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.
Thursday, December 31, 2009
Wednesday, December 30, 2009
NEW SHORT SALE RULES
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.
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.
Thursday, December 24, 2009
Real Estate Resolutions 2010
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.
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.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, December 22, 2009
Move-Down Buyers Can Be Eligible For Tax Credit Too
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.
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.
Monday, December 14, 2009
Your Credit Score
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.
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
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!
Home Buyer Tax Credit
Should answer every question you can think of!
Wednesday, December 2, 2009
NEW FHA LOAN LIMITS
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
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
Tuesday, December 1, 2009
Market Conditions
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.
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.
Friday, November 27, 2009
How to Save to Buy a Home
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.
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.
Thursday, November 12, 2009
More on the Home Buyer Tax Credit
"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.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
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.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Friday, November 6, 2009
Tax Credit for Homebuyers & Owners Now Approved
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
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
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)
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)
Thursday, November 5, 2009
New Tax Credit Extended Homebuyers
NBC announced tonight that the following info reported by Nike Neill has been approved.
---------------------------------------------------------------------------------
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
---------------------------------------------------------------------------------
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
Saturday, October 24, 2009
Mortgage Rate Rises to 5 Percent
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."
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
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.
Thursday, October 22, 2009
Sell Short, Get $1,500
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.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
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.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, October 20, 2009
For Help Making Your Home Affordable
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/
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/
Monday, October 19, 2009
Washington Report: Tax Credit
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.
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.
Friday, October 16, 2009
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!
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
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.
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.
Monday, October 5, 2009
Preserving Homes and Communities Act
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.
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.
Tuesday, September 29, 2009
Mortgage Rate Dip Impacts Housing
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.
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.
Monday, September 21, 2009
TAX CREDIT CHANGES
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
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
Friday, September 18, 2009
FIRST TIME BUYER TAX CREDIT
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!
The Clock Is Ticking
If you are planning on taking advantange of the program, you better get started now!
NEW JOBS AVAILABLE
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!
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!
Thursday, September 17, 2009
NEWS OF NOTE
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!
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!
Friday, September 4, 2009
NEW APPRAISAL AND LOAN PROBLEMS
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.
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.
Sunday, August 30, 2009
MORTGAGE HELP
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.
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.
Tuesday, August 18, 2009
Price and Sale Gains
Realty Times of August 18, 2009
Real Estate Outlook: Price and Sale Gains by Kenneth R. Harney
Sales of existing homes and condos continue to power the real estate market, in some areas they're up by double digits, and despite all the negative headlines about foreclosures, even prices are rising in many places as well.
Sales in the second quarter ending June 30 jumped by nearly 4 percent countrywide, according to the National Association of Realtors. Second quarter sales in 39 states were higher than the first quarter, as they were in 129 out of the 155 largest markets.
New York saw an impressive 22 percent increase for the quarter, as did Wisconsin. California, Michigan and Minnesota all registered double-digit sales gains compared with the second quarter of 2008.
Prices were still flat or down in markets where large percentages of sales are bank-owned REO. But in relatively healthy metro areas like Beaumont and Port Arthur, Texas, they were up significantly, by 11 percent over the second quarter of 2008.
In the Denver area during June, home prices were 6 percent higher than May, and resales increased by an eye-popping 32 percent, according to MDA DataQuick researchers.
Several of the national home price indexes also continue to point to more than a mere bottoming out -- they're documenting real turnarounds in key areas. The Integrated Asset Services (IAS) 360 index reported a 1.2 percent average increase in its thousands of data-gathering submarkets and neighborhoods for June.
Average prices in Boston gained 2.9 percent for the month, according to IAS. In Chicago they were up 1.3 percent, Los Angeles 2.2 percent, San Francisco 1.7 percent, and San Diego 1.4 percent.
Meanwhile, mortgages continued their modest but steady gains, with new loan applications to buy houses up last week by about one percent over the previous week, according to the Mortgage Bankers Association.
Rates jumped slightly, however, with 30 year fixed conventional loans going for an average 5.4 percent, and fifteen year rates at 4.7 percent.
Conditions in the overall economy were more mixed than in the housing arena, but the big picture still has most economists, and even the Federal Reserve, encouraged that the recession will be over this year.
Fewer jobs were lost last month than expected and unemployment fell to 9.4 percent. But let's face it: losing a quarter of a million jobs in the span of a month is still a serious drag on the economy - and is certainly no plus for housing.
On the other hand, is there anybody out there who wants to trade today's mixed outlook with last fall's horror show scenario, when we were all tottering on the edge of a global financial disaster?
Copyright © 2009 Realty Times. All Rights Reserved.
Real Estate Outlook: Price and Sale Gains by Kenneth R. Harney
Sales of existing homes and condos continue to power the real estate market, in some areas they're up by double digits, and despite all the negative headlines about foreclosures, even prices are rising in many places as well.
Sales in the second quarter ending June 30 jumped by nearly 4 percent countrywide, according to the National Association of Realtors. Second quarter sales in 39 states were higher than the first quarter, as they were in 129 out of the 155 largest markets.
New York saw an impressive 22 percent increase for the quarter, as did Wisconsin. California, Michigan and Minnesota all registered double-digit sales gains compared with the second quarter of 2008.
Prices were still flat or down in markets where large percentages of sales are bank-owned REO. But in relatively healthy metro areas like Beaumont and Port Arthur, Texas, they were up significantly, by 11 percent over the second quarter of 2008.
In the Denver area during June, home prices were 6 percent higher than May, and resales increased by an eye-popping 32 percent, according to MDA DataQuick researchers.
Several of the national home price indexes also continue to point to more than a mere bottoming out -- they're documenting real turnarounds in key areas. The Integrated Asset Services (IAS) 360 index reported a 1.2 percent average increase in its thousands of data-gathering submarkets and neighborhoods for June.
Average prices in Boston gained 2.9 percent for the month, according to IAS. In Chicago they were up 1.3 percent, Los Angeles 2.2 percent, San Francisco 1.7 percent, and San Diego 1.4 percent.
Meanwhile, mortgages continued their modest but steady gains, with new loan applications to buy houses up last week by about one percent over the previous week, according to the Mortgage Bankers Association.
Rates jumped slightly, however, with 30 year fixed conventional loans going for an average 5.4 percent, and fifteen year rates at 4.7 percent.
Conditions in the overall economy were more mixed than in the housing arena, but the big picture still has most economists, and even the Federal Reserve, encouraged that the recession will be over this year.
Fewer jobs were lost last month than expected and unemployment fell to 9.4 percent. But let's face it: losing a quarter of a million jobs in the span of a month is still a serious drag on the economy - and is certainly no plus for housing.
On the other hand, is there anybody out there who wants to trade today's mixed outlook with last fall's horror show scenario, when we were all tottering on the edge of a global financial disaster?
Copyright © 2009 Realty Times. All Rights Reserved.
Wednesday, July 29, 2009
Real Estate Outlook: Positive Growth
Realty Times of July 28, 2009
Real Estate Outlook: Positive Growth by Kenneth R. Harney
There was an important piece of economic news last week that has HUGE significance for real estate and housing, but it got minimal coverage on TV and in print.
The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.
That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.
That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.
There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.
The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.
Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.
Meanwhile, residential real estate continues to put up impressive numbers on the tote board:
New single family housing starts in June rose by 14.4 percent -- the fourth straight month of increasing activity by home builders, who'd previously shut down construction because they hadn't sold off their inventories. And they were afraid consumers wouldn't pay the prices they need to charge.
Those worries are over. Total starts in New England were up by 29 percent and in the Midwest by 33 percent. Builders report seeing much more traffic at their subdivision showrooms, far lower fallout on contracts, and rising sales.
Sales of existing homes were up in many areas for the month as well - rising by 3.6 percent nationwide in June, according to the National Association of Realtors. Lawrence Yun, chief economist for the association, commented that "we expect (this) gradual uptrend in sales to continue" thanks to the $8,000 home buyer credit, favorable mortgage rates and low prices.
New mortgage applications to buy houses continued to increase last week, according to the Mortgage Bankers Association, even though rates edged slightly higher. Thirty-year fixed rates averaged 5.3 percent and 15-year rates averaged 4.8 percent for the week, both up by two-tenths of a percentage point.
All in all, the numbers are looking better and better.
Copyright © 2009 Realty Times. All Rights Reserved.
Real Estate Outlook: Positive Growth by Kenneth R. Harney
There was an important piece of economic news last week that has HUGE significance for real estate and housing, but it got minimal coverage on TV and in print.
The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.
That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.
That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.
There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.
The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.
Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.
Meanwhile, residential real estate continues to put up impressive numbers on the tote board:
New single family housing starts in June rose by 14.4 percent -- the fourth straight month of increasing activity by home builders, who'd previously shut down construction because they hadn't sold off their inventories. And they were afraid consumers wouldn't pay the prices they need to charge.
Those worries are over. Total starts in New England were up by 29 percent and in the Midwest by 33 percent. Builders report seeing much more traffic at their subdivision showrooms, far lower fallout on contracts, and rising sales.
Sales of existing homes were up in many areas for the month as well - rising by 3.6 percent nationwide in June, according to the National Association of Realtors. Lawrence Yun, chief economist for the association, commented that "we expect (this) gradual uptrend in sales to continue" thanks to the $8,000 home buyer credit, favorable mortgage rates and low prices.
New mortgage applications to buy houses continued to increase last week, according to the Mortgage Bankers Association, even though rates edged slightly higher. Thirty-year fixed rates averaged 5.3 percent and 15-year rates averaged 4.8 percent for the week, both up by two-tenths of a percentage point.
All in all, the numbers are looking better and better.
Copyright © 2009 Realty Times. All Rights Reserved.
Thursday, July 23, 2009
Mortgage Fraud Crackdown
From Realty Times of July 23, 2009
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Mortgage Fraud Crackdown by Broderick Perkins
Apparently, even in hard times, mortgage fraud remains an easy con.
The number of Suspicious Activity Reports (SARs) for mortgage fraud tracked by the Federal Bureau of Investigation could skyrocket by nearly 300 percent this year.
Compared to 2007, mortgage fraud SARs in 2008 had already increased by more than 36 percent to 63,000. But just two months into 2009, the FBI has already documented nearly 29,000 mortgage fraud SARs. At that rate, some 174,000 SARs,
• a 276 percent increase
• could be filed by the end of the year.
And that's only what the FBI can see.
"Many mortgage finance-related entities are either loosely or completely unregulated at the state or federal level," said FBI Director Robert Mueller in recent testimony before the U.S. Senate Appropriations panel.
The good news?
"The current financial crisis has produced an unexpected consequence. They have helped reveal numerous mortgage fraud schemes, Ponzi schemes, and investment frauds, such as the Bernard Madoff scam," Mueller testified.
But while the Feds are catching up with Wall Street crooks, struggling homeowners on Main Street remain common prey. Despite tougher lending standards putting the kibosh on some types of home loan scams, organized wise guys continue to traffic in mortgage fraud.
That's prompted the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois to launch new initiatives to pump up fraud investigations and step up enforcement actions, especially to protect homeowners seeking relief from President Obama's Making Home Affordable initiative.
The effort particularly targets loan modification and mortgage fraud.
Mortgage fraud, a relatively new form of organized crime, first cashed in on the greed that came with the boom market, when some buyers would do anything to own a home • including lie on the application. Cons, often insiders, also falsified documents, inflated appraisals and used other underhanded techniques to get home loans approved and properties flipped for a hefty profit when appreciation was skyrocketing.
With the housing market bust, however, came stricter underwriting scrutiny which helped stem the tide of loans approved with fabricated information.
Now, mortgage fraud is taking advantage of vulnerable, gullible homeowners facing foreclosure. Like those who once fibbed to cash in on the booming market, many struggling homeowners are likewise willing to do anything to remain homeowners.
Mueller said today's host of sophisticated scams are associated with new loan modification services, foreclosure bailouts, equity grabs, bankruptcy, identity theft and property flipping, among others.
Bruce Hahn, president of the American Homeowners Foundation, a non-profit advocacy group in Washington, D.C. says it's tough to tell the good guys from the bad without a scorecard.
"Some loan modification services are competent, but some are incompetent and there is another group of people who post ads to help with mortgage problems, but are basically fraudsters and fronts," Hahn said.
The FTC recently surveyed online and print advertising for mortgage foreclosure rescue operations nationwide and identified approximately 71 distinct companies running suspicious ads.
It's clear homeowners, who want to avoid being taken by the new scammers must likewise become more sophisticated.
The experts advise:
• Don't be a rube. If it sounds too good to be true • it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.
"A fair number of homeowners have actually paid someone money before they see us. They see us because they paid and the company didn't do anything for them," said Martin Eichner, director of housing counseling services for Project Sentinel in Northern California.
• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure.
"The most outrageous of these schemes are offers to take your mortgage payment and hold them for you in a trust account. That is a total rip off. Never give your mortgage payment to any third party," Eichner said.
• Attempts to cajole you into making false statements in the name of mortgage relief is a red flag. Likewise don't sign blank documents or those you don't understand.
• Seek out family, friends, co-workers and others you trust who recently successfully solved a mortgage problem. Ask them for referrals. That applies to loan modifications, work outs, restructuring and refinance efforts.
"I would say contact a U.S. Department of Housing and Urban Development, but you can't just say that. We can't help everybody who needs help (because of overwhelming demand). If you hire a for-profit service you should be paying money only if (and after) they are successful. If they are an attorney, contact the state bar. For mortgage brokers (and real estate agents) check with the California Department of Real Estate," Eichner added.
Hahn also says to contact city and county housing offices for assistance and referrals and the latest information on legal, government-sponsored assistance.
Get more help from the Making Home Affordable initiative.
--------------------------------------------------------------------------------
Copyright © 2009 Realty Times. All Rights Reserved.
Wednesday, July 15, 2009
America's most affordable cities.
From Realty Times of July 15, 2009
Market Conditions by Realty Times Staff
Forbes.com recently reported on its what stats show are America's most affordable cities.
Their criteria was based on cost of living and employment rates. They report that "U.S. homes are more affordable than they've been in two decades. The most recent report by the National Association of Homebuilders and Wells Fargo Bank showed that 72.5% of American homes sold in the last quarter were considered affordable. Of course, foreclosures and sliding prices may play a role."
Making the list:
Phoenix, Arizona
Columbus, Ohio
San Antonio, Texas
Houston, Texas
Dallas, Texas
Austin, Texas
Cincinnati, Ohio
Pittsburgh, Pennsylvania
St. Louis, Missouri
Indianapolis, Indiana
Copyright © 2009 Realty Times. All Rights Reserved.
Market Conditions by Realty Times Staff
Forbes.com recently reported on its what stats show are America's most affordable cities.
Their criteria was based on cost of living and employment rates. They report that "U.S. homes are more affordable than they've been in two decades. The most recent report by the National Association of Homebuilders and Wells Fargo Bank showed that 72.5% of American homes sold in the last quarter were considered affordable. Of course, foreclosures and sliding prices may play a role."
Making the list:
Phoenix, Arizona
Columbus, Ohio
San Antonio, Texas
Houston, Texas
Dallas, Texas
Austin, Texas
Cincinnati, Ohio
Pittsburgh, Pennsylvania
St. Louis, Missouri
Indianapolis, Indiana
Copyright © 2009 Realty Times. All Rights Reserved.
Monday, July 13, 2009
From Realty Times of July 13, 2009
Washington Report: Home Affordable Refinance Program by Kenneth R. Harney
The Obama administration's latest expansion of its "home affordable" refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously "underwater," or where they're worth a lot less than the mortgage balance owed on them.
Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Under the original rules for the program, the cutoff point was just five percent negative equity -- or a "loan to value" (LTV) ratio of 105 percent.
Though an estimated 80,000 owners already have been refinanced by Fannie and Freddie, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner decided that the 105% LTV limit left too many borrowers out of reach.
In some parts of California, Nevada, Arizona and Florida, 40 to 50 percent of home owners are now stuck with negative equities, according to industry estimates. In Las Vegas, 67 percent of owners are underwater.
Zillow.com estimates that nationwide, 22 percent of all owners have negative equity in their properties - many of them by more than five percent.
The newly-expanded "home affordable" program opens the door not only to lower monthly payments for seriously underwater borrowers, but also to the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster.
Here's an example of how the expanded program could work:
Say your house is currently valued at $240,000, but your mortgage balance is $300,000.
You are underwater by 25 percent.
If your loan is owned or guaranteed by Fannie or Freddie, and you're not behind on your payments, you should be eligible for a "home affordable" refi.
Say your current payments are eighteen hundred sixty dollars a month. By refinancing into a new 30-year, $300,000 loan at five and a quarter percent, you could cut your principal and interest payment to about sixteen hundred sixty a month - a $200 saving.
Or you could shorten your loan term from 30 years to say, 15 years or 20 years at five and an eighth percent. If you could handle the slightly higher monthly payments, you'd accelerate your principal paydown speed, build equity and go from underwater to above water much faster, even without local market value appreciation.
To take advantage, contact your loan servicer to see if your mortgage is owned by Freddie or Fannie. Or you can check online at either fanniemae.com/loanlook, or freddiemac.com/mymortgage.
Copyright © 2009 Realty Times. All Rights Reserved.
Washington Report: Home Affordable Refinance Program by Kenneth R. Harney
The Obama administration's latest expansion of its "home affordable" refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously "underwater," or where they're worth a lot less than the mortgage balance owed on them.
Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Under the original rules for the program, the cutoff point was just five percent negative equity -- or a "loan to value" (LTV) ratio of 105 percent.
Though an estimated 80,000 owners already have been refinanced by Fannie and Freddie, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner decided that the 105% LTV limit left too many borrowers out of reach.
In some parts of California, Nevada, Arizona and Florida, 40 to 50 percent of home owners are now stuck with negative equities, according to industry estimates. In Las Vegas, 67 percent of owners are underwater.
Zillow.com estimates that nationwide, 22 percent of all owners have negative equity in their properties - many of them by more than five percent.
The newly-expanded "home affordable" program opens the door not only to lower monthly payments for seriously underwater borrowers, but also to the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster.
Here's an example of how the expanded program could work:
Say your house is currently valued at $240,000, but your mortgage balance is $300,000.
You are underwater by 25 percent.
If your loan is owned or guaranteed by Fannie or Freddie, and you're not behind on your payments, you should be eligible for a "home affordable" refi.
Say your current payments are eighteen hundred sixty dollars a month. By refinancing into a new 30-year, $300,000 loan at five and a quarter percent, you could cut your principal and interest payment to about sixteen hundred sixty a month - a $200 saving.
Or you could shorten your loan term from 30 years to say, 15 years or 20 years at five and an eighth percent. If you could handle the slightly higher monthly payments, you'd accelerate your principal paydown speed, build equity and go from underwater to above water much faster, even without local market value appreciation.
To take advantage, contact your loan servicer to see if your mortgage is owned by Freddie or Fannie. Or you can check online at either fanniemae.com/loanlook, or freddiemac.com/mymortgage.
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, July 7, 2009
Real Estate Outlook
From Realty Times of July 7, 2009
Real Estate Outlook: Gains Versus Gloom by Kenneth R. Harney
(Note Phoenix comments!)
When even the Case-Shiller index, which ranks as the gloomiest of all the measures of house price movements, starts reporting gains then you know something is stirring out there in real estate.
In its latest monthly survey, Standard & Poor's Case-Shiller index found prices up in a number of key markets: Dallas prices gained 1.7 percent, Denver 1.5 percent and other cities -- Washington DC, Seattle, San Francisco, Atlanta, Boston and Cleveland -- registered smaller increases.
Nationally, the Case-Shiller index came in slightly negative for the month overall, as did the Federal Housing Finance Agency's home purchase price index.
But even the most bearish researchers now agree: Prices are bottoming out, even in some of the hardest-hit areas.
Home sales are also up in many local markets, sometimes dramatically so. Take metropolitan Phoenix. According to the latest MDA DataQuick survey, sales in the Phoenix market grew at their fastest pace in two years during May.
Resales of detached houses were up by 56 percent over year ago levels, and condo sales were up by 30 percent.
Even prices in the Phoenix area, a market still weighed down by a high percentage of distressed sales and foreclosures, gained by 3.5 percent in May over April levels.
That's an important turnaround, but the sobering fact is that even with that gain, prices in Phoenix are still down 38 percent compared with the same period in 2008.
Other important developments this week pointing to improvements in the housing sector:
Mortgage rates continue to drop, and are now approaching the lows we saw a few months back. According to the Mortgage Bankers Association, average 30 year fixed rates hit 5.3 percent last week-the third straight weekly decline. Fifteen year fixed rates already have pushed below the 5 percent mark - and averaged just 4.8 percent last week.
Consumer sentiment, as measured by the University of Michigan's survey, was up slightly again, with more consumers indicating confidence in making “big ticket” purchases, which of course include houses.
Now none of this is to suggest that real estate is in great shape and happy days are here again.
That's not the case -- not with hundreds of thousands of workers losing their jobs every month and the national unemployment rate projected to approach 10 percent. And not with lenders continuing to impose tough credit and underwriting standards on all home purchase mortgage applications.
But after so many months of negative news, we think it's important to acknowledge the positive signs popping up on home sales, pricing and interest rates - even if we still have a long way to go to full recovery.
Copyright © 2009 Realty Times. All Rights Reserved.
Real Estate Outlook: Gains Versus Gloom by Kenneth R. Harney
(Note Phoenix comments!)
When even the Case-Shiller index, which ranks as the gloomiest of all the measures of house price movements, starts reporting gains then you know something is stirring out there in real estate.
In its latest monthly survey, Standard & Poor's Case-Shiller index found prices up in a number of key markets: Dallas prices gained 1.7 percent, Denver 1.5 percent and other cities -- Washington DC, Seattle, San Francisco, Atlanta, Boston and Cleveland -- registered smaller increases.
Nationally, the Case-Shiller index came in slightly negative for the month overall, as did the Federal Housing Finance Agency's home purchase price index.
But even the most bearish researchers now agree: Prices are bottoming out, even in some of the hardest-hit areas.
Home sales are also up in many local markets, sometimes dramatically so. Take metropolitan Phoenix. According to the latest MDA DataQuick survey, sales in the Phoenix market grew at their fastest pace in two years during May.
Resales of detached houses were up by 56 percent over year ago levels, and condo sales were up by 30 percent.
Even prices in the Phoenix area, a market still weighed down by a high percentage of distressed sales and foreclosures, gained by 3.5 percent in May over April levels.
That's an important turnaround, but the sobering fact is that even with that gain, prices in Phoenix are still down 38 percent compared with the same period in 2008.
Other important developments this week pointing to improvements in the housing sector:
Mortgage rates continue to drop, and are now approaching the lows we saw a few months back. According to the Mortgage Bankers Association, average 30 year fixed rates hit 5.3 percent last week-the third straight weekly decline. Fifteen year fixed rates already have pushed below the 5 percent mark - and averaged just 4.8 percent last week.
Consumer sentiment, as measured by the University of Michigan's survey, was up slightly again, with more consumers indicating confidence in making “big ticket” purchases, which of course include houses.
Now none of this is to suggest that real estate is in great shape and happy days are here again.
That's not the case -- not with hundreds of thousands of workers losing their jobs every month and the national unemployment rate projected to approach 10 percent. And not with lenders continuing to impose tough credit and underwriting standards on all home purchase mortgage applications.
But after so many months of negative news, we think it's important to acknowledge the positive signs popping up on home sales, pricing and interest rates - even if we still have a long way to go to full recovery.
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, June 30, 2009
Real Estate Market Conditions
Realty Times of June 30, 2009
Market Conditions by Realty Times Staff
The National Association of Realtors is reporting that May saw a gain in the sale of existing homes -- up by 2.4 percent.
Regionally, existing-home sales varied:
Northeast: rose 3.9 percent
Midwest: rose 9.0 percent
South: unchanged
West: down 0.9 percent
Are we out of the woods? Dr. Lawrence Yun said the appraisal problem is serious. "Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales," he said. "In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."
Copyright © 2009 Realty Times. All Rights Reserved.
Market Conditions by Realty Times Staff
The National Association of Realtors is reporting that May saw a gain in the sale of existing homes -- up by 2.4 percent.
Regionally, existing-home sales varied:
Northeast: rose 3.9 percent
Midwest: rose 9.0 percent
South: unchanged
West: down 0.9 percent
Are we out of the woods? Dr. Lawrence Yun said the appraisal problem is serious. "Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales," he said. "In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."
Copyright © 2009 Realty Times. All Rights Reserved.
Thursday, June 25, 2009
New Loan Modification, Short Sale Options
I can only hope none of you need this information, but if you do:
From Realty Times of June 25, 2009
New Loan Modification, Short Sale Options by Broderick Perkins
Now, mortgage modifications can include second mortgages -- not just first mortgages -- and cash incentives are sweetening short sale deals, thanks to new efforts by the Obama Administration.
The new efforts give some homeowners a second shot at a home-saving loan modification, especially if they were originally turned down -- or turned off -- because the second mortgage (piggy back, home equity loan or line of credit, etc.) impeded the process.
Other homeowners may now be able to take the short sale escape route from unaffordable mortgages that could otherwise wind up in foreclosure.
Second mortgage modifications
Loan modifications are designed to make the home loan more affordable, typically by reducing the interest rate, extending the term of the loan and, less often, by reducing the principal. They are not refinanced mortgages, which pay off the old mortgage with a new mortgage.
Under Making Home Affordable's new second-lien program, borrowers whose first mortgages are modified will automatically have payments reduced on their second mortgages as well, provided the first and second-mortgage lender participates in the program.
Twelve mortgage servicers currently do. Among them are large banks including, Bank of America, Wells Fargo, Countrywide, Citibank, Chase and others.
Eligible homeowners looking to modify their first mortgage must be an owner-occupant of the home; have an unpaid principal balance that is no more than $729,750; have a loan that was originated on or before January 1, 2009; have a mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31 percent of their gross monthly income; and have a mortgage payment that is not affordable, perhaps because of a significant change in income or expenses.
Under the new second mortgage program, in addition to lowering the payment, lenders can also opt to erase a borrower's second mortgage in exchange for a lump-sum payment from the government.
New short sale incentives
Short sale incentives were among recent refinements to the Obama administration's housing rescue programs.
In a short sale, the lender closes the mortgage in return for whatever sale price the homeowner can net. However, the difference is sometimes considered income for which the selling homeowner may be taxed. It's important to include a tax professional's advice in the deal.
Under the new short sale incentive, lenders can receive a $1,000 payment from the U.S. Treasury for allowing the owner to sell the house for less than the amount owed on the mortgage and for accepting the proceeds as full repayment, rather than treat it as a short sale.
Lenders can also receive $1,000 for accepting a deed-in-lieu transaction, in which the deed is simply transferred to the lender instead of going through a costly foreclosure.
Homeowners who agree to short sales or deed-in-lieu deals can receive up to $1,500 in closing costs. To help stop second mortgages from blocking the deal, the Treasury will pay second lien holders up to $1,000 to relinquish their claims in such transactions.
To learn more about these options visit MakingHomeAffordable.gov
Copyright © 2009 Realty Times. All Rights Reserved.
From Realty Times of June 25, 2009
New Loan Modification, Short Sale Options by Broderick Perkins
Now, mortgage modifications can include second mortgages -- not just first mortgages -- and cash incentives are sweetening short sale deals, thanks to new efforts by the Obama Administration.
The new efforts give some homeowners a second shot at a home-saving loan modification, especially if they were originally turned down -- or turned off -- because the second mortgage (piggy back, home equity loan or line of credit, etc.) impeded the process.
Other homeowners may now be able to take the short sale escape route from unaffordable mortgages that could otherwise wind up in foreclosure.
Second mortgage modifications
Loan modifications are designed to make the home loan more affordable, typically by reducing the interest rate, extending the term of the loan and, less often, by reducing the principal. They are not refinanced mortgages, which pay off the old mortgage with a new mortgage.
Under Making Home Affordable's new second-lien program, borrowers whose first mortgages are modified will automatically have payments reduced on their second mortgages as well, provided the first and second-mortgage lender participates in the program.
Twelve mortgage servicers currently do. Among them are large banks including, Bank of America, Wells Fargo, Countrywide, Citibank, Chase and others.
Eligible homeowners looking to modify their first mortgage must be an owner-occupant of the home; have an unpaid principal balance that is no more than $729,750; have a loan that was originated on or before January 1, 2009; have a mortgage payment (including taxes, insurance, and home owners association dues) that is more than 31 percent of their gross monthly income; and have a mortgage payment that is not affordable, perhaps because of a significant change in income or expenses.
Under the new second mortgage program, in addition to lowering the payment, lenders can also opt to erase a borrower's second mortgage in exchange for a lump-sum payment from the government.
New short sale incentives
Short sale incentives were among recent refinements to the Obama administration's housing rescue programs.
In a short sale, the lender closes the mortgage in return for whatever sale price the homeowner can net. However, the difference is sometimes considered income for which the selling homeowner may be taxed. It's important to include a tax professional's advice in the deal.
Under the new short sale incentive, lenders can receive a $1,000 payment from the U.S. Treasury for allowing the owner to sell the house for less than the amount owed on the mortgage and for accepting the proceeds as full repayment, rather than treat it as a short sale.
Lenders can also receive $1,000 for accepting a deed-in-lieu transaction, in which the deed is simply transferred to the lender instead of going through a costly foreclosure.
Homeowners who agree to short sales or deed-in-lieu deals can receive up to $1,500 in closing costs. To help stop second mortgages from blocking the deal, the Treasury will pay second lien holders up to $1,000 to relinquish their claims in such transactions.
To learn more about these options visit MakingHomeAffordable.gov
Copyright © 2009 Realty Times. All Rights Reserved.
Tuesday, June 16, 2009
Real Estate Outlook
From Realty Times of June 16, 2009
Real Estate Outlook: Mortgage Rates and Inflation
by Kenneth R. Harney
Most of the key economic indicators for real estate continue to be at least moderately positive -- home sales are up, prices are stabilizing or up, unsold inventories are down, and even new unemployment filings are down slightly.
But there's a storm cloud looming on the near horizon that everybody needs to keep an eye on: Mortgage rates have been moving up -- fast. Bond market investors are spooked by the federal government's massive borrowings to pay for the stimulus and the deficit.
They're worried that serious inflation may be coming and they're demanding higher rates on the ten year Treasury bonds that are the benchmark used to price mortgages.
But let's focus first on the positive side of the ledger: A key housing price index released last week suggests that the long-awaited turnaround may be underway. The Integrated Asset Services Index - which is based on data from 15,000 local market segments around the U.S. -- went flat on a national basis in May for the first time in a year.
Prices in the Northeast were up by six tenths of a percent for the month. In the Midwest they rose by one tenth of a percent, they were down slightly in the South, and flat in the Western region.
Now that might not impress you, but David McCarthy, CEO of the research and services firm, said flat means bottoming out - and in his words, "that's encouraging (for housing) for the long term."
In some California markets that had experienced severe hits during the darkest days of the bust, the price changes for the month were larger than the national numbers.
San Bernadino prices gained 1.1 percent between April and May. Monterey saw a 3.7 percent increase and Sacramento homes were up four tenths of a percent.
Meanwhile, ZIP Realty's monthly national survey of unsold housing inventories found the number of MLS listings in 28 major markets down by 4 percent in May, and by 24 percent from year-earlier levels.
Now on to the sobering news on mortgage rates: No one can predict precisely how high rates are headed, but in the past two weeks they've jumped by more than a percentage point. The Mortgage Bankers Association reports that last week alone average 30-year fixed rate jumped to 5.6 percent from five and a quarter the week before.
Some analysts project rates to hit and surpass the 6 percent mark if current trends continue.
Bottom line: Given that house prices have turned around, and interest costs are soaring, value-conscious shoppers need to get their contracts and loan applications in -- quick!
Copyright © 2009 Realty Times. All Rights Reserved.
Real Estate Outlook: Mortgage Rates and Inflation
by Kenneth R. Harney
Most of the key economic indicators for real estate continue to be at least moderately positive -- home sales are up, prices are stabilizing or up, unsold inventories are down, and even new unemployment filings are down slightly.
But there's a storm cloud looming on the near horizon that everybody needs to keep an eye on: Mortgage rates have been moving up -- fast. Bond market investors are spooked by the federal government's massive borrowings to pay for the stimulus and the deficit.
They're worried that serious inflation may be coming and they're demanding higher rates on the ten year Treasury bonds that are the benchmark used to price mortgages.
But let's focus first on the positive side of the ledger: A key housing price index released last week suggests that the long-awaited turnaround may be underway. The Integrated Asset Services Index - which is based on data from 15,000 local market segments around the U.S. -- went flat on a national basis in May for the first time in a year.
Prices in the Northeast were up by six tenths of a percent for the month. In the Midwest they rose by one tenth of a percent, they were down slightly in the South, and flat in the Western region.
Now that might not impress you, but David McCarthy, CEO of the research and services firm, said flat means bottoming out - and in his words, "that's encouraging (for housing) for the long term."
In some California markets that had experienced severe hits during the darkest days of the bust, the price changes for the month were larger than the national numbers.
San Bernadino prices gained 1.1 percent between April and May. Monterey saw a 3.7 percent increase and Sacramento homes were up four tenths of a percent.
Meanwhile, ZIP Realty's monthly national survey of unsold housing inventories found the number of MLS listings in 28 major markets down by 4 percent in May, and by 24 percent from year-earlier levels.
Now on to the sobering news on mortgage rates: No one can predict precisely how high rates are headed, but in the past two weeks they've jumped by more than a percentage point. The Mortgage Bankers Association reports that last week alone average 30-year fixed rate jumped to 5.6 percent from five and a quarter the week before.
Some analysts project rates to hit and surpass the 6 percent mark if current trends continue.
Bottom line: Given that house prices have turned around, and interest costs are soaring, value-conscious shoppers need to get their contracts and loan applications in -- quick!
Copyright © 2009 Realty Times. All Rights Reserved.
Monday, June 8, 2009
Arizona Home Market
I spoke with 3 of the large Title Companies this last week All told basically the same story -
May closing were 3 times the April closings!
Urban legend or is it happening?
May closing were 3 times the April closings!
Urban legend or is it happening?
Reshaping Fannie and Freddie
Realty Times of June 8, 2009
Washington Report: Reshaping Fannie and Freddie
by Kenneth R. Harney
Congress took its first step last week on a mission that could totally reshape the American mortgage market.
A House financial services subcommittee held the first hearing on what to do with Fannie Mae and Freddie Mac -- the failed, trillion-dollar mortgage giants that are now operating under direct federal control.
The ultimate answers are likely to determine the types of loans and interest rates that home buyers will have in the future. That's because Fannie and Freddie have dominated the real estate market for decades, writing the rulebook on everything from loan sizes, credit requirements, downpayments and underwriting standards.
Among the idea floated at last week's Capitol Hill hearing were a “utility” concept, where Fannie and Freddie might be merged into a single, privately-owned, federally-regulated superstore for mortgage money.
The model would be along the lines of the water, power and sewage utilities we see all over the country, but there'd just be one mega-utility to fund mortgages. The utility concept was first proposed last year by former Treasury Secretary Hank Paulson. The Obama Administration has not spoken out publicly on it yet.
Another idea floated at the hearing was to broaden the mortgage menus of whatever agency or agencies replace Fannie and Freddie to include types of mortgages they currently can't touch -- especially jumbo home loans and commercial real estate mortgages.
Frances Martinez Myers, representing the National Association of Realtors, said jumbos and commercial real estate loans are suffering in the credit crunch and need more support. Commercial and investment property owners in particular, said Myers, find themselves unable to refinance because there is neither a private nor public secondary market for their loans at the moment.
The Mortgage Bankers Association came to the hearing with a white paper listing various alternative futures for Fannie and Freddie, including turning them into a government-owned version of the FHA and Ginnie Mae, but targeted on conventional mortgages.
Without endorsing any particular alternative, the MBA also suggested consideration be given to a private “cooperative” model, in which banks and other mortgage industry players would pool their assets and provide secondary market services in addition to mortgage originations.
Under this scenario, the federal government would provide back-up insurance against “catastrophic losses” that exceed the private cooperative's capital and pledged assets.
Where's the debate over Fannie and Freddie headed? Look for Congress to hold more exploratory hearings this year. Then, maybe as early as next year if the recession is over and the market is healthier , the Obama administration might begin drafting its preferred solution - which almost certainly will not involve total privatization.
Copyright © 2009 Realty Times. All Rights Reserved.
Washington Report: Reshaping Fannie and Freddie
by Kenneth R. Harney
Congress took its first step last week on a mission that could totally reshape the American mortgage market.
A House financial services subcommittee held the first hearing on what to do with Fannie Mae and Freddie Mac -- the failed, trillion-dollar mortgage giants that are now operating under direct federal control.
The ultimate answers are likely to determine the types of loans and interest rates that home buyers will have in the future. That's because Fannie and Freddie have dominated the real estate market for decades, writing the rulebook on everything from loan sizes, credit requirements, downpayments and underwriting standards.
Among the idea floated at last week's Capitol Hill hearing were a “utility” concept, where Fannie and Freddie might be merged into a single, privately-owned, federally-regulated superstore for mortgage money.
The model would be along the lines of the water, power and sewage utilities we see all over the country, but there'd just be one mega-utility to fund mortgages. The utility concept was first proposed last year by former Treasury Secretary Hank Paulson. The Obama Administration has not spoken out publicly on it yet.
Another idea floated at the hearing was to broaden the mortgage menus of whatever agency or agencies replace Fannie and Freddie to include types of mortgages they currently can't touch -- especially jumbo home loans and commercial real estate mortgages.
Frances Martinez Myers, representing the National Association of Realtors, said jumbos and commercial real estate loans are suffering in the credit crunch and need more support. Commercial and investment property owners in particular, said Myers, find themselves unable to refinance because there is neither a private nor public secondary market for their loans at the moment.
The Mortgage Bankers Association came to the hearing with a white paper listing various alternative futures for Fannie and Freddie, including turning them into a government-owned version of the FHA and Ginnie Mae, but targeted on conventional mortgages.
Without endorsing any particular alternative, the MBA also suggested consideration be given to a private “cooperative” model, in which banks and other mortgage industry players would pool their assets and provide secondary market services in addition to mortgage originations.
Under this scenario, the federal government would provide back-up insurance against “catastrophic losses” that exceed the private cooperative's capital and pledged assets.
Where's the debate over Fannie and Freddie headed? Look for Congress to hold more exploratory hearings this year. Then, maybe as early as next year if the recession is over and the market is healthier , the Obama administration might begin drafting its preferred solution - which almost certainly will not involve total privatization.
Copyright © 2009 Realty Times. All Rights Reserved.
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