM averaged 4.09 percent.

1-year Treasury-indexed ARM averaged 3.17 percent this week with an average 0.6 point, down from last week when it averaged 3.21 percent. At this time last year, the 1-year ARM averaged 4.12 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, reports, "With the crisis in Japan, investors rushed to buy the security of U.S. Treasury bonds , which lowered its yields and other interest rates as well. This allowed fixed mortgage rates to drift lower this week."

"In aggregate, families have been strengthening their balance sheets. In the fourth quarter of 2010, household net worth rose by $2.1 trillion, boosted by gains in the stock market. This helped lower their financial obligation ratio (debt payments relative to disposable income) to the lowest level since the first quarter of 1995."

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates Continue Downward Trend

2011-03-16T09:58:00.000-07:00

March 16, 2011 from Realty Times

Mortgage Rates Continue Downward Trend by Ed Ferrara

After seeing no movement for most of last week, mortgage rates declined today continuing a three week downward trend. Freerateupdate.com's daily survey of wholesale and direct lenders show that conforming mortgage rates all declined by .125%. Conforming 30 year fixed rate mortgages are at 4.625%, 15 year fixed rate mortgages are at 3.750% and 5/1 adjustable mortgage rates are at 3.000%. These are the best conforming mortgage rates available with 0.7 to 1% to borrowers with good credit and the ability to meet lender approval. The most popular of these are the fixed rate mortgage loans which offer borrowers the security of monthly mortgage payments that remain the same throughout the life of the loan.

FHA mortgage rates had mixed results this week. FHA 30 year fixed mortgage rates saw a decrease of .125% and are at 4.375%, FHA 15 year fixed mortgage rates remain unchanged and are at 4.000% and FHA 5/1 adjustable rate mortgages are at 3.750% which is an increase of .250%. FHA mortgage loans continue to be popular with borrowers, especially first time home buyers due to FHA low down payment requirements and easier credit qualifying guidelines. On the other hand, borrowers must pay higher FHA closing costs (APR) because FHA charges various fees and an upfront mortgage insurance premium.

Jumbo mortgage rates saw the same downward slide as conforming mortgage rates. Jumbo 30 year fixed mortgage rates are at 5.250% which is a decrease of .125%. Jumbo 15 year fixed mortgage rates are at 5.000% and Jumbo 5/1 adjustable mortgage rates are at 3.625%, both down .250%. These low jumbo mortgage rates are available to well qualified borrowers with 0.7 to 1% origination fee. Jumbo mortgage loans are necessary for mortgage financing above the conforming loan limit which is $417,000 to $729,250 depending on the location of the property.

Mortgage rates move up and down and in the opposite direction of MBS prices (mortgage backed securities). This past week, economic data released included the increase in unemployment claims, the rise of wholesale inventories and sales and the increase in retail trade sales. While responding lightly to these reports, the most movement for MBS prices came from the continued unrest in the Middle East. In addition, the recent earthquake and tsunami in Japan has investors concerned about the economic recovery on a worldwide scale which has had the strongest affect on MBS prices that ultimately resulted in the reduction of almost all mortgage rates.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1 point origination.

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates ...Show Improvement

2011-03-09T08:47:00.000-08:00

March 9, 2011 from Realty Times

Mortgage Rates Today: Home Mortgage Rates Continue to Show Improvement by Ed Ferrara

Over the past week, mortgage rates continued to show improvement with a decrease of .125% for conforming 15 year fixed mortgage rates and 5/1 ARM loan rates. Freerateupdate.com's daily survey of wholesale and direct lenders show that 30 year fixed mortgage rates are at 4.750%, 15 year fixed mortgage rates are at 3.875% and 5/1 adjustable mortgage rates are at 3.125%. Conforming fixed rate mortgage loans continue to be popular with borrowers who want the security of a set monthly mortgage payment for the life of loan and are available with 0.7 to 1% origination fee to those with good credit.

Remaining unchanged, FHA 30 year fixed mortgage rates are at 4.500% and FHA 15 year fixed mortgage rates are at 4.000%. FHA 5/1 ARM loan rates are at 3.500% which is a decrease of .125%. FHA fixed mortgage rates continue to be competitive with conforming fixed mortgage rates, although FHA mortgage loans offer several benefits to borrowers including a low down payment requirement and easier credit qualifying. Borrowers must pay higher FHA closing costs (APR) because FHA charges an upfront mortgage insurance premium and other various fees. Jumbo mortgage rates saw no changes over the past week.

Jumbo 30 year fixed mortgage rates are at 5.375%, jumbo 15 year fixed mortgage rates are at 5.250% and jumbo 5/1 ARM loan rates are at 3.875%. Jumbo mortgage loans are required for mortgage financing above the conforming loan limit which is $417,000 to $729,250 depending on the property location. Available with 0.7 to 1% origination point, these are the best jumbo mortgage rates offered to well qualified borrowers.

MBS prices (mortgage backed prices) affect mortgage rates which move in the opposite direction. MBS price movements continue to be unpredictable and not necessarily dependent on the economic data reported. This past week's reports included an increase in private sector jobs, a decrease in weekly jobless claims and a lower unemployment rate. Although mortgage rates are down, MBA reported weekly purchase and refinance activity down. Regardless of economic reports released, the tensions in the Middle East continue to be driving the emotions of investors and causing market volatility.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1 point origination.

Current California Mortgage Rates

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates Ease Down

2011-03-05T09:21:00.000-08:00

March 2, 2011 in Realty Times

Mortgage Rates Ease Down to Better Pricing by Ed Ferrara

This past week mortgage rates eased down to better pricing which is positive news for borrowers. Freerateupdate.com's daily survey of wholesale and direct lenders show that current 15 year fixed mortgage rates are at 3.875% after two decreases over the past week while 30 year fixed mortgage rates remain the same at 4.750%. 5/1 ARM loans rates also decreased .125% to the current 3.125%. Available with 0.7 to 1% origination fee, these are the best mortgage rates available to borrowers who have good credit and the ability to meet lender guidelines.

FHA 30 year fixed mortgage rates decreased .125% and are at 4.500% while FHA 15year fixed mortgage rates remain the same at 4.000%. FHA 5/1 adjustable mortgage rates also decreased .125% and are at 3.500%. Offering the benefit of a low down payment, FHA mortgage loans continue to be popular with borrowers even though FHA closing costs (APR) are higher due to various FHA fees and the upfront mortgage insurance premium.

Jumbo mortgage loans also saw improvement this week. Jumbo 30 year fixed mortgage rates are at 5.375% and jumbo adjustable mortgage rates are at 3.875%, both decreasing .125%. Jumbo 15 year fixed mortgage rates remain the same at 5.250%. Jumbo mortgage loans are necessary for mortgage financing above the conforming loan limit which is $417,000 to $729,250 depending on the area. For well qualified borrowers, these are the best jumbo mortgage rates available with 0.7 to 1% origination point.

MBS prices (mortgage backed securities) saw the highest jump last Tuesday which resulted in the decline of mortgage rates. Mortgage rates move in the opposite direction of MBS prices. The current unrest in the Middle East has caused investors to move money into safe investments this past week. Although pending home sales was below expectation, other economic data releases included higher consumer confidence, increased existing home sales, lower jobless claims and an increase in personal income, all of which point to a slow but steady economic recovery.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1 point origination.

California Mortgage Rates

Massachusetts Mortgage Rates

Texas Mortgage Rates

Copyright © 2011 Realty Times. All Rights Reserved.

Existing-Home Sales Rise

2011-02-28T08:49:00.000-08:00

February 28, 2011 from Realty Times

Real Estate Outlook: Existing-Home Sales Rise by Carla Hill

The housing market continues to keep experts and analysts on their toes.

While existing-home sales rose again in January and are outpacing year-ago levels, we are still seeing a drop in home prices across much the country.

Existing-home sales increased 2.7 percent in January and are 5.3 percent above January of 2010.

Lawrence Yun, NAR chief economist, sees the rise as positive, but with room for improvement. "The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence," Yun said. "The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity."

Regionally, the West saw the largest existing-home sales increase. In the West they rose 7.9 percent and are 7.0 percent above January 2010. The Midwest and South also saw monthly rises -- up 1.8 and 3.6 percent respectively.

The Northeast didn't fare as well. The Northeastern region is down 4.6 from December and down 1.2 from year ago levels.

The most recent reports from the Case-Shiller Index have brought on a slew of comments from the experts. The Case-Shiller quarterly index showed prices fell 3.9 percent in the fourth quarter and 4.1 percent for all of 2010.

Karl Case reports that the housing market is "a rocky bottom with a down trend." And, unfortunately, he was the optimist!

Mr. Robert Shiller, on the other hand, reported that the increased precedence of foreclosures, as well as the impending decisions over the future of Freddie Mac and Fannie Mae, leaves risk of future declines at 15 to 25 percent.

Realty Trac reports that 26 percent of all homes sold in 2010 were foreclosures and short sales. The states with the largest percent of distressed sales were Nevada, at 57 percent of all sales; Arizona, at 49 percent; California, 44 percent; and Florida 36 percent.

It's the slow jobs recovery that is partially to blame for this second hit on the housing market, however, new reports from the Labor Department indicate that jobless claims fells again last week. It is now at the lowest levels since late July 2008.

This is a bit of welcome news for a market that is yearning for a bright spot.

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates This Week Better

2011-02-27T07:50:00.001-08:00

February 24, 2011 from Realty Times

Fixed Mortgage Rates This Week Better For Borrowers by Ed Ferrara

After slight movement early last week, mortgage rates ended up looking better for borrowers with a decrease of .125% for conforming 30 year and 15 year mortgage interest rates making them more competitive with FHA mortgage rates.

FreeRateUpdate.com's daily survey of wholesale and direct lenders show that current 30 year fixed mortgage rates are at 4.750% and 15 year fixed mortgage rates are at 4.125%. 5/1 adjustable mortgage rates are at 3.250%. Still remaining below 5%, these are the best mortgage rates available with 0.7 to 1% origination fee to well qualified borrowers who can also meet lender approval.

FHA 5/1 adjustable mortgage rates increased .125% and are at 3.625%. >FHA 30 year fixed mortgage interest rates are at 4.625% and FHA 15 year fixed mortgage interest rates are at 4.000%, both remaining the same.

FHA mortgage loans continue to attract borrowers for the benefits they offer such as the low down payment requirement although FHA closing costs (APR) are higher due to the upfront mortgage insurance premium and other applicable FHA fees. Coming April 18th, FHA is increasing the annual mortgage insurance premium by .25% for FHA 30 year and FHA 15 year fixed rate mortgage loans.

Jumbo 15 year fixed mortgage rates saw the biggest jump increasing .250% and are at 5.250%. Jumbo 30 year fixed mortgage rates are at 5.500% and jumbo 5/1 ARM loan rates are at 4.125%, both remaining the same. Jumbo mortgage loans are available for borrowers in need of financing above the conforming loan limit which is $417,000 to $729,250 depending on location. Available with 0.7 to 1% origination fee, these low jumbo mortgage rates can still be obtained by borrowers who have outstanding credit.

MBS prices (mortgage backed securities) have fluctuated each day this past week depending on the news and investor reaction. Mortgage rates increase and decrease in the opposite direction of MBS prices. After Tuesday's mixed results, mortgage rates stabilized for the rest of the week upon the release of the producer price index,, the consumer price index and housing starts which all came in better than expected.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1 point origination.

Today’s New York Mortgage Rates

Copyright © 2011 Realty Times. All Rights Reserved.

When will it end

2011-02-24T07:47:00.000-08:00

Taken from responses to the question "When will it end?" by other Realtors.

1) As long as the banks are involved in real estate transactions which they know nothing about, it probably won't end for years to come. These banks are unbelievable. They just sent us a short sale package back saying that the word "Phoenix" was abbreviated "Phx" and it need to be spelling out on the listing contract. Once it was corrected, it took them two weeks to come back and demand that all parties sign the listing contract. Say what? Since when does a buyer get to look at listing contracts between the seller and broker?

Problems like this one are occurring every day. Yes, I wonder too, when will it end?

2) It will end when the large prevelent foreclosures and short sales end. I agree with (above), each bank/company has their own rules for these properties. It is not a matter of understanding how to deal with the foreclosure, because it is almost impossible to learn all the different rules.

3) Good question! I definitely agree with both (of the above), but would add that until unemployment abates and jobs open up or are created, we will continue to have issues.

4) There is also the perception by consumers that the market is in complete disarray and they are waiting for it to return to "normal." There are almost no buyers in the market because they think prices will continue to drop. Potential sellers know they are going to take a beating if they try to sell. They all think that, at some point, the market will return to where it was. Until consumers realize that this, in many ways, is the new normal, buyers and sellers will continue to sit on the sidelines.

Then there is the issue of financing. But I'll leave that for another commenter.

ED Comment: These are the views of four Realtors that offer reflection of where the market is and when will we see some stability return. "Normal" is not a return to our past, it is where we are today and for the foreseeable future. If you are sitting on the fence, waiting will not provide a better time to act for several years to come.

Denis

Buy and Bail

2011-02-23T09:48:00.000-08:00

Advice from Craig Bohall, Mortgage Lender.

Buy and Bail = Buy a new house and Bail (walk) on the one you are currently living in!

or

Bail and Buy = Bail or walk on a home that 1 spouse was obligated on and then buy a new home using only the 2nd spouses credit.

This has become a huge issue in the country as there were rules a few years ago that allowed you to buy a home and not have some things checked out . Not any more. Fannie, Freddie and the Govt have closed every loophole they could find to stop all related tactics.

These situations have become more prevalent with the decline in market values.

Buy and Bail - They are usually at a high risk of occurrence when:

1. A borrower is moving to a new home in the same market and keeping current residence, especially when they owe more on their current home than its current value and they can purchase a similar property or larger size home for less. This risk still exists when a borrower is not purchasing in the same market.

Investors are cracking down hard on mortgage companies that don’t sniff this out ahead of time and there are huge penalties for lenders who loan money to people and then those people bail on another home!

Bail and Buy – These are at a high risk of occurrence when:

1 A non-purchasing spouse (#1)is in default/foreclosure/short sale on the property currently serving as the primary residence of the purchasing spouse (#2).

These transactions also show up when the non-purchasing spouse has had a previous foreclosure/short sale/deed-in-lieu within the last 12 months on any property that our borrower was party to either due to occupancy of the property or by marital knowledge (borrower was married to non-purchasing spouse at the time of event, property was indicated on joint tax returns, etc.)

So just because your spouse is not on this new loan but he/she had a foreclosure/short sale / deed-in-lieu recently does not mean that “nobody will find out” - TRUST ME they find out everything!

Without getting into the 50 new guidelines and rules and ways that information can be gathered on your residence, home, mortgage, history, tax records, IRS files etc……. just pleeeeeeeeeese believe that trying to buy and bail or bail and buy will likely not work because there are thousands of underwriters, guideline writers, govt officials and bank auditors, and govt policy writers who all combined have thought of all the ways you can possibly think of to sneak past the system and they have 20 systems that you don’t even know about.

Don’t do it!

Craig Bohall

Your “Safe Harbor” Lender

480-344-2852 – office

480-374-6946 - e-fax

craig@myazmp.com

www.myazmp.com

5304 E Southern Ave #101

Mesa AZ 85206

NMLS 233903

MB-0904081

Housing Affordability Reaches 20 Year High

2011-02-23T07:09:00.000-08:00

Realty Times February 23, 2011

Housing Affordability Reaches 20 Year High
by Carla Hill

Housing affordability is higher today than it has been for decades. What does this mean for today's buyer? It means now is the time to buy.

According to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data, "73.9 percent of all new and existing homes sold in the fourth quarter of 2010 were affordable to families earning the national median income of $64,400."

"Today's report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "However, while this is good news for consumers, both home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales."

Are you looking for the best of the best when it comes to affordable markets? Indianpolois-Carmel, Indiana, is a great place to start. It was ranked as the most affordable housing market in the entire country. Ninety-three percent of homes sold in the city were affordable to households earning to area median of $68,700.

On the opposite end of the spectrum, Santa Cruz-Watsonville, CA, was ranked as the least affordable city in the country. Only 45 percent of homes were affordable to families making the median household income of $84,200.

Also near the bottom of the list, according to the NAHB, were: Ocean City, N.J; San Luis Obispo-Paso Robles, Calif.; Laredo, Texas; and Santa Barbara-Santa Maria-Goleta, Calif.

Nearly all of the lowest range major metrol areas were in California, which is not surprisingly considering the housing bubble that formed in the early 2000s.

Copyright © 2011 Realty Times. All Rights Reserved.

Don't Be Mystified By The Mortgage Maze

2011-02-17T08:43:00.000-08:00

February 17, 2011 - Realty Times

Don't Be Mystified By The Mortgage Maze by Broderick Perkins

Years after the housing market tanked and sank the economy, more than 70 percent of Americans say getting a mortgage today is a serious national problem, according to a new study by MortgageMatch.com, a home loan and information site operated by Move, Inc.

According to the MortgageMatch.com survey, today's lending environment is so confusing many borrowers are experiencing high levels of stress and frustration.

More than one in five recent home buyers (20.9 percent) told MortgageMatch.com, waiting to hear if they were approved for a mortgage was more stressful than waiting to hear if they got a job.

MortgageMatch.com says home buyers can significantly improve their chances of getting a mortgage application approved on the best possible terms in today's tough lending marketplace by taking the following steps.

• Pay down your debt as much as you can before applying for a mortgage.

Lenders calculate the ratio of your debt to your income to determine how much you can afford to borrow. Your total debt-to-income is based on how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees.

By reducing your debt as much as you can, you will improve your debt-to-income ratio and your credit score.

• Clean up your credit long before you apply for a mortgage.

Credit is critical today, not just to get a mortgage but to get the best terms. A marginal credit score can cost you tens of thousands of dollars over the life of the loan. Your score on the 850-point FICO credit rating scale must be 680 today to qualify for a prime loan and at least 720 to get the best rates.

Pull one or all of your three annual credit reports from AnnualCreditReport.com and check yourself, before you wreck yourself.

You'll have to pay a nominal fee of $10 to $15 to each credit bureau -- Equifax, Experian and TransUnion -- to get your credit score. Review your report for errors and omissions.

• Don't make a major purchase on credit and don't apply for new credit before you apply for a mortgage or at any point before your mortgage closes. Purchases and credit accounts increase your debt and hurt your debt-to-income ratio.

• Increase your down payment. The more you put down the better your rate and your chances at scoring on that loan application. If you can't increase your money down, buy a cheaper home. Now is not the time to stretch.

• Get all your docs in a row before you apply for a mortgage. Don't waste time or raise the ire of lenders who are tougher than ever on documentation for income, assets, financial obligations and more. When you apply, have your paperwork ready.

• Know and prepare for your cash requirements. Cash expenses, beyond the down payment can crush you. Closings costs are on the rise. They can include transfer taxes, lenders fees, title insurance, escrow, settlement and home inspection costs. Also upfront property taxes, homeowner association dues homeowner insurance and other costs could come due before you close.

• Larger loans raise your costs. So called "jumbo mortgages" exceed the $417,000 "conforming loan level" in most parts of the country. In high cost areas like New York City, Washington D.C., Miami, and many parts of California, jumbos begin at $729,750. Larger mortgages are more risky so they cost more, require better credit and demand larger down payments.

• Negotiate tough. Ask for a purchase price lower than the value. A lower price serves both you by lowering your loan-to-value ratio and your lender, by reducing its risk. In today's marketplace, many sellers are willing to deal. Go for it.

• Don't get taken. When you see rates attractive rates advertised on the Internet or TV don't froth. They could be come-on or teaser rates with lots of strings attached. In addition, rates change several times during the day and differ by locale, by borrower, by loan-to-value ratio and due to a host of other factors. Advertised rates maybe be what you see, but they are often not what you get.

Copyright © 2011 Realty Times. All Rights Reserved.

Why Hire a Real Estate Agent or REALTOR?

2011-02-11T07:34:00.001-08:00

From Realty Times on 12 February

Why Hire a Real Estate Agent or REALTOR? by Phoebe Chongchua

As spring rolls in, many people start listing their home for sale. The weather warms up and buyers, having recovered from the holidays, begin to house hunt.

Many buyers will go it alone. They hit the Internet for their first line of attack in house hunting. They peruse magazines and open houses. But they miss an important key player in their house-hunting mission–the real estate agent.

The real estate agent is not a go-between paper shuffler. Your real estate agent is the connection to the inside world of real estate. Yes, the Internet can provide you with lots of information, but it can't replace a knowledgeable real estate agent.

Finding the best agent who meets your needs is like finding a good friend. I'm not kidding. Having to work with an agent that doesn't understand your needs for housing can result in endless headaches, but working with an expert in the industry takes away the worry and stress, and streamlines the process.

It can be a jungle out there. Navigating through the foreclosures, short sales, and excessive inventory can make some buyers feel overwhelmed. The result? They continue to rent!

If you have the right team of experts surrounding you and looking out for your best interest, you're not afraid to aim high and go after exactly what you want. An agent isn't your cheerleader but is there to help you get precisely what you want and the best deal possible.

The agent has a fiduciary duty to you–to provide trust and confidence. Up to now, we've talked mostly about an agent–a person licensed to sell real estate but is that the same as a REALTOR®? The answer is no. And since the terms are often confused, it's worth taking a moment to explain how the National Association of REALTORS® (NAR) defines them.

Both are licensed to sell real estate but REALTORS® are members of the National Association of REALTORS® and are required to follow the REALTOR® Code of Ethics. According to NAR, there are 17 articles in the Code of Ethics and they are strictly enforced.

Here's what is stated in the 2011, Code of Ethics and Standards of Practice from NAR, "The term Realtor® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal."

Whether you hire a real estate agent or a REALTOR®, the most important thing you can do is research their background, reputation in the market, and get references. This is likely the biggest financial move you'll make, so taking the time to find information about the agent or REALTOR® you're about to hire is a wise investment.

Visiting real estate offices and meeting with their staff is another good way to explore who will fit with your personality and match your needs. Contacting friends for referrals is a good start, but don't just hire your friend's agent or REALTOR® because the real estate transaction worked out for your friend. Spend a little time to effectively communicate your needs, goals, and desires, and then listen carefully to how the agent or REALTOR® responds.

It may not be a marriage but it's certainly a relationship that could last a lifetime, creating a successful financial situation for all.

Copyright © 2011 Realty Times. All Rights Reserved.

Follow the note "View my complete profile" in the right column to "My Webpage" for references.

Mortgage Rates Rise to 5.05 Percent

2011-02-11T07:33:00.001-08:00

February 11, 2011

From Realty Times: 30-Year Fixed-Rate Mortgage Rates Rise to 5.05 Percent

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®) which shows long- and short-term rates rising this week.

30-year fixed-rate mortgage (FRM) averaged 5.05 percent with an average 0.7 point for the week ending February 10, 2011, up from last week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 4.97 percent. Interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.

15-year FRM this week averaged 4.29 percent with an average 0.7 point, up from last week when it averaged 4.08 percent. A year ago at this time, the 15-year FRM averaged 4.34 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.92 percent this week, with an average 0.6 point, up from last week when it averaged 3.69 percent. A year ago, the 5-year ARM averaged 4.19 percent.

1-year Treasury-indexed ARM averaged 3.35 percent this week with an average 0.6 point, up from last week when it averaged 3.26 percent. At this time last year, the 1-year ARM averaged 4.33 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week. For all of 2010, nonfarm productivity rose 3.6 percent, the most since 2002, while January’s unemployment rate unexpectedly fell from 9.4 percent to 9.0 percent. Moreover, the service industry expanded in January at the fastest pace since August 2005."

Copyright © 2011 Realty Times. All Rights Reserved.

Changing World of Mortgages

2011-01-25T08:13:00.001-08:00

January 25, 2011 from Realty Times

Successfully Navigating The Changing World of Mortgages by PJ Wade

The world of mortgages is changing. To paraphrase the old Joni Mitchell song, most consumers will not know what they’ve got until it’s gone.

They won’t realize that by the time a mortgage is paid off, borrowers have paid two or three times the original amount borrowed—the mortgage principal—to buy real estate they originally bargained hard for to cut costs.
They won’t understand what they could have done to increase their real estate holdings and improve their profits until the legal and tax advantages that support investment and individual creativity disappear.
The real estate and banking sectors are set up to facilitate their deal making and profit taking with a measure of consumer protection added to keep things from becoming noticeably one sided. Too many buyers and sellers further stack the deck against themselves by not digging deeper than fads, marketing, and salesmanship. Most real estate buyers and sellers invest more time learning about their latest mobile device and its apps than exploring ownership and financial strategies for buying residential and recreational property.

Therefore, they may not miss what they did not understand, and would have appreciated, in the first place. Have you heard about a great government program or a tax advantage only when the media lament its end? How do you make sure you are taking advantage of all the options open to you to reduce the cost of the money you borrow to purchase real estate—your mortgage?

Real estate buyers and owners who want to achieve more for less should start this new year by learning what the latest round of mortgage resets mean to their specific real estate goals and opportunities. We always advocate going to the source, so dive into the detail announced by the Federal Ministry of Finance January 17, 2011: http://www.fin.gc.ca/n11/11-003-eng.asp

Here are a few perspectives to start you off.

Just remember, that what is relevant to you and your specific situation may not be on this list, hence the value of going to source:

Motives and motivation: The title, “The Harper Government Takes Prudent Action to Support the Long-Term Stability of Canada’s Housing Market,” has an election ring to it. Either the federal government is positive there won’t be more negatives ahead for housing, so it wants to appear to have created the soft landing, or it is bailing out before problems hit, so it can point fingers at others while patting itself on the back. What’s your opinion?

Reduce amortization: Cutting the maximum amortization period down 5 years to 30 years is not the across-the-board measure it has been presented as. This restriction applies only to new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. The 35-year amortization may be available for mortgages outside these restrictions for borrowers that lenders feel suit this repayment method. The amortization period is the number of years, at a specific payment amount, that it will take to pay the mortgage principal and interest to zero.

Buyers’ advantage: The longer the amortization period the smaller the monthly payment of principal and interest, and the greater the mortgage principal a buyer will qualify to borrow. Buyers could opt for the longest amortization possible—which used to be 40 years, then 35 and now 30—and then, down the road, decrease the amortization period on renewal to cut total interest costs.
Owners’ advantage: The shorter the amortization period, the lower the total amount of interest paid on a mortgage. The common 25-year period provides a hefty profit for lenders. Pop your original mortgage principal into a mortgage calculator, and see how much you have paid for this borrowed money in the first 10 years. Compare this with how much is left to pay on the mortgage. Shorten the amortization period as much as possible when you renew. Even one year can make a difference in the total interest paid.
Equity building: The government reports the latest restrictions will “allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire”. Home equity management is an ongoing topic in this column, but if these changes represent the government’s best shot at facilitating equity building, they need input from consumers on what would really aid in accumulating value and repaying mortgage debt.
Taking taxpayers off the hook for lenders: The government backs mortgages arranged to buy real estate, so if the borrower defaults and can’t make payments, the government (that’s taxpayers) cover losses for lenders (that’s largely the big banks). Those same lenders promote refinancing for a range of home improvement and lifestyle uses, the government is letting it be known that this lender-promoted debt should not be as risk-free for lenders as arranging the original mortgage. Lender reactions to the government taking taxpayers off the hook for mortgage default or lack of repayment may not be pleasant for homeowners.

Restricting access to equity: By lowering the maximum amount Canadians can borrow when refinancing their mortgages the government says it’s promoting savings. The drop from 90 per cent to 85 may not seem significant until you want that 5 per cent in your pocket. This change means the only way to access that 15 per cent is to sell. When so many want to stay in their own homes as they age, does this move seem in synch with consumers goals?
Withdrawing government insurance on lines of credit: Lenders who issue lines of credit secured by real estate, including home equity lines of credit, will no longer have government insurance to cover them against losses. The government believes its move will ensure that risks associated with consumer-debt products used to borrow funds unrelated to real estate purchases are managed by the financial institutions and not borne by taxpayers. Will lenders demand a premium for their additional risk?
Note: The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.

Government intervention: The government’s paternalistic approach with this “for their own good” set of financial rewrites opens the door to many considerations. Do you want the government deciding what’s best for you and your real estate, or would you prefer to deal with lenders who set standards and criteria for lending on a case-by-case basis? What may not be prudent for one borrower may be calculated risk for another.
The Honourable Jim Flaherty, Minister of Finance, was said to make “prudent adjustments to the rules” to “support hard-working Canadian families saving through home ownership”. Does their definition of “saving” properly describe your intentions in owning real estate?

If you need help understanding finance and planning for your future, is the government your preferred source and resource? Maybe the wrong level of government and the wrong ministry are involved. Wouldn’t it be more practical to teach money management and real estate investment in public school, so we all become our own experts?

Copyright © 2011 Realty Times. All Rights Reserved.

Double-Dip on the Horizon?

2011-01-17T08:51:00.000-08:00

January 17, 2011

Real Estate Outlook: Double-Dip on the Horizon? by Carla Hill

Is the housing market poised for a double dip in house values? Corelogic reports that as of November, home values were down 5 percent from the same time the year before.

CoreLogic Chief Economist Mark Fleming says, "We're continuing to see the influence of seasonal declines that typically depress home prices during the latter part of the year, but the fact that the rate of decline increased for November is indicative of the uphill battle we're facing with the housing recovery."

Steep declines were seen in multiple locales across the nation. Idaho saw home values fall 13.5 percent.

Zillow.com reports that the "decline in home values from the national peak in June 2006 officially surpassed the magnitude of declines experienced during the Great Depression, falling 26 percent from peak levels."

Also troublesome is the monthly pace at which homes values are now declining. In November the rate rose to 0.78 percent.

According to Zillow, "We're still seeing significant weakness in the lowest home value tier, particularly with the expiration of the Federal home buyer tax credits. ... Weakness in the bottom tier of homes naturally translate into the higher tiers as these homeowners become exposed to negative equity (and thus are removed from the demand equation altogether) or have less money to spend buying their next home."

Economists say that for at least the next 2 quarters we'll see larger factors -- such as unemployment -- producing more home value declines.

The New York Times reported last week that we could see new job growth thanks in part to the Federal Reserve's plan to buy up $600 billion worth of Treasury securities.

Janet L. Yellen, Fed vice chairwoman, noted, “It will not be a panacea, but I believe it will be effective in fostering maximum employment and price stability."

There are those, however, that criticize the Fed's move, saying it could instead create future financial imbalances.

Time will tell, but for now, most are hoping for the best.

The Mortgage Banker Association, the national association representing the real estate finance industry, is reporting in their latest findings that mortgage applications rose. The Refinance Index rose 4.9 in just one week. This is welcome news, as the unadjusted Purchase Index increased 41.9 percent compared with the previous week, but was still 10.5 percent lower than the same week one year ago.

Copyright © 2011 Realty Times. All Rights Reserved.

Mortgage Rates Down for Second Week

2011-01-14T10:10:00.000-08:00

January 14, 2011

Mortgage Rates Down for Second Week

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®). The survey results showed lower mortgage rates for both long- and short-term rates, with the 30-year reaching a four-week low.

30-year fixed-rate mortgage (FRM) averaged 4.71 percent with an average 0.8 point for the week ending January 13, 2011, down from last week when it averaged 4.77 percent. Last year at this time, the 30-year FRM averaged 5.06 percent.

15-year FRM this week averaged 4.08 percent with an average 0.7 point, down from last week when it averaged 4.13 percent. A year ago at this time, the 15-year FRM averaged 4.45 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.72 percent this week, with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago, the 5-year ARM averaged 4.32 percent.

1-year Treasury-indexed ARM averaged 3.23 percent this week with an average 0.6 point, down from last week when it averaged 3.24 percent. At this time last year, the 1-year ARM averaged 4.39 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, reports, "Bond yields drifted lower following the release of the December employment report , which was weaker than the market consensus forecast and implied that the labor market is still in a sluggish recovery. Fixed mortgage rates followed bond yields lower for a second consecutive week, bringing them to a four-week low."

"In its January 12th regional economic review, the Federal Reserve noted that activity in residential real estate and new home construction remained slow across all Districts over the last two months of 2010 due to concerns about the pace of economic recovery, especially in employment. In addition, the outlooks for residential real estate were mixed, with contacts in most Districts described as expecting continued weak conditions."

Copyright © 2011 Realty Times. All Rights Reserved.

Tips for Appraisals

2011-01-13T07:28:00.000-08:00

January 13, 2011

Tips for Appraisals by Carla Hill

Appraisals allow for homeowners and buyers to establish what is fair market value of a property. In addition, an appraisal allows a lender to know how much they can safely lend.

According to The Appraisal Institute, a global membership association of professional real estate appraisers, "Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."

This process, however, can be trying and even frustrating. Recent declines in the housing markets have spawned scapegoats across the industry, including appraisers. And increased caution from lenders has slowed the buying process.

"Too many consumers in this struggling real estate market face problems with appraisals when attempting to buy or sell a home," said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. "But rather than passively endure delays in closing a sale, homeowners and buyers can take proactive steps to avoid pitfalls."

To reduce your stress during this time, consider these simple tips from the AI®.

Understand the role of appraisals. It is neither in your interest nor the interest of your lender for you to purchase a property that is over-priced for its value.

Make sure the lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute). The lowest priced appraiser does not necessarily equate with the most qualified. This is a time to get the numbers right.

Accompany the appraiser during the inspection of the property if possible. The more active of a participant you are in the process, the more you will understand it, and be able to catch any errors.

Request a copy of the appraisal report from the lender. Federal law requires that you receive a copy of the appraisal within 30 days.

Examine the appraisal report and ask questions. Be sure to examine the report for errors. According to "Appraising the Appraisal: The Art of Appraisal Review," 2nd edition, common errors in appraisals include: misuse of adjustments to comparables, disregarding special financing and concessions, or miscalculation of gross living area.

Appeal the appraisal if appropriate. Market conditions do change, especially in these economic times. If you feel that new information may change the appraisal, be sure to contact them!

Ask the lender to order a second appraisal by a qualified and designated appraiser.

File legitimate complaints with appropriate state board or professional appraisal organizations.
For more information on appraisals, you may wish to visit The Appraisal Institute's website at www.appraisalinstitute.org.

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Copyright © 2011 Realty Times. All Rights Reserved.

Pending Homes Sales Rise

2011-01-05T12:00:00.000-08:00

January 4, 2011

Pending Homes Sales Rise by Carla Hill

While credit remains tight as we move forward into 2011, top economists expect that if the job market revives this year, and interest rates rise only moderately, the housing market could experience a boost.

Pending homes sales are already on the rise. The National Association of Realtors' Pending Home Sales Index reports that pending homes sales rose in November by 3.5 percent.

Lawrence Yun, NAR chief economist, said historically high housing affordability is boosting sales activity. "In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market," he said. "But further gains are needed to reach normal levels of sales activity."

Across the nation, we see regionally diverse markets, however. The Northeast saw pending home sales rise by 1.8 percent, but this figure is still 6.2 percent below November 2009. The West also saw a stunning 18.2 percent jump. This jump leaves it within 0.4 percent of year ago levels.

Both the Midwest and South saw declines, though, in pending sales. The Midwest declined 4.2 percent and is still 7.7 percent below year ago levels. The South fell only 1.8 percent.

"As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2 to 3 percent in 2012," Yun said.

For now, the 30-year fixed rate mortgage remains in the low five percent range, which is near a historical low. The extension of Bush-era tax credits, as well as renewed hopes of job growth could very easily translate into more sales on the housing market horizon.

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Copyright © 2011 Realty Times. All Rights Reserved.

Long-Term Mortgage Rates Rise

2010-12-03T08:16:00.000-08:00

December 3, 2010

Long-Term Mortgage Rates Rise for the Third Time in as Many Weeks

McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the both fixed- and shorter-term mortgage rates rose this week. This was the third week in a row where fixed-rate mortgage rates were up.

30-year fixed-rate mortgage (FRM) averaged 4.46 percent with an average 0.8 point for the week ending December 2, 2010, up from last week when it averaged 4.40 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

15-year FRM this week averaged 3.81 percent with an average 0.7 point, up from last week when it averaged 3.77 percent. A year ago at this time, the 15-year FRM averaged 4.27 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.49 percent this week, with an average 0.6 point, up from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.19 percent.

1-year Treasury-indexed ARM averaged 3.25 percent this week with an average 0.6 point, up from last week when it averaged 3.23 percent. At this time last year, the 1-year ARM averaged 4.25 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, states, "Mortgage rates followed bond yields higher this week as recently released economic data suggest the economy may be stronger this quarter than the previous. Regional manufacturing indexes for Dallas, Chicago and Milwaukee all rose in November. In addition, the Federal Reserve noted that 10 of its 12 regions saw improvement through mid-November in its December 1st regional economic review."

"House prices indices, however, are trending downwards. The 12-month growth rate in the S&P/Case-Shiller® 20-city index eased from 1.7 percent in August to 0.6 percent in September. Only six of the cities had positive annual growth, compared to nine in August."

Copyright © 2010 Realty Times. All Rights Reserved.

10 Tips For New Buyers

2010-11-17T07:31:00.000-08:00

November 17, 2010

10 Tips For New Buyers by Carla Hill

It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.

Here are 10 steps that buyers can take to make home dreams a reality!

1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.

2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Preapproved. It's time to talk to a lender! Pre-approval will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

5. Get Prequalified. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are prequalified.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.

9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company.

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Rates Up But Still Incredibly Low

2010-10-29T09:07:00.000-07:00

October 29, 2010

Mortgage Rates Up But Still Incredibly Low from Realty Times

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS), which found that the 30-year fixed-rate mortgage rate rose slightly for the second consecutive time in six weeks. The 15-year fixed-rate mortgage rate also rose slightly while the 5-year ARM set another low, and the 1-year ARM tied last week's low.

30-year fixed-rate mortgage (FRM) averaged 4.23 percent with an average 0.8 point for the week ending October 28, 2010, up from last week when it averaged 4.21 percent. Last year at this time, the 30-year FRM averaged 5.03 percent.

15-year FRM this week averaged 3.66 percent with an average 0.7 point, up from last week when it averaged 3.64 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.41 percent this week, with an average 0.6 point, down from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.42 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.

1-year Treasury-indexed ARM averaged 3.30 percent this week with an average 0.7 point, unchanged from last week. At this time last year, the 1-year ARM averaged 4.57 percent . The 1-year ARM ties last week's low.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Mixed economic data releases left mortgage rates little changed this week. Consumer confidence increased slightly in October, according to The Conference Board , but still remains at low levels. Based on the S&P/Case-Shiller 20-city composite index, house prices fell 0.3 percent between July and August, while the purchase-only index by the Federal Housing Finance Agency showed a 0.4 percent gain over the same period."

"Historically low rates are supporting home sales and reducing the excess stock of homes available for sale. Existing home sales, including condominiums and co-ops, rose for the second consecutive month in September, up almost 18.0 percent over July's low. Similarly, sales of new homes had back-to-back increases and were 7.7 percent above July. The inventory of new homes for sale has either stayed the same or declined every month of this year."

Copyright © 2010 Realty Times. All Rights Reserved.

Bank of America Plans to Resume Foreclosures

2010-10-23T09:07:00.000-07:00

WASHINGTON (AP) -- The pace of U.S. home foreclosures may not slow much after all.

Bank of America said Monday that it plans to resume seizing more than 100,000 homes in 23 states next week. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.

Ally Financial Inc's GMAC Mortgage unit is also resuming foreclosures once documents are fixed. Gina Proia, a spokeswoman for Ally, said that "as we review the affected files and take any remediation needed, the foreclosure process then resumes."

Analysts expect other lenders to correct problems with the way they handled documents and proceed with a wave of foreclosures that have depressed the housing market. They are likely to follow because foreclosure practices were similar from bank to bank, said banking analyst Nancy Bush of NAB Research.

"We'll be back to square one by the end of the year," she said.

Copyright by Associated Press

Bank of America Halts Foreclosures

2010-10-18T08:28:00.000-07:00

October 18, 2010

Realty Times - Real Estate Outlook: Bank of America Halts Foreclosures by Carla Hill

It's announcement has been received with mixed reviews. Many homeowners on the brink of foreclosure are breathing a temporary sigh of relief, as Bank of America announced it would become the first major bank to halt both foreclosure proceedings and sales. This will take effect in each of the 50 U.S. states.

The decision comes on the heels of mounting political pressure, namely that from Senator Christopher Dodd, chairman of the Senate Banking Committee, and the impending November 16th hearing on foreclosures.

The temporary cessation of foreclosure proceedings will give Bank of America time, in the wake of the mortgage crisis, to review its own methods, to ensure fairness and that no predatory practices are in place.

Zillow.com is reporting that the foreclosure rate climbed again in August and became an even larger portion of monthly transactions. Foreclosure resales as a percentage of all sales in August were 19%, up 2 percent from July.

In an housing market that is already anemic, however, will this halt bring more paperwork, pressure, and slowed sales?

Vicki Cox Golder, NAR President, notes, "There are valid foreclosures that should move ahead quickly, and we shouldn't lump them in with mortgages that are suspect. That would cause deep problems in an already fragile market and throw many families into uncertainty."

The National Association of Realtors also reports that "thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy."

This temporary halt could also put more pressure on an ailing job market. Remodelers, contractors, and other workers employed to rehab newly purchased foreclosures may now find themselves without work.

Last week it was reported that U.S. Payrolls had already dropped 95,000 in September.

Will the Fed take action under this mounting pressure when it meets up on November 2nd and 3rd? Time will tell and we'll keep you posted of any changes that may coming your way.

For now, the market remains mostly unchanged. According to the NAHB/Wells Fargo Housing Market Index, results remain "dismal." They report that new job formations slowed in the second and third quarters and both businesses and consumers pulled back on purchases. Overall uncertainty over economic growth has become the latest impediment to a resurgence in new housing -- even with historically low interest rates, leveling house prices and pent-up demand from unformed households.

Zillow predicts that a bottom in national home values will happen later this year or early next year at the latest.

It looks like for now, the housing market will continue on its weakened path.

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Rates Continue to Fall

2010-10-08T16:49:00.000-07:00

Realty Times of October 8, 2010

Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate dropped yet again to break the survey's all-time low; the 15-year fixed-rate did the same. The 5-year ARM also set an all-time survey low.

30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.8 point for the week ending October 7, 2010, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.87 percent.

15-year FRM this week averaged a record low of 3.72 percent with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.52 percent. A year ago, the 5-year ARM averaged 4.35 percent.

1-year Treasury-indexed ARM averaged 3.40 percent this week with an average 0.7 point, down from last week when it averaged 3.48 percent. At this time last year, the 1-year ARM averaged 4.53 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac report, "The 12-month growth rate in the core price index for personal consumption , which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease to new or near record lows this week."

"Housing affordability increased for the second month in a row in August to tie April's level, according to the National Association of Realtors® (NAR). As a result, pending existing home sales also rose for the second consecutive month in August to the strongest pace in four months, the NAR also reported. Furthermore, since the end of August, mortgage applications for home purchases were up over 14 percent for the week ended October 1st."

Copyright © 2010 Realty Times. All Rights Reserved.

30-Yr Mortgage Rate Nears 3.875 Percent

2010-09-29T08:18:00.000-07:00

September 29, 2010
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From Realty Times, 30-Yr Mortgage Rate Nears 3.875 Percent by Ed Ferrara

Mortgage-backed securities prices, which drive mortgage rates their opposite, posted gains Monday and Tuesday consecutively, pressuring mortgage rates to move downward again from already record low levels where they began the week.

30-year fixed mortgage rates, currently at 4% for well-qualified borrowers who pay 1 point origination, are very near 3.875%. 30-year fixed mortgage rates have never been below 4% before. 15-year fixed mortgage rates remain at 3.5% but could improve any hour as well.

FreeRateUpdate.com surveys over 2 dozen wholesale lenders' rate sheets for brokers daily to determine the most accurate mortgage rates available to highly qualified borrowers at a standard origination fee.

FHA loan rates continue to mirror conforming mortgage rates. Today's 30-year fixed FHA loan rate is also 4%; however, MI and other FHA closing fees make APR higher than that of a conforming mortgage at the same note rate and origination.

Jumbo mortgage rates are improved from last week and today's jumbo 30-year fixed loan rate is 4.875%, a record low.

Wells Fargo mortgage rates, as advertised on their website, are unchanged with 4.375% (4.559 APR) being their offering on a conventional 30-year fixed mortgage.

Mortgage refinance applications have been flat according to the MBA, who posts figures weekly, since spiking as rates slid into the low 4's.

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Copyright © 2010 Realty Times. All Rights Reserved.

Fixed-Rate Mortgages Unchanged

2010-09-24T09:43:00.000-07:00

September 24, 2010
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From Realty Times - Fixed-Rate Mortgages Unchanged While ARMs Are Mixed

McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate and the 15-year fixed-rate were unchanged; shorter-term rates were mixed.

30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.7 point for the week ending September 23, 2010, unchanged from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 5.04 percent.

15-year FRM this week averaged a record low of 3.82 percent with an average 0.7 point, unchanged from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.54 percent this week, with an average 0.6 point, down slightly from last week when it averaged 3.55 percent. A year ago, the 5-year ARM averaged 4.51 percent.

1-year Treasury-indexed ARM averaged 3.46 percent this week with an average 0.7 point, up from last week when it averaged 3.40 percent. At this time last year, the 1-year ARM averaged 4.52 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, said, "In its September 21st policy committee statement, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months. In addition, inflation was at levels somewhat below its comfort zone. The perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week."

"Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession; the one exception was the 1980 downturn. The National Bureau of Economic Research recently announced that the current recession ended in June 2009. Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September."

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Copyright © 2010 Realty Times. All Rights Reserved.

Attack on Homeownership

2010-09-21T08:35:00.000-07:00

The Attack on Homeownership by Bob Hunt September 21, 2010

Homeownership is under attack in America. A small sampling: "The Case Against Homeownership" by Barbara Kiviat, Time Magazine cover story, Sept. 6, 2010; "Downsizing the Dream" by Washington Post columnist, Robert Samuelson, August 29, 2010; and "The Un-American Dream" by Don Watkins and Yaron Brook of the Ayn Rand Center, in Forbes.com, August 27, 2010.

Certain aspects of the attack are not, strictly speaking, against homeownership itself. Rather, they are arguments from principle against government policies that promote homeownership. These are principled arguments in the sense that they derive from beliefs that oppose all government attempts to influence any of our choices. Thus, Watkins and Brook write, "A government crusade to promote homeownership is un-American." "In America, the government’s job is to protect our freedom to pursue our values, not to dictate what our values are. Its homeownership policy should be the same as its toaster oven policy: laissez-faire."

Others may not in general oppose government intervention and attempts to influence our choices, but they suggest that, in the particular case of promoting homeownership, the cost to government is simply too high. Kiviat says that the mortgage interest deduction "cost the government some $80 billion in lost revenue in 2009." Samuelson estimates, "Tax breaks (mainly the deductions for mortgage interest and property taxes, plus preferential treatment of capital gains on homes) exceeded $120 billion in 2009."

Of course these figures may amount to chump change in the context of the multi-trillion dollar estimates regarding the cost of bailouts and the "stimulus". Moreover, the "lost revenues" attributed to tax-advantaged housing may well be offset by the variety of positive social outcomes (e.g. lower crime rates) that have been attributed to neighborhoods with high ownership rates.

Perhaps the wildest attack comes in the Time Magazine article by Kiviat: "The dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago." But she is mistaken. All those regrettable events were not caused by homeownership; they were caused by foolishly-easy credit and by reckless lending programs.

In August of 2010 the National Association of Realtors® (NAR) released a paper entitled "Social Benefits of Homeownership and Stable Housing". The timeliness of this document was probably not coincidental. The paper is a "review of existing academic literature that documents the social benefits of homeownership." There is not room here to recount the detail, but the study concludes "…there is evidence from numerous studies that attest to the benefits accruing to many segments of society. Homeownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency." "Public policy makers would be wise to consider the immense social benefits of homeownership for families, local communities, and the nation."

The NAR study is clear that the social benefits of homeownership are tied to stability (the lack of high turnover in neighborhoods). But Kiviat, in the Time Magazine article, even questions the value of that. "Homeownership may provide a sense of stability to families, but stability in today’s economy isn’t always a virtue." She quotes economist Andrew Oswald, "The economy is changing all the time, and we need people to be mobile in order to drop into the right job slots."

What to make of all this? Well, I don’t think homeownership is about to be banned. But you can sure expect to see some chipping away at its tax advantages as the government tries to figure out how it’s going to get out of the financial hole that has been dug. There will be a lot of economic arguments.

Can we put a value on homeownership? Ironically, the best answer may be contained in an anecdote that appears in the Time article. Kiviat writes, "Star Korajkic, one of America’s newest homeowners, doesn’t particularly care about all this financial history. What she cares about is being able to paint her daughter’s room purple without asking anyone’s permission."

And what is the value of that? Priceless.

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Copyright © 2010 Realty Times. All Rights Reserved.

Avoid Foreclosure

2010-09-21T08:20:00.000-07:00

From Realty Times - Avoid Foreclosure by Carla Hill on September 21, 2010

In a country with a growing foreclosure rate, new default notices being sent every day, and an unemployment rate over 9 percent, the chances of foreclosure affecting you or someone you know is on the rise.

RealtyTrac.com reports that in August 2010, foreclosure filings rose by 4 percent, with 338,836 new filings, affecting one in every 381 households.

If you find yourself struggling to make your payments, here are some ways to avoid foreclosure.

First, be realistic about your situation. Answer phone calls from your lender and open your mail. This is the time to face your problem head on. Could a foreclosure be on the horizon? Be aware of warning signs.

Warning signs can include significant life changes, such as the death of a spouse, loss of job, illness, divorce, and steep increases in your mortgage payment.

If you are having trouble making monthly payments on other bills, now is the time to pay attention. Your mortgage could be the next bill that becomes too much. In order to curb missed payments, prioritize your spending.

Establish a budget and cut out any unnecessary spending (e.g. movies, cable, eating out, shopping) until you are in a more stable financial state. Apart from healthcare, there is nothing more important than your home. If you have assets to sell off, then do so! The cash may be better spend in helping you save your home.

Next, call your lender to explain your situation and to see what options are available. In these tough economic times, many lenders have programs that may help you stay in your home. Foreclosures do more than run ruin on your credit score, they also affect a lender's bottom line. If working out an agreement with you can help them save that bottom line, the changes of them helping you are high.

When you speak with your lender, have proof of your monthly income, as well as your budget on hand. You will also need to have an explanation of why you are unable to make your payments. Has someone lost their job? Has there been a medical emergency? It is best to be honest and upfront with your lender regarding your situation.

Some options you may discuss with your lender include refinancing, reinstatement (where your lender allows you to pay the money you are behind in one lump sum and by a certain date), forbearance (a temporary reduction or cessation of your mortgage payment), a new repayment plan, and loan modification (a permanent change to some of the terms of your existing mortgage).

Beware of scammers during this process. Help and counsel from your lender should be free of charge. If you come across someone requesting a fee in order to facilitate help, chances are it is a scam.

The Making Home Affordable Program is also available for those who are struggling to make their payments. This program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.

The sooner you contact your lender, the better. Don't wait until you are days away from being foreclosed. The process of working out an arrangement with your lender could take multiple phone calls and weeks of time.

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Copyright © 2010 Realty Times. All Rights Reserved.

Real Estate Outlook

2010-09-21T00:22:00.000-07:00

From Realty Times - Real Estate Outlook: Foreclosures Rise by Carla Hill on 9-20-10

For some real estate investors this week -- it could be good news. The National Association of Home Builder's latest Multifamily market index reports that current and expected demand for rental apartments improved significantly in the second quarter of 2010 compared to the first quarter.

David Crowe, NAHB's Chief Economist remarked that "as the supply of additional units declines and pent-up household formations re-emerge when the labor markets improve, demand for traditional rental apartments will rise. It is possible that the supply of new units will not arrive in time to meet the emerging demand and some shortages will occur in some markets."

This promising piece of news was followed by new on consumer spending.

Consumer spending is on the rise, even if its only a modest gain. The Commerce Department reports that spending rose 0.4 percent in July, and that is after remaining flat during the month of June.

The Wall Street Journal reported that consumer spending is on track to grow at a 2 percent annual rate in the 3rd quarter. So, it's slow, but not a stand still.

Unemployment across the nation is still affecting millions. Around 15 million to be more precise. The first week of September saw a fall in initial jobless claims -- down 27,000, the lowest level in quite some time. And experts are seeing signs of sustainable growth, even with the rate of unemployment still around 9 percent.

Are you one of the many homeowners living in neighborhoods hit hard by foreclosures? The Obama Administration and HUD announced it has awarded an additional $1 billion in funding to all states along with a number of counties and local communities struggling to reverse the effects of the crisis.

The grants are designed to reverse the effect foreclosed properties have on their neighborhoods and home values. Among other things, the grants will be used to offer downpayment and closing cost assistance to low to moderate income homebuyers.

Foreclosures are still overwhelming many markets, rising 4 percent in August. RealtyTrac.com CEO, James Saccacio reports that "the trend lines of decreasing default notices and increasing bank repossessions converged in August, with virtually the same number of new default notices and bank repossessions for the month — a clear indication that the clogged foreclosure pipeline is being carefully managed on both ends by lenders and servicers."

Are you a borrower over the age of 62 looking to make ends meet? Chances are, then, that you've heard of reverse mortgages. These loans tap into the equity of a home, in turn helping those in need of fast cash.

The Federal Reserve Board has proposed new rules to help stop unfair practices that exist with these -- many times costly -- loans. We should see the proposal for new regulations by this November. We'll keep you informed.

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Copyright © 2010 Realty Times. All Rights Reserved.

STRIPPING FORECLOSED HOMES

2010-09-21T00:14:00.000-07:00

ARIZONA INFORMATION TO ASSIST THE ARIZONA MORTGAGE BROKER©
(May 18, 2009)

FBI AGENTS AND LOCAL LAW-ENFORCEMENT HAVE ARRESTED FIVE PEOPLE THIS PAST MONTH FOR STRIPPING THEIR FORECLOSED HOMES

FACTS

FBI agents and local law-enforcement personnel have arrested five people in the past month for stripping their foreclosed homes of appliances, cabinets, countertops and plumbing fixtures. That includes cases in Fountain Hills, Anthem, Phoenix and Surprise of some of the more egregious violators who are taking everything they can out of homes.

To combat the theft, the Mortgage Fraud Task Force is going after violators who have stripped multiple investment properties that investors are losing to foreclosure, rather than homeowners who have lost their home. But the enforcement effort is also trying to discourage those thefts as well.

One realtor has been recently arrested for this type of theft. The task force recently arrested Kailash Bhatt, 43, after officials say he advertised the sale of cabinets, granite countertops, an oven, microwave and dishwasher on craiglist.org. Bhatt, who owned a foreclosed home in Anthem, was indicted last month by a Maricopa County grand jury on charges of theft and defrauding creditors. Bhatt, who operates a Web site listing foreclosed properties, accepted $2,000 from an undercover task force agent, according to the Maricopa County Attorney's Office.

The FBI Mortgage Task Force, which got its start last June, is also continuing to investigate mortgage-fraud cases. Prosecutors are working on plea deals or to take those cases to trial, said Halferty, the task force supervisor. Some of the new cases involved schemes with losses of $10 million to $100 million, she said. Agent Tolhurst said a number of people employed in financial services and real estate have come forward to assist the task force. (azrep51409)

MORAL

First buy the investment property, then strip it and then win the prize of going to prison . Remember, everyone is innocent until convicted. I trust he has a good attorney. If not, I can recommend one.

Improve Your Credit Score Before Searching for a Home

2010-09-08T07:41:00.001-07:00

From RISMEDIA via Lowes -
Improve Your Credit Score Before Searching for a Home
By Paige Tepping

RISMEDIA, September 8, 2010--Many prospective homeowners find out the hard way the importance of a good credit score when they apply for a home mortgage, especially after the subprime loan crisis. If you are considering buying a home in the near future, it is a good idea to give your credit score a check-up and then take positive steps to improve your credit score if you find problems. Ideally, it is best to begin working on improving your credit score at least six months before you plan to start shopping for a home.

According to the experts at Buy-and-Sell-House-Fast.com, the following tips will help you improve your credit and should be taken before you begin your home search.

The first critical step in taking care of your credit is to check your credit report. Unfortunately, many people fail to take this all important first step. Instead, they wait until they have applied for a mortgage loan to find out from the lender that there are problems with their credit scores.

By checking your credit score before you apply for a mortgage loan, you gain the opportunity to find out if there are problems which you can correct and discrepancies that need to be removed. When you check your credit report, make sure you check all three of the national credit reporting agencies: Experian, Trans-Union and EquiFax.

Review your credit report carefully for items that may be erroneous. If you believe that an item on your credit report is reported in error, you have the right to contest it. To do so, you will need to contact the credit reporting agency and explain why you believe the item is inaccurate. Supporting documentation such as receipts and cancelled checks can help your claim. Alternatively, you can engage a credit report repair services firm to fix your credit report.

If there are derogatory items on your credit report that are accurate but which could cause problems in your loan application, you cannot have them removed; however, you can take positive steps to counteract them. In the event that you have missed payments in the past, take steps now to get your bills current. Even if it means tapping into money that you might be planning to use for a down payment, it is essential that you get your accounts current and keep them that way. Begin by immediately making your payments on time. There is nothing which can lower your credit score more quickly than late payments. Ideally, make an attempt to begin sending in your payments a few days ahead of time to make sure they arrive on time and you do not have any more late payments on your record. If necessary, begin taking advantage of electronic payments in order to make sure your payments are made on time. Over time, this can make significant difference.

Keep in mind that eradicating all of your credit balances is really not the solution. In fact, credit can be your friend when you are looking to make a big purchase such as a home. The key is to make sure your credit is positive, not negative. Toward that end, avoid actually closing out your accounts. Instead, make an effort to pay down your balances and keep them paid down well below the minimum or completely paid off, but do not close the account. When your lender runs your credit to make a decision on your mortgage application, he or she will want to see that you have had a long credit management history.

After reviewing your credit history, if you see that most, if not all of your credit cards are maxed out or nearly maxed out, it is time to sit down and plan an aggressive strategy for paying some of them down. One of the critical factors that often determine your ability to be approved for a mortgage loan is your debt to income ratio. In addition, high credit card balances can drag down your credit score. Therefore, it is important to look at paying off some of your balances.

It is generally better to begin with your highest-rate balances first. Many consumers are tempted to move around balances when they receive an offer from another bank that is good; however, before you do this, remember that the worst thing you can do when you are trying to make a major purchase is to open new accounts.

By following these guidelines, you can improve your credit score and improve your chances of being approved for your home mortgage loan.

Lowe's Customer Care(CON8) 1065 Curtis Bridge Rd. Wilkesboro, NC 28698.

© 2010 by Lowe's®. All rights reserved.

Five Smart Reasons to Buy a Home Now

2010-07-30T08:01:00.000-07:00

Five Smart Reasons to Buy a Home Now

RISMEDIA, July 30, 2010--The economy is stabilizing. Home prices are holding. It's not just as good a time as ever to buy a house. It's one of the best times ever.

ForSaleByOwner.com presents five overlooked reasons why now is a great time to buy a house.

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.

2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.

3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.

4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines...again. Now that appraisers have more flexibility to set values that reflect the current market, today's deals will make it over the finish line.

5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by "workforce housing" programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.

RISMedia, Inc.

© 2010 by Lowe's®. All rights reserved

Mortgage Rates Stable This Week

2010-07-16T08:59:00.001-07:00

Realty Times of July 16, 2010

Mortgage Rates Stable This Week

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). 30-Year Mortgage Rates tied last week's record low.

News Facts

30-year fixed-rate mortgage (FRM) averaged 4.57 percent with an average 0.7 point for the week ending July 15, 2010, unchanged from last week when it averaged 4.57 percent. Last year at this time, the 30-year FRM averaged 5.14 percent. This rate ties the all-time low reached last week in Freddie Mac's 39-year survey.

15-year FRM this week averaged 4.06 percent with an average 0.7 point, down from last week when it averaged 4.07 percent. A year ago at this time, the 15-year FRM averaged 4.63 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.85 percent this week, with an average 0.7 point, up from last week when it averaged 3.75 percent. A year ago, the 5-year ARM averaged 4.83 percent.

1-year Treasury-indexed ARM averaged 3.74 percent this week with an average 0.7 point, down from last week when it averaged 3.75 percent. At this time last year, the 1-year ARM averaged 4.76 percent.

Frank Nothaft, Freddie Mac vice president and chief economist, reports, "Fixed-rate mortgages continued to hover at 50-year lows, thereby supporting homebuyer affordability and refinance activity. Over the past month, about four out of five conventional loan applications and more than one-half of FHA and VA loan applications were for refinance. Compared to the recent peak in 30-year fixed interest rates 13 months ago (week of June 11, 2009), current rates are a full percentage point lower. With today's rates, homebuyers would save about $1,500 in payments each year on a $200,000 loan compared to rates last June."

Copyright © 2010 Realty Times. All Rights Reserved.

4.25% 30-Yr Fixed Mortgage Rate

2010-06-30T08:42:00.000-07:00

Realty Times of June 30, 2010

4.25% 30-Yr Fixed Mortgage Rate Available to Well-Qualified Consumers
by Ed Ferrara

Never before have mortgage rates been this low. 30-yr fixed mortgage rates are at 4.25% for well-qualified consumers paying a standard .07 to 1 point origination fee shows FreeRateUpdate.com research of wholesale lenders' rate sheets for brokers. 15-yr fixed mortgage rates, also at a record low, are at 3.75%.

A $250,000 30-year fixed mortgage at an interest rate of 4.25% has a monthly principal and interest payment of just $1,229.85 per month.

FHA mortgage rates today are nearly identical to those of conforming mortgages. Today's FHA 30-yr fixed rate is also 4.25%. That being said, MI and other FHA fees make the APR (closing costs) higher on an FHA loan, even with the same note rate.

Today's jumbo 30-yr fixed rate remains at 5.25%. Jumbo mortgage rates are also at a record low.

Wells Fargo is advertising a conventional 30-yr fixed-rate of 4.625% today, with an APR of 4.812%. (source: Wells Fargo Website)

Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, were up significantly yesterday, helping to stabilize mortgage interest rates at their current record low. It's possible we could see even lower rates as the week goes on.

Copyright © 2010 Realty Times. All Rights Reserved.

Choosing the Best Home

2010-06-24T07:44:00.000-07:00

From Realty Times of June 24, 2010

Choosing the Best Home by Carla Hill

After weeks of searching for your next home, you now have it narrowed down to two great options. One offers a shorter commute, but the other offers more square footage for your growing family. How can you make the best choice?

There are several strategies you can employ in your decision making process. Above all, be confident in your decision making abilities. "The fear of making serious decisions is a new kind of fear, called decidophobia," proclaimed by Walter Kaufmann at Princeton University in 1973. Worry and procrastination do nothing to aid the process, so buyers, be confident that you will make a sound choice.

Pro/Con list: In this case, you are deciding between two houses as your prospective home. For each house, divide a sheet of paper into two columns: pro and con. Be realistic about what the positive and negative factors would be for each purchase. Considerations could include: price, location, schools, repairs, square footage, floorplans, street noise, neighborhood value, comparables, and gut intuition.

Brainstorm scenarios: Chances are, whatever house you decided upon will be your residence for many years to come. Try and think ahead to situations that may arise in the future, and how each residence would affect those situations. Do you have aging parents that could move in? If so, then which house provides the best floorplan for this? Planning on having children? Check out ratings on local schools.

Do the math: Business executives might call this the "cost/benefit analysis." Buying a home is a huge financial decision, and while personal preferences (e.g. location, schools, square footage) all come into play in homebuying, many purchases are based on what makes the best financial sense. Discuss numbers and neighborhood comparables with your real estate agent. One home may be a smaller dollar amount, but the other may be a better deal in the long run. Some neighborhoods are up and coming, while others have come and gone. Are either homes overpriced or underpriced for their neighborhoods? Do either homes need repairs or updates?

Priorities list: Yes, you know you want the pool, landscaping, granite counters, close proximity to work, extra bath, and the list goes on. But when push comes to shove, and it might, what items are your priority, really? For some, driving a longer commute is worth having a larger house or a cheaper price. For other buyers, the exact opposite can be true.

Change perspectives: Sometimes you simply must step out of your own shoes to see a situation clearly. There are many different ways to approach this decision. You can look at it from an emotional point of view (which home do you love), an intuitive view (what does your gut tell you), and even a devil's advocate view (what if). Experts consider this the "Six Thinking Hats," introduced by Edward de Bono in a book of the same title, where you put on six different hats during a decision making process. Try and see the buying process from the perspective of your spouse, your children, friends, and even your worst enemy.

Finally, be realistic in your own abilities. While the final decision rests on your capable shoulders, you should rely on the professionals that are by your side. This includes your agent, lender, attorney, and even your family. And while you are the final say, remember that you have a team to help give you information to fuel that sound decision.

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Copyright © 2010 Realty Times. All Rights Reserved.

Deficiency Judgments

2010-06-15T14:58:00.000-07:00

June 15, 2010 by Realty Times

Mortgage Lenders Can't Always Obtain Deficiency Judgments by Bob Hunt

One of the major concerns facing the millions of homeowners who are currently delinquent on their mortgage and "upside down" in value is that they fear not only losing their homes but also being subsequently pursued for a deficiency judgment.

Different states have different laws regarding foreclosure and deficiencies. Anyone who has the kind of concern noted above should verify those laws in their own particular state.

In California, the threat of a deficiency judgment -- which, technically, may be real – is frequently, for practical purposes, not a serious one. In some situations there is no threat at all. The discussion that follows here pertains to California law.

In the context of this discussion, a deficiency judgment is a judgment that may be entered by a court. Generally, it is the difference between the foreclosure sale price (the successful bid amount) and the amount of debt owed. In order to obtain a deficiency judgment, a lender must apply to the court for the judgment within three months of a judicial foreclosure sale.

In California, a major exception to the deficiency judgment rules is that no deficiency judgment is allowed when the loan is a purchase money loan for owner-occupied residential property from one to four units. Simply put, if the loan was made for the purchase of your home, no deficiency judgment is allowed.

Another major exception to the deficiency judgment rules is that no deficiency judgment can be obtained if the foreclosure is non-judicial. To understand this, we must note that there are two kinds of foreclosure available in California. One – the overwhelmingly most common – is a non-judicial foreclosure, also known as a trustee sale. A non-judicial foreclosure occurs when, pursuant to a deed of trust, the lender notifies the trustee that the borrower is delinquent. The trustee files a public notice of default. Then, in approximately three months, if the delinquency has not been cured, the trustee publishes a notice of sale. Approximately three weeks after that, if there is still no cure of the default, a trustee sale occurs. (At the discretion of the lender, this sale can be postponed.) This foreclosure sale is the "auction at the courthouse steps." There is no court action.

In a non-judicial foreclosure, when a trustee sale occurs, there is no deficiency judgment available. If the property sold for less than the loan amount, that is the lender’s loss. There is no further recovery. (Two minor exceptions to this are: 1. if the loan had been obtained by fraud or 2. if the property had been intentionally damaged by the borrower.)

The other kind of foreclosure in California is a judicial foreclosure. This involves filing a lawsuit, to which the borrower may respond. Rather than taking the typical four to five months that a non-judicial foreclosure requires, this may take a year or more. Moreover, being a lawsuit, it can be costly. For reasons of time and money, then, lenders hardly ever file judicial foreclosures. It might make sense to do so in the context of a large commercial loan where a borrower might have significant assets worth pursuing. But it is hard to imagine many circumstances where it would be worthwhile to pursue a judicial foreclosure against a homeowner.

If a homeowner’s loan is not a "purchase money" loan – perhaps it is a subsequent "cash-out" refinance loan – then the borrower does have personal liability for the loan. It would be possible for the lender to seek a deficiency judgment. But to do so, the lender would first have to conduct a judicial foreclosure and, as noted, that is very unlikely.

Finally, we note a slightly different but increasingly common situation where a lender may pursue a borrower personally for liability on a loan secured by real estate. This is the case of a "wiped out" junior lien. Many homeowners have second mortgage loans, some even thirds. If these were loans incurred in order to purchase owner-occupied property, then they are subject to the same rules discussed above. No deficiency judgment is available. But if the junior lien is not purchase money, and if foreclosure by the senior lien (the first mortgage) leaves the junior unpaid, then they may pursue the borrower directly just like any other debt.

Deficiency judgments are certainly something for financially distressed homeowners to be concerned about. But they are not as widely available as is sometimes thought.

Copyright © 2010 Realty Times. All Rights Reserved.

Rent or Buy A Home?

2010-06-14T09:11:00.000-07:00

In 2010: Rent or Buy A Home?

RISMEDIA, June 14, 2010--First time home buyers have a lot to consider this summer when making the decision to rent or buy a home: interest rates are at all-time lows, there's still plenty of housing stock and prices are at or near their lowest in years.

Still, deciding whether to buy a home or rent an apartment can be a complicated decision. How do you know what's right for you? Potential buyers should ask themselves several key questions before making this important decision.

1. What will monthly costs be, and can I afford the payments?
Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb. If you can't keep mortgage payments below that, you may be better off renting for awhile.

2. What other debt do I have?
Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of monthly income.

3. What is my credit score? Can I qualify for a good interest rate?
A high credit score indicates strong creditworthiness, and that qualifies you for better interest rates on a mortgage. Maxing out on your credit lines and paying bills late will lower your credit score. The impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly two percentage points less in interest on a mortgage than someone with a score of 620. Lower interest rates also mean lower monthly payments. If your credit score is low, you may want to delay buying a home until you can improve your score.

4. How much will taxes, monthly maintenance, or other fees cost?
Owning a home means you'll have to pay real estate taxes and other costs like insurance and maintenance. On the other hand, owning a home brings big tax savings at the end of the year. As a renter, the owner pays those costs for you.

5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. You'll build equity in your house and its value is likely to increase over the years.

© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trades marks of LF, LLC.

Real Estate Outlook: Positive Trends

2010-06-07T09:59:00.000-07:00

Realty Times of June 7, 2010

Real Estate Outlook: Positive Trends by Kenneth R. Harney

Positive news on housing and real estate keep rolling in -- thanks in large part to federal home purchase tax credits and continuing near-record low mortgage rates.

Last week's pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month -- up by six percent in April -- and now stand 22 percent higher than the year before.

Every region but one -- the South -- racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.

The South's pending sales were less than one percent off from the previous month, but are still an impressive 31 percent above where they were 12 months before.

Home prices also appear to be moving on an upward curve, according to the latest Clear Capital Home Data Index -- which tracks price movements in thousands of local markets and Zip codes.

Clear Capital's national report for the month of May found prices up by 6.8 percent year over year.

Consumer confidence is definitely powering some of these sales and price numbers, economists say. The Conference Board's index for consumer confidence in May rose by five points -- a good sign for consumers' willingness to spend money.

Lynn Franco, who directs the Conference Board's survey research center, noted that the "expectations" component of the index was particularly strong -- and is now at its highest point in nearly three years.

According to Franco, consumers' previous fears about the job market, incomes and the overall economy have been on the decline for a couple of months now.

Meanwhile, mortgage giant Fannie Mae released its latest economic projections for the rest of the year. Chief economist Doug Duncan says he sees a "self-sustaining economic recovery" gradually taking shape -- again good news for housing.

Of course, not all the latest numbers on real estate are upbeat. They never are. Now a closely watched index tied to likely new home purchase offers two to three months down the road has gone negative. The Mortgage Bankers Association's index of new loan applications declined again for the third straight week, and now is at its lowest point in 14 years.

What's going on here? Most likely its the tax credits. The April 30 deadline for signed contracts for the two tax credit programs -- and the phaseout of the entire credit program June 30 -- are definitely pushing loan applications down.

As we said last week, the credits -- which are part of the federal stimulus efforts -- pushed many purchasers to move up their transactions to the first half of the year. Lawrence Yun, chief economist for the National Association of Realtors, says the underlying strength of the economic recovery should allow sales and loan applications to recover in the second half, without any need for additional federal help.

Copyright © 2010 Realty Times. All Rights Reserved.

Markets Overseas Lowers Mortgage Rates

2010-05-28T09:23:00.000-07:00

From Realty Times of May 28, 2010

Instability in Financial Markets Overseas Lowers Mortgage Rates Here

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending May 27, 2010, down from last week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.

The 15-year FRM this week averaged 4.21 percent with an average 0.7 point , down from last week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, up from last week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.

The 1-year Treasury-indexed ARM averaged 3.95 percent this week with an average 0.6 point, down from last week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent."

"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Rates at an All Time Low

2010-05-25T08:56:00.000-07:00

From Realty Times of May 25, 2010

Today's Mortgage Rates at an All Time Low by Ed Ferrara

Wary of a volatile stock market and concerned about by European debt woes investors moved to bonds last week pushing bond prices up and mortgage rates down. Mortgage rates, which move the opposite direction of mortgage-backed securities prices, had wavered just below 5% for much of the year until last weeks big decline. Mortgage rates today are even lower than levels December of last year, what's now the previous all time low.

Today's official FreeRateUpdate.com conventional 30 year fixed mortgage rate, available to well-qualified borrowers paying about a point origination, is 4.5%. Today's conventional 15 year fixed rate is 4%, with some lenders reported "squeezing" out 3.875%.

Today's FHA 30 year fixed rate is 4.375%. APR (closing cost) on an FHA loan is typically much higher than that of a conventional mortgage because of MI and other FHA fees.

Today's jumbo 30 year fixed rate, for jumbo mortgages exceeding jumbo conforming loan limits, is 5.5%. It's reported 5.375% is available to borrowers with an extremely low loan to value ratio.

Wells Fargo, the nations largest volume mortgage originator, is currently offering a conventional 30 year fixed rate of 4.875%, with an APR of 5.065. Wells Fargo mortgage rates are available on their website.

FreeRateUpdate.com researches over 2 dozen wholesale lenders' rate sheets for brokers on a daily basis to determine the most accurate mortgage rates for well-qualified borrowers paying a standard origination fee of about 1 point.

Today's Mortgage Rates - currently available to well-qualified consumers at a standard .07 to 1 point origination.

30-yr fixed-rate - 4.500%

15-yr fixed-rate - 4.000%

5/1 ARM rate - 3.500%

FHA 30-yr fixed-rate - 4.375%

FHA 15-yr fixed-rate - 4.00%

FHA 5/1 ARM rate - 3.500%

VA 30-yr fixed-rate - 4.625%

Jumbo 30-yr fixed-rate - 5.500%

Jumbo Conforming 30-yr fixed-rate - 4.750%
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Copyright © 2010 Realty Times. All Rights Reserved.

Real Estate Outlook: Up or Down?

2010-05-17T08:26:00.000-07:00

From Realty Times of May 17, 2010

Real Estate Outlook: Up or Down? by Kenneth R. Harney

You may have seen the latest home sales and price numbers and wondered: What's going on here? Are we up? Are we down?

Depending on which TV network reported the news last week, it sounded either like real estate is continuing along its steady road to recovery - -or that we just hit a pothole in the road.

One major business news channel reported it this way: "Home sales down 14 percent in the first quarter." Other media reported an 11 percent GAIN.

So what is it?

Well, dig down into the actual numbers from the National Association of Realtors and you find that, yes, 2010 first quarter home sales were 14 percent lower than they were in the final quarter of 2009.

Home sales nationwide, however, in the first quarter of 2010 were 11.4 percent higher than they were during the same quarter the year before. And any economist will tell you: year to year comparisons are more meaningful than quarter to quarter data, which tend to be more volatile.

Lawrence Yun, chief economist for the National Association of Realtors, pointed out that sales in the fourth quarter of last year were unusually high because of a surge of closings related to the original expiration date of the housing tax credit.

We can probably expect a similar surge to show up some time in the coming two quarters caused by sales closings before the June 30 termination date of the credit program.

The 11 percent year over year gain is a much more reliable gauge of where the market really is, says Yun -- and that's a very healthy trajectory because consumers have more confidence in the economy, are spending more, and mortgage rates remain near all-time lows.

Gains in prices year over year in local markets are especially encouraging: Of the 152 metropolitan statistical areas surveyed by the National Association of Realtors, median prices in 91 were higher than the year before. Though most of the gains were in single digits, 29 markets saw median price increases in double digits.

Economists say the price and sales gains reflect the improvements underway in the overall US economy. The latest federal employment numbers saw a 290,000 net job increase in March, plus a drop in new filings for unemployment insurance claims.

Manufacturing jobs are expanding again, after years of declines, and the Gross Domestic Product (or GDP) is up by more than 3 percent.

In the words of Freddie Mac's chief economist, Frank Nothaft, "the underlying fundamentals for housing markets are improving rapidly" -- and should continue to do so through 2010.
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Copyright © 2010 Realty Times. All Rights Reserved.

Home Buying Secrets for the 'Average Joe'

2010-05-13T07:06:00.000-07:00

Realty Times of May 13, 2010

Home Buying Secrets for the 'Average Joe' by Broderick Perkins

New York City attorney Edward A. Mermelstein is, well, a big shot in the Big Apple -- but he hasn't forgotten the little guy.

Co-founder of the international, multilingual (11 languages) real estate law firm Edward A. Mermelstein & Associates, he's also got an office in Moscow and offers legal services to financial and real estate institutions, including representation for international transactions, business litigation, dispute resolution and insurance matters.

Clients include international conglomerates, start-up ventures and entrepreneurs, multi-national corporations, land charitable organizations, government officials and others, but he also offers insight for the 'Average Joe' -- home buyers who need all the help they can get right now.

Mermelstein's "Home Buying Secrets for the Average Joe" are a timely example of his insight for buyers.

• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood, which can be found on websites such as Zillow.com, PropertyShark.com, StreetEasy.com, HouseValues.com, Trulia.com and others. Keep in mind these numbers sometimes trail the market by several months. A real estate agent can provide the latest sales data.

• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.

Go to AnnualCreditReport.com, the only federal government-sanctioned service for obtaining a truly free credit report from one or all three of the major credit bureaus. On AnnualCreditReport.com, select your state and hit the red "Request Report" button and follow the instructions. The report is free, but you will have to pay a nominal fee to get your credit score.

• Bid low - In many of today's buyers' markets you can offer 10 to 15 percent below the list price because prices are based on contracts signed three to four months ago. List prices don't necessarily reflect the most current values, especially in markets still on the decline, according to Mermelstein.

• Consider a 'Lucky 7' loan - Take advantage of the lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.

Mermelstein also says to consider 30/15 year mortgages which are fixed for 15 years, amortized over 30 years and due in full in 15 years.

These and other mortgage options come with lower starting rates as a hedge against interest rates rising in the near future.

• Get pre-approved - Go beyond prequalifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price.

• Consider a newly built home - The new home sector has been harder hit than resales. Concessions and reduced prices are the norm. The latest U.S. Census Bureau data reveal that sales of new homes fell for the fourth consecutive month in February, to a seasonally adjusted annual level of 308,000 sales - a year-over-year decline of 13 percent and the lowest level ever. Just be sure to check out the reputation of the builder.

• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always. Just because it's new doesn't mean it's defect free. Hidden problems can torpedo the value of your home.

• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality. • Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.

• Negotiate - Don't be afraid to dicker. It's a buyers' market. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.

• Don't skimp on the help - If you look for the least expensive attorney, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then carefully vet them.
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Copyright © 2010 Realty Times. All Rights Reserved.

Real Estate Outlook: Experts Weigh In

2010-05-10T07:28:00.000-07:00

Realty Times of May 10, 2010

Real Estate Outlook: Experts Weigh In by Kenneth R. Harney

Mega-investor Warren Buffett and a group of top corporate leaders are weighing in on a key issue that's crucial to a sustained real estate recovery: How long will the good economic news we've been getting lately continue?

Are we going to be let down later in the second half of the year, or is the current, slow-moving national economic growth pattern a long term trend?

Buffet told his annual stockholders gathering in Omaha that, the economy is showing "significant" and persistent improvement for the first time since the financial crisis broke in 2008.

Other top business leaders polled by the Conference Board -- and quoted last week by the Wall Street Journal - said they are now "confident that the U.S. will see sustained growth through 2010" - with moderate gains in employment, consumer spending and consumer confidence.

That's hugely important for housing of course - and offers a strong answer to economic doomsayers who predict a sharp drop in home sales and real estate activity following the expiration of the tax credits.

The latest housing and mortgage numbers certainly look encouraging:

Pending home sales jumped by more than five percent in March, according to the National Association of Realtors, and were 21 percent higher than the previous year for the same month.

Home prices are turning at least modestly positive again in the majority of large housing markets. The closely-watched PMI risk index, which looks at price decline potentials for two years out, found that 42 of the 50 largest markets in its latest survey showed diminished risk.

Another index -- from valuation data firm Clear Capital - found home prices gained by five percent nationally year over year. Prices in a handful of what Clear Capital calls "micro" markets are doing better than that. Washington DC, for example, saw an 8.4 percent increase over last year, according to the latest index.

Meanwhile, new applications for loans to purchase houses took another big jump -- up 13 percent over the previous week, according to the Mortgage Bankers Association.

MBA vice president for research, Michael Fratantoni, said that last week's FHA and VA share of home purchase applications soared above 50 percent -- the highest it's been in more than two decades.

Finally, there was some outstanding news for home buyers and sellers in high cost markets: The jumbo loan market is roaring back -- with more banks now offering big loans and cutting rates. One major lender even announced that for credit-worthy applicants, it's dropping rates on jumbos to 5.7 percent for 30 years -- the best ever.

Copyright © 2010 Realty Times. All Rights Reserved.

Real Estate Outlook: Faster Recovery?

2010-04-19T08:28:00.000-07:00

April 19, 2010 in Realty Times

Real Estate Outlook: Faster Recovery?
by Kenneth R. Harney

It's been a long time since we've seen the Wall Street Journal run a front-page article suggesting that the national economy appears to be rebounding faster than most analysts forecast. But that happened last week.

And over the past couple of years, we haven't seen retail sales -- a key barometer of consumer confidence -- jump by almost two percent in a single month. But we saw that last week as well.

And then there's real estate: The latest Federal Reserve "beige book" on economic conditions nationwide, issued last week, said something we haven't heard in a long, long time. Housing activity is up in 11 of the 12 bank districts.

All of this, of course, sounds like promising news for home sales in the coming months. In fact, Freddie Mac's economists see total sales this year at least 10 percent higher than last year, even with the possibility of higher mortgage interest rates.

But there are complications in the mix: The Fed's "beige book" report essentially said, yes, housing is on an upward path at the moment, but what happens to sales after the home purchase tax credits expire mid-year?

Will expansion elsewhere in the economy be able to sustain sales and prices?

Lawrence Yun, chief economist for the National Association of Realtors, has similar concerns. In his latest commentary, Yun says steadily rising employment will be essential to keeping housing positive once the credits disappear.

The employment report for March was encouraging: 162,000 net new jobs, Yun noted, even in hard hit sectors like manufacturing. Yun's forecast model projects one million additional new jobs this year, plus another two million next year.

But even that sort of rebound in employment won't be enough to replace the 8.2 million jobs lost in the recession years. So the unemployment challenge is likely to be with us for a few years -- at best.

Meanwhile, though foreclosures remain troublingly high, the rate of delinquencies on existing mortgages may have actually peaked and could be headed downward. Equifax and Moody's Economy.com report that the percentage of home loans thirty days late dropped in the first quarter - the first decline in four years.

And in major housing markets that took hard hits during the bust, signs of recovery continue to multiply. For example, in the six counties of Southern California, home sales were up 33 percent in March over February, and were up five percent over 2009 levels, according to MDA Data Quick.

Even median prices were on the rise -- by 14 percent over year-earlier levels.

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Rates Dip

2010-04-13T10:23:00.000-07:00

April 13, 2010 Realty Times

Mortgage Rates Dip - Private Buyers Fill Government Void
by Ed Ferrara

Last Wednesday afternoon, just as results of the weekly Freddie Mac survey were finalized, mortgage rates dipped. The decline in long term mortgage rates was an effect of rising MBS prices. Mortgage rates move opposite mortgage-backed securities prices. Surprisingly, so far private buyers have successfully filled the void left in mortgage-backed securities markets since the government discontinued their MBS purchasing program on Mar. 31st.

FreeRateUpdate.com research of wholesale lenders' rate sheets shows conventional 30-year fixed mortgages are available today at 4.875% to well-qualified consumers paying a standard .07 to 1 point origination, down from 5% this time last week. 15-yr fixed mortgages are available at 4.25, and 5/1 adjustable rate mortgages at 3.75.

FHA 30-yr fixed loans are available at 4.75%, down from 4.875 last week. Despite the FHA 30-yr rate being slightly better than that of the conforming 30-yr, cost and in turn APR is significantly higher because of MI and other FHA fees.

Jumbo 30-yr fixed mortgages remain available at 5.625%.

Despite rates near all time lows refinance applications are down a whopping 16% according to the Mortgage Bankers Association. Purchases, up for the third straight week, now make up half of all applications.

Today's Mortgage Rates:

30-yr fixed-rate - 4.875%

15-yr fixed-rate - 4.250%

5/1 ARM rate - 3.750%

FHA 30-yr fixed-rate - 4.750%

FHA 15-yr fixed-rate - 4.50%

FHA 5/1 ARM rate - 3.750%

VA 30-yr fixed-rate - 5.000

Jumbo 30-yr fixed-rate - 5.625%

Jumbo Conforming 30-yr fixed-rate - 5.250%
Source: freerateupdate.com

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Rates Lower After Strong Auction Demand

2010-04-12T08:20:00.000-07:00

Rates Lower After Strong Auction Demand
Highlights Average 30 yr fixed rate Stocks (Weekly)
Continuing Jobless Claims fell to the lowest level since December 2008

The Fed lowered its forecasts for inflation in 2010 and 2011

As expected, the European Central Bank (ECB) made no change in rates

The Dow stock index reached an 18-month high

This week: -0.05% Dow: 10,950 +50

Last week: +0.10% NASDAQ: 2,425 +25

Although this week's economic data was generally stronger than expected, it was overshadowed by solid demand for the Treasury auctions and intensified concerns about the economic situation in Greece, which helped mortgage markets. After reaching the highest levels since August, mortgage rates ended a little lower than where they ended last week.

Recent increases in yields on long-term fixed-rate securities such as 10-yr Treasuries and mortgage-backed securities (MBS) appeared to have been sufficient to attract investors. Very strong demand from both foreign and domestic investors for Wednesday's 10-yr auction pushed Treasury yields lower, and mortgage rates followed. Increasing the appeal, renewed worries about the fiscal situation in Greece caused investors to seek the safety of US securities. Comforting statements from Fed officials that they expect inflation to remain low for a long time also added to the demand.

In the housing sector, February Pending Home Sales jumped 8% from January, far exceeding the consensus forecast. Pending Home Sales are a leading indicator of housing market activity. The chief economist of the National Association of Realtors (NAR) considered the data to be a potential sign of a 'second surge of home sales this spring'. To receive the homebuyer tax credit, contracts must be signed by the end of April, which likely boosted the results for February. As buyers seek to take advantage of the program, March and April pending sales may show strength as well.

Courtesy of:

Craig Bohall
Loan Officer
5304 E Southern Ave #101
Mesa, AZ 85206
480-344-3646
craig@myazmp.com
www.myazmp.com

Pending Sales Up

2010-04-12T08:14:00.000-07:00

April 12, 2010 Realty Times

Real Estate Outlook: Pending Sales Up by Kenneth R. Harney

Signs of recovery in the housing market and the national economy keep popping up - and are even beginning to surprise veteran analysts on Wall Street and elsewhere.

Though economists had expected the latest pending home sales index to be down - after all, February saw the worst weather in decades in large parts of the U.S. - the numbers actually took a big bounce.

The National Association of Realtors reported that pending sales jumped 8.2 percent for the month and were 17 percent higher than they were at the same time last year.

Contracts in the Northeast were up by 9 percent, the Midwest by 22 percent and in the South by 9 percent. Only the Western region came in negative - down by 5 percent. But even in the West, pending sales were 15 percent higher than they were the year before.

With the April 30 deadline for sales contracts to qualify for the two housing tax credits just weeks away, analysts expect home sales activity to remain high. Lawrence Yun, chief economist for the National Association of Realtors, says he thinks we may be in “the early stages of a second surge” of real estate transactions that could continue into mid-year.

But let's be clear: Home sales are not only being pushed by tax credits. Far stronger impetus is coming from steadily improving conditions in the national economy and rising consumer perceptions that finally things are getting better.

Look at the latest monthly employment numbers from the Bureau of Labor Statistics. For the first time in nearly two years, there was significant new job creation during the month of March - 162,000 payroll positions.

That was helped along in part by Census Bureau hiring to conduct the 2010 census, but there was growth elsewhere as well: 15,000 net new construction jobs, 17,000 manufacturing jobs, and 11,000 business services jobs.

Home Depot and other big household-oriented retailers announced that they have begun hiring again. Retails sales nationwide jumped by 23 percent for the month; home furnishings and furniture sales were up 14 percent

Mark Zandi, chief economist for Moody's Economy.com, told the New York Times that “consumers are (getting) almost giddy” in their zeal to resume spending, and they are cutting their savings to fund their new purchases.

All of this, of course, is great news for housing, which is hardwired to employment growth and consumer confidence

But don't assume we're out of the woods quite yet -- not with the national unemployment rate stuck at 9.7 percent. And there's another challenge taking shape on the horizon: Rising mortgage rates that are inevitable in an economy rebounding out of recession.

Copyright © 2010 Realty Times. All Rights Reserved.

30-Year Mortgage Rates to Highest Level

2010-04-09T08:31:00.000-07:00

From Realty Times of April 9, 2010

Bond Yields Push 30-Year Mortgage Rates to Highest Level in Eight Months

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.21 percent with an average 0.6 point for the week ending April 8, 2010, up from last week when it averaged 5.08 percent. Last year at this time, the 30-year FRM averaged 4.87 percent. This is the highest the 30-year FRM has been since the week ending August 13, 2009 when it averaged 5.29 percent.

The 15-year FRM this week averaged 4.52 percent with an average 0.6 point, up from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.54 percent. This is the highest the 15-year FRM has been since the week ending December 31, 2009, when it averaged 4.54 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent this week, with an average 0.6 point, up from last week when it averaged 4.10 percent. A year ago, the 5-year ARM averaged 4.93 percent.

The 1-year Treasury-indexed ARM averaged 4.14 percent this week with an average 0.5 point, up from last week when it averaged 4.05 percent. At this time last year, the 1-year ARM averaged 4.83 percent.

"Once again, mortgage rates followed bond yields higher amid a positive March employment report," said Frank Nothaft, Freddie Mac vice president and chief economist. "The economy added 162,000 jobs, which was the largest monthly gain over the past three years. In addition, revisions raised the January and February figures by a combined 61,000 workers. Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007."

"Following its extension in early November of last year, the homebuyer tax credit is showing some impact on housing market activity, mostly through the use of government-insured mortgages, which tend to be a favorite among first-time homebuyers. Compared to the week ending December 4, 2009, which was the first week after the original expiration date, mortgage applications for home purchases are up 17 percent for the first week in April of this year for government-insured loans, compared to an 11 percent decline in conventional loans, according to the Mortgage Bankers Association. Also, pending existing home sales jumped 8.2 percent in February, well above the market consensus and represented the second largest increase since records began in 2001, the National Association of Realtors ® reported. Homebuyers must enter a housing contract by April 30th and close by June 30th in order to receive the tax credit."

Copyright © 2010 Realty Times. All Rights Reserved.

Real Estate Outlook: National PMI Index

2010-02-15T20:28:00.000-08:00

Realty Times of February 15, 2010

Real Estate Outlook: National PMI Index by Kenneth R. Harney

One of the most accurate forecasters of housing value movements has just signaled something potentially important: For the first time in a year, according to the national PMI index, “overall risk has decreased” in the 384 metropolitan markets covered by the survey.

The PMI risk index is produced quarterly by private mortgage insurance giant, PMI Group. It examines local employment, household income, economic growth, demographic changes and other factors to predict where home values are headed in these market areas.

PMI's risk index was among the earliest warning bells about the housing crash, so its quarterly findings are followed closely by mortgage analysts. According to the latest index released last week, home values are increasing in dozens of major metropolitan markets, causing the average risk rating for the U.S. to drop by 2.6 percent.

That's not huge, but it's a directional signal. The index found risk levels elevated in the so-called “sand states” -- California, Florida, Nevada and Arizona. It also documented a slight worsening of affordability conditions in 81 percent of metropolitan markets -- mainly the result of the uptick in home prices and slightly higher average mortgage interest rates late last year.

Another key market barometer was released last week with at least mildly encouraging numbers: The Zillow index of home owner negative equity found that the national average rate dropped to 21.4 percent in the last quarter of 2009, down from 23 percent in the second quarter.

Also the Federal Reserve's quarterly study measuring the nation's finances - the so-called “flow of funds” report, found that after nearly three years of declines, Americans are building positive equity in their homes again.

Between the first quarter of last year and the third quarter, according to the Fed, homeowner equity increased by almost $1 trillion. That was caused primarily by a combination of rising home values and principal paydowns on mortgages.

Meanwhile, home builders are also reporting an easing of their multi-year tale of woe: Several major publicly-traded national builders, including D R Horton and Beazer, announced last week that they are seeing higher numbers of orders along with reduced cancellation rates on contracts.

Horton said in its most recent quarter, orders for new homes were 45 percent above year-earlier levels, and the cancellation rate dropped from 38 percent to 26 percent.

Mortgage rates continue to be helpful as well: Thirty year fixed rates dropped to 4.9 percent last week, according to the Mortgage Bankers Association. Fifteen year rates remained flat at 4.3 percent.

Copyright © 2010 Realty Times. All Rights Reserved.

Buyer's Tax Credit

2010-02-12T07:13:00.000-08:00

Last October most people thought the first time home buyers’ tax credit was over and done with, the deadline of November 30, 2009 looked impossible for most people to close escrow within the time frame necessary to claim their tax credit of up to $8,000. Don’t let this happen twice!

Thanks to the National Association of REALTORS’® call to action and the overwhelming response of its members, we got an extension and expansion of this valuable program. Its new expanded version not only extends the first time home buyer tax credit but now opens the program up to property owners that have owned their home for at least five (5) years.

I invite you to visit REALTOR.org for a full explanation of this program together with free and low-cost pamphlets to order/download explaining how this works. Bottom line for both tax credit groups is they must have a property under contract by April 30th, 2010 and close escrow by June 30th. Come on people – time’s a wastin’. Let hit the road running and help clients take advantage of that credit. Check out what’s going on right now to help you:

Refinancing

2010-02-11T07:22:00.000-08:00

Realty Times of February 11, 2010

Resolve to Take a Look at Refinancing by Broderick Perkins

If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.

Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.

What's more, the year began with fixed interest rates hovering slightly above 5 percent, but still near record lows, according to Erate.com.

First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment.

The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.

The study analyzed residential mortgage refinances that occurred between October 2008 and June 2009 to test the impact of Federal Reserve efforts to lower interest rates and to measure effect of the Making Home Affordable's Home Affordable Refinance Program (HARP).

This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. The previous HARP loan-to-value limit was 105 percent.

Also, if the existing mortgage were written without mortgage insurance, the new loan won't be burdened with the extra cost. Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.

Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

Another plus from the program: The higher loan-to-value ratios were first available only to qualified borrowers who applied through their existing servicer.

That's changed.

Since Oct. 1, 2009, homeowners got the option to shop around and refinance through any Fannie or Freddie lender.

In addition to lowering your monthly payment, a refinanced mortgage can move you to a fixed or adjustable rate, shorten the term of your home loan, or let you tap home equity -- with a lender's approval.

"The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets," said study author, Mark Fleming, Ph.D. and First American's chief economist.

"This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure," he added.

Perhaps, but some say the economy needs more than lower rates.

"Low fixed rates are only part of the solution to our economic problems," says Nancy Osborne, chief operating officer at Erate.com.

"Home buyers can enjoy record low rates to help them qualify for more home, and this in conjunction with the government's home-buyer tax credit work to stimulate the purchase market, yet the rising unemployment rate may make purchasing a home somewhat risky for all but the most securely employed," she added.

To check your eligibility for a refinance under the new provision, go to Making Home Affordable.

To compare rates, costs and other factors by state, go to Erate.com.

Copyright © 2010 Realty Times. All Rights Reserved.

Housing Affected by Demographic Trends

2010-02-05T07:25:00.000-08:00

From Realty Times of February 5, 2010

Housing Affected by Demographic Trends by Phoebe Chongchua

The Urban Land Institute predicts there will be two major changes beginning in this new decade in our country that will affect the housing market.

The first is that home appreciation will slow. The report predicts annual appreciation of 1 percent to 2 percent. The second change is that the record-high U.S. homeownership rate will decline from 69 percent to 62 percent.

Four other demographic trends are likely to have an impact as well. Aging baby boomers, those 55 to 64 years old, will keep working, and, some may stay put in their current suburban homes until the values recover. And, just as I wrote about last week, those in this group who do move will look for comfortable, easy homes (first-floor master bedroom), but the report indicates they’ll look for mixed-age living environments that cater to active lifestyles.

The second major demographic trend could impact the second-home market. Those between the ages of 46 to 54 years old, according to the report, are in their prime earning years; however, they lack home equity and may not be able to afford second homes (unlike the older baby boomers).

There are approximately 68-million people that make up Generation Y. This group is even larger than the baby boomers. But the report indicates this group is less interested in homeownership. The author of the report, John K. McIlwain, wrote, “They will be renters by necessity or choice for years ahead.” Not surprisingly, this tech-savvy group places high value on communities—real and virtual—where information and ideas can be shared.

This generation likes walkable, close-in communities. They’re not seeking to escape to the outer edges of town, unless they can’t afford anything nearby. Another big draw—“net zero” homes—green and powered exclusively by alternative energy.

The fourth major demographic trend involves immigrants. This group is often attracted to multi-generational housing in areas that have a strong sense of community. So, larger homes are preferred, if affordable.

Overall, the lasting stability of the U.S. housing market, according to McIlwain, will depend most on the structure and revitalization of the private home mortgage finance system.

"Re-establishing a robust private mortgage market will require both strong market fundamentals and a reformed mortgage securitization structure that eliminates past abuses," McIlwain said. Bye-bye suburbia, study says. Well, not completely. But the study does indicate that several factors are escalating the popularity of urbanization: two-person household growth (including those households without children), fewer baby boomers moving to the suburbs, Gen Y opting/forced to rent rather than own, and public policies that encourage compact development.

However, the author of the study says that urban infill development can’t accommodate all the housing demand from the demographic groups. McIlwain cautions that suburban development "must adapt or it will be obsolete.” A new era is blossoming, “The suburban century is over. This is the urban century."

Copyright © 2010 Realty Times. All Rights Reserved.

90 Day No Flip Rule Waived

2010-01-18T12:23:00.000-08:00

Investors are now exempt from the 90-day seasoning rule. The datailed rules can be found here:

90 DAY FLIP RULE WAIVED

This will allow investors that have purchased FHA repos to put them on the MLS or By Owner networks much sooner. This should offer some good properties much sooner, move in ready as compared to Short Sales and Bank Owned - providing the investor cleans up the properties after his purchase.

The incentive for the investor is a quick return on his investment and increases the rate at which foreclosed homes are returned to the market in move in condition.

Let's hope it works as intended!

Short Sales a More Usable Tool

2010-01-15T07:31:00.000-08:00

By Paul Owers in Lowe's Daily Real Estate News [newsletter@rismedia.com] of 1/15/10

New Guidelines Meant to Make Short Sales a More Usable Tool

Posted By susanne On January 14, 2010 @ 4:47 pm In Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story

[1]RISMEDIA, January 15, 2010—(MCT)—Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.

The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida’s housing market, where about one in every five existing-home purchases involves a short sale.

Gary Balanoff, a real-estate agent with RE/MAX Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury’s expedited short sale process emerges between now and April, he said, he’s not going to tell his clients any differently. “It’s a very tough process to get some degree of standards,” Balanoff said of short sales. “I think this will help—it will put more pressure to comply and get quicker results. Three or four months of waiting for an answer is not doing anyone any good—even lenders.”

The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn’t expect the new deadline measures to be applied or enforced evenly.

In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are “under water,” meaning they owe more than their homes are currently worth.

According to the Orlando Regional Realtor Association, 20% of its members’ existing-home sales in December 2009 were short sales. An additional 43% were bank-owned properties, and the remaining 37% were “normal” resales. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.

The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.

The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.

The Treasury plan, which must be implemented by lenders no later than April 2010, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000. Sclafani, a psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. “I want to move on, but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”

U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales “a more usable tool.” Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen. But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed. “This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”

Some Florida real estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”

A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified. Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.

Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association. “That will be a challenge,” he said.

In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties. “I think the pressure on the banks is a good thing,” Kellogg said.

(c) 2010, Sun Sentinel

Distributed by McClatchy-Tribune Information Services.

© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trademarks of LF, LLC.

As noted in the article, there are skeptics re how the banks will actually respond.

Real Estate Outlook

2010-01-12T17:00:00.000-08:00

Realty Times of January 12, 2010

Real Estate Outlook: The Numbers Are In by Kenneth R. Harney

The drop in the latest pending home sales index got a lot of press attention, but that blip downward shouldn't be your guide on what to expect for real estate in 2010.

The 16 percent decline in November pending sales from October's unusually high index was due almost entirely to buyers' behavior confronting what they thought was an expiring tax credit.

In October the pending sales index went off the charts. Buyers were scrambling to sign contracts before the $8,000 credit program expired at the end of the month.

In November, buyer behavior was just the opposite. When Congress extended the credit through next April 30, the pressure was off. Nobody needed to rush to sign contracts.

Not surprisingly, the November index hit the skids.

Meanwhile, even November's pending sales number was a solid 16 percent above November 2008. That suggests that even without the extra incentive provided by the credit, the home sale market is gaining strength for its own fundamental reasons: huge pent-up demand, low prices and great financing.

But keep this in mind: Those fundamentals are dynamic - and buyers and sellers need to stay on top of them as they change in the weeks ahead.

For example, as we've noted before here at Realty Times, with the economy climbing slowly out of recession, and the Federal Reserve expected to throttle back on its mortgage securities purchases , interest rates are now trending upwards.

Last week's thirty year average fixed rate for new mortgages hit 5.2 percent, according to the Mortgage Bankers Association. That's still very low by historical standards, but it's up nearly a quarter of a percentage point just since mid December.

Fifteen year fixed rates averaged 4.6 percent -- a rise of one third of a point in the past few weeks.

Home prices are also beginning to trend upward in key markets, according to the latest Case-Shiller home price index. In San Francisco and Minneapolis, the index is up by about 15 percent since the low point earlier in 2009, according to an analysis by Bespoke Investment Group.

The same analysis found the Case-Shiller index up 8.3 percent from last year's low point to the latest month in metropolitan Washington DC, 7.6 percent in San Diego, 7.2 percent in Denver, 6.9 percent in Chicago and Phoenix, 6.8 percent in Dallas and 6.1 percent in Boston.

With reports of fewer layoffs plus significant new gains in manufacturing outplut and retail sales don't be surprised to see prices-and mortgage rates -- continue to rise in the months ahead.

Copyright © 2010 Realty Times. All Rights Reserved.

REO Discontent

2010-01-11T07:38:00.000-08:00

Note - A REO is Real Estate Owned - Banks don't want REO's. Bank owned/Lender owned properties are not Short Sales, they move much quicker!

Realty Times of January 11, 2010

Washington Report: REO Discontent
by Kenneth R. Harney

Mortgage giant Fannie Mae is unhappy about the mounting thousands of REO houses it's stuck with, but now it's moving to sell off that inventory faster than it has in the past, potentially opening up some interesting opportunities for home buyers and their agents.

In a new policy announcement, Fannie says it will now accept purchase offers for its REO immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review.

Under its previous policy, Fannie gave lenders and servicers fifteen days to find a better purchase offer for new REO they sent to the company following foreclosure.

That policy affected all repossessions where Fannie demanded the loan file on the house - potentially exposing errors in underwriting or servicing, and requiring reimbursement for losses by the lender.

But that policy also had a negative impact on Fannie's ability to move its REO out the door quickly. The fifteen day time-out slowed down the works - and sometimes kept properties out of reach of ready and willing buyers.

Partly as a result, Fannie's portfolio of unsold acquired real estate has been ballooning lately. According to its most recent securities filing, the company, now under federal control, took in more than 98,000 properties following foreclosures during the first three quarters of 2009.

During the same time, it sold about 90,000 houses.

But because of a widening imbalance of REO in and out the door dating to prior years, Fannie was sitting with 72,000 unsold houses -- about a 7 percent jump from the same period the year before.

Fannie's response to this REO bloat? Sell off the houses faster by accepting purchase offers through its network of real estate listing agents earlier.

In the company's memo to lenders and servicers, it basically said this: We're now going to market houses as soon as they come in the door and we've established a current value.

No more fifteen day time out period for lenders whose REO we've selected for loan file reviews.

As soon as Fannie lists an REO property, it will be fair game for home buyers. And if Fannie ultimately sells for a loss -- and the loan file review turns up bad underwriting or other problems -- Fannie plans to stick the lender with the loss.

Bottom line for home buyers and agents under the policy change: Look for earlier access to REO properties, and earlier decisions on purchase offers.

Fannie is determined to slim down its REO portfolio in 2010, and that just might provide opportunities for heads-up buyers and agents looking for deals.

Copyright © 2010 Realty Times. All Rights Reserved.

Mortgage Modification Video

2009-12-31T08:42:00.000-08:00

Realty Times of December 31, 2009

Mortgage Modification Video Valuable for Distressed Homeowners
by Broderick Perkins

A new video helps struggling homeowners navigate the federal mortgage modification program.

Offered for free to anyone by mortgage insurer and risk management company PMI Mortgage Insurance Co., the two-part video "Navigating the Home Affordable Modification Program" is a helpful adjunct to existing information about the federal Home Affordable Modification Program (HAMP) on the MakingHomeAffordable.gov Web site.

A mortgage modification occurs when the lender reworks the terms of your existing home loan, typically to lower payments and make the home more affordable for you. Lower payments can result from a lower interest rate, extended loan term, reduced principal or any combination of those approaches.

A mortgage modification is not a refinanced mortgage, which replaces the old mortgage with a new loan.

Part 1 of the "Navigating HAMP" video provides basic orientation for homeowners who may not have heard of HAMP, it covers the objectives of the program, and helps you determine if you qualify for a HAMP modification.

Under HAMP, you may qualify for a mortgage modification if your home is your primary residence; your first mortgage's balance is no more than $729,750; you face financial hardship that is affecting or will affect your ability to make mortgage payments; you signed for your current mortgage on or before January 1, 2009 and your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31 percent of your current gross income.

"Distressed homeowners who are facing the prospect of losing their home need to know that help is available for those truly interested in saving their homes. This instructional video leverages the growing popularity of internet-based video to give homeowners an overview of how HAMP works and their important role in the process," said John Jelavich, head of PMI’s Homeownership Preservation Initiatives group.

Part 2 of the "Navigating HAMP" video uses examples to demonstrate how affordability is achieved with a loan modification, it walks homeowners through the steps necessary to obtain a modification and discusses the information homeowners need to provide their mortgage servicer, including:

• Pay stubs or other verification of your monthly before-tax (gross) income.
• Your most recent income tax return.
• Statements for savings and other assets.
• Your first and second mortgage (if any), home equity loan or line of credit statements
• Account balances and minimum monthly payments due on all of your credit cards, car loans, student loans and other debts.
• A completed Hardship Affidavit describing any circumstances that caused your income to be reduced or expenses to be increased.

"The jury is still out on the success of the HAMP program. Progress has been slow in materializing but may finally be gaining steam as many of the trial loan modifications are finally beginning to transition into permanent ones," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Osborne added, "A large part of the problem has been getting the loan servicers ramped up with the staff and technology to handle the massive wave of modifications, something they had no real experience with previously."

To learn more about loan modifications visit "Mortgage Modification Madness", "Mortgage Modification Updates" and watch "Navigating the Home Affordable Modification Program."
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Copyright © 2009 Realty Times. All Rights Reserved.

NEW SHORT SALE RULES

2009-12-30T07:30:00.000-08:00

Realth Times of December 30, 2009

Investor Report: HUD Guidance by Kenneth R. Harney

Investors and others who expect to use FHA financing in connection with a short sale better check out the latest guidance issued by HUD last week.

A letter to lenders by FHA commissioner David Stevens essentially spells out the agency's revised policies on short sales.

Here's a quick overview:

Number one: Applicants for new FHA insured mortgages will be turned down - effective immediately - if they participated in a short sale of their principal residence, simply to “take advantage of declining market conditions,” or to “purchase a similar or superior property at a reduced price within a reasonable commuting distance” of the house they disposed of via a short sale.

Since FHA apparently believes that some homeowners may be renting out their current houses in order to buy others through short sales, Stevens's letter cautions lenders to make certain such applicants qualify under the agency's strict rules relating to rental income.

Those rules generally limit consideration of rental income from a vacated residence as part of the qualifying income to purchase another property.

In its guidance, FHA says lenders “may consider” rental income, minus an appropriate vacancy factor, when the applicant's loan to value ratio or LTV on the vacated property is 75 percent or less.

FHA rules also permit consideration of rental income when the borrower is relocating because of an employment change and has a one year signed lease agreement.

What FHA is saying with its new guidelines for lenders is this: We don't want to finance a bumper crop of rental investment houses where current owner-occupants spot a great deal in their local market that's listed as a discount-price short sale.

Even if that purchaser fully intends to occupy the replacement house as a principal residence, FHA says in effect: We want to play it safe on qualifying that buyer in terms of income sources. So we're going to be really strict when part of the applicant's qualifying income comes from renting out his or her former home.

Stevens added that people who dispose of their houses though short sales can qualify for FHA financing on another house only if they are current in payments on the mortgage for the previous year as well as on all installment debts.

On the other hand, short sellers who are in default on their mortgage - and used the short sale as an alternative to a foreclosure by their lender - generally will not be eligible for an FHA-insured home purchase loan for three years following the close of the short sale.

Copyright © 2009 Realty Times. All Rights Reserved.

Real Estate Resolutions 2010

2009-12-24T07:41:00.000-08:00

Realty Times of December 24, 2009

Real Estate Resolutions 2010 by Broderick Perkins

Sure you can lose weight, get in shape, launch a business or find a new job.

But haven't you also procrastinated long enough about buying a home?

How long has it been since you upgraded your home with a new roof, spiffed up landscaping or pulled some other home improvement?

And that post-World War II ranch home of yours could certainly use a few energy efficient do-overs.

Look to low mortgage interest rates, bargain home prices and other favorable market conditions to give you the resolve to consider home sweet home in your list of must-dos next year.

• Join the nearly 18 percent of Americans who say they've resolved to become a first-time homebuyer in 2010, according to a new Move.com survey. That's both a smart move and a timely one. Mortgage rates are at record lows, prices are down and the $8,000 first-time home buyer tax credit has been extended until April 30, 2010. It's also been expanded to include a $6,500 tax credit to move-up buyers.

• More than 15 percent of those who responded to the survey said saving money to purchase a new home is their top real estate resolution for the New Year. Resolve with them to learn the best way to budget, plan ahead and save money.

• Nearly 40 percent say No. 1 on their list of resolutions is starting a home improvement. Cheap home equity money should help them not only start, but also complete the job. Calabasas, CA-based Informa Research Services found home equity lines of credit (HELOCs) for $50,000, with an 80 percent loan-to-value note, were available in early December at an average variable rate of 4.98 percent. Some rates were as low as 2.74 percent.

• The Move.com survey also found 9.1 percent most wanted to fix their credit so they can buy a home next year. To get started all you need to do is take a look at your next credit card statement for a toll free number directing you to counseling help. That's part of the new, but little-known mandated disclosure provisions in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act).

• Nearly 16 percent are wisely considering buying an investment property as their top resolution. The couldn't have picked a better time in the last half decade. Another Move.com survey recently found more than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, thanks to more attractive investment conditions.

"If you anticipate inflationary conditions in the future, investment property could be a good bet to hedge against it," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

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Copyright © 2009 Realty Times. All Rights Reserved.

Move-Down Buyers Can Be Eligible For Tax Credit Too

2009-12-22T07:47:00.000-08:00

From Realty Times of December 22, 2009

Move-Down Buyers Can Be Eligible For Tax Credit Too by Bob Hunt

Move up, move down, move sideways; it just doesn't matter. Whichever direction you move, financially, you may still qualify for the new tax credit available to current homeowners. It is unfortunate that the credit has too often been characterized as a credit for "move-up" homeowners. The phrase carries the implication that the new home must cost more than the sale price of the former one. Indeed, even the November 6 White House Press Release said that the credit would be available to qualified homeowners who "wish to step up to a new home." Same implication.

So, it is worth emphasizing that the credit is equally available to homeowners who are moving down, cost-wise.

The move-down homebuyer is not an unusual phenomenon. For years retirees have been known to move from a larger home to one that is smaller and often less expensive. Moreover, it is reasonable to think that current economic conditions may lead to even more move-down buyers. Just as thousands of families have found it necessary or desirable to downsize with respect to their cars and their general lifestyle, so it may be when it comes to considering the costs of owning and maintaining a larger house than they really need.

The same requirements apply to both move-down and move-up buyers.

First of all, the previous home must have been occupied as the buyer's principal residence for at least five consecutive years out of the past eight years. Two examples: (1) Suppose that during the past eight years you occupied the property for three years, then rented it out for two years (perhaps because of a job transfer or temporary assignment), and then occupied it again for three years up until now. Even though you had occupied the property as your principal residence for six of the past eight years, you would not be eligible because you had not occupied it for five consecutive years. (I'm not saying this makes sense; I'm just reporting on the requirements.) (2) Suppose you bought a home eight (or more) years ago, you occupied it as a principal residence until two years ago when you sold it. Would you qualify? Yes, because you had occupied it as a principal residence for at least five consecutive years of the past eight.

There are important issues of timing as well. You must have purchased (that is closed on) the replacement home sometime after 11/6/2009 and before 4/30/2010. With one exception: the new home will also qualify if you had entered into a binding contract no later than April 30, 2010 and you closed no later than June 30, 2010.

The time the previous home sold doesn't matter. Indeed, it doesn't even have to be sold. You might, for example, keep it as a rental.

The tax credit is for 10% of the purchase price up to a maximum credit of $6,500 for joint filers and $3,250 for those filing separately. There is a full credit for singles whose income does not exceed $125,000 and for couples whose income is no more than $225,000. A phase-out applies to higher incomes up to $145,000 and $245,000 respectively.

The cost of the new home may not exceed $800,000.

The new home must be used as a principal residence for a three year period subsequent to closing, or else the credit must be repaid.

This program won't help everyone, of course; but it's pretty nice for those to whom it applies.
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Copyright © 2009 Realty Times. All Rights Reserved.

Your Credit Score

2009-12-14T08:22:00.000-08:00

From Realty Times of December 14, 2009

2010 and Rebuilding or Protecting Your Credit Score by M. Anthony Carr

If the latest numbers on credit card delinquency is any indicator, U.S. consumers are starting to get a handle on their credit card debt. In the 3rd quarter of this year, according to data from TransUnion, a credit reporting agency, the delinquency rate dropped to 1.1 percent.

The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O'Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home. The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.

Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans (low rates, low/zero point, and even product availability), seem to favor those with good credit.

The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850. They also have a great resource on how to understand the score: What I like about McLaughlin’s information from his Market Monitor newsletter is that he provides the number of points your score will drop or increase with these items in place or cleaned up.

“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most, some obvious, some not so obvious: Maxed out credit cards: Doesn’t seem like a big deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaacs, a hefty price to pay for accumulating debt.

30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.

Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.

Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.

Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.”

FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.

Here are the three credit reporting agencies that use the FICO score:

Equifax (www.equifax.com)

TransUnion (www.TransUnion.com)

Experian (www.Experian.com)

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Copyright © 2009 Realty Times. All Rights Reserved.

Complete Tax Credit Details

2009-12-14T07:17:00.001-08:00

Frequently Asked Questions About the Move-Up/Repeat Home Buyer Tax Credit brought to you by the National Association of Home Builders

Home Buyer Tax Credit

Should answer every question you can think of!

NEW FHA LOAN LIMITS

2009-12-02T17:53:00.000-08:00

FHA released the new loan limits starting January 1st 2010

Here in Maricopa County, we will see the max loan limit drop from $346,250 to $271,050 for SFR.

That is the same number as we used to have before HUD raised loan limits temporarily to allow for more folks to qualify back in 2008.

For a majority of the USA, the FHA loan limits will be …

1-Unit $271,050

2-Unit $347,000

3-Unit $419,400

4-Unit $521,250

For high cost areas, the limits will remain the same as previously set in 2008. They are as follows:

One-Unit $ 729,750

Two-Unit $ 934,200

Three-Unit $ 1,129,250

Four-Unit $ 1,403,400

In the future you can go to https://entp.hud.gov/idapp/html/hicostlook.cfm to find the limits whenever you wish.

The above info provided as a courtesy by:

Craig Bohall Your “Safe Harbor” Lender

ACADEMY MORTGAGE CORPORATION

480-344-3646 – office

480-374-6924 - e-fax

www.myazmp.com

craig@myazmp.com

Market Conditions

2009-12-01T07:26:00.000-08:00

Realty Times of December 1, 2009

Market Conditions

Existing home sales have shown promising figures, as first-time buyers take advantage of the buyer tax credit and historically low interest rates.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate1 of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," he said. "With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

Regionally, existing-home sales in the Northeast rose 11.6 percent to an annual level of 1.06 million in October, and are 27.7 percent higher than October 2008. The median price in the Northeast was $235,400, down 2.6 percent from a year ago.

Existing-home sales in the Midwest surged 14.4 percent. The median price in the Midwest was $146,600, a gain of 1.1 percent from October 2008, the only region seeing a gain in median price.

In the South, existing-home sales rose 12.7 percent to an annual level of 2.30 million in October and are 25.7 percent higher than October 2008. The median price in the South was $151,100, down 6.3 percent from a year ago.

The smallest increase in existing-home sales was seen in the West, which increased just 1.6. However, this number is a healthy 12.0 percent above a year ago. Home prices are still down for the region.

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Source: NAR
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Copyright © 2009 Realty Times. All Rights Reserved.

How to Save to Buy a Home

2009-11-27T07:46:00.000-08:00

Realty Times of November 27, 2009

How to Save to Buy a Home by Phoebe Chongchua

It can be one of the hardest things to do -- save money for your first home. But now, more than ever, there's incentive to buy. Government housing tax credits have been extended and that's sparking buyers' interest.

Reports show that U.S. homes sales increased 10 percent in October to the highest level since February 2007. The tax credit, less expensive homes, and lower mortgage rates are being credited. However, while the government is helping to support the purchasing of a home, many Americans still can't afford to buy one.

"Most Americans are spoiled. Most Americans spend a lot of money on discretionary items," says Eric Tyson, co-author of Home Buying for Dummies, 4th Edition. "What it really comes down to is you have to be motivated to look at where are you currently spending money and what discretionary spending can you cut off," says Tyson.

So how do you get in a position to buy a home? For some the process can seem nearly impossible. First-time homebuyers are often fearful they'll never be able to accumulate a down payment now that stricter guidelines are being enforced for taking out home loans.

Tyson says to look over your finances and see where things can be cut back a little. For instance, maybe you have a gym membership that you really use only a few times a month; does that justify having it? Another big area to find savings, especially for single people, is the dining out category. "Some people spend an enormous amount of money eating out," says Tyson. Tyson says if you really want to save, take a look at the car you're driving. "I argued 15 years ago that you should only pay cash for a car and that you should not take out an auto loan or a lease. My first publisher argued that's not realistic. … Well, if you're trying to save for your retirement or trying to save for a house and you go out and buy a $30,000 car by taking out an auto loan, that's insane—you can't afford it," says Tyson. Still, he says most Americans continue to take out auto loans, "and they do it because they can't afford the car and that's just crazy. What you're doing is borrowing against future income to be able to drive a car that's more expensive than what you can really afford."

"A severe recession as we've been through recently is a wake-up call and it forces people to realize that they can't continue to spend this way," says Tyson.

Tyson says he sees people who spend an enormous amount of money on things like sporting events and while he understands their passion, if they're trying to save for a home, something must go. "I'm not saying to cut it all out but how about cutting half of it out. It comes down to trade-offs." Another trade-off might be to watch some of the events on TV rather than go to them. This brings us to the point of seeking savings in your utility bills by bundling cable, Internet, phone or maybe even cutting down to the bare essentials of channels. "Shop anew for services and see if you can combine them under one company and get discounts for doing so," says Tyson.

Have you checked your cell phone bill lately? A lot of times those charges add up very quickly. "People are wasting an enormous amount of money in this area because of the Web surfing, the downloads, and the text messaging," says Tyson.

The bottom line is saving for a home is a very personal experience—what one person is willing to give up another person may not. If you keep your goal set on purchasing that home then you'll find the effort to get there is not nearly as difficult and you're likely to find that there are more places to cut costs than you realize.

Copyright © 2009 Realty Times. All Rights Reserved.

More on the Home Buyer Tax Credit

2009-11-12T08:31:00.000-08:00

"Broderick does a great job of clarifying the new legislation." - Denis

Realty Times of November 12, 2009

Home Buyer Tax Credit Extended, Expanded by Broderick Perkins

The extension of the first-time home buyer tax credit will help continue to clear out inventory, but expanding the credit to include more buyers may not be as helpful in high-cost housing areas.

President Barack Obama recently signed legislation that extends the deadline on the first-time home buyer tax credit and adds a smaller tax credit for move-up and other home buyers.

The extension and expansion gives home buyers a tax incentive to buy a home until at least April 30, 2010 -- April 30, 2011 for qualifying military personnel. The previous deadline was just weeks away, November 30, 2009.

"The extension of the first-time home buyer tax credit will be crucial to clearing out unsold inventory and especially the lagging bank owned inventory that has not even hit the market yet," said Kim DiBenedetto, president of the Monterey County Association of Realtors.

That's true of many housing markets.

"California Association of Realtor studies tell us that for more than 75 percent of home buyers this year, the tax credit was very important and more than 40 percent of the home buyers would not have been able to buy without the credit," added DiBenedetto.

The existing tax credit for first-time homebuyers remains at a maximum $8,000.

A new tax credit of up to $6,500 is available to qualifying existing homeowners who buy a new primary residence (or have one built) by April 30, 2010, if they owned their existing home for five consecutive years over the last eight years. Second homes don't qualify for the credit.

Home buyers have to repay the credit if they live in their primary residence less than 36 months and are not members of the military.

The new rule also raises the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, from the current $75,000 and $150,000.

The maximum allowed home purchase price is $800,000, which won't be as useful to move-up buyers in high-cost areas.

"Part of the bill also expanded the credit to move up buyers, however, it may not be as helpful to the homeowners in our areas because there is a cap on the purchase price of $800,000, but we are grateful to anything that will help even a few," said DiBenedetto, a real estate agent with Coldwell Banker Del Monte Realty in Carmel.

That's also true of high-cost markets nationwide.

Both first-time home buyers and others must contract to buy a home by April 30, but close escrow by June 30, 2010.

Buyers can claim the credit on their 2009 taxes, even if the purchase is made in 2010 by filing an amended return.

DiBenedetto said "This will also assist in selling the short sale inventory that those buyers were afraid to consider because of the time frame involved in closing them when they were on this deadline to close by the end of the month (November)."

Buyers who don't owe taxes can have the credit refunded to them as a rebate.

More information is available from the Internal Revenue Service (IRS}, including a question and answer page.

It's all good news for the housing market.

The National Association of Realtors says as many as 400,000 resale transactions (1.2 million for both new and resale homes) were completed specifically because of the first-time home buyer tax credit, since it began, and that put a dent in the housing inventory.

Home sales also add property and sales tax revenues to the coffers of local governments as reduced inventory helps boost prices and home values.

The first-time home buyer tax credit's availability has coincided with mortgage rates often hanging below 5 percent, according to Jeff Howard, CEO of Erate.com.

As the November 30 tax credit deadline neared, reports from the Commerce Department, revealed new home sales slipped 3.6 percent in September and were down 7.8 percent from September 2008.

Tax credit history

As part of the Housing and Economic Recovery Act of 2008, Congress first created a $7,500 first-time home buyer tax credit for those who purchased a home between April 8, 2008, and July 1, 2009.

Later, under the American Recovery and Reinvestment Act of 2009, Congress extended the credit and raised it to an $8,000 tax credit for those who purchased homes by the current November 30, 2009 expiration date.

By October 9, 2009, more than 1.2 million tax returns had claimed about $8.5 billion in the refundable tax credit, for both new and resale homes - according to the Treasury Inspector General for Tax Administration (TIGTA).

A TIGTA audit also revealed last month that nearly 90,000 taxpayers -- including nearly 600 children -- may have fraudulently enjoyed the credit, hoodwinking the government out of more than $600 million.

The new legislation includes provisions to stifle fraud after the Internal Revenue Service identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

Cheating the IRS is a federal felony that comes with a fine of up to $250,000 and three years in a federal pen, or both.

To combat fraud, a HUD-1 Settlement Statement will have to be attached to the tax return to secure the credit.

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Copyright © 2009 Realty Times. All Rights Reserved.

Tax Credit for Homebuyers & Owners Now Approved

2009-11-06T18:09:00.000-08:00

From Mike Neill of American Alliance Mortgage - Follow up:

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three year) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit Versus Tax Deduction

It's important to remember that the tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!

Higher Income Caps

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

Remember, the new tax credit program includes a number of details and qualifications. For mor information or answers to specific questions, please call or email me today.

In addition, you may be able to benefit from additional housing related provisions, including the following:

Tax Incentives to Spur Energy Savings and Green Jobs

This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings

This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits to HUD-Assisted Housing

This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance

This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

As always, if you have any questions about your specific situation or would like to discuss how you may benefit from this program, please call or email me. I'll be happy to sit down with you.

Mike Neill
American Alliance Mortgage
480-505-2202 ext. 208
mike@aamcbank.com

Fannie Mae Deed for Lease™ Program

2009-11-06T07:13:00.001-08:00

November 5, 2009

Fannie Mae Announces Deed for Lease™ Program

WASHINGTON, DC -- Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender.

"The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities."

The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income.

Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.

For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers.Our job is to help those who house America.

Fannie Mae Resource Center Telephone 1-800-7FANNIE
(1-800-732-6643)

New Tax Credit Extended Homebuyers

2009-11-05T14:40:00.000-08:00

NBC announced tonight that the following info reported by Nike Neill has been approved.

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From American Alliance Mortgage - Michael Neill

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500: First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000.

Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers.

First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.

Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.

Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.

Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

American Alliance Mortgage
Michael Neill
480-505-2202 ext. 208
mike@aamcbank.com

Mortgage Rate Rises to 5 Percent

2009-10-24T09:07:00.000-07:00

Realty Times of October 23, 2009

National Average Long-Term Mortgage Rate Rises to 5 Percent

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.00 percent with an average 0.7 point for the week ending October 22, 2009, up from last week when it averaged 4.92 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.

The 15-year FRM this week averaged 4.43 percent with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago, the 5-year ARM averaged 6.06 percent.

The one-year Treasury-indexed ARM averaged 4.54 percent this week with an average 0.6 point, down from last week when it averaged 4.60 percent. At this time last year, the 1-year ARM averaged 5.23 percent.

"Following bond yields, long-term mortgages rates edged up slightly this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Although rates for 5/1 ARMs and traditional 1-year ARMs are around half a percentage point below 30-year fixed mortgages, consumers appear to be seeking the stability of fixed-rate mortgages. According to the Mortgage Bankers Association, ARMs averaged only about 6 percent of the number of mortgage applications in September and October thus far."

"The housing market is still trying to recover in the second half of the year. The Federal Reserve reported in its October 21st regional economic review that housing market conditions improved in recent weeks, primarily from a pickup in sales of low-to medium-priced houses. However, residential construction activity was reported to remain weak in most areas. New construction of single family homes rebounded in September, rising at a 3.9 percent annual rate, but did not erase all of the declines set in August, based on figures released by the Department of Commerce. Moreover, homebuilder confidence, as measured by the National Association of Homebuilder's Housing Market Index, fell slightly in October and marked the first decline since January of this year."
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Copyright © 2009 Realty Times. All Rights Reserved.

Sell Short, Get $1,500

2009-10-22T07:49:00.000-07:00

Realty Times of October 22, 2009

Sell Short, Get $1,500 in Closing Costs by Broderick Perkins

The U.S. Treasury is poised to announce a finalized plan to expand mortgage relief efforts to include short sales.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance.

It's a strategy to avoid foreclosure, but banks have been more likely to let a home go into foreclosure, rather than short sell it, even if it means holding the property during moratoriums set by some jurisdictions.

That's because short sale bids often come in well below the last appraisal, real estate agents don't want the extra work involved and buyers fear a four-to-five month transaction period that could end in a no-deal scenario.

To help move more distressed properties through the clogged pipeline, the Treasury, under the Making Home Affordable's Home Affordable Modification Program (HAMP) is expected to announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals (the deed is transferred to the lender, avoiding the more costly foreclosure proceeding).

The Treasury will also pay the lender $1,000 for accepting a short sale or deed-in-lieu deal.

Earlier this year when the plan was first announced, there was also a provision to pay second lien holders up to $1,000 to relinquish their claim in such transactions.

Thus far, Refinancing Fannie Mae or Freddie Mac mortgages under the Home Affordable Refinance Program (HARP) and HAMP mortgage modifications have been the "go-to" foreclosure options among federal mortgage relief programs.

Some 260,000 homeowners have refinanced under the HARP program since January, according to the Federal Housing Finance Agency.

FHFA also said during the second quarter this year there were 11,700 short sales and 202,200 trial loan modifications under government programs.
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Copyright © 2009 Realty Times. All Rights Reserved.

For Help Making Your Home Affordable

2009-10-20T08:34:00.000-07:00

Learn About Making Home Affordable

Refinancing
Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home.

Modification
Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income.

Beware of Foreclosure Rescue Scams - Help Is Free!
Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes. Recognize and avoid common scams.
Assistance from a HUD-approved housing counselor is FREE.
Beware of people who pressure you to sign papers immediately, or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
Never make a mortgage payment to anyone other than your mortgage company without their approval.

Report Lending Discrimination to HUD

If you believe you have experienced discrimination based on race, gender, national origin, or another reason, contact HUD’s Office of Fair Housing and Equal Opportunity at 1-800-669-9777.

To read the full text of the government webpage, go to http://makinghomeaffordable.gov/

Washington Report: Tax Credit

2009-10-19T08:12:00.000-07:00

Realty Times of October 19, 2009

Washington Report: Tax Credit by Kenneth R. Harney

Realtors, home builders and consumers hoping not just for an extension of the $8,000 tax credit, but an expansion to all buyers in 2010, shouldn't hold their breath.

That's because it's looking more likely that Congress will only agree to a continuation of the current credit beyond its scheduled November 30 termination date.

But that's not bad news. Just a few weeks back the key question was: will Congress extend the credit at all? Now that looks like a pretty safe bet.

When it comes to tax issues, you've got to follow what New York Congressman Charlie Rangel is saying. He's the chairman of the Ways and Means committee, and no tax legislation has even a chance of getting anywhere without his say-so.

On the other hand, bills he supports, they just about always make it at least to the House floor, and usually beyond.

Here's what Rangel told reporters last week about the housing tax credit: "There's no question I think it should be extended," he said. How long, I haven't discussed." Rangel also said he doesn't thing that "eligibility should be expanded beyond the first-time home buyers," according to Dow Jones Newswires.

That's probably the kiss of death for lobbyists pushing for an increase in the maximum credit to $15,000, and expansion of coverage to nearly all buyers of homes in 2010, and an increase in the income limits for eligible purchasers.

The National Association of Realtors and the National Association of Home Builders have been the most outspoken advocates of a year long extension and expansion of the credit, up to a maximum $15,000.

Informed of Rangel's comments, home builders president Jerry Howard said he's no longer as "optimistic about expansion" as he once was.

But, on the other hand, chairman Rangel's endorsement of an extension of the credit -- for a yet-to-be specified period of months -- has got be a lifesaver for thousands of buyers who've been worried they'd miss out on this year's credit because they can't close their transactions by November 30.

The politics of the tax credit, and the likely rejection of a bigger credit, are all about the budget deficit. Lawmakers on both sides of the aisle are looking for ways to cover the multi-billion-dollar revenue costs of an extension of the credit. Some estimates go as high as $15 billion.

One idea advanced by Georgia Republican Sen. Johnny Isakson: tap into some of the unspent economic stimulus bill money still sitting in the $800 billion economic stimulus bill.

Copyright © 2009 Realty Times. All Rights Reserved.

Keep in mind, unless extended the cut off date is November 30,2009.

2009-10-16T08:18:00.000-07:00

Realty Times of October 16, 2009

Vital Information for First-Time Buyers by Phoebe Chongchua

The first-time homebuyer Federal tax credit for $8000, record-low interest rates, and nationwide median home prices dropping to the lowest point in five years, makes this an enticing time to consider buying a home. By the way, that tax incentive isn't truly just for first-time buyers -- it's defined as those not having owned a home in the last three years. Research and knowing your options are critical. Check with your tax accountant for more details. Note that the deadline is rapidly approaching to cash-in on this tax incentive, which runs out November 30th.

According to an article in August in the Raleigh News & Observer, 10.8 percent of buyers are motivated to buy due to Federal and state tax incentives. So far only 1.14 million buyers have filed for the credit but many more are expected to file for it on their 2010 returns. However, the National Association of Realtors reports that the first-time homebuyer figure in July was still about 10 percent below the average for the past six years.

There are many aspects to consider when buying your first home. Your price point, location, lifestyle, expert help, mortgage programs, inspections, how quickly you want/need to move, the list goes on. It can seem like an overwhelming process for first-time buyers. In fact, some shy away and continue to rent simply because they don't know who to turn to or where to begin. Today there are more resources than ever available with just the click of a mouse; however, that can create information overload! But if you take a breath and relax, I'll sort through some important factors for home buying. And even if you're a seller, it's good to review this material because it helps to remind you where first-time buyers' mindsets are when they make an offer on your home.

Give yourself more time than you think you need. Due to the housing crisis and credit crunch, the mortgage process can take even longer than it did previously. Searching for a home is averaging about 12 weeks while getting the mortgage process wrapped up can take up to 60 days, according to information released by National Association of REALTORS 2008 Profile of Buyers and Sellers.

Give yourself plenty of time to understand how much home you can afford, what kind of loan is most suitable for your needs, and, of course, plenty of time to select the home that fits your lifestyle. First-time homebuyers often don't have a lot of comparison shopping experience. Frequently they're just getting started. What is acceptable for a rental is likely different from what first-time buyers expect and accept when purchasing their first home. However, first-time buyers must understand that shopping for a home is akin to shopping for a mate … there are always some compromises that are necessary. If you don't allow enough time, you'll find that it will lead to headaches, rushed decisions, and, in the end, you may feel pressured to buy something that you have not had enough time to completely consider—maybe because you have to relocate and start your job.

Never skip an inspection. You simply can't spot everything that could be wrong with the home. While not all sellers do it, some hire an inspector to inspect the home when they list it on the market. However, the burden of the inspection typically falls on the buyer to pay for it. And the information you receive is invaluable. Hiring a certified inspector to give the home a once-over will help you discover problem areas that your agent can then negotiate for repair work or price adjustment. Also, note that the home inspections (yours and the sellers) may differ; examine both, this way you'll learn more about your potential home.

Frank Schulte-Ladbeck, a licensed home inspector says that when you get your home inspection be certain to have everything turned on. In one case, "The water valve to the house was turned to almost off. When you turned it on to regular pressure… the seller had water spurting out of almost all of the faucets because all of the O-rings, the seals, had all dried so much that they were just allowing water to spill right out of them," said Schulte-Ladbeck.

Use experts to help prepare. Having a team of experts who can expedite your search by finding the most suitable properties for you will save you endless hours of looking. Also, the right mortgage expert simplifies the loan process. You'll be guided through the home-buying process instead of becoming overwhelmed by the options, paperwork, and tasks. Using the best specialists can truly make buying your first home a wonderful experience.

Copyright © 2009 Realty Times. All Rights Reserved.

There are several bills in Congress relating to an extension of the Federal Tax Credit for 1st Time Homebuyers and reportedly one that covers ALL buyers. We shall see!

Rates Still Below 5 Percent

2009-10-16T08:12:00.000-07:00

Realty Times of October 16, 2009

30-Year Fixed Rate Still Below 5 Percent for Third Consecutive Week

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.92 percent with an average 0.7 point for the week ending October 15, 2009, up from last week when it averaged 4.87 percent. Last year at this time, the 30-year FRM averaged 6.46 percent.

The 15-year FRM this week averaged 4.37 percent with an average 0.7 point, up from last week when it averaged 4.33 percent. A year ago at this time, the 15-year FRM averaged 6.14 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.38 percent this week, with an average 0.6 point, up from last week when it averaged 4.35 percent. A year ago, the 5-year ARM averaged 6.14 percent.

The one-year Treasury-indexed ARM averaged 4.60 percent this week with an average 0.5 point, up from last week when it averaged 4.53 percent. At this time last year, the 1-year ARM averaged 5.16 percent.

"Mortgage rates rose slightly over the week, but rates on 30-year fixed mortgages remained below 5 percent for the third consecutive week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Homeowners are taking advantage of these low rates to refinance their current balances. Over the past five weeks ending October 9, more than three out of five mortgage applications were for refinancing, according the Mortgage Bankers Association."

"The outlook on economic growth in the second half of this year has improved over the past few months. At it's September 22-23 monetary policy meetings, the Federal Reserve increased its forecast for real GDP growth from the last meeting in mid-August. They noted that data from the housing sector indicated that a gradual recovery in activity was under way. The modest strengthening came about, in part, to improvements in housing affordability stemming from low interest rates for conforming loans and a lower level of house prices."

Copyright © 2009 Realty Times. All Rights Reserved.

Preserving Homes and Communities Act

2009-10-05T07:52:00.000-07:00

Realty Times of October 5, 2009

Washington Report: Preserving Homes and Communities Act by Kenneth R. Harney

Capitol Hill housing and mortgage lobbyists were buzzing last week about an aggressive new legislative proposal that could put tens of thousands of financially-stressed home owners into loan modifications, even if their lenders and loan servicers had to be dragged kicking and yelling to the negotiating table.

Under the new bill, which was sponsored by four Democratic senators active in housing issues, all lenders and servicers operating in the U.S. would be prohibited from foreclosing on home owners unless they had discussed reasonable modification options with the borrowers.

Lenders who didn't comply would be hit by stiff fines and other legal penalties.

Even more significant -- all lenders would be required to perform what the bill calls a “net present value” test for every seriously delinquent borrower -- that is, a financial analysis weighing the financial benefits of a modification of loan terms, compared with those of a foreclosure.

If the net present value of a modification exceeded that of a foreclosure, lenders would be required by federal law do so.

For borrowers unable to handle the payments offered under a modification plan, the bill would create a multi-billion national fund for states to make loans or grants to prevent foreclosures.

The bill, called the Preserving Homes and Communities Act, was authored by Rhode Island Senator Jack Reed, a senior banking committee member. It's co-sponsors include Illinois Senator Dick Durbin, Jeff Merkey of Oregon and Sheldon Whitehouse of Rhode Island.

The senators said they plan to push the legislation hard because they're frustrated by the slow pace of loan modifications in the face of record numbers of foreclosures this year.

“Voluntary efforts to keep families in their homes have failed,” said Durbin. “This bill will force lenders to modify qualified mortgages” rather than letting them move quickly to foreclosure, which destroys households and neighborhoods.

The mortgage payment assistance program created by the bill would provide money to state housing agencies to set up revolving funds to assist people who've lost income in the recession and now face the imminent loss of their house.

Federal and state funds could provide gap financing to get people past their problems -- or outright grants -- to help them avoid foreclosure.

The bill would also fund state and local programs that create “mandatory mediation” requirements. Lenders would have to allow mediation efforts between themselves and their borrowers before filing foreclosures against home owners.

Though certain to be opposed by banking and mortgage lending groups, the new proposal could get serious traction in the Senate, and is virtually certain to get strongly support in the heavily Democratic House.

Copyright © 2009 Realty Times. All Rights Reserved.

Mortgage Rate Dip Impacts Housing

2009-09-29T07:57:00.000-07:00

September 29, 2009 from Realty Times

Real Estate Outlook: Mortgage Rate Dip Impacts Housing by Kenneth R. Harney

You may have seen the headlines last week about the Federal Reserve continuing its policy of keeping interest rates low to stimulate the economy. But you might have missed a major byproduct of that move that's certain to have a direct impact on home real estate: Thirty-year fixed mortgage rates slipped below the five percent mark for the first time in nearly half a year, dipping to 4.9 percent.

Fifteen year fixed rates are just 4.4 percent.

Now, there's nothing more stimulating for home buyers than mortgage money at rates that are about as low as they go. And sure enough, applications for new mortgages jumped by nearly 6 percent last week, according to the Mortgage Bankers Association.

Applications to buy homes using FHA financing soared to the highest share in the history of the Mortgage Bankers' index - which goes back to 1990.

Meanwhile, existing home sale closings took a breather from the rapid increases of the past several months, according to the National Association of Realtors. Sales in August declined by 2.7 percent, but remained 3.4 percent higher than they were in August of 2008, said Lawrence Yun, chief economist for the Realtors.

He attributed the slightly lower rate of closed sales in part to clogs in the system -- more contracts being written, but longer wait times to go to closing, leading to a higher rate of fallouts.

In other key developments:

The index of leading economic indicators, which is produced by the Conference Board and forecasts economic activity three to six months down the road, was up again last month -- by six tenths of a percent.

That was the fifth straight month of higher readings for the index, and would have been higher had unemployment not held it back, according to analysts.

Home prices continued their slow gains, according to the Federal Housing Finance Agency. Its home price index, which is based on Fannie Mae and Freddie Mac transactions, found prices up by three tenths of a point nationwide in the latest survey month.

That coincides with most private price indexes, which have found that we're past bottom and headed back up in most parts of the country.

Finally, the private mortgage insurance industry, which virtually eliminated low-downpayment financing opportunities in many markets during the past year by declaring them "declining" or "distressed," has begun reversing course.

Genworth Mortgage Insurance Company last week removed 63 of its 68 previous designations of "declining markets." That should open up non-FHA cash-out refinancings and low-downpayment home purchase mortgages to thousands of people who'd been squeezed out under the old rules.

Copyright © 2009 Realty Times. All Rights Reserved.

TAX CREDIT CHANGES

2009-09-21T10:14:00.000-07:00

September 21, 2009 From Realty Times

Washington Report: Tax Credit Changes by Kenneth R. Harney

The first major change to the $8,000 home buyers tax credit began moving through Congress last week, giving hope to real estate and building groups pushing for extension of the entire program before it expires Nov. 30.

House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the “Service Members Home Ownership Act of 2009” late last week, with a floor vote expected this week.

The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.

During their absence, they are not occupants of their houses, and sometimes have to rent them out or sell. Any of these events make them ineligible to retain the $8,000 credit under current law. Ineligible buyers must then repay the credit to the IRS.

Oregon Congressman Earl Blumenauer, sponsor of one of the bills consolidated into Rangel's, said “it is absurd that thousands of Americans serving our country, away from friends and family ... must choose between their service work and home ownership.”

The Ways and Means committee's bill would waive the repayment requirement when a service member must sell a home within the 36 month period because of a transfer to a new duty station or overseas, and would count service-related absences toward the 36 month requirement.

Another provision in the bill would extend the $8,000 credit for another year for personnel who may have missed out on claiming the credit because they thought they wouldn't qualify due to an overseas posting.

The credit for these individuals would be extended to November 30, 2010 from November 30, 2009, provided the served outside the U.S. for at least 90 days during calendar year 2009.

The bill, which has bipartisan support, could be sent to the Senate for action as early as next week, Congressional sources told Realty Times.

More important for the housing market overall, however, is the precedent set by the bill's extension of the credit for an extra year. It's not a far leap from that position to a general extension of the entire $8,000 credit program to the same date.

The National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association jointly sponsored an ad campaign last week aimed at convincing Congress to give the credit program another year.

Realty Times will keep you on top of this fast-moving issue as it develops.

Copyright © 2009 Realty Times. All Rights Reserved

FIRST TIME BUYER TAX CREDIT

2009-09-18T10:46:00.000-07:00

This is an excellent article by RISMedia (The leader in Real Estate Information Services). It addresses the details of the Tax Credit system, some warnings about timing and comments on the possible extension of the program.

The Clock Is Ticking

If you are planning on taking advantange of the program, you better get started now!

NEW JOBS AVAILABLE

2009-09-18T09:30:00.000-07:00

You may have heard Clark Howard on the radio talking about a broad range of subjects affecting our daily lives.

This article by Clark really got my notice - "300,000 New Jobs on the way". I think he is on to something:

CLARK HOWARD VIDEO

This is definately a place you want to consider if you are among the many unemployed.

I wish you the best of luck - be one of the 300,00!

NEWS OF NOTE

2009-09-17T13:25:00.000-07:00

Items gathered from several places:

The median home price in the Phoenix area reportedly rose for the first time in 2 years. The median price was over $120,000. No doubt the 1st Time Homebuyer program has something to do with that. The inventory of homes in the $100,000 price range in nearly non-exsistant in even Maricopa and Johnson ranch, and even the next range step up to $150,000 is small at best. Most remaining in that market are short-sales which have less appeal to most buyers today.

There were over 8,000 sales in the Phoenix market in August, offset somewhat by 12,000 new listings. The Foreclosure Pipeline is approaching 50,000, but one hopes a large percentage of those will be resolved by loan modifications. You may have read about the judge that brought a Senior VP from a major bank to Phoenix for 2 days of grilling on why modifications are only in the 2 to 3% range? Workload seems to have been the answer - when new loans stopped, people were laid off. How about we hire some back?

Related issue, credit cards.

Some rules that just kicked in the Credit Card industry mean that:

-Card issuers must mail credit card bills at least 21 days before their due dates. That's up from 14 days. Issuers were"banking" on the fact that consumers would make a payment late and incur a $35 late fee.

-Card issuers must give you the option to avoid future interest rate increases and pay off any outstanding balance under your current rate. If you take this option, you won't be able to make additional charges on that card, and you must pay off the balance within five years the bank can cancel the card and make you pay it off under your old terms, but with a higher minimum payment, according to Consumers Union. "Your new payment could be double your old minimum payment, or higher, if needed, to pay off the card in five years."

-Card issuers must give you at least 45 days' notice before making major changes in terms, such as changing your interest rate or the fees they charge. That's up from 15 days. Other card changes that require at least 45 days' notice include an increase in your minimum payment and switching your fixed rate to a variable rate.

After seeing their housing and personal wealth hammered by the recession, U.S. consumers are saving more and paring down their debts, a trend that the new law could reinforce.

For the three months that ended June 30, U.S. households on average carried a credit card balance of $7,987, down from a high of $8,529 in the third quarter of last year, according to Moody's Economy.com.

For Information on getting a new credit card if you're current terms are undesirable visit Bankrate.com

Oh, by the way, the Feds announced today that savings in the U.S. rose by 3%. Why is my head spinning?

Hang in there!

NEW APPRAISAL AND LOAN PROBLEMS

2009-09-04T09:04:00.000-07:00

The Home Valuation Code of Conduct(HVCC)went into effect on May 1, 2009. HVCC establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. Realtors® and mortgage brokers are prohibited from selecting appraisers except for In House staff appraisers.

To date, only Fannie Mae and Freddie Mac have agreed to adopt the Code. There is a strong feeling in the Real Estate Industry that the new system has created manor negative results in the home sales environment. In one long sentence, sales fall through due to delays and bad appraisals, Appraisers are given less time to complete their work and get paid less, many appraisers have left the business, and the system even sends appraisers from another state to work in unfamiliar territory. One or more appraisers from California were sent to Tucson to perform appraisel work?

To date HUD, who administrates FHA, has declined to accept the HVCC. Suddenly, FHA is becoming the lender of choice in our floundering Real Estate Market.

A few facts from recent news releases and information offered on radio programs:

1) Approximately 1/3 of all home owners in the U.S. are upside down on their homes (i.e. their loan is greater than the current value of their home!)

2) An estimated 75 to 80% of those loans are sub-prime loans.

3) And for the first time in history, over 7% of those loans are prime loans!

4) In Phoenix, the national 33% estimate becomes 51% of homeowners that owe more than their house is worth.

An Arizona judge recently forced Wells Fargo Senior Vice President Joe Ohayon to Phoenix for 2 days to explain why so few loan modifications had been granted and why they failed to communicate with those seeking help?

The customer that filed the case that prompted this judicial action said they never told her there was a problem with her request paperwork, they failed to tell her they had turned her down on her request for help, and she states she is now about to lose her home of 15 years. Nice job, Wells Fargo.

For those facing the potential for foreclosure, please see my last blog, "Mortgage Help". I wish you success in overcoming the barriers that seem to persist.

MORTGAGE HELP

2009-08-30T08:36:00.000-07:00

Yes, there is help out there. There are also scam artists ready to rip you off and put you deeper in debt.

Your best place to start is the NATIONAL FOUNDATION FOR CREDIT COUNSELING. They are at NFCC

They will assist you in finding the best way to proceed and from whom you can get legitimate help. You may be able to obtain a loan modification or sell your home in a "short sale". Let the NFCC guide you in the process and don't get scammed by anyone.

There is good evidence that the system is working, but be patient - it takes work and time. Whatever you do, don't walk away from the home! You will end up with no credit and a massive debt to repay when they find you!!

And the most recent evidence is that if you do a short sale and your debt balance (the money you owe on the mortgage less the price the property sells for at auction or in a short sale) is forgiven by the bank, the IRS will not tax you for the balance forgiven.

My best to you in this time of difficulty for us all. At least we will get you started in the right place.