Feds reverse rule to assist first-time home buyers
by J. Craig Anderson - May. 19, 2009 12:00 AM
The Arizona Republic
Federal officials on Monday reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.
A week earlier, U.S. Department of Housing and Urban Development Secretary Shaun Donovan had told the National Association of Home Builders that HUD would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans.
Lenders, home builders and real- estate agents had reacted favorably to the bridge-loan proposal, saying it would open up the housing market to more first-time buyers.
However, not everyone was in favor of using the tax credit as collateral on a down-payment loan.
"That tax credit should be savings, not debt," said Patricia Garcia-Duarte, executive director of Neighborhood Housing Services in Phoenix.
Garcia-Duarte said the proposal too closely resembled a now-illegal practice known as seller-funded down-payment assistance, which allowed a home's seller to "gift" the down payment to a specific buyer through a non-profit organization.
Phoenix loan originator Dean Wegner was among the housing-industry professionals who had expressed enthusiasm about the bridge-loan plan.
Wegner said the program would have boosted local home sales, but he added that the bridge loans likely would have come with a high interest rate.
The loans also could have created income-tax issues, according to the IRS officials who shot down HUD's plan.
Still, Wegner remains optimistic that the government will seek other means to circumvent the FHA's required 3.5 percent down payment.
"They will probably come out with a zero-down FHA loan starting January 1, once the $8,000 goes away," he said.
Wednesday, May 20, 2009
Monday, May 11, 2009
The New Appraisal System
From Realty Times of May 11, 2009
Washington Report: Appraisal System
by Kenneth R. Harney
Last week saw the official kickoff of Fannie Mae's and Freddie Mac's mandatory new system of appraisals nationwide, and some mortgage and appraisal groups are up in arms over sharply higher costs for consumers.
The so-called "home valuation code of conduct" imposed by Fannie and Freddie puts most appraisal assignments in the hands of management companies, some of whom are owned by major lenders such as Bank of America and Wells Fargo.
The Appraisal Institute, which represents 20,000 appraisers across the country, and the National Association of Realtors, which has thousands of appraiser members, both have been critical of the new code.
The Institute is particularly incensed at the expanded management company role in appraisals because those companies pay appraisers much less than their standard fees, and tack on thirty to fifty percent extra charged to the consumer.
For example, an appraiser who'd normally charge $325 for a valuation ordered though a lender or mortgage broker, now might be required by a management company to do the same work for $175 to $200.
Meanwhile the consumer, who has no idea where the money is going, is charged $400 or more for the appraisal, and must pay for it up front by credit card, rather than at closing.
The $200 to $225 extra goes to the management company. If the deal falls through and the mortgage doesn't close, that's the consumer's problem. The appraisal fee has already been pocketed by the management company.
Now evidence is circulating in Washington that not only are appraisal fees significantly higher under the new Fannie-Freddie code, but are being extended to FHA mortgages, despite the fact that FHA is not covered by the code.
The National Association of Mortgage Brokers has begun documenting the higher fees and other problems with the new code. In one case the association shared with Realty Times last week, a large lender, EverBank, circulated its list of new appraisal fees to be charged consumers through its "automated appraisal system."
Not only does the bank require credit payment for appraisals up front, but it now charges a flat $465 for FHA appraisals and $390 for standard single family conventional appraisals. Flat fees go up to $700 in Hawaii.
Roy de Loach, CEO of the brokers group, cited one member's experience -- where total appraisal fees for a routine FHA cash-out refi ballooned to $1,068 to the consumer.
Home buyers and realty professionals need to be aware of these sharply escalating fees -- and their controversial use on FHA loans that are supposed to be exempt from the Fannie-Freddie code.
Copyright © 2009 Realty Times. All Rights Reserved.
Washington Report: Appraisal System
by Kenneth R. Harney
Last week saw the official kickoff of Fannie Mae's and Freddie Mac's mandatory new system of appraisals nationwide, and some mortgage and appraisal groups are up in arms over sharply higher costs for consumers.
The so-called "home valuation code of conduct" imposed by Fannie and Freddie puts most appraisal assignments in the hands of management companies, some of whom are owned by major lenders such as Bank of America and Wells Fargo.
The Appraisal Institute, which represents 20,000 appraisers across the country, and the National Association of Realtors, which has thousands of appraiser members, both have been critical of the new code.
The Institute is particularly incensed at the expanded management company role in appraisals because those companies pay appraisers much less than their standard fees, and tack on thirty to fifty percent extra charged to the consumer.
For example, an appraiser who'd normally charge $325 for a valuation ordered though a lender or mortgage broker, now might be required by a management company to do the same work for $175 to $200.
Meanwhile the consumer, who has no idea where the money is going, is charged $400 or more for the appraisal, and must pay for it up front by credit card, rather than at closing.
The $200 to $225 extra goes to the management company. If the deal falls through and the mortgage doesn't close, that's the consumer's problem. The appraisal fee has already been pocketed by the management company.
Now evidence is circulating in Washington that not only are appraisal fees significantly higher under the new Fannie-Freddie code, but are being extended to FHA mortgages, despite the fact that FHA is not covered by the code.
The National Association of Mortgage Brokers has begun documenting the higher fees and other problems with the new code. In one case the association shared with Realty Times last week, a large lender, EverBank, circulated its list of new appraisal fees to be charged consumers through its "automated appraisal system."
Not only does the bank require credit payment for appraisals up front, but it now charges a flat $465 for FHA appraisals and $390 for standard single family conventional appraisals. Flat fees go up to $700 in Hawaii.
Roy de Loach, CEO of the brokers group, cited one member's experience -- where total appraisal fees for a routine FHA cash-out refi ballooned to $1,068 to the consumer.
Home buyers and realty professionals need to be aware of these sharply escalating fees -- and their controversial use on FHA loans that are supposed to be exempt from the Fannie-Freddie code.
Copyright © 2009 Realty Times. All Rights Reserved.
Labels:
appraisals,
Fannie Mae,
FHA,
Freddie Mac,
gov't help,
lending concerns,
loan costs
Friday, May 8, 2009
Phoenix in the middle of recovery
Realty Times of May 8, 2009
Hot Market: Phoenix in the middle of recovery by M. Anthony Carr
A year ago, I covered the Phoenix market in this column, saying that comparing April '08 to April '07, it looked like this western market had hit bottom – sales were up 15 percent year-over-year. That prediction, seems to have been right on the nose as nearly 12 months later, sales are up a whopping 78 percent from March 2008 to March 2009.
With listings down 17 percent for the metro area, sales are siphoning off inventory and buyers are picking deals at prices they haven't seen in more than 5 years, according to blogger Ron Wilczek, West USA Realty "Another notable fact is that the year over year (YOY) sales are up for the 10th consecutive month," blogs Wilczek. "One more notable fact: the year over year over year (YOYOY) sales are up for the fourth consecutive month. I admit that I "made up" that last statistical category. But essentially it means that the sales in March 2009, February 2009, January 2009 and December 2008 were all higher than the same months for the last two years."
The foreclosure sale dominates the market, but may be a necessary evil to jump-start one of the largest markets in the southwest. Wilczek says foreclosure sales make up more than 75 percent for March 2009.
"Though March's percentage was a slight increase from February 2009's, the percentage of Phoenix foreclosure sales (Valley wide) has remained relatively stable over the last three months," he says. "This is a change from the trend we saw starting in June 2007 and lasting until December 2008. Foreclosure properties during that time sold at a steadily increasing rate each month -- sometimes by a substantial amount."
Copyright © 2009 Realty Times. All Rights Reserved.
Hot Market: Phoenix in the middle of recovery by M. Anthony Carr
A year ago, I covered the Phoenix market in this column, saying that comparing April '08 to April '07, it looked like this western market had hit bottom – sales were up 15 percent year-over-year. That prediction, seems to have been right on the nose as nearly 12 months later, sales are up a whopping 78 percent from March 2008 to March 2009.
With listings down 17 percent for the metro area, sales are siphoning off inventory and buyers are picking deals at prices they haven't seen in more than 5 years, according to blogger Ron Wilczek, West USA Realty "Another notable fact is that the year over year (YOY) sales are up for the 10th consecutive month," blogs Wilczek. "One more notable fact: the year over year over year (YOYOY) sales are up for the fourth consecutive month. I admit that I "made up" that last statistical category. But essentially it means that the sales in March 2009, February 2009, January 2009 and December 2008 were all higher than the same months for the last two years."
The foreclosure sale dominates the market, but may be a necessary evil to jump-start one of the largest markets in the southwest. Wilczek says foreclosure sales make up more than 75 percent for March 2009.
"Though March's percentage was a slight increase from February 2009's, the percentage of Phoenix foreclosure sales (Valley wide) has remained relatively stable over the last three months," he says. "This is a change from the trend we saw starting in June 2007 and lasting until December 2008. Foreclosure properties during that time sold at a steadily increasing rate each month -- sometimes by a substantial amount."
Copyright © 2009 Realty Times. All Rights Reserved.
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