December 3, 2010
Long-Term Mortgage Rates Rise for the Third Time in as Many Weeks
McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the both fixed- and shorter-term mortgage rates rose this week. This was the third week in a row where fixed-rate mortgage rates were up.
30-year fixed-rate mortgage (FRM) averaged 4.46 percent with an average 0.8 point for the week ending December 2, 2010, up from last week when it averaged 4.40 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.
15-year FRM this week averaged 3.81 percent with an average 0.7 point, up from last week when it averaged 3.77 percent. A year ago at this time, the 15-year FRM averaged 4.27 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.49 percent this week, with an average 0.6 point, up from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.19 percent.
1-year Treasury-indexed ARM averaged 3.25 percent this week with an average 0.6 point, up from last week when it averaged 3.23 percent. At this time last year, the 1-year ARM averaged 4.25 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac, states, "Mortgage rates followed bond yields higher this week as recently released economic data suggest the economy may be stronger this quarter than the previous. Regional manufacturing indexes for Dallas, Chicago and Milwaukee all rose in November. In addition, the Federal Reserve noted that 10 of its 12 regions saw improvement through mid-November in its December 1st regional economic review."
"House prices indices, however, are trending downwards. The 12-month growth rate in the S&P/Case-Shiller® 20-city index eased from 1.7 percent in August to 0.6 percent in September. Only six of the cities had positive annual growth, compared to nine in August."
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, December 3, 2010
Wednesday, November 17, 2010
10 Tips For New Buyers
November 17, 2010
10 Tips For New Buyers by Carla Hill
It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.
Here are 10 steps that buyers can take to make home dreams a reality!
1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.
2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!
3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.
4. Get Preapproved. It's time to talk to a lender! Pre-approval will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?
5. Get Prequalified. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are prequalified.
6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.
7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".
8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.
9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.
10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company.
Copyright © 2010 Realty Times. All Rights Reserved.
10 Tips For New Buyers by Carla Hill
It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.
Here are 10 steps that buyers can take to make home dreams a reality!
1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.
2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!
3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.
4. Get Preapproved. It's time to talk to a lender! Pre-approval will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?
5. Get Prequalified. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are prequalified.
6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.
7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".
8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.
9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.
10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, October 29, 2010
Mortgage Rates Up But Still Incredibly Low
October 29, 2010
Mortgage Rates Up But Still Incredibly Low from Realty Times
McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS), which found that the 30-year fixed-rate mortgage rate rose slightly for the second consecutive time in six weeks. The 15-year fixed-rate mortgage rate also rose slightly while the 5-year ARM set another low, and the 1-year ARM tied last week's low.
30-year fixed-rate mortgage (FRM) averaged 4.23 percent with an average 0.8 point for the week ending October 28, 2010, up from last week when it averaged 4.21 percent. Last year at this time, the 30-year FRM averaged 5.03 percent.
15-year FRM this week averaged 3.66 percent with an average 0.7 point, up from last week when it averaged 3.64 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.41 percent this week, with an average 0.6 point, down from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.42 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.
1-year Treasury-indexed ARM averaged 3.30 percent this week with an average 0.7 point, unchanged from last week. At this time last year, the 1-year ARM averaged 4.57 percent . The 1-year ARM ties last week's low.
Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Mixed economic data releases left mortgage rates little changed this week. Consumer confidence increased slightly in October, according to The Conference Board , but still remains at low levels. Based on the S&P/Case-Shiller 20-city composite index, house prices fell 0.3 percent between July and August, while the purchase-only index by the Federal Housing Finance Agency showed a 0.4 percent gain over the same period."
"Historically low rates are supporting home sales and reducing the excess stock of homes available for sale. Existing home sales, including condominiums and co-ops, rose for the second consecutive month in September, up almost 18.0 percent over July's low. Similarly, sales of new homes had back-to-back increases and were 7.7 percent above July. The inventory of new homes for sale has either stayed the same or declined every month of this year."
Copyright © 2010 Realty Times. All Rights Reserved.
Mortgage Rates Up But Still Incredibly Low from Realty Times
McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS), which found that the 30-year fixed-rate mortgage rate rose slightly for the second consecutive time in six weeks. The 15-year fixed-rate mortgage rate also rose slightly while the 5-year ARM set another low, and the 1-year ARM tied last week's low.
30-year fixed-rate mortgage (FRM) averaged 4.23 percent with an average 0.8 point for the week ending October 28, 2010, up from last week when it averaged 4.21 percent. Last year at this time, the 30-year FRM averaged 5.03 percent.
15-year FRM this week averaged 3.66 percent with an average 0.7 point, up from last week when it averaged 3.64 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.41 percent this week, with an average 0.6 point, down from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.42 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.
1-year Treasury-indexed ARM averaged 3.30 percent this week with an average 0.7 point, unchanged from last week. At this time last year, the 1-year ARM averaged 4.57 percent . The 1-year ARM ties last week's low.
Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Mixed economic data releases left mortgage rates little changed this week. Consumer confidence increased slightly in October, according to The Conference Board , but still remains at low levels. Based on the S&P/Case-Shiller 20-city composite index, house prices fell 0.3 percent between July and August, while the purchase-only index by the Federal Housing Finance Agency showed a 0.4 percent gain over the same period."
"Historically low rates are supporting home sales and reducing the excess stock of homes available for sale. Existing home sales, including condominiums and co-ops, rose for the second consecutive month in September, up almost 18.0 percent over July's low. Similarly, sales of new homes had back-to-back increases and were 7.7 percent above July. The inventory of new homes for sale has either stayed the same or declined every month of this year."
Copyright © 2010 Realty Times. All Rights Reserved.
Saturday, October 23, 2010
Bank of America Plans to Resume Foreclosures
WASHINGTON (AP) -- The pace of U.S. home foreclosures may not slow much after all.
Bank of America said Monday that it plans to resume seizing more than 100,000 homes in 23 states next week. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.
Ally Financial Inc's GMAC Mortgage unit is also resuming foreclosures once documents are fixed. Gina Proia, a spokeswoman for Ally, said that "as we review the affected files and take any remediation needed, the foreclosure process then resumes."
Analysts expect other lenders to correct problems with the way they handled documents and proceed with a wave of foreclosures that have depressed the housing market. They are likely to follow because foreclosure practices were similar from bank to bank, said banking analyst Nancy Bush of NAB Research.
"We'll be back to square one by the end of the year," she said.
Copyright by Associated Press
Bank of America said Monday that it plans to resume seizing more than 100,000 homes in 23 states next week. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed.
Ally Financial Inc's GMAC Mortgage unit is also resuming foreclosures once documents are fixed. Gina Proia, a spokeswoman for Ally, said that "as we review the affected files and take any remediation needed, the foreclosure process then resumes."
Analysts expect other lenders to correct problems with the way they handled documents and proceed with a wave of foreclosures that have depressed the housing market. They are likely to follow because foreclosure practices were similar from bank to bank, said banking analyst Nancy Bush of NAB Research.
"We'll be back to square one by the end of the year," she said.
Copyright by Associated Press
Monday, October 18, 2010
Bank of America Halts Foreclosures
October 18, 2010
Realty Times - Real Estate Outlook: Bank of America Halts Foreclosures by Carla Hill
It's announcement has been received with mixed reviews. Many homeowners on the brink of foreclosure are breathing a temporary sigh of relief, as Bank of America announced it would become the first major bank to halt both foreclosure proceedings and sales. This will take effect in each of the 50 U.S. states.
The decision comes on the heels of mounting political pressure, namely that from Senator Christopher Dodd, chairman of the Senate Banking Committee, and the impending November 16th hearing on foreclosures.
The temporary cessation of foreclosure proceedings will give Bank of America time, in the wake of the mortgage crisis, to review its own methods, to ensure fairness and that no predatory practices are in place.
Zillow.com is reporting that the foreclosure rate climbed again in August and became an even larger portion of monthly transactions. Foreclosure resales as a percentage of all sales in August were 19%, up 2 percent from July.
In an housing market that is already anemic, however, will this halt bring more paperwork, pressure, and slowed sales?
Vicki Cox Golder, NAR President, notes, "There are valid foreclosures that should move ahead quickly, and we shouldn't lump them in with mortgages that are suspect. That would cause deep problems in an already fragile market and throw many families into uncertainty."
The National Association of Realtors also reports that "thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy."
This temporary halt could also put more pressure on an ailing job market. Remodelers, contractors, and other workers employed to rehab newly purchased foreclosures may now find themselves without work.
Last week it was reported that U.S. Payrolls had already dropped 95,000 in September.
Will the Fed take action under this mounting pressure when it meets up on November 2nd and 3rd? Time will tell and we'll keep you posted of any changes that may coming your way.
For now, the market remains mostly unchanged. According to the NAHB/Wells Fargo Housing Market Index, results remain "dismal." They report that new job formations slowed in the second and third quarters and both businesses and consumers pulled back on purchases. Overall uncertainty over economic growth has become the latest impediment to a resurgence in new housing -- even with historically low interest rates, leveling house prices and pent-up demand from unformed households.
Zillow predicts that a bottom in national home values will happen later this year or early next year at the latest.
It looks like for now, the housing market will continue on its weakened path.
Copyright © 2010 Realty Times. All Rights Reserved.
Realty Times - Real Estate Outlook: Bank of America Halts Foreclosures by Carla Hill
It's announcement has been received with mixed reviews. Many homeowners on the brink of foreclosure are breathing a temporary sigh of relief, as Bank of America announced it would become the first major bank to halt both foreclosure proceedings and sales. This will take effect in each of the 50 U.S. states.
The decision comes on the heels of mounting political pressure, namely that from Senator Christopher Dodd, chairman of the Senate Banking Committee, and the impending November 16th hearing on foreclosures.
The temporary cessation of foreclosure proceedings will give Bank of America time, in the wake of the mortgage crisis, to review its own methods, to ensure fairness and that no predatory practices are in place.
Zillow.com is reporting that the foreclosure rate climbed again in August and became an even larger portion of monthly transactions. Foreclosure resales as a percentage of all sales in August were 19%, up 2 percent from July.
In an housing market that is already anemic, however, will this halt bring more paperwork, pressure, and slowed sales?
Vicki Cox Golder, NAR President, notes, "There are valid foreclosures that should move ahead quickly, and we shouldn't lump them in with mortgages that are suspect. That would cause deep problems in an already fragile market and throw many families into uncertainty."
The National Association of Realtors also reports that "thousands of first-time and move-up buyers who hoped to make a foreclosed property their new home now face uncertainty, anxiety and possibly remorse as they worry that closing on their desired property could be in jeopardy."
This temporary halt could also put more pressure on an ailing job market. Remodelers, contractors, and other workers employed to rehab newly purchased foreclosures may now find themselves without work.
Last week it was reported that U.S. Payrolls had already dropped 95,000 in September.
Will the Fed take action under this mounting pressure when it meets up on November 2nd and 3rd? Time will tell and we'll keep you posted of any changes that may coming your way.
For now, the market remains mostly unchanged. According to the NAHB/Wells Fargo Housing Market Index, results remain "dismal." They report that new job formations slowed in the second and third quarters and both businesses and consumers pulled back on purchases. Overall uncertainty over economic growth has become the latest impediment to a resurgence in new housing -- even with historically low interest rates, leveling house prices and pent-up demand from unformed households.
Zillow predicts that a bottom in national home values will happen later this year or early next year at the latest.
It looks like for now, the housing market will continue on its weakened path.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, October 8, 2010
Mortgage Rates Continue to Fall
Realty Times of October 8, 2010
Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey
McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate dropped yet again to break the survey's all-time low; the 15-year fixed-rate did the same. The 5-year ARM also set an all-time survey low.
30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.8 point for the week ending October 7, 2010, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.87 percent.
15-year FRM this week averaged a record low of 3.72 percent with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.52 percent. A year ago, the 5-year ARM averaged 4.35 percent.
1-year Treasury-indexed ARM averaged 3.40 percent this week with an average 0.7 point, down from last week when it averaged 3.48 percent. At this time last year, the 1-year ARM averaged 4.53 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac report, "The 12-month growth rate in the core price index for personal consumption , which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease to new or near record lows this week."
"Housing affordability increased for the second month in a row in August to tie April's level, according to the National Association of Realtors® (NAR). As a result, pending existing home sales also rose for the second consecutive month in August to the strongest pace in four months, the NAR also reported. Furthermore, since the end of August, mortgage applications for home purchases were up over 14 percent for the week ended October 1st."
Copyright © 2010 Realty Times. All Rights Reserved.
Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey
McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate dropped yet again to break the survey's all-time low; the 15-year fixed-rate did the same. The 5-year ARM also set an all-time survey low.
30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.8 point for the week ending October 7, 2010, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.87 percent.
15-year FRM this week averaged a record low of 3.72 percent with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.52 percent. A year ago, the 5-year ARM averaged 4.35 percent.
1-year Treasury-indexed ARM averaged 3.40 percent this week with an average 0.7 point, down from last week when it averaged 3.48 percent. At this time last year, the 1-year ARM averaged 4.53 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac report, "The 12-month growth rate in the core price index for personal consumption , which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease to new or near record lows this week."
"Housing affordability increased for the second month in a row in August to tie April's level, according to the National Association of Realtors® (NAR). As a result, pending existing home sales also rose for the second consecutive month in August to the strongest pace in four months, the NAR also reported. Furthermore, since the end of August, mortgage applications for home purchases were up over 14 percent for the week ended October 1st."
Copyright © 2010 Realty Times. All Rights Reserved.
Wednesday, September 29, 2010
30-Yr Mortgage Rate Nears 3.875 Percent
September 29, 2010
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From Realty Times, 30-Yr Mortgage Rate Nears 3.875 Percent by Ed Ferrara
Mortgage-backed securities prices, which drive mortgage rates their opposite, posted gains Monday and Tuesday consecutively, pressuring mortgage rates to move downward again from already record low levels where they began the week.
30-year fixed mortgage rates, currently at 4% for well-qualified borrowers who pay 1 point origination, are very near 3.875%. 30-year fixed mortgage rates have never been below 4% before. 15-year fixed mortgage rates remain at 3.5% but could improve any hour as well.
FreeRateUpdate.com surveys over 2 dozen wholesale lenders' rate sheets for brokers daily to determine the most accurate mortgage rates available to highly qualified borrowers at a standard origination fee.
FHA loan rates continue to mirror conforming mortgage rates. Today's 30-year fixed FHA loan rate is also 4%; however, MI and other FHA closing fees make APR higher than that of a conforming mortgage at the same note rate and origination.
Jumbo mortgage rates are improved from last week and today's jumbo 30-year fixed loan rate is 4.875%, a record low.
Wells Fargo mortgage rates, as advertised on their website, are unchanged with 4.375% (4.559 APR) being their offering on a conventional 30-year fixed mortgage.
Mortgage refinance applications have been flat according to the MBA, who posts figures weekly, since spiking as rates slid into the low 4's.
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Copyright © 2010 Realty Times. All Rights Reserved.
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From Realty Times, 30-Yr Mortgage Rate Nears 3.875 Percent by Ed Ferrara
Mortgage-backed securities prices, which drive mortgage rates their opposite, posted gains Monday and Tuesday consecutively, pressuring mortgage rates to move downward again from already record low levels where they began the week.
30-year fixed mortgage rates, currently at 4% for well-qualified borrowers who pay 1 point origination, are very near 3.875%. 30-year fixed mortgage rates have never been below 4% before. 15-year fixed mortgage rates remain at 3.5% but could improve any hour as well.
FreeRateUpdate.com surveys over 2 dozen wholesale lenders' rate sheets for brokers daily to determine the most accurate mortgage rates available to highly qualified borrowers at a standard origination fee.
FHA loan rates continue to mirror conforming mortgage rates. Today's 30-year fixed FHA loan rate is also 4%; however, MI and other FHA closing fees make APR higher than that of a conforming mortgage at the same note rate and origination.
Jumbo mortgage rates are improved from last week and today's jumbo 30-year fixed loan rate is 4.875%, a record low.
Wells Fargo mortgage rates, as advertised on their website, are unchanged with 4.375% (4.559 APR) being their offering on a conventional 30-year fixed mortgage.
Mortgage refinance applications have been flat according to the MBA, who posts figures weekly, since spiking as rates slid into the low 4's.
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Copyright © 2010 Realty Times. All Rights Reserved.
Friday, September 24, 2010
Fixed-Rate Mortgages Unchanged
September 24, 2010
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From Realty Times - Fixed-Rate Mortgages Unchanged While ARMs Are Mixed
McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate and the 15-year fixed-rate were unchanged; shorter-term rates were mixed.
30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.7 point for the week ending September 23, 2010, unchanged from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 5.04 percent.
15-year FRM this week averaged a record low of 3.82 percent with an average 0.7 point, unchanged from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.54 percent this week, with an average 0.6 point, down slightly from last week when it averaged 3.55 percent. A year ago, the 5-year ARM averaged 4.51 percent.
1-year Treasury-indexed ARM averaged 3.46 percent this week with an average 0.7 point, up from last week when it averaged 3.40 percent. At this time last year, the 1-year ARM averaged 4.52 percent.
Frank Nothaft, vice president and chief economist of Freddie Mac, said, "In its September 21st policy committee statement, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months. In addition, inflation was at levels somewhat below its comfort zone. The perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week."
"Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession; the one exception was the 1980 downturn. The National Bureau of Economic Research recently announced that the current recession ended in June 2009. Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September."
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Copyright © 2010 Realty Times. All Rights Reserved.
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From Realty Times - Fixed-Rate Mortgages Unchanged While ARMs Are Mixed
McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate and the 15-year fixed-rate were unchanged; shorter-term rates were mixed.
30-year fixed-rate mortgage (FRM) averaged 4.37 percent with an average 0.7 point for the week ending September 23, 2010, unchanged from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 5.04 percent.
15-year FRM this week averaged a record low of 3.82 percent with an average 0.7 point, unchanged from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.46 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.54 percent this week, with an average 0.6 point, down slightly from last week when it averaged 3.55 percent. A year ago, the 5-year ARM averaged 4.51 percent.
1-year Treasury-indexed ARM averaged 3.46 percent this week with an average 0.7 point, up from last week when it averaged 3.40 percent. At this time last year, the 1-year ARM averaged 4.52 percent.
Frank Nothaft, vice president and chief economist of Freddie Mac, said, "In its September 21st policy committee statement, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months. In addition, inflation was at levels somewhat below its comfort zone. The perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week."
"Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession; the one exception was the 1980 downturn. The National Bureau of Economic Research recently announced that the current recession ended in June 2009. Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September."
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Copyright © 2010 Realty Times. All Rights Reserved.
Tuesday, September 21, 2010
Attack on Homeownership
The Attack on Homeownership by Bob Hunt September 21, 2010
Homeownership is under attack in America. A small sampling: "The Case Against Homeownership" by Barbara Kiviat, Time Magazine cover story, Sept. 6, 2010; "Downsizing the Dream" by Washington Post columnist, Robert Samuelson, August 29, 2010; and "The Un-American Dream" by Don Watkins and Yaron Brook of the Ayn Rand Center, in Forbes.com, August 27, 2010.
Certain aspects of the attack are not, strictly speaking, against homeownership itself. Rather, they are arguments from principle against government policies that promote homeownership. These are principled arguments in the sense that they derive from beliefs that oppose all government attempts to influence any of our choices. Thus, Watkins and Brook write, "A government crusade to promote homeownership is un-American." "In America, the government’s job is to protect our freedom to pursue our values, not to dictate what our values are. Its homeownership policy should be the same as its toaster oven policy: laissez-faire."
Others may not in general oppose government intervention and attempts to influence our choices, but they suggest that, in the particular case of promoting homeownership, the cost to government is simply too high. Kiviat says that the mortgage interest deduction "cost the government some $80 billion in lost revenue in 2009." Samuelson estimates, "Tax breaks (mainly the deductions for mortgage interest and property taxes, plus preferential treatment of capital gains on homes) exceeded $120 billion in 2009."
Of course these figures may amount to chump change in the context of the multi-trillion dollar estimates regarding the cost of bailouts and the "stimulus". Moreover, the "lost revenues" attributed to tax-advantaged housing may well be offset by the variety of positive social outcomes (e.g. lower crime rates) that have been attributed to neighborhoods with high ownership rates.
Perhaps the wildest attack comes in the Time Magazine article by Kiviat: "The dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago." But she is mistaken. All those regrettable events were not caused by homeownership; they were caused by foolishly-easy credit and by reckless lending programs.
In August of 2010 the National Association of Realtors® (NAR) released a paper entitled "Social Benefits of Homeownership and Stable Housing". The timeliness of this document was probably not coincidental. The paper is a "review of existing academic literature that documents the social benefits of homeownership." There is not room here to recount the detail, but the study concludes "…there is evidence from numerous studies that attest to the benefits accruing to many segments of society. Homeownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency." "Public policy makers would be wise to consider the immense social benefits of homeownership for families, local communities, and the nation."
The NAR study is clear that the social benefits of homeownership are tied to stability (the lack of high turnover in neighborhoods). But Kiviat, in the Time Magazine article, even questions the value of that. "Homeownership may provide a sense of stability to families, but stability in today’s economy isn’t always a virtue." She quotes economist Andrew Oswald, "The economy is changing all the time, and we need people to be mobile in order to drop into the right job slots."
What to make of all this? Well, I don’t think homeownership is about to be banned. But you can sure expect to see some chipping away at its tax advantages as the government tries to figure out how it’s going to get out of the financial hole that has been dug. There will be a lot of economic arguments.
Can we put a value on homeownership? Ironically, the best answer may be contained in an anecdote that appears in the Time article. Kiviat writes, "Star Korajkic, one of America’s newest homeowners, doesn’t particularly care about all this financial history. What she cares about is being able to paint her daughter’s room purple without asking anyone’s permission."
And what is the value of that? Priceless.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Homeownership is under attack in America. A small sampling: "The Case Against Homeownership" by Barbara Kiviat, Time Magazine cover story, Sept. 6, 2010; "Downsizing the Dream" by Washington Post columnist, Robert Samuelson, August 29, 2010; and "The Un-American Dream" by Don Watkins and Yaron Brook of the Ayn Rand Center, in Forbes.com, August 27, 2010.
Certain aspects of the attack are not, strictly speaking, against homeownership itself. Rather, they are arguments from principle against government policies that promote homeownership. These are principled arguments in the sense that they derive from beliefs that oppose all government attempts to influence any of our choices. Thus, Watkins and Brook write, "A government crusade to promote homeownership is un-American." "In America, the government’s job is to protect our freedom to pursue our values, not to dictate what our values are. Its homeownership policy should be the same as its toaster oven policy: laissez-faire."
Others may not in general oppose government intervention and attempts to influence our choices, but they suggest that, in the particular case of promoting homeownership, the cost to government is simply too high. Kiviat says that the mortgage interest deduction "cost the government some $80 billion in lost revenue in 2009." Samuelson estimates, "Tax breaks (mainly the deductions for mortgage interest and property taxes, plus preferential treatment of capital gains on homes) exceeded $120 billion in 2009."
Of course these figures may amount to chump change in the context of the multi-trillion dollar estimates regarding the cost of bailouts and the "stimulus". Moreover, the "lost revenues" attributed to tax-advantaged housing may well be offset by the variety of positive social outcomes (e.g. lower crime rates) that have been attributed to neighborhoods with high ownership rates.
Perhaps the wildest attack comes in the Time Magazine article by Kiviat: "The dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago." But she is mistaken. All those regrettable events were not caused by homeownership; they were caused by foolishly-easy credit and by reckless lending programs.
In August of 2010 the National Association of Realtors® (NAR) released a paper entitled "Social Benefits of Homeownership and Stable Housing". The timeliness of this document was probably not coincidental. The paper is a "review of existing academic literature that documents the social benefits of homeownership." There is not room here to recount the detail, but the study concludes "…there is evidence from numerous studies that attest to the benefits accruing to many segments of society. Homeownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency." "Public policy makers would be wise to consider the immense social benefits of homeownership for families, local communities, and the nation."
The NAR study is clear that the social benefits of homeownership are tied to stability (the lack of high turnover in neighborhoods). But Kiviat, in the Time Magazine article, even questions the value of that. "Homeownership may provide a sense of stability to families, but stability in today’s economy isn’t always a virtue." She quotes economist Andrew Oswald, "The economy is changing all the time, and we need people to be mobile in order to drop into the right job slots."
What to make of all this? Well, I don’t think homeownership is about to be banned. But you can sure expect to see some chipping away at its tax advantages as the government tries to figure out how it’s going to get out of the financial hole that has been dug. There will be a lot of economic arguments.
Can we put a value on homeownership? Ironically, the best answer may be contained in an anecdote that appears in the Time article. Kiviat writes, "Star Korajkic, one of America’s newest homeowners, doesn’t particularly care about all this financial history. What she cares about is being able to paint her daughter’s room purple without asking anyone’s permission."
And what is the value of that? Priceless.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Avoid Foreclosure
From Realty Times - Avoid Foreclosure by Carla Hill on September 21, 2010
In a country with a growing foreclosure rate, new default notices being sent every day, and an unemployment rate over 9 percent, the chances of foreclosure affecting you or someone you know is on the rise.
RealtyTrac.com reports that in August 2010, foreclosure filings rose by 4 percent, with 338,836 new filings, affecting one in every 381 households.
If you find yourself struggling to make your payments, here are some ways to avoid foreclosure.
First, be realistic about your situation. Answer phone calls from your lender and open your mail. This is the time to face your problem head on. Could a foreclosure be on the horizon? Be aware of warning signs.
Warning signs can include significant life changes, such as the death of a spouse, loss of job, illness, divorce, and steep increases in your mortgage payment.
If you are having trouble making monthly payments on other bills, now is the time to pay attention. Your mortgage could be the next bill that becomes too much. In order to curb missed payments, prioritize your spending.
Establish a budget and cut out any unnecessary spending (e.g. movies, cable, eating out, shopping) until you are in a more stable financial state. Apart from healthcare, there is nothing more important than your home. If you have assets to sell off, then do so! The cash may be better spend in helping you save your home.
Next, call your lender to explain your situation and to see what options are available. In these tough economic times, many lenders have programs that may help you stay in your home. Foreclosures do more than run ruin on your credit score, they also affect a lender's bottom line. If working out an agreement with you can help them save that bottom line, the changes of them helping you are high.
When you speak with your lender, have proof of your monthly income, as well as your budget on hand. You will also need to have an explanation of why you are unable to make your payments. Has someone lost their job? Has there been a medical emergency? It is best to be honest and upfront with your lender regarding your situation.
Some options you may discuss with your lender include refinancing, reinstatement (where your lender allows you to pay the money you are behind in one lump sum and by a certain date), forbearance (a temporary reduction or cessation of your mortgage payment), a new repayment plan, and loan modification (a permanent change to some of the terms of your existing mortgage).
Beware of scammers during this process. Help and counsel from your lender should be free of charge. If you come across someone requesting a fee in order to facilitate help, chances are it is a scam.
The Making Home Affordable Program is also available for those who are struggling to make their payments. This program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.
The sooner you contact your lender, the better. Don't wait until you are days away from being foreclosed. The process of working out an arrangement with your lender could take multiple phone calls and weeks of time.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
In a country with a growing foreclosure rate, new default notices being sent every day, and an unemployment rate over 9 percent, the chances of foreclosure affecting you or someone you know is on the rise.
RealtyTrac.com reports that in August 2010, foreclosure filings rose by 4 percent, with 338,836 new filings, affecting one in every 381 households.
If you find yourself struggling to make your payments, here are some ways to avoid foreclosure.
First, be realistic about your situation. Answer phone calls from your lender and open your mail. This is the time to face your problem head on. Could a foreclosure be on the horizon? Be aware of warning signs.
Warning signs can include significant life changes, such as the death of a spouse, loss of job, illness, divorce, and steep increases in your mortgage payment.
If you are having trouble making monthly payments on other bills, now is the time to pay attention. Your mortgage could be the next bill that becomes too much. In order to curb missed payments, prioritize your spending.
Establish a budget and cut out any unnecessary spending (e.g. movies, cable, eating out, shopping) until you are in a more stable financial state. Apart from healthcare, there is nothing more important than your home. If you have assets to sell off, then do so! The cash may be better spend in helping you save your home.
Next, call your lender to explain your situation and to see what options are available. In these tough economic times, many lenders have programs that may help you stay in your home. Foreclosures do more than run ruin on your credit score, they also affect a lender's bottom line. If working out an agreement with you can help them save that bottom line, the changes of them helping you are high.
When you speak with your lender, have proof of your monthly income, as well as your budget on hand. You will also need to have an explanation of why you are unable to make your payments. Has someone lost their job? Has there been a medical emergency? It is best to be honest and upfront with your lender regarding your situation.
Some options you may discuss with your lender include refinancing, reinstatement (where your lender allows you to pay the money you are behind in one lump sum and by a certain date), forbearance (a temporary reduction or cessation of your mortgage payment), a new repayment plan, and loan modification (a permanent change to some of the terms of your existing mortgage).
Beware of scammers during this process. Help and counsel from your lender should be free of charge. If you come across someone requesting a fee in order to facilitate help, chances are it is a scam.
The Making Home Affordable Program is also available for those who are struggling to make their payments. This program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.
The sooner you contact your lender, the better. Don't wait until you are days away from being foreclosed. The process of working out an arrangement with your lender could take multiple phone calls and weeks of time.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook
From Realty Times - Real Estate Outlook: Foreclosures Rise by Carla Hill on 9-20-10
For some real estate investors this week -- it could be good news. The National Association of Home Builder's latest Multifamily market index reports that current and expected demand for rental apartments improved significantly in the second quarter of 2010 compared to the first quarter.
David Crowe, NAHB's Chief Economist remarked that "as the supply of additional units declines and pent-up household formations re-emerge when the labor markets improve, demand for traditional rental apartments will rise. It is possible that the supply of new units will not arrive in time to meet the emerging demand and some shortages will occur in some markets."
This promising piece of news was followed by new on consumer spending.
Consumer spending is on the rise, even if its only a modest gain. The Commerce Department reports that spending rose 0.4 percent in July, and that is after remaining flat during the month of June.
The Wall Street Journal reported that consumer spending is on track to grow at a 2 percent annual rate in the 3rd quarter. So, it's slow, but not a stand still.
Unemployment across the nation is still affecting millions. Around 15 million to be more precise. The first week of September saw a fall in initial jobless claims -- down 27,000, the lowest level in quite some time. And experts are seeing signs of sustainable growth, even with the rate of unemployment still around 9 percent.
Are you one of the many homeowners living in neighborhoods hit hard by foreclosures? The Obama Administration and HUD announced it has awarded an additional $1 billion in funding to all states along with a number of counties and local communities struggling to reverse the effects of the crisis.
The grants are designed to reverse the effect foreclosed properties have on their neighborhoods and home values. Among other things, the grants will be used to offer downpayment and closing cost assistance to low to moderate income homebuyers.
Foreclosures are still overwhelming many markets, rising 4 percent in August. RealtyTrac.com CEO, James Saccacio reports that "the trend lines of decreasing default notices and increasing bank repossessions converged in August, with virtually the same number of new default notices and bank repossessions for the month — a clear indication that the clogged foreclosure pipeline is being carefully managed on both ends by lenders and servicers."
Are you a borrower over the age of 62 looking to make ends meet? Chances are, then, that you've heard of reverse mortgages. These loans tap into the equity of a home, in turn helping those in need of fast cash.
The Federal Reserve Board has proposed new rules to help stop unfair practices that exist with these -- many times costly -- loans. We should see the proposal for new regulations by this November. We'll keep you informed.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
For some real estate investors this week -- it could be good news. The National Association of Home Builder's latest Multifamily market index reports that current and expected demand for rental apartments improved significantly in the second quarter of 2010 compared to the first quarter.
David Crowe, NAHB's Chief Economist remarked that "as the supply of additional units declines and pent-up household formations re-emerge when the labor markets improve, demand for traditional rental apartments will rise. It is possible that the supply of new units will not arrive in time to meet the emerging demand and some shortages will occur in some markets."
This promising piece of news was followed by new on consumer spending.
Consumer spending is on the rise, even if its only a modest gain. The Commerce Department reports that spending rose 0.4 percent in July, and that is after remaining flat during the month of June.
The Wall Street Journal reported that consumer spending is on track to grow at a 2 percent annual rate in the 3rd quarter. So, it's slow, but not a stand still.
Unemployment across the nation is still affecting millions. Around 15 million to be more precise. The first week of September saw a fall in initial jobless claims -- down 27,000, the lowest level in quite some time. And experts are seeing signs of sustainable growth, even with the rate of unemployment still around 9 percent.
Are you one of the many homeowners living in neighborhoods hit hard by foreclosures? The Obama Administration and HUD announced it has awarded an additional $1 billion in funding to all states along with a number of counties and local communities struggling to reverse the effects of the crisis.
The grants are designed to reverse the effect foreclosed properties have on their neighborhoods and home values. Among other things, the grants will be used to offer downpayment and closing cost assistance to low to moderate income homebuyers.
Foreclosures are still overwhelming many markets, rising 4 percent in August. RealtyTrac.com CEO, James Saccacio reports that "the trend lines of decreasing default notices and increasing bank repossessions converged in August, with virtually the same number of new default notices and bank repossessions for the month — a clear indication that the clogged foreclosure pipeline is being carefully managed on both ends by lenders and servicers."
Are you a borrower over the age of 62 looking to make ends meet? Chances are, then, that you've heard of reverse mortgages. These loans tap into the equity of a home, in turn helping those in need of fast cash.
The Federal Reserve Board has proposed new rules to help stop unfair practices that exist with these -- many times costly -- loans. We should see the proposal for new regulations by this November. We'll keep you informed.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
STRIPPING FORECLOSED HOMES
ARIZONA INFORMATION TO ASSIST THE ARIZONA MORTGAGE BROKER©
(May 18, 2009)
FBI AGENTS AND LOCAL LAW-ENFORCEMENT HAVE ARRESTED FIVE PEOPLE THIS PAST MONTH FOR STRIPPING THEIR FORECLOSED HOMES
FACTS
FBI agents and local law-enforcement personnel have arrested five people in the past month for stripping their foreclosed homes of appliances, cabinets, countertops and plumbing fixtures. That includes cases in Fountain Hills, Anthem, Phoenix and Surprise of some of the more egregious violators who are taking everything they can out of homes.
To combat the theft, the Mortgage Fraud Task Force is going after violators who have stripped multiple investment properties that investors are losing to foreclosure, rather than homeowners who have lost their home. But the enforcement effort is also trying to discourage those thefts as well.
One realtor has been recently arrested for this type of theft. The task force recently arrested Kailash Bhatt, 43, after officials say he advertised the sale of cabinets, granite countertops, an oven, microwave and dishwasher on craiglist.org. Bhatt, who owned a foreclosed home in Anthem, was indicted last month by a Maricopa County grand jury on charges of theft and defrauding creditors. Bhatt, who operates a Web site listing foreclosed properties, accepted $2,000 from an undercover task force agent, according to the Maricopa County Attorney's Office.
The FBI Mortgage Task Force, which got its start last June, is also continuing to investigate mortgage-fraud cases. Prosecutors are working on plea deals or to take those cases to trial, said Halferty, the task force supervisor. Some of the new cases involved schemes with losses of $10 million to $100 million, she said. Agent Tolhurst said a number of people employed in financial services and real estate have come forward to assist the task force. (azrep51409)
MORAL
First buy the investment property, then strip it and then win the prize of going to prison . Remember, everyone is innocent until convicted. I trust he has a good attorney. If not, I can recommend one.
(May 18, 2009)
FBI AGENTS AND LOCAL LAW-ENFORCEMENT HAVE ARRESTED FIVE PEOPLE THIS PAST MONTH FOR STRIPPING THEIR FORECLOSED HOMES
FACTS
FBI agents and local law-enforcement personnel have arrested five people in the past month for stripping their foreclosed homes of appliances, cabinets, countertops and plumbing fixtures. That includes cases in Fountain Hills, Anthem, Phoenix and Surprise of some of the more egregious violators who are taking everything they can out of homes.
To combat the theft, the Mortgage Fraud Task Force is going after violators who have stripped multiple investment properties that investors are losing to foreclosure, rather than homeowners who have lost their home. But the enforcement effort is also trying to discourage those thefts as well.
One realtor has been recently arrested for this type of theft. The task force recently arrested Kailash Bhatt, 43, after officials say he advertised the sale of cabinets, granite countertops, an oven, microwave and dishwasher on craiglist.org. Bhatt, who owned a foreclosed home in Anthem, was indicted last month by a Maricopa County grand jury on charges of theft and defrauding creditors. Bhatt, who operates a Web site listing foreclosed properties, accepted $2,000 from an undercover task force agent, according to the Maricopa County Attorney's Office.
The FBI Mortgage Task Force, which got its start last June, is also continuing to investigate mortgage-fraud cases. Prosecutors are working on plea deals or to take those cases to trial, said Halferty, the task force supervisor. Some of the new cases involved schemes with losses of $10 million to $100 million, she said. Agent Tolhurst said a number of people employed in financial services and real estate have come forward to assist the task force. (azrep51409)
MORAL
First buy the investment property, then strip it and then win the prize of going to prison . Remember, everyone is innocent until convicted. I trust he has a good attorney. If not, I can recommend one.
Wednesday, September 8, 2010
Improve Your Credit Score Before Searching for a Home
From RISMEDIA via Lowes -
Improve Your Credit Score Before Searching for a Home
By Paige Tepping
RISMEDIA, September 8, 2010--Many prospective homeowners find out the hard way the importance of a good credit score when they apply for a home mortgage, especially after the subprime loan crisis. If you are considering buying a home in the near future, it is a good idea to give your credit score a check-up and then take positive steps to improve your credit score if you find problems. Ideally, it is best to begin working on improving your credit score at least six months before you plan to start shopping for a home.
According to the experts at Buy-and-Sell-House-Fast.com, the following tips will help you improve your credit and should be taken before you begin your home search.
The first critical step in taking care of your credit is to check your credit report. Unfortunately, many people fail to take this all important first step. Instead, they wait until they have applied for a mortgage loan to find out from the lender that there are problems with their credit scores.
By checking your credit score before you apply for a mortgage loan, you gain the opportunity to find out if there are problems which you can correct and discrepancies that need to be removed. When you check your credit report, make sure you check all three of the national credit reporting agencies: Experian, Trans-Union and EquiFax.
Review your credit report carefully for items that may be erroneous. If you believe that an item on your credit report is reported in error, you have the right to contest it. To do so, you will need to contact the credit reporting agency and explain why you believe the item is inaccurate. Supporting documentation such as receipts and cancelled checks can help your claim. Alternatively, you can engage a credit report repair services firm to fix your credit report.
If there are derogatory items on your credit report that are accurate but which could cause problems in your loan application, you cannot have them removed; however, you can take positive steps to counteract them. In the event that you have missed payments in the past, take steps now to get your bills current. Even if it means tapping into money that you might be planning to use for a down payment, it is essential that you get your accounts current and keep them that way. Begin by immediately making your payments on time. There is nothing which can lower your credit score more quickly than late payments. Ideally, make an attempt to begin sending in your payments a few days ahead of time to make sure they arrive on time and you do not have any more late payments on your record. If necessary, begin taking advantage of electronic payments in order to make sure your payments are made on time. Over time, this can make significant difference.
Keep in mind that eradicating all of your credit balances is really not the solution. In fact, credit can be your friend when you are looking to make a big purchase such as a home. The key is to make sure your credit is positive, not negative. Toward that end, avoid actually closing out your accounts. Instead, make an effort to pay down your balances and keep them paid down well below the minimum or completely paid off, but do not close the account. When your lender runs your credit to make a decision on your mortgage application, he or she will want to see that you have had a long credit management history.
After reviewing your credit history, if you see that most, if not all of your credit cards are maxed out or nearly maxed out, it is time to sit down and plan an aggressive strategy for paying some of them down. One of the critical factors that often determine your ability to be approved for a mortgage loan is your debt to income ratio. In addition, high credit card balances can drag down your credit score. Therefore, it is important to look at paying off some of your balances.
It is generally better to begin with your highest-rate balances first. Many consumers are tempted to move around balances when they receive an offer from another bank that is good; however, before you do this, remember that the worst thing you can do when you are trying to make a major purchase is to open new accounts.
By following these guidelines, you can improve your credit score and improve your chances of being approved for your home mortgage loan.
Lowe's Customer Care(CON8) 1065 Curtis Bridge Rd. Wilkesboro, NC 28698.
© 2010 by Lowe's®. All rights reserved.
Improve Your Credit Score Before Searching for a Home
By Paige Tepping
RISMEDIA, September 8, 2010--Many prospective homeowners find out the hard way the importance of a good credit score when they apply for a home mortgage, especially after the subprime loan crisis. If you are considering buying a home in the near future, it is a good idea to give your credit score a check-up and then take positive steps to improve your credit score if you find problems. Ideally, it is best to begin working on improving your credit score at least six months before you plan to start shopping for a home.
According to the experts at Buy-and-Sell-House-Fast.com, the following tips will help you improve your credit and should be taken before you begin your home search.
The first critical step in taking care of your credit is to check your credit report. Unfortunately, many people fail to take this all important first step. Instead, they wait until they have applied for a mortgage loan to find out from the lender that there are problems with their credit scores.
By checking your credit score before you apply for a mortgage loan, you gain the opportunity to find out if there are problems which you can correct and discrepancies that need to be removed. When you check your credit report, make sure you check all three of the national credit reporting agencies: Experian, Trans-Union and EquiFax.
Review your credit report carefully for items that may be erroneous. If you believe that an item on your credit report is reported in error, you have the right to contest it. To do so, you will need to contact the credit reporting agency and explain why you believe the item is inaccurate. Supporting documentation such as receipts and cancelled checks can help your claim. Alternatively, you can engage a credit report repair services firm to fix your credit report.
If there are derogatory items on your credit report that are accurate but which could cause problems in your loan application, you cannot have them removed; however, you can take positive steps to counteract them. In the event that you have missed payments in the past, take steps now to get your bills current. Even if it means tapping into money that you might be planning to use for a down payment, it is essential that you get your accounts current and keep them that way. Begin by immediately making your payments on time. There is nothing which can lower your credit score more quickly than late payments. Ideally, make an attempt to begin sending in your payments a few days ahead of time to make sure they arrive on time and you do not have any more late payments on your record. If necessary, begin taking advantage of electronic payments in order to make sure your payments are made on time. Over time, this can make significant difference.
Keep in mind that eradicating all of your credit balances is really not the solution. In fact, credit can be your friend when you are looking to make a big purchase such as a home. The key is to make sure your credit is positive, not negative. Toward that end, avoid actually closing out your accounts. Instead, make an effort to pay down your balances and keep them paid down well below the minimum or completely paid off, but do not close the account. When your lender runs your credit to make a decision on your mortgage application, he or she will want to see that you have had a long credit management history.
After reviewing your credit history, if you see that most, if not all of your credit cards are maxed out or nearly maxed out, it is time to sit down and plan an aggressive strategy for paying some of them down. One of the critical factors that often determine your ability to be approved for a mortgage loan is your debt to income ratio. In addition, high credit card balances can drag down your credit score. Therefore, it is important to look at paying off some of your balances.
It is generally better to begin with your highest-rate balances first. Many consumers are tempted to move around balances when they receive an offer from another bank that is good; however, before you do this, remember that the worst thing you can do when you are trying to make a major purchase is to open new accounts.
By following these guidelines, you can improve your credit score and improve your chances of being approved for your home mortgage loan.
Lowe's Customer Care(CON8) 1065 Curtis Bridge Rd. Wilkesboro, NC 28698.
© 2010 by Lowe's®. All rights reserved.
Friday, July 30, 2010
Five Smart Reasons to Buy a Home Now
Five Smart Reasons to Buy a Home Now
RISMEDIA, July 30, 2010--The economy is stabilizing. Home prices are holding. It's not just as good a time as ever to buy a house. It's one of the best times ever.
ForSaleByOwner.com presents five overlooked reasons why now is a great time to buy a house.
1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines...again. Now that appraisers have more flexibility to set values that reflect the current market, today's deals will make it over the finish line.
5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by "workforce housing" programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.
RISMedia, Inc.
© 2010 by Lowe's®. All rights reserved
RISMEDIA, July 30, 2010--The economy is stabilizing. Home prices are holding. It's not just as good a time as ever to buy a house. It's one of the best times ever.
ForSaleByOwner.com presents five overlooked reasons why now is a great time to buy a house.
1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines...again. Now that appraisers have more flexibility to set values that reflect the current market, today's deals will make it over the finish line.
5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by "workforce housing" programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.
RISMedia, Inc.
© 2010 by Lowe's®. All rights reserved
Friday, July 16, 2010
Mortgage Rates Stable This Week
Realty Times of July 16, 2010
Mortgage Rates Stable This Week
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). 30-Year Mortgage Rates tied last week's record low.
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.57 percent with an average 0.7 point for the week ending July 15, 2010, unchanged from last week when it averaged 4.57 percent. Last year at this time, the 30-year FRM averaged 5.14 percent. This rate ties the all-time low reached last week in Freddie Mac's 39-year survey.
15-year FRM this week averaged 4.06 percent with an average 0.7 point, down from last week when it averaged 4.07 percent. A year ago at this time, the 15-year FRM averaged 4.63 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.85 percent this week, with an average 0.7 point, up from last week when it averaged 3.75 percent. A year ago, the 5-year ARM averaged 4.83 percent.
1-year Treasury-indexed ARM averaged 3.74 percent this week with an average 0.7 point, down from last week when it averaged 3.75 percent. At this time last year, the 1-year ARM averaged 4.76 percent.
Frank Nothaft, Freddie Mac vice president and chief economist, reports, "Fixed-rate mortgages continued to hover at 50-year lows, thereby supporting homebuyer affordability and refinance activity. Over the past month, about four out of five conventional loan applications and more than one-half of FHA and VA loan applications were for refinance. Compared to the recent peak in 30-year fixed interest rates 13 months ago (week of June 11, 2009), current rates are a full percentage point lower. With today's rates, homebuyers would save about $1,500 in payments each year on a $200,000 loan compared to rates last June."
Copyright © 2010 Realty Times. All Rights Reserved.
Mortgage Rates Stable This Week
Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®). 30-Year Mortgage Rates tied last week's record low.
News Facts
30-year fixed-rate mortgage (FRM) averaged 4.57 percent with an average 0.7 point for the week ending July 15, 2010, unchanged from last week when it averaged 4.57 percent. Last year at this time, the 30-year FRM averaged 5.14 percent. This rate ties the all-time low reached last week in Freddie Mac's 39-year survey.
15-year FRM this week averaged 4.06 percent with an average 0.7 point, down from last week when it averaged 4.07 percent. A year ago at this time, the 15-year FRM averaged 4.63 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.85 percent this week, with an average 0.7 point, up from last week when it averaged 3.75 percent. A year ago, the 5-year ARM averaged 4.83 percent.
1-year Treasury-indexed ARM averaged 3.74 percent this week with an average 0.7 point, down from last week when it averaged 3.75 percent. At this time last year, the 1-year ARM averaged 4.76 percent.
Frank Nothaft, Freddie Mac vice president and chief economist, reports, "Fixed-rate mortgages continued to hover at 50-year lows, thereby supporting homebuyer affordability and refinance activity. Over the past month, about four out of five conventional loan applications and more than one-half of FHA and VA loan applications were for refinance. Compared to the recent peak in 30-year fixed interest rates 13 months ago (week of June 11, 2009), current rates are a full percentage point lower. With today's rates, homebuyers would save about $1,500 in payments each year on a $200,000 loan compared to rates last June."
Copyright © 2010 Realty Times. All Rights Reserved.
Wednesday, June 30, 2010
4.25% 30-Yr Fixed Mortgage Rate
Realty Times of June 30, 2010
4.25% 30-Yr Fixed Mortgage Rate Available to Well-Qualified Consumers
by Ed Ferrara
Never before have mortgage rates been this low. 30-yr fixed mortgage rates are at 4.25% for well-qualified consumers paying a standard .07 to 1 point origination fee shows FreeRateUpdate.com research of wholesale lenders' rate sheets for brokers. 15-yr fixed mortgage rates, also at a record low, are at 3.75%.
A $250,000 30-year fixed mortgage at an interest rate of 4.25% has a monthly principal and interest payment of just $1,229.85 per month.
FHA mortgage rates today are nearly identical to those of conforming mortgages. Today's FHA 30-yr fixed rate is also 4.25%. That being said, MI and other FHA fees make the APR (closing costs) higher on an FHA loan, even with the same note rate.
Today's jumbo 30-yr fixed rate remains at 5.25%. Jumbo mortgage rates are also at a record low.
Wells Fargo is advertising a conventional 30-yr fixed-rate of 4.625% today, with an APR of 4.812%. (source: Wells Fargo Website)
Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, were up significantly yesterday, helping to stabilize mortgage interest rates at their current record low. It's possible we could see even lower rates as the week goes on.
Copyright © 2010 Realty Times. All Rights Reserved.
4.25% 30-Yr Fixed Mortgage Rate Available to Well-Qualified Consumers
by Ed Ferrara
Never before have mortgage rates been this low. 30-yr fixed mortgage rates are at 4.25% for well-qualified consumers paying a standard .07 to 1 point origination fee shows FreeRateUpdate.com research of wholesale lenders' rate sheets for brokers. 15-yr fixed mortgage rates, also at a record low, are at 3.75%.
A $250,000 30-year fixed mortgage at an interest rate of 4.25% has a monthly principal and interest payment of just $1,229.85 per month.
FHA mortgage rates today are nearly identical to those of conforming mortgages. Today's FHA 30-yr fixed rate is also 4.25%. That being said, MI and other FHA fees make the APR (closing costs) higher on an FHA loan, even with the same note rate.
Today's jumbo 30-yr fixed rate remains at 5.25%. Jumbo mortgage rates are also at a record low.
Wells Fargo is advertising a conventional 30-yr fixed-rate of 4.625% today, with an APR of 4.812%. (source: Wells Fargo Website)
Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, were up significantly yesterday, helping to stabilize mortgage interest rates at their current record low. It's possible we could see even lower rates as the week goes on.
Copyright © 2010 Realty Times. All Rights Reserved.
Thursday, June 24, 2010
Choosing the Best Home
From Realty Times of June 24, 2010
Choosing the Best Home by Carla Hill
After weeks of searching for your next home, you now have it narrowed down to two great options. One offers a shorter commute, but the other offers more square footage for your growing family. How can you make the best choice?
There are several strategies you can employ in your decision making process. Above all, be confident in your decision making abilities. "The fear of making serious decisions is a new kind of fear, called decidophobia," proclaimed by Walter Kaufmann at Princeton University in 1973. Worry and procrastination do nothing to aid the process, so buyers, be confident that you will make a sound choice.
Pro/Con list: In this case, you are deciding between two houses as your prospective home. For each house, divide a sheet of paper into two columns: pro and con. Be realistic about what the positive and negative factors would be for each purchase. Considerations could include: price, location, schools, repairs, square footage, floorplans, street noise, neighborhood value, comparables, and gut intuition.
Brainstorm scenarios: Chances are, whatever house you decided upon will be your residence for many years to come. Try and think ahead to situations that may arise in the future, and how each residence would affect those situations. Do you have aging parents that could move in? If so, then which house provides the best floorplan for this? Planning on having children? Check out ratings on local schools.
Do the math: Business executives might call this the "cost/benefit analysis." Buying a home is a huge financial decision, and while personal preferences (e.g. location, schools, square footage) all come into play in homebuying, many purchases are based on what makes the best financial sense. Discuss numbers and neighborhood comparables with your real estate agent. One home may be a smaller dollar amount, but the other may be a better deal in the long run. Some neighborhoods are up and coming, while others have come and gone. Are either homes overpriced or underpriced for their neighborhoods? Do either homes need repairs or updates?
Priorities list: Yes, you know you want the pool, landscaping, granite counters, close proximity to work, extra bath, and the list goes on. But when push comes to shove, and it might, what items are your priority, really? For some, driving a longer commute is worth having a larger house or a cheaper price. For other buyers, the exact opposite can be true.
Change perspectives: Sometimes you simply must step out of your own shoes to see a situation clearly. There are many different ways to approach this decision. You can look at it from an emotional point of view (which home do you love), an intuitive view (what does your gut tell you), and even a devil's advocate view (what if). Experts consider this the "Six Thinking Hats," introduced by Edward de Bono in a book of the same title, where you put on six different hats during a decision making process. Try and see the buying process from the perspective of your spouse, your children, friends, and even your worst enemy.
Finally, be realistic in your own abilities. While the final decision rests on your capable shoulders, you should rely on the professionals that are by your side. This includes your agent, lender, attorney, and even your family. And while you are the final say, remember that you have a team to help give you information to fuel that sound decision.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Choosing the Best Home by Carla Hill
After weeks of searching for your next home, you now have it narrowed down to two great options. One offers a shorter commute, but the other offers more square footage for your growing family. How can you make the best choice?
There are several strategies you can employ in your decision making process. Above all, be confident in your decision making abilities. "The fear of making serious decisions is a new kind of fear, called decidophobia," proclaimed by Walter Kaufmann at Princeton University in 1973. Worry and procrastination do nothing to aid the process, so buyers, be confident that you will make a sound choice.
Pro/Con list: In this case, you are deciding between two houses as your prospective home. For each house, divide a sheet of paper into two columns: pro and con. Be realistic about what the positive and negative factors would be for each purchase. Considerations could include: price, location, schools, repairs, square footage, floorplans, street noise, neighborhood value, comparables, and gut intuition.
Brainstorm scenarios: Chances are, whatever house you decided upon will be your residence for many years to come. Try and think ahead to situations that may arise in the future, and how each residence would affect those situations. Do you have aging parents that could move in? If so, then which house provides the best floorplan for this? Planning on having children? Check out ratings on local schools.
Do the math: Business executives might call this the "cost/benefit analysis." Buying a home is a huge financial decision, and while personal preferences (e.g. location, schools, square footage) all come into play in homebuying, many purchases are based on what makes the best financial sense. Discuss numbers and neighborhood comparables with your real estate agent. One home may be a smaller dollar amount, but the other may be a better deal in the long run. Some neighborhoods are up and coming, while others have come and gone. Are either homes overpriced or underpriced for their neighborhoods? Do either homes need repairs or updates?
Priorities list: Yes, you know you want the pool, landscaping, granite counters, close proximity to work, extra bath, and the list goes on. But when push comes to shove, and it might, what items are your priority, really? For some, driving a longer commute is worth having a larger house or a cheaper price. For other buyers, the exact opposite can be true.
Change perspectives: Sometimes you simply must step out of your own shoes to see a situation clearly. There are many different ways to approach this decision. You can look at it from an emotional point of view (which home do you love), an intuitive view (what does your gut tell you), and even a devil's advocate view (what if). Experts consider this the "Six Thinking Hats," introduced by Edward de Bono in a book of the same title, where you put on six different hats during a decision making process. Try and see the buying process from the perspective of your spouse, your children, friends, and even your worst enemy.
Finally, be realistic in your own abilities. While the final decision rests on your capable shoulders, you should rely on the professionals that are by your side. This includes your agent, lender, attorney, and even your family. And while you are the final say, remember that you have a team to help give you information to fuel that sound decision.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Tuesday, June 15, 2010
Deficiency Judgments
June 15, 2010 by Realty Times
Mortgage Lenders Can't Always Obtain Deficiency Judgments by Bob Hunt
One of the major concerns facing the millions of homeowners who are currently delinquent on their mortgage and "upside down" in value is that they fear not only losing their homes but also being subsequently pursued for a deficiency judgment.
Different states have different laws regarding foreclosure and deficiencies. Anyone who has the kind of concern noted above should verify those laws in their own particular state.
In California, the threat of a deficiency judgment -- which, technically, may be real – is frequently, for practical purposes, not a serious one. In some situations there is no threat at all. The discussion that follows here pertains to California law.
In the context of this discussion, a deficiency judgment is a judgment that may be entered by a court. Generally, it is the difference between the foreclosure sale price (the successful bid amount) and the amount of debt owed. In order to obtain a deficiency judgment, a lender must apply to the court for the judgment within three months of a judicial foreclosure sale.
In California, a major exception to the deficiency judgment rules is that no deficiency judgment is allowed when the loan is a purchase money loan for owner-occupied residential property from one to four units. Simply put, if the loan was made for the purchase of your home, no deficiency judgment is allowed.
Another major exception to the deficiency judgment rules is that no deficiency judgment can be obtained if the foreclosure is non-judicial. To understand this, we must note that there are two kinds of foreclosure available in California. One – the overwhelmingly most common – is a non-judicial foreclosure, also known as a trustee sale. A non-judicial foreclosure occurs when, pursuant to a deed of trust, the lender notifies the trustee that the borrower is delinquent. The trustee files a public notice of default. Then, in approximately three months, if the delinquency has not been cured, the trustee publishes a notice of sale. Approximately three weeks after that, if there is still no cure of the default, a trustee sale occurs. (At the discretion of the lender, this sale can be postponed.) This foreclosure sale is the "auction at the courthouse steps." There is no court action.
In a non-judicial foreclosure, when a trustee sale occurs, there is no deficiency judgment available. If the property sold for less than the loan amount, that is the lender’s loss. There is no further recovery. (Two minor exceptions to this are: 1. if the loan had been obtained by fraud or 2. if the property had been intentionally damaged by the borrower.)
The other kind of foreclosure in California is a judicial foreclosure. This involves filing a lawsuit, to which the borrower may respond. Rather than taking the typical four to five months that a non-judicial foreclosure requires, this may take a year or more. Moreover, being a lawsuit, it can be costly. For reasons of time and money, then, lenders hardly ever file judicial foreclosures. It might make sense to do so in the context of a large commercial loan where a borrower might have significant assets worth pursuing. But it is hard to imagine many circumstances where it would be worthwhile to pursue a judicial foreclosure against a homeowner.
If a homeowner’s loan is not a "purchase money" loan – perhaps it is a subsequent "cash-out" refinance loan – then the borrower does have personal liability for the loan. It would be possible for the lender to seek a deficiency judgment. But to do so, the lender would first have to conduct a judicial foreclosure and, as noted, that is very unlikely.
Finally, we note a slightly different but increasingly common situation where a lender may pursue a borrower personally for liability on a loan secured by real estate. This is the case of a "wiped out" junior lien. Many homeowners have second mortgage loans, some even thirds. If these were loans incurred in order to purchase owner-occupied property, then they are subject to the same rules discussed above. No deficiency judgment is available. But if the junior lien is not purchase money, and if foreclosure by the senior lien (the first mortgage) leaves the junior unpaid, then they may pursue the borrower directly just like any other debt.
Deficiency judgments are certainly something for financially distressed homeowners to be concerned about. But they are not as widely available as is sometimes thought.
Copyright © 2010 Realty Times. All Rights Reserved.
Mortgage Lenders Can't Always Obtain Deficiency Judgments by Bob Hunt
One of the major concerns facing the millions of homeowners who are currently delinquent on their mortgage and "upside down" in value is that they fear not only losing their homes but also being subsequently pursued for a deficiency judgment.
Different states have different laws regarding foreclosure and deficiencies. Anyone who has the kind of concern noted above should verify those laws in their own particular state.
In California, the threat of a deficiency judgment -- which, technically, may be real – is frequently, for practical purposes, not a serious one. In some situations there is no threat at all. The discussion that follows here pertains to California law.
In the context of this discussion, a deficiency judgment is a judgment that may be entered by a court. Generally, it is the difference between the foreclosure sale price (the successful bid amount) and the amount of debt owed. In order to obtain a deficiency judgment, a lender must apply to the court for the judgment within three months of a judicial foreclosure sale.
In California, a major exception to the deficiency judgment rules is that no deficiency judgment is allowed when the loan is a purchase money loan for owner-occupied residential property from one to four units. Simply put, if the loan was made for the purchase of your home, no deficiency judgment is allowed.
Another major exception to the deficiency judgment rules is that no deficiency judgment can be obtained if the foreclosure is non-judicial. To understand this, we must note that there are two kinds of foreclosure available in California. One – the overwhelmingly most common – is a non-judicial foreclosure, also known as a trustee sale. A non-judicial foreclosure occurs when, pursuant to a deed of trust, the lender notifies the trustee that the borrower is delinquent. The trustee files a public notice of default. Then, in approximately three months, if the delinquency has not been cured, the trustee publishes a notice of sale. Approximately three weeks after that, if there is still no cure of the default, a trustee sale occurs. (At the discretion of the lender, this sale can be postponed.) This foreclosure sale is the "auction at the courthouse steps." There is no court action.
In a non-judicial foreclosure, when a trustee sale occurs, there is no deficiency judgment available. If the property sold for less than the loan amount, that is the lender’s loss. There is no further recovery. (Two minor exceptions to this are: 1. if the loan had been obtained by fraud or 2. if the property had been intentionally damaged by the borrower.)
The other kind of foreclosure in California is a judicial foreclosure. This involves filing a lawsuit, to which the borrower may respond. Rather than taking the typical four to five months that a non-judicial foreclosure requires, this may take a year or more. Moreover, being a lawsuit, it can be costly. For reasons of time and money, then, lenders hardly ever file judicial foreclosures. It might make sense to do so in the context of a large commercial loan where a borrower might have significant assets worth pursuing. But it is hard to imagine many circumstances where it would be worthwhile to pursue a judicial foreclosure against a homeowner.
If a homeowner’s loan is not a "purchase money" loan – perhaps it is a subsequent "cash-out" refinance loan – then the borrower does have personal liability for the loan. It would be possible for the lender to seek a deficiency judgment. But to do so, the lender would first have to conduct a judicial foreclosure and, as noted, that is very unlikely.
Finally, we note a slightly different but increasingly common situation where a lender may pursue a borrower personally for liability on a loan secured by real estate. This is the case of a "wiped out" junior lien. Many homeowners have second mortgage loans, some even thirds. If these were loans incurred in order to purchase owner-occupied property, then they are subject to the same rules discussed above. No deficiency judgment is available. But if the junior lien is not purchase money, and if foreclosure by the senior lien (the first mortgage) leaves the junior unpaid, then they may pursue the borrower directly just like any other debt.
Deficiency judgments are certainly something for financially distressed homeowners to be concerned about. But they are not as widely available as is sometimes thought.
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, June 14, 2010
Rent or Buy A Home?
In 2010: Rent or Buy A Home?
RISMEDIA, June 14, 2010--First time home buyers have a lot to consider this summer when making the decision to rent or buy a home: interest rates are at all-time lows, there's still plenty of housing stock and prices are at or near their lowest in years.
Still, deciding whether to buy a home or rent an apartment can be a complicated decision. How do you know what's right for you? Potential buyers should ask themselves several key questions before making this important decision.
1. What will monthly costs be, and can I afford the payments?
Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb. If you can't keep mortgage payments below that, you may be better off renting for awhile.
2. What other debt do I have?
Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of monthly income.
3. What is my credit score? Can I qualify for a good interest rate?
A high credit score indicates strong creditworthiness, and that qualifies you for better interest rates on a mortgage. Maxing out on your credit lines and paying bills late will lower your credit score. The impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly two percentage points less in interest on a mortgage than someone with a score of 620. Lower interest rates also mean lower monthly payments. If your credit score is low, you may want to delay buying a home until you can improve your score.
4. How much will taxes, monthly maintenance, or other fees cost?
Owning a home means you'll have to pay real estate taxes and other costs like insurance and maintenance. On the other hand, owning a home brings big tax savings at the end of the year. As a renter, the owner pays those costs for you.
5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. You'll build equity in your house and its value is likely to increase over the years.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trades marks of LF, LLC.
RISMEDIA, June 14, 2010--First time home buyers have a lot to consider this summer when making the decision to rent or buy a home: interest rates are at all-time lows, there's still plenty of housing stock and prices are at or near their lowest in years.
Still, deciding whether to buy a home or rent an apartment can be a complicated decision. How do you know what's right for you? Potential buyers should ask themselves several key questions before making this important decision.
1. What will monthly costs be, and can I afford the payments?
Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb. If you can't keep mortgage payments below that, you may be better off renting for awhile.
2. What other debt do I have?
Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of monthly income.
3. What is my credit score? Can I qualify for a good interest rate?
A high credit score indicates strong creditworthiness, and that qualifies you for better interest rates on a mortgage. Maxing out on your credit lines and paying bills late will lower your credit score. The impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly two percentage points less in interest on a mortgage than someone with a score of 620. Lower interest rates also mean lower monthly payments. If your credit score is low, you may want to delay buying a home until you can improve your score.
4. How much will taxes, monthly maintenance, or other fees cost?
Owning a home means you'll have to pay real estate taxes and other costs like insurance and maintenance. On the other hand, owning a home brings big tax savings at the end of the year. As a renter, the owner pays those costs for you.
5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. You'll build equity in your house and its value is likely to increase over the years.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trades marks of LF, LLC.
Monday, June 7, 2010
Real Estate Outlook: Positive Trends
Realty Times of June 7, 2010
Real Estate Outlook: Positive Trends by Kenneth R. Harney
Positive news on housing and real estate keep rolling in -- thanks in large part to federal home purchase tax credits and continuing near-record low mortgage rates.
Last week's pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month -- up by six percent in April -- and now stand 22 percent higher than the year before.
Every region but one -- the South -- racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.
The South's pending sales were less than one percent off from the previous month, but are still an impressive 31 percent above where they were 12 months before.
Home prices also appear to be moving on an upward curve, according to the latest Clear Capital Home Data Index -- which tracks price movements in thousands of local markets and Zip codes.
Clear Capital's national report for the month of May found prices up by 6.8 percent year over year.
Consumer confidence is definitely powering some of these sales and price numbers, economists say. The Conference Board's index for consumer confidence in May rose by five points -- a good sign for consumers' willingness to spend money.
Lynn Franco, who directs the Conference Board's survey research center, noted that the "expectations" component of the index was particularly strong -- and is now at its highest point in nearly three years.
According to Franco, consumers' previous fears about the job market, incomes and the overall economy have been on the decline for a couple of months now.
Meanwhile, mortgage giant Fannie Mae released its latest economic projections for the rest of the year. Chief economist Doug Duncan says he sees a "self-sustaining economic recovery" gradually taking shape -- again good news for housing.
Of course, not all the latest numbers on real estate are upbeat. They never are. Now a closely watched index tied to likely new home purchase offers two to three months down the road has gone negative. The Mortgage Bankers Association's index of new loan applications declined again for the third straight week, and now is at its lowest point in 14 years.
What's going on here? Most likely its the tax credits. The April 30 deadline for signed contracts for the two tax credit programs -- and the phaseout of the entire credit program June 30 -- are definitely pushing loan applications down.
As we said last week, the credits -- which are part of the federal stimulus efforts -- pushed many purchasers to move up their transactions to the first half of the year. Lawrence Yun, chief economist for the National Association of Realtors, says the underlying strength of the economic recovery should allow sales and loan applications to recover in the second half, without any need for additional federal help.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: Positive Trends by Kenneth R. Harney
Positive news on housing and real estate keep rolling in -- thanks in large part to federal home purchase tax credits and continuing near-record low mortgage rates.
Last week's pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month -- up by six percent in April -- and now stand 22 percent higher than the year before.
Every region but one -- the South -- racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.
The South's pending sales were less than one percent off from the previous month, but are still an impressive 31 percent above where they were 12 months before.
Home prices also appear to be moving on an upward curve, according to the latest Clear Capital Home Data Index -- which tracks price movements in thousands of local markets and Zip codes.
Clear Capital's national report for the month of May found prices up by 6.8 percent year over year.
Consumer confidence is definitely powering some of these sales and price numbers, economists say. The Conference Board's index for consumer confidence in May rose by five points -- a good sign for consumers' willingness to spend money.
Lynn Franco, who directs the Conference Board's survey research center, noted that the "expectations" component of the index was particularly strong -- and is now at its highest point in nearly three years.
According to Franco, consumers' previous fears about the job market, incomes and the overall economy have been on the decline for a couple of months now.
Meanwhile, mortgage giant Fannie Mae released its latest economic projections for the rest of the year. Chief economist Doug Duncan says he sees a "self-sustaining economic recovery" gradually taking shape -- again good news for housing.
Of course, not all the latest numbers on real estate are upbeat. They never are. Now a closely watched index tied to likely new home purchase offers two to three months down the road has gone negative. The Mortgage Bankers Association's index of new loan applications declined again for the third straight week, and now is at its lowest point in 14 years.
What's going on here? Most likely its the tax credits. The April 30 deadline for signed contracts for the two tax credit programs -- and the phaseout of the entire credit program June 30 -- are definitely pushing loan applications down.
As we said last week, the credits -- which are part of the federal stimulus efforts -- pushed many purchasers to move up their transactions to the first half of the year. Lawrence Yun, chief economist for the National Association of Realtors, says the underlying strength of the economic recovery should allow sales and loan applications to recover in the second half, without any need for additional federal help.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, May 28, 2010
Markets Overseas Lowers Mortgage Rates
From Realty Times of May 28, 2010
Instability in Financial Markets Overseas Lowers Mortgage Rates Here
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending May 27, 2010, down from last week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.
The 15-year FRM this week averaged 4.21 percent with an average 0.7 point , down from last week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, up from last week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.
The 1-year Treasury-indexed ARM averaged 3.95 percent this week with an average 0.6 point, down from last week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent."
"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.
Copyright © 2010 Realty Times. All Rights Reserved.
Instability in Financial Markets Overseas Lowers Mortgage Rates Here
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending May 27, 2010, down from last week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.
The 15-year FRM this week averaged 4.21 percent with an average 0.7 point , down from last week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, up from last week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.
The 1-year Treasury-indexed ARM averaged 3.95 percent this week with an average 0.6 point, down from last week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent."
"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.
Copyright © 2010 Realty Times. All Rights Reserved.
Tuesday, May 25, 2010
Mortgage Rates at an All Time Low
From Realty Times of May 25, 2010
Today's Mortgage Rates at an All Time Low by Ed Ferrara
Wary of a volatile stock market and concerned about by European debt woes investors moved to bonds last week pushing bond prices up and mortgage rates down. Mortgage rates, which move the opposite direction of mortgage-backed securities prices, had wavered just below 5% for much of the year until last weeks big decline. Mortgage rates today are even lower than levels December of last year, what's now the previous all time low.
Today's official FreeRateUpdate.com conventional 30 year fixed mortgage rate, available to well-qualified borrowers paying about a point origination, is 4.5%. Today's conventional 15 year fixed rate is 4%, with some lenders reported "squeezing" out 3.875%.
Today's FHA 30 year fixed rate is 4.375%. APR (closing cost) on an FHA loan is typically much higher than that of a conventional mortgage because of MI and other FHA fees.
Today's jumbo 30 year fixed rate, for jumbo mortgages exceeding jumbo conforming loan limits, is 5.5%. It's reported 5.375% is available to borrowers with an extremely low loan to value ratio.
Wells Fargo, the nations largest volume mortgage originator, is currently offering a conventional 30 year fixed rate of 4.875%, with an APR of 5.065. Wells Fargo mortgage rates are available on their website.
FreeRateUpdate.com researches over 2 dozen wholesale lenders' rate sheets for brokers on a daily basis to determine the most accurate mortgage rates for well-qualified borrowers paying a standard origination fee of about 1 point.
Today's Mortgage Rates - currently available to well-qualified consumers at a standard .07 to 1 point origination.
30-yr fixed-rate - 4.500%
15-yr fixed-rate - 4.000%
5/1 ARM rate - 3.500%
FHA 30-yr fixed-rate - 4.375%
FHA 15-yr fixed-rate - 4.00%
FHA 5/1 ARM rate - 3.500%
VA 30-yr fixed-rate - 4.625%
Jumbo 30-yr fixed-rate - 5.500%
Jumbo Conforming 30-yr fixed-rate - 4.750%
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Today's Mortgage Rates at an All Time Low by Ed Ferrara
Wary of a volatile stock market and concerned about by European debt woes investors moved to bonds last week pushing bond prices up and mortgage rates down. Mortgage rates, which move the opposite direction of mortgage-backed securities prices, had wavered just below 5% for much of the year until last weeks big decline. Mortgage rates today are even lower than levels December of last year, what's now the previous all time low.
Today's official FreeRateUpdate.com conventional 30 year fixed mortgage rate, available to well-qualified borrowers paying about a point origination, is 4.5%. Today's conventional 15 year fixed rate is 4%, with some lenders reported "squeezing" out 3.875%.
Today's FHA 30 year fixed rate is 4.375%. APR (closing cost) on an FHA loan is typically much higher than that of a conventional mortgage because of MI and other FHA fees.
Today's jumbo 30 year fixed rate, for jumbo mortgages exceeding jumbo conforming loan limits, is 5.5%. It's reported 5.375% is available to borrowers with an extremely low loan to value ratio.
Wells Fargo, the nations largest volume mortgage originator, is currently offering a conventional 30 year fixed rate of 4.875%, with an APR of 5.065. Wells Fargo mortgage rates are available on their website.
FreeRateUpdate.com researches over 2 dozen wholesale lenders' rate sheets for brokers on a daily basis to determine the most accurate mortgage rates for well-qualified borrowers paying a standard origination fee of about 1 point.
Today's Mortgage Rates - currently available to well-qualified consumers at a standard .07 to 1 point origination.
30-yr fixed-rate - 4.500%
15-yr fixed-rate - 4.000%
5/1 ARM rate - 3.500%
FHA 30-yr fixed-rate - 4.375%
FHA 15-yr fixed-rate - 4.00%
FHA 5/1 ARM rate - 3.500%
VA 30-yr fixed-rate - 4.625%
Jumbo 30-yr fixed-rate - 5.500%
Jumbo Conforming 30-yr fixed-rate - 4.750%
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, May 17, 2010
Real Estate Outlook: Up or Down?
From Realty Times of May 17, 2010
Real Estate Outlook: Up or Down? by Kenneth R. Harney
You may have seen the latest home sales and price numbers and wondered: What's going on here? Are we up? Are we down?
Depending on which TV network reported the news last week, it sounded either like real estate is continuing along its steady road to recovery - -or that we just hit a pothole in the road.
One major business news channel reported it this way: "Home sales down 14 percent in the first quarter." Other media reported an 11 percent GAIN.
So what is it?
Well, dig down into the actual numbers from the National Association of Realtors and you find that, yes, 2010 first quarter home sales were 14 percent lower than they were in the final quarter of 2009.
Home sales nationwide, however, in the first quarter of 2010 were 11.4 percent higher than they were during the same quarter the year before. And any economist will tell you: year to year comparisons are more meaningful than quarter to quarter data, which tend to be more volatile.
Lawrence Yun, chief economist for the National Association of Realtors, pointed out that sales in the fourth quarter of last year were unusually high because of a surge of closings related to the original expiration date of the housing tax credit.
We can probably expect a similar surge to show up some time in the coming two quarters caused by sales closings before the June 30 termination date of the credit program.
The 11 percent year over year gain is a much more reliable gauge of where the market really is, says Yun -- and that's a very healthy trajectory because consumers have more confidence in the economy, are spending more, and mortgage rates remain near all-time lows.
Gains in prices year over year in local markets are especially encouraging: Of the 152 metropolitan statistical areas surveyed by the National Association of Realtors, median prices in 91 were higher than the year before. Though most of the gains were in single digits, 29 markets saw median price increases in double digits.
Economists say the price and sales gains reflect the improvements underway in the overall US economy. The latest federal employment numbers saw a 290,000 net job increase in March, plus a drop in new filings for unemployment insurance claims.
Manufacturing jobs are expanding again, after years of declines, and the Gross Domestic Product (or GDP) is up by more than 3 percent.
In the words of Freddie Mac's chief economist, Frank Nothaft, "the underlying fundamentals for housing markets are improving rapidly" -- and should continue to do so through 2010.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: Up or Down? by Kenneth R. Harney
You may have seen the latest home sales and price numbers and wondered: What's going on here? Are we up? Are we down?
Depending on which TV network reported the news last week, it sounded either like real estate is continuing along its steady road to recovery - -or that we just hit a pothole in the road.
One major business news channel reported it this way: "Home sales down 14 percent in the first quarter." Other media reported an 11 percent GAIN.
So what is it?
Well, dig down into the actual numbers from the National Association of Realtors and you find that, yes, 2010 first quarter home sales were 14 percent lower than they were in the final quarter of 2009.
Home sales nationwide, however, in the first quarter of 2010 were 11.4 percent higher than they were during the same quarter the year before. And any economist will tell you: year to year comparisons are more meaningful than quarter to quarter data, which tend to be more volatile.
Lawrence Yun, chief economist for the National Association of Realtors, pointed out that sales in the fourth quarter of last year were unusually high because of a surge of closings related to the original expiration date of the housing tax credit.
We can probably expect a similar surge to show up some time in the coming two quarters caused by sales closings before the June 30 termination date of the credit program.
The 11 percent year over year gain is a much more reliable gauge of where the market really is, says Yun -- and that's a very healthy trajectory because consumers have more confidence in the economy, are spending more, and mortgage rates remain near all-time lows.
Gains in prices year over year in local markets are especially encouraging: Of the 152 metropolitan statistical areas surveyed by the National Association of Realtors, median prices in 91 were higher than the year before. Though most of the gains were in single digits, 29 markets saw median price increases in double digits.
Economists say the price and sales gains reflect the improvements underway in the overall US economy. The latest federal employment numbers saw a 290,000 net job increase in March, plus a drop in new filings for unemployment insurance claims.
Manufacturing jobs are expanding again, after years of declines, and the Gross Domestic Product (or GDP) is up by more than 3 percent.
In the words of Freddie Mac's chief economist, Frank Nothaft, "the underlying fundamentals for housing markets are improving rapidly" -- and should continue to do so through 2010.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Thursday, May 13, 2010
Home Buying Secrets for the 'Average Joe'
Realty Times of May 13, 2010
Home Buying Secrets for the 'Average Joe' by Broderick Perkins
New York City attorney Edward A. Mermelstein is, well, a big shot in the Big Apple -- but he hasn't forgotten the little guy.
Co-founder of the international, multilingual (11 languages) real estate law firm Edward A. Mermelstein & Associates, he's also got an office in Moscow and offers legal services to financial and real estate institutions, including representation for international transactions, business litigation, dispute resolution and insurance matters.
Clients include international conglomerates, start-up ventures and entrepreneurs, multi-national corporations, land charitable organizations, government officials and others, but he also offers insight for the 'Average Joe' -- home buyers who need all the help they can get right now.
Mermelstein's "Home Buying Secrets for the Average Joe" are a timely example of his insight for buyers.
• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood, which can be found on websites such as Zillow.com, PropertyShark.com, StreetEasy.com, HouseValues.com, Trulia.com and others. Keep in mind these numbers sometimes trail the market by several months. A real estate agent can provide the latest sales data.
• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.
Go to AnnualCreditReport.com, the only federal government-sanctioned service for obtaining a truly free credit report from one or all three of the major credit bureaus. On AnnualCreditReport.com, select your state and hit the red "Request Report" button and follow the instructions. The report is free, but you will have to pay a nominal fee to get your credit score.
• Bid low - In many of today's buyers' markets you can offer 10 to 15 percent below the list price because prices are based on contracts signed three to four months ago. List prices don't necessarily reflect the most current values, especially in markets still on the decline, according to Mermelstein.
• Consider a 'Lucky 7' loan - Take advantage of the lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.
Mermelstein also says to consider 30/15 year mortgages which are fixed for 15 years, amortized over 30 years and due in full in 15 years.
These and other mortgage options come with lower starting rates as a hedge against interest rates rising in the near future.
• Get pre-approved - Go beyond prequalifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price.
• Consider a newly built home - The new home sector has been harder hit than resales. Concessions and reduced prices are the norm. The latest U.S. Census Bureau data reveal that sales of new homes fell for the fourth consecutive month in February, to a seasonally adjusted annual level of 308,000 sales - a year-over-year decline of 13 percent and the lowest level ever. Just be sure to check out the reputation of the builder.
• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always. Just because it's new doesn't mean it's defect free. Hidden problems can torpedo the value of your home.
• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality. • Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.
• Negotiate - Don't be afraid to dicker. It's a buyers' market. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.
• Don't skimp on the help - If you look for the least expensive attorney, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then carefully vet them.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Home Buying Secrets for the 'Average Joe' by Broderick Perkins
New York City attorney Edward A. Mermelstein is, well, a big shot in the Big Apple -- but he hasn't forgotten the little guy.
Co-founder of the international, multilingual (11 languages) real estate law firm Edward A. Mermelstein & Associates, he's also got an office in Moscow and offers legal services to financial and real estate institutions, including representation for international transactions, business litigation, dispute resolution and insurance matters.
Clients include international conglomerates, start-up ventures and entrepreneurs, multi-national corporations, land charitable organizations, government officials and others, but he also offers insight for the 'Average Joe' -- home buyers who need all the help they can get right now.
Mermelstein's "Home Buying Secrets for the Average Joe" are a timely example of his insight for buyers.
• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood, which can be found on websites such as Zillow.com, PropertyShark.com, StreetEasy.com, HouseValues.com, Trulia.com and others. Keep in mind these numbers sometimes trail the market by several months. A real estate agent can provide the latest sales data.
• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.
Go to AnnualCreditReport.com, the only federal government-sanctioned service for obtaining a truly free credit report from one or all three of the major credit bureaus. On AnnualCreditReport.com, select your state and hit the red "Request Report" button and follow the instructions. The report is free, but you will have to pay a nominal fee to get your credit score.
• Bid low - In many of today's buyers' markets you can offer 10 to 15 percent below the list price because prices are based on contracts signed three to four months ago. List prices don't necessarily reflect the most current values, especially in markets still on the decline, according to Mermelstein.
• Consider a 'Lucky 7' loan - Take advantage of the lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.
Mermelstein also says to consider 30/15 year mortgages which are fixed for 15 years, amortized over 30 years and due in full in 15 years.
These and other mortgage options come with lower starting rates as a hedge against interest rates rising in the near future.
• Get pre-approved - Go beyond prequalifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price.
• Consider a newly built home - The new home sector has been harder hit than resales. Concessions and reduced prices are the norm. The latest U.S. Census Bureau data reveal that sales of new homes fell for the fourth consecutive month in February, to a seasonally adjusted annual level of 308,000 sales - a year-over-year decline of 13 percent and the lowest level ever. Just be sure to check out the reputation of the builder.
• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always. Just because it's new doesn't mean it's defect free. Hidden problems can torpedo the value of your home.
• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality. • Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.
• Negotiate - Don't be afraid to dicker. It's a buyers' market. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.
• Don't skimp on the help - If you look for the least expensive attorney, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then carefully vet them.
--------------------------------------------------------------------------------
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, May 10, 2010
Real Estate Outlook: Experts Weigh In
Realty Times of May 10, 2010
Real Estate Outlook: Experts Weigh In by Kenneth R. Harney
Mega-investor Warren Buffett and a group of top corporate leaders are weighing in on a key issue that's crucial to a sustained real estate recovery: How long will the good economic news we've been getting lately continue?
Are we going to be let down later in the second half of the year, or is the current, slow-moving national economic growth pattern a long term trend?
Buffet told his annual stockholders gathering in Omaha that, the economy is showing "significant" and persistent improvement for the first time since the financial crisis broke in 2008.
Other top business leaders polled by the Conference Board -- and quoted last week by the Wall Street Journal - said they are now "confident that the U.S. will see sustained growth through 2010" - with moderate gains in employment, consumer spending and consumer confidence.
That's hugely important for housing of course - and offers a strong answer to economic doomsayers who predict a sharp drop in home sales and real estate activity following the expiration of the tax credits.
The latest housing and mortgage numbers certainly look encouraging:
Pending home sales jumped by more than five percent in March, according to the National Association of Realtors, and were 21 percent higher than the previous year for the same month.
Home prices are turning at least modestly positive again in the majority of large housing markets. The closely-watched PMI risk index, which looks at price decline potentials for two years out, found that 42 of the 50 largest markets in its latest survey showed diminished risk.
Another index -- from valuation data firm Clear Capital - found home prices gained by five percent nationally year over year. Prices in a handful of what Clear Capital calls "micro" markets are doing better than that. Washington DC, for example, saw an 8.4 percent increase over last year, according to the latest index.
Meanwhile, new applications for loans to purchase houses took another big jump -- up 13 percent over the previous week, according to the Mortgage Bankers Association.
MBA vice president for research, Michael Fratantoni, said that last week's FHA and VA share of home purchase applications soared above 50 percent -- the highest it's been in more than two decades.
Finally, there was some outstanding news for home buyers and sellers in high cost markets: The jumbo loan market is roaring back -- with more banks now offering big loans and cutting rates. One major lender even announced that for credit-worthy applicants, it's dropping rates on jumbos to 5.7 percent for 30 years -- the best ever.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: Experts Weigh In by Kenneth R. Harney
Mega-investor Warren Buffett and a group of top corporate leaders are weighing in on a key issue that's crucial to a sustained real estate recovery: How long will the good economic news we've been getting lately continue?
Are we going to be let down later in the second half of the year, or is the current, slow-moving national economic growth pattern a long term trend?
Buffet told his annual stockholders gathering in Omaha that, the economy is showing "significant" and persistent improvement for the first time since the financial crisis broke in 2008.
Other top business leaders polled by the Conference Board -- and quoted last week by the Wall Street Journal - said they are now "confident that the U.S. will see sustained growth through 2010" - with moderate gains in employment, consumer spending and consumer confidence.
That's hugely important for housing of course - and offers a strong answer to economic doomsayers who predict a sharp drop in home sales and real estate activity following the expiration of the tax credits.
The latest housing and mortgage numbers certainly look encouraging:
Pending home sales jumped by more than five percent in March, according to the National Association of Realtors, and were 21 percent higher than the previous year for the same month.
Home prices are turning at least modestly positive again in the majority of large housing markets. The closely-watched PMI risk index, which looks at price decline potentials for two years out, found that 42 of the 50 largest markets in its latest survey showed diminished risk.
Another index -- from valuation data firm Clear Capital - found home prices gained by five percent nationally year over year. Prices in a handful of what Clear Capital calls "micro" markets are doing better than that. Washington DC, for example, saw an 8.4 percent increase over last year, according to the latest index.
Meanwhile, new applications for loans to purchase houses took another big jump -- up 13 percent over the previous week, according to the Mortgage Bankers Association.
MBA vice president for research, Michael Fratantoni, said that last week's FHA and VA share of home purchase applications soared above 50 percent -- the highest it's been in more than two decades.
Finally, there was some outstanding news for home buyers and sellers in high cost markets: The jumbo loan market is roaring back -- with more banks now offering big loans and cutting rates. One major lender even announced that for credit-worthy applicants, it's dropping rates on jumbos to 5.7 percent for 30 years -- the best ever.
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, April 19, 2010
Real Estate Outlook: Faster Recovery?
April 19, 2010 in Realty Times
Real Estate Outlook: Faster Recovery?
by Kenneth R. Harney
It's been a long time since we've seen the Wall Street Journal run a front-page article suggesting that the national economy appears to be rebounding faster than most analysts forecast. But that happened last week.
And over the past couple of years, we haven't seen retail sales -- a key barometer of consumer confidence -- jump by almost two percent in a single month. But we saw that last week as well.
And then there's real estate: The latest Federal Reserve "beige book" on economic conditions nationwide, issued last week, said something we haven't heard in a long, long time. Housing activity is up in 11 of the 12 bank districts.
All of this, of course, sounds like promising news for home sales in the coming months. In fact, Freddie Mac's economists see total sales this year at least 10 percent higher than last year, even with the possibility of higher mortgage interest rates.
But there are complications in the mix: The Fed's "beige book" report essentially said, yes, housing is on an upward path at the moment, but what happens to sales after the home purchase tax credits expire mid-year?
Will expansion elsewhere in the economy be able to sustain sales and prices?
Lawrence Yun, chief economist for the National Association of Realtors, has similar concerns. In his latest commentary, Yun says steadily rising employment will be essential to keeping housing positive once the credits disappear.
The employment report for March was encouraging: 162,000 net new jobs, Yun noted, even in hard hit sectors like manufacturing. Yun's forecast model projects one million additional new jobs this year, plus another two million next year.
But even that sort of rebound in employment won't be enough to replace the 8.2 million jobs lost in the recession years. So the unemployment challenge is likely to be with us for a few years -- at best.
Meanwhile, though foreclosures remain troublingly high, the rate of delinquencies on existing mortgages may have actually peaked and could be headed downward. Equifax and Moody's Economy.com report that the percentage of home loans thirty days late dropped in the first quarter - the first decline in four years.
And in major housing markets that took hard hits during the bust, signs of recovery continue to multiply. For example, in the six counties of Southern California, home sales were up 33 percent in March over February, and were up five percent over 2009 levels, according to MDA Data Quick.
Even median prices were on the rise -- by 14 percent over year-earlier levels.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: Faster Recovery?
by Kenneth R. Harney
It's been a long time since we've seen the Wall Street Journal run a front-page article suggesting that the national economy appears to be rebounding faster than most analysts forecast. But that happened last week.
And over the past couple of years, we haven't seen retail sales -- a key barometer of consumer confidence -- jump by almost two percent in a single month. But we saw that last week as well.
And then there's real estate: The latest Federal Reserve "beige book" on economic conditions nationwide, issued last week, said something we haven't heard in a long, long time. Housing activity is up in 11 of the 12 bank districts.
All of this, of course, sounds like promising news for home sales in the coming months. In fact, Freddie Mac's economists see total sales this year at least 10 percent higher than last year, even with the possibility of higher mortgage interest rates.
But there are complications in the mix: The Fed's "beige book" report essentially said, yes, housing is on an upward path at the moment, but what happens to sales after the home purchase tax credits expire mid-year?
Will expansion elsewhere in the economy be able to sustain sales and prices?
Lawrence Yun, chief economist for the National Association of Realtors, has similar concerns. In his latest commentary, Yun says steadily rising employment will be essential to keeping housing positive once the credits disappear.
The employment report for March was encouraging: 162,000 net new jobs, Yun noted, even in hard hit sectors like manufacturing. Yun's forecast model projects one million additional new jobs this year, plus another two million next year.
But even that sort of rebound in employment won't be enough to replace the 8.2 million jobs lost in the recession years. So the unemployment challenge is likely to be with us for a few years -- at best.
Meanwhile, though foreclosures remain troublingly high, the rate of delinquencies on existing mortgages may have actually peaked and could be headed downward. Equifax and Moody's Economy.com report that the percentage of home loans thirty days late dropped in the first quarter - the first decline in four years.
And in major housing markets that took hard hits during the bust, signs of recovery continue to multiply. For example, in the six counties of Southern California, home sales were up 33 percent in March over February, and were up five percent over 2009 levels, according to MDA Data Quick.
Even median prices were on the rise -- by 14 percent over year-earlier levels.
Copyright © 2010 Realty Times. All Rights Reserved.
Tuesday, April 13, 2010
Mortgage Rates Dip
April 13, 2010 Realty Times
Mortgage Rates Dip - Private Buyers Fill Government Void
by Ed Ferrara
Last Wednesday afternoon, just as results of the weekly Freddie Mac survey were finalized, mortgage rates dipped. The decline in long term mortgage rates was an effect of rising MBS prices. Mortgage rates move opposite mortgage-backed securities prices. Surprisingly, so far private buyers have successfully filled the void left in mortgage-backed securities markets since the government discontinued their MBS purchasing program on Mar. 31st.
FreeRateUpdate.com research of wholesale lenders' rate sheets shows conventional 30-year fixed mortgages are available today at 4.875% to well-qualified consumers paying a standard .07 to 1 point origination, down from 5% this time last week. 15-yr fixed mortgages are available at 4.25, and 5/1 adjustable rate mortgages at 3.75.
FHA 30-yr fixed loans are available at 4.75%, down from 4.875 last week. Despite the FHA 30-yr rate being slightly better than that of the conforming 30-yr, cost and in turn APR is significantly higher because of MI and other FHA fees.
Jumbo 30-yr fixed mortgages remain available at 5.625%.
Despite rates near all time lows refinance applications are down a whopping 16% according to the Mortgage Bankers Association. Purchases, up for the third straight week, now make up half of all applications.
Today's Mortgage Rates:
30-yr fixed-rate - 4.875%
15-yr fixed-rate - 4.250%
5/1 ARM rate - 3.750%
FHA 30-yr fixed-rate - 4.750%
FHA 15-yr fixed-rate - 4.50%
FHA 5/1 ARM rate - 3.750%
VA 30-yr fixed-rate - 5.000
Jumbo 30-yr fixed-rate - 5.625%
Jumbo Conforming 30-yr fixed-rate - 5.250%
Source: freerateupdate.com
Copyright © 2010 Realty Times. All Rights Reserved.
Mortgage Rates Dip - Private Buyers Fill Government Void
by Ed Ferrara
Last Wednesday afternoon, just as results of the weekly Freddie Mac survey were finalized, mortgage rates dipped. The decline in long term mortgage rates was an effect of rising MBS prices. Mortgage rates move opposite mortgage-backed securities prices. Surprisingly, so far private buyers have successfully filled the void left in mortgage-backed securities markets since the government discontinued their MBS purchasing program on Mar. 31st.
FreeRateUpdate.com research of wholesale lenders' rate sheets shows conventional 30-year fixed mortgages are available today at 4.875% to well-qualified consumers paying a standard .07 to 1 point origination, down from 5% this time last week. 15-yr fixed mortgages are available at 4.25, and 5/1 adjustable rate mortgages at 3.75.
FHA 30-yr fixed loans are available at 4.75%, down from 4.875 last week. Despite the FHA 30-yr rate being slightly better than that of the conforming 30-yr, cost and in turn APR is significantly higher because of MI and other FHA fees.
Jumbo 30-yr fixed mortgages remain available at 5.625%.
Despite rates near all time lows refinance applications are down a whopping 16% according to the Mortgage Bankers Association. Purchases, up for the third straight week, now make up half of all applications.
Today's Mortgage Rates:
30-yr fixed-rate - 4.875%
15-yr fixed-rate - 4.250%
5/1 ARM rate - 3.750%
FHA 30-yr fixed-rate - 4.750%
FHA 15-yr fixed-rate - 4.50%
FHA 5/1 ARM rate - 3.750%
VA 30-yr fixed-rate - 5.000
Jumbo 30-yr fixed-rate - 5.625%
Jumbo Conforming 30-yr fixed-rate - 5.250%
Source: freerateupdate.com
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, April 12, 2010
Mortgage Rates Lower After Strong Auction Demand
Rates Lower After Strong Auction Demand
Highlights Average 30 yr fixed rate Stocks (Weekly)
Continuing Jobless Claims fell to the lowest level since December 2008
The Fed lowered its forecasts for inflation in 2010 and 2011
As expected, the European Central Bank (ECB) made no change in rates
The Dow stock index reached an 18-month high
This week: -0.05% Dow: 10,950 +50
Last week: +0.10% NASDAQ: 2,425 +25
Although this week's economic data was generally stronger than expected, it was overshadowed by solid demand for the Treasury auctions and intensified concerns about the economic situation in Greece, which helped mortgage markets. After reaching the highest levels since August, mortgage rates ended a little lower than where they ended last week.
Recent increases in yields on long-term fixed-rate securities such as 10-yr Treasuries and mortgage-backed securities (MBS) appeared to have been sufficient to attract investors. Very strong demand from both foreign and domestic investors for Wednesday's 10-yr auction pushed Treasury yields lower, and mortgage rates followed. Increasing the appeal, renewed worries about the fiscal situation in Greece caused investors to seek the safety of US securities. Comforting statements from Fed officials that they expect inflation to remain low for a long time also added to the demand.
In the housing sector, February Pending Home Sales jumped 8% from January, far exceeding the consensus forecast. Pending Home Sales are a leading indicator of housing market activity. The chief economist of the National Association of Realtors (NAR) considered the data to be a potential sign of a 'second surge of home sales this spring'. To receive the homebuyer tax credit, contracts must be signed by the end of April, which likely boosted the results for February. As buyers seek to take advantage of the program, March and April pending sales may show strength as well.
Courtesy of:
Craig Bohall
Loan Officer
5304 E Southern Ave #101
Mesa, AZ 85206
480-344-3646
craig@myazmp.com
www.myazmp.com
Highlights Average 30 yr fixed rate Stocks (Weekly)
Continuing Jobless Claims fell to the lowest level since December 2008
The Fed lowered its forecasts for inflation in 2010 and 2011
As expected, the European Central Bank (ECB) made no change in rates
The Dow stock index reached an 18-month high
This week: -0.05% Dow: 10,950 +50
Last week: +0.10% NASDAQ: 2,425 +25
Although this week's economic data was generally stronger than expected, it was overshadowed by solid demand for the Treasury auctions and intensified concerns about the economic situation in Greece, which helped mortgage markets. After reaching the highest levels since August, mortgage rates ended a little lower than where they ended last week.
Recent increases in yields on long-term fixed-rate securities such as 10-yr Treasuries and mortgage-backed securities (MBS) appeared to have been sufficient to attract investors. Very strong demand from both foreign and domestic investors for Wednesday's 10-yr auction pushed Treasury yields lower, and mortgage rates followed. Increasing the appeal, renewed worries about the fiscal situation in Greece caused investors to seek the safety of US securities. Comforting statements from Fed officials that they expect inflation to remain low for a long time also added to the demand.
In the housing sector, February Pending Home Sales jumped 8% from January, far exceeding the consensus forecast. Pending Home Sales are a leading indicator of housing market activity. The chief economist of the National Association of Realtors (NAR) considered the data to be a potential sign of a 'second surge of home sales this spring'. To receive the homebuyer tax credit, contracts must be signed by the end of April, which likely boosted the results for February. As buyers seek to take advantage of the program, March and April pending sales may show strength as well.
Courtesy of:
Craig Bohall
Loan Officer
5304 E Southern Ave #101
Mesa, AZ 85206
480-344-3646
craig@myazmp.com
www.myazmp.com
Pending Sales Up
April 12, 2010 Realty Times
Real Estate Outlook: Pending Sales Up by Kenneth R. Harney
Signs of recovery in the housing market and the national economy keep popping up - and are even beginning to surprise veteran analysts on Wall Street and elsewhere.
Though economists had expected the latest pending home sales index to be down - after all, February saw the worst weather in decades in large parts of the U.S. - the numbers actually took a big bounce.
The National Association of Realtors reported that pending sales jumped 8.2 percent for the month and were 17 percent higher than they were at the same time last year.
Contracts in the Northeast were up by 9 percent, the Midwest by 22 percent and in the South by 9 percent. Only the Western region came in negative - down by 5 percent. But even in the West, pending sales were 15 percent higher than they were the year before.
With the April 30 deadline for sales contracts to qualify for the two housing tax credits just weeks away, analysts expect home sales activity to remain high. Lawrence Yun, chief economist for the National Association of Realtors, says he thinks we may be in “the early stages of a second surge” of real estate transactions that could continue into mid-year.
But let's be clear: Home sales are not only being pushed by tax credits. Far stronger impetus is coming from steadily improving conditions in the national economy and rising consumer perceptions that finally things are getting better.
Look at the latest monthly employment numbers from the Bureau of Labor Statistics. For the first time in nearly two years, there was significant new job creation during the month of March - 162,000 payroll positions.
That was helped along in part by Census Bureau hiring to conduct the 2010 census, but there was growth elsewhere as well: 15,000 net new construction jobs, 17,000 manufacturing jobs, and 11,000 business services jobs.
Home Depot and other big household-oriented retailers announced that they have begun hiring again. Retails sales nationwide jumped by 23 percent for the month; home furnishings and furniture sales were up 14 percent
Mark Zandi, chief economist for Moody's Economy.com, told the New York Times that “consumers are (getting) almost giddy” in their zeal to resume spending, and they are cutting their savings to fund their new purchases.
All of this, of course, is great news for housing, which is hardwired to employment growth and consumer confidence
But don't assume we're out of the woods quite yet -- not with the national unemployment rate stuck at 9.7 percent. And there's another challenge taking shape on the horizon: Rising mortgage rates that are inevitable in an economy rebounding out of recession.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: Pending Sales Up by Kenneth R. Harney
Signs of recovery in the housing market and the national economy keep popping up - and are even beginning to surprise veteran analysts on Wall Street and elsewhere.
Though economists had expected the latest pending home sales index to be down - after all, February saw the worst weather in decades in large parts of the U.S. - the numbers actually took a big bounce.
The National Association of Realtors reported that pending sales jumped 8.2 percent for the month and were 17 percent higher than they were at the same time last year.
Contracts in the Northeast were up by 9 percent, the Midwest by 22 percent and in the South by 9 percent. Only the Western region came in negative - down by 5 percent. But even in the West, pending sales were 15 percent higher than they were the year before.
With the April 30 deadline for sales contracts to qualify for the two housing tax credits just weeks away, analysts expect home sales activity to remain high. Lawrence Yun, chief economist for the National Association of Realtors, says he thinks we may be in “the early stages of a second surge” of real estate transactions that could continue into mid-year.
But let's be clear: Home sales are not only being pushed by tax credits. Far stronger impetus is coming from steadily improving conditions in the national economy and rising consumer perceptions that finally things are getting better.
Look at the latest monthly employment numbers from the Bureau of Labor Statistics. For the first time in nearly two years, there was significant new job creation during the month of March - 162,000 payroll positions.
That was helped along in part by Census Bureau hiring to conduct the 2010 census, but there was growth elsewhere as well: 15,000 net new construction jobs, 17,000 manufacturing jobs, and 11,000 business services jobs.
Home Depot and other big household-oriented retailers announced that they have begun hiring again. Retails sales nationwide jumped by 23 percent for the month; home furnishings and furniture sales were up 14 percent
Mark Zandi, chief economist for Moody's Economy.com, told the New York Times that “consumers are (getting) almost giddy” in their zeal to resume spending, and they are cutting their savings to fund their new purchases.
All of this, of course, is great news for housing, which is hardwired to employment growth and consumer confidence
But don't assume we're out of the woods quite yet -- not with the national unemployment rate stuck at 9.7 percent. And there's another challenge taking shape on the horizon: Rising mortgage rates that are inevitable in an economy rebounding out of recession.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, April 9, 2010
30-Year Mortgage Rates to Highest Level
From Realty Times of April 9, 2010
Bond Yields Push 30-Year Mortgage Rates to Highest Level in Eight Months
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.21 percent with an average 0.6 point for the week ending April 8, 2010, up from last week when it averaged 5.08 percent. Last year at this time, the 30-year FRM averaged 4.87 percent. This is the highest the 30-year FRM has been since the week ending August 13, 2009 when it averaged 5.29 percent.
The 15-year FRM this week averaged 4.52 percent with an average 0.6 point, up from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.54 percent. This is the highest the 15-year FRM has been since the week ending December 31, 2009, when it averaged 4.54 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent this week, with an average 0.6 point, up from last week when it averaged 4.10 percent. A year ago, the 5-year ARM averaged 4.93 percent.
The 1-year Treasury-indexed ARM averaged 4.14 percent this week with an average 0.5 point, up from last week when it averaged 4.05 percent. At this time last year, the 1-year ARM averaged 4.83 percent.
"Once again, mortgage rates followed bond yields higher amid a positive March employment report," said Frank Nothaft, Freddie Mac vice president and chief economist. "The economy added 162,000 jobs, which was the largest monthly gain over the past three years. In addition, revisions raised the January and February figures by a combined 61,000 workers. Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007."
"Following its extension in early November of last year, the homebuyer tax credit is showing some impact on housing market activity, mostly through the use of government-insured mortgages, which tend to be a favorite among first-time homebuyers. Compared to the week ending December 4, 2009, which was the first week after the original expiration date, mortgage applications for home purchases are up 17 percent for the first week in April of this year for government-insured loans, compared to an 11 percent decline in conventional loans, according to the Mortgage Bankers Association. Also, pending existing home sales jumped 8.2 percent in February, well above the market consensus and represented the second largest increase since records began in 2001, the National Association of Realtors ® reported. Homebuyers must enter a housing contract by April 30th and close by June 30th in order to receive the tax credit."
Copyright © 2010 Realty Times. All Rights Reserved.
Bond Yields Push 30-Year Mortgage Rates to Highest Level in Eight Months
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.21 percent with an average 0.6 point for the week ending April 8, 2010, up from last week when it averaged 5.08 percent. Last year at this time, the 30-year FRM averaged 4.87 percent. This is the highest the 30-year FRM has been since the week ending August 13, 2009 when it averaged 5.29 percent.
The 15-year FRM this week averaged 4.52 percent with an average 0.6 point, up from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.54 percent. This is the highest the 15-year FRM has been since the week ending December 31, 2009, when it averaged 4.54 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.25 percent this week, with an average 0.6 point, up from last week when it averaged 4.10 percent. A year ago, the 5-year ARM averaged 4.93 percent.
The 1-year Treasury-indexed ARM averaged 4.14 percent this week with an average 0.5 point, up from last week when it averaged 4.05 percent. At this time last year, the 1-year ARM averaged 4.83 percent.
"Once again, mortgage rates followed bond yields higher amid a positive March employment report," said Frank Nothaft, Freddie Mac vice president and chief economist. "The economy added 162,000 jobs, which was the largest monthly gain over the past three years. In addition, revisions raised the January and February figures by a combined 61,000 workers. Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007."
"Following its extension in early November of last year, the homebuyer tax credit is showing some impact on housing market activity, mostly through the use of government-insured mortgages, which tend to be a favorite among first-time homebuyers. Compared to the week ending December 4, 2009, which was the first week after the original expiration date, mortgage applications for home purchases are up 17 percent for the first week in April of this year for government-insured loans, compared to an 11 percent decline in conventional loans, according to the Mortgage Bankers Association. Also, pending existing home sales jumped 8.2 percent in February, well above the market consensus and represented the second largest increase since records began in 2001, the National Association of Realtors ® reported. Homebuyers must enter a housing contract by April 30th and close by June 30th in order to receive the tax credit."
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, February 15, 2010
Real Estate Outlook: National PMI Index
Realty Times of February 15, 2010
Real Estate Outlook: National PMI Index by Kenneth R. Harney
One of the most accurate forecasters of housing value movements has just signaled something potentially important: For the first time in a year, according to the national PMI index, “overall risk has decreased” in the 384 metropolitan markets covered by the survey.
The PMI risk index is produced quarterly by private mortgage insurance giant, PMI Group. It examines local employment, household income, economic growth, demographic changes and other factors to predict where home values are headed in these market areas.
PMI's risk index was among the earliest warning bells about the housing crash, so its quarterly findings are followed closely by mortgage analysts. According to the latest index released last week, home values are increasing in dozens of major metropolitan markets, causing the average risk rating for the U.S. to drop by 2.6 percent.
That's not huge, but it's a directional signal. The index found risk levels elevated in the so-called “sand states” -- California, Florida, Nevada and Arizona. It also documented a slight worsening of affordability conditions in 81 percent of metropolitan markets -- mainly the result of the uptick in home prices and slightly higher average mortgage interest rates late last year.
Another key market barometer was released last week with at least mildly encouraging numbers: The Zillow index of home owner negative equity found that the national average rate dropped to 21.4 percent in the last quarter of 2009, down from 23 percent in the second quarter.
Also the Federal Reserve's quarterly study measuring the nation's finances - the so-called “flow of funds” report, found that after nearly three years of declines, Americans are building positive equity in their homes again.
Between the first quarter of last year and the third quarter, according to the Fed, homeowner equity increased by almost $1 trillion. That was caused primarily by a combination of rising home values and principal paydowns on mortgages.
Meanwhile, home builders are also reporting an easing of their multi-year tale of woe: Several major publicly-traded national builders, including D R Horton and Beazer, announced last week that they are seeing higher numbers of orders along with reduced cancellation rates on contracts.
Horton said in its most recent quarter, orders for new homes were 45 percent above year-earlier levels, and the cancellation rate dropped from 38 percent to 26 percent.
Mortgage rates continue to be helpful as well: Thirty year fixed rates dropped to 4.9 percent last week, according to the Mortgage Bankers Association. Fifteen year rates remained flat at 4.3 percent.
Copyright © 2010 Realty Times. All Rights Reserved.
Real Estate Outlook: National PMI Index by Kenneth R. Harney
One of the most accurate forecasters of housing value movements has just signaled something potentially important: For the first time in a year, according to the national PMI index, “overall risk has decreased” in the 384 metropolitan markets covered by the survey.
The PMI risk index is produced quarterly by private mortgage insurance giant, PMI Group. It examines local employment, household income, economic growth, demographic changes and other factors to predict where home values are headed in these market areas.
PMI's risk index was among the earliest warning bells about the housing crash, so its quarterly findings are followed closely by mortgage analysts. According to the latest index released last week, home values are increasing in dozens of major metropolitan markets, causing the average risk rating for the U.S. to drop by 2.6 percent.
That's not huge, but it's a directional signal. The index found risk levels elevated in the so-called “sand states” -- California, Florida, Nevada and Arizona. It also documented a slight worsening of affordability conditions in 81 percent of metropolitan markets -- mainly the result of the uptick in home prices and slightly higher average mortgage interest rates late last year.
Another key market barometer was released last week with at least mildly encouraging numbers: The Zillow index of home owner negative equity found that the national average rate dropped to 21.4 percent in the last quarter of 2009, down from 23 percent in the second quarter.
Also the Federal Reserve's quarterly study measuring the nation's finances - the so-called “flow of funds” report, found that after nearly three years of declines, Americans are building positive equity in their homes again.
Between the first quarter of last year and the third quarter, according to the Fed, homeowner equity increased by almost $1 trillion. That was caused primarily by a combination of rising home values and principal paydowns on mortgages.
Meanwhile, home builders are also reporting an easing of their multi-year tale of woe: Several major publicly-traded national builders, including D R Horton and Beazer, announced last week that they are seeing higher numbers of orders along with reduced cancellation rates on contracts.
Horton said in its most recent quarter, orders for new homes were 45 percent above year-earlier levels, and the cancellation rate dropped from 38 percent to 26 percent.
Mortgage rates continue to be helpful as well: Thirty year fixed rates dropped to 4.9 percent last week, according to the Mortgage Bankers Association. Fifteen year rates remained flat at 4.3 percent.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, February 12, 2010
Buyer's Tax Credit
Last October most people thought the first time home buyers’ tax credit was over and done with, the deadline of November 30, 2009 looked impossible for most people to close escrow within the time frame necessary to claim their tax credit of up to $8,000. Don’t let this happen twice!
Thanks to the National Association of REALTORS’® call to action and the overwhelming response of its members, we got an extension and expansion of this valuable program. Its new expanded version not only extends the first time home buyer tax credit but now opens the program up to property owners that have owned their home for at least five (5) years.
I invite you to visit REALTOR.org for a full explanation of this program together with free and low-cost pamphlets to order/download explaining how this works. Bottom line for both tax credit groups is they must have a property under contract by April 30th, 2010 and close escrow by June 30th. Come on people – time’s a wastin’. Let hit the road running and help clients take advantage of that credit. Check out what’s going on right now to help you:
Thanks to the National Association of REALTORS’® call to action and the overwhelming response of its members, we got an extension and expansion of this valuable program. Its new expanded version not only extends the first time home buyer tax credit but now opens the program up to property owners that have owned their home for at least five (5) years.
I invite you to visit REALTOR.org for a full explanation of this program together with free and low-cost pamphlets to order/download explaining how this works. Bottom line for both tax credit groups is they must have a property under contract by April 30th, 2010 and close escrow by June 30th. Come on people – time’s a wastin’. Let hit the road running and help clients take advantage of that credit. Check out what’s going on right now to help you:
Thursday, February 11, 2010
Refinancing
Realty Times of February 11, 2010
Resolve to Take a Look at Refinancing by Broderick Perkins
If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.
Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.
What's more, the year began with fixed interest rates hovering slightly above 5 percent, but still near record lows, according to Erate.com.
First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment.
The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.
The study analyzed residential mortgage refinances that occurred between October 2008 and June 2009 to test the impact of Federal Reserve efforts to lower interest rates and to measure effect of the Making Home Affordable's Home Affordable Refinance Program (HARP).
This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home.
Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. The previous HARP loan-to-value limit was 105 percent.
Also, if the existing mortgage were written without mortgage insurance, the new loan won't be burdened with the extra cost. Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.
Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.
The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.
Another plus from the program: The higher loan-to-value ratios were first available only to qualified borrowers who applied through their existing servicer.
That's changed.
Since Oct. 1, 2009, homeowners got the option to shop around and refinance through any Fannie or Freddie lender.
In addition to lowering your monthly payment, a refinanced mortgage can move you to a fixed or adjustable rate, shorten the term of your home loan, or let you tap home equity -- with a lender's approval.
"The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets," said study author, Mark Fleming, Ph.D. and First American's chief economist.
"This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure," he added.
Perhaps, but some say the economy needs more than lower rates.
"Low fixed rates are only part of the solution to our economic problems," says Nancy Osborne, chief operating officer at Erate.com.
"Home buyers can enjoy record low rates to help them qualify for more home, and this in conjunction with the government's home-buyer tax credit work to stimulate the purchase market, yet the rising unemployment rate may make purchasing a home somewhat risky for all but the most securely employed," she added.
To check your eligibility for a refinance under the new provision, go to Making Home Affordable.
To compare rates, costs and other factors by state, go to Erate.com.
Copyright © 2010 Realty Times. All Rights Reserved.
Resolve to Take a Look at Refinancing by Broderick Perkins
If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.
Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.
What's more, the year began with fixed interest rates hovering slightly above 5 percent, but still near record lows, according to Erate.com.
First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment.
The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.
The study analyzed residential mortgage refinances that occurred between October 2008 and June 2009 to test the impact of Federal Reserve efforts to lower interest rates and to measure effect of the Making Home Affordable's Home Affordable Refinance Program (HARP).
This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home.
Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. The previous HARP loan-to-value limit was 105 percent.
Also, if the existing mortgage were written without mortgage insurance, the new loan won't be burdened with the extra cost. Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.
Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.
The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.
Another plus from the program: The higher loan-to-value ratios were first available only to qualified borrowers who applied through their existing servicer.
That's changed.
Since Oct. 1, 2009, homeowners got the option to shop around and refinance through any Fannie or Freddie lender.
In addition to lowering your monthly payment, a refinanced mortgage can move you to a fixed or adjustable rate, shorten the term of your home loan, or let you tap home equity -- with a lender's approval.
"The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets," said study author, Mark Fleming, Ph.D. and First American's chief economist.
"This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure," he added.
Perhaps, but some say the economy needs more than lower rates.
"Low fixed rates are only part of the solution to our economic problems," says Nancy Osborne, chief operating officer at Erate.com.
"Home buyers can enjoy record low rates to help them qualify for more home, and this in conjunction with the government's home-buyer tax credit work to stimulate the purchase market, yet the rising unemployment rate may make purchasing a home somewhat risky for all but the most securely employed," she added.
To check your eligibility for a refinance under the new provision, go to Making Home Affordable.
To compare rates, costs and other factors by state, go to Erate.com.
Copyright © 2010 Realty Times. All Rights Reserved.
Friday, February 5, 2010
Housing Affected by Demographic Trends
From Realty Times of February 5, 2010
Housing Affected by Demographic Trends by Phoebe Chongchua
The Urban Land Institute predicts there will be two major changes beginning in this new decade in our country that will affect the housing market.
The first is that home appreciation will slow. The report predicts annual appreciation of 1 percent to 2 percent. The second change is that the record-high U.S. homeownership rate will decline from 69 percent to 62 percent.
Four other demographic trends are likely to have an impact as well. Aging baby boomers, those 55 to 64 years old, will keep working, and, some may stay put in their current suburban homes until the values recover. And, just as I wrote about last week, those in this group who do move will look for comfortable, easy homes (first-floor master bedroom), but the report indicates they’ll look for mixed-age living environments that cater to active lifestyles.
The second major demographic trend could impact the second-home market. Those between the ages of 46 to 54 years old, according to the report, are in their prime earning years; however, they lack home equity and may not be able to afford second homes (unlike the older baby boomers).
There are approximately 68-million people that make up Generation Y. This group is even larger than the baby boomers. But the report indicates this group is less interested in homeownership. The author of the report, John K. McIlwain, wrote, “They will be renters by necessity or choice for years ahead.” Not surprisingly, this tech-savvy group places high value on communities—real and virtual—where information and ideas can be shared.
This generation likes walkable, close-in communities. They’re not seeking to escape to the outer edges of town, unless they can’t afford anything nearby. Another big draw—“net zero” homes—green and powered exclusively by alternative energy.
The fourth major demographic trend involves immigrants. This group is often attracted to multi-generational housing in areas that have a strong sense of community. So, larger homes are preferred, if affordable.
Overall, the lasting stability of the U.S. housing market, according to McIlwain, will depend most on the structure and revitalization of the private home mortgage finance system.
"Re-establishing a robust private mortgage market will require both strong market fundamentals and a reformed mortgage securitization structure that eliminates past abuses," McIlwain said. Bye-bye suburbia, study says. Well, not completely. But the study does indicate that several factors are escalating the popularity of urbanization: two-person household growth (including those households without children), fewer baby boomers moving to the suburbs, Gen Y opting/forced to rent rather than own, and public policies that encourage compact development.
However, the author of the study says that urban infill development can’t accommodate all the housing demand from the demographic groups. McIlwain cautions that suburban development "must adapt or it will be obsolete.” A new era is blossoming, “The suburban century is over. This is the urban century."
Copyright © 2010 Realty Times. All Rights Reserved.
Housing Affected by Demographic Trends by Phoebe Chongchua
The Urban Land Institute predicts there will be two major changes beginning in this new decade in our country that will affect the housing market.
The first is that home appreciation will slow. The report predicts annual appreciation of 1 percent to 2 percent. The second change is that the record-high U.S. homeownership rate will decline from 69 percent to 62 percent.
Four other demographic trends are likely to have an impact as well. Aging baby boomers, those 55 to 64 years old, will keep working, and, some may stay put in their current suburban homes until the values recover. And, just as I wrote about last week, those in this group who do move will look for comfortable, easy homes (first-floor master bedroom), but the report indicates they’ll look for mixed-age living environments that cater to active lifestyles.
The second major demographic trend could impact the second-home market. Those between the ages of 46 to 54 years old, according to the report, are in their prime earning years; however, they lack home equity and may not be able to afford second homes (unlike the older baby boomers).
There are approximately 68-million people that make up Generation Y. This group is even larger than the baby boomers. But the report indicates this group is less interested in homeownership. The author of the report, John K. McIlwain, wrote, “They will be renters by necessity or choice for years ahead.” Not surprisingly, this tech-savvy group places high value on communities—real and virtual—where information and ideas can be shared.
This generation likes walkable, close-in communities. They’re not seeking to escape to the outer edges of town, unless they can’t afford anything nearby. Another big draw—“net zero” homes—green and powered exclusively by alternative energy.
The fourth major demographic trend involves immigrants. This group is often attracted to multi-generational housing in areas that have a strong sense of community. So, larger homes are preferred, if affordable.
Overall, the lasting stability of the U.S. housing market, according to McIlwain, will depend most on the structure and revitalization of the private home mortgage finance system.
"Re-establishing a robust private mortgage market will require both strong market fundamentals and a reformed mortgage securitization structure that eliminates past abuses," McIlwain said. Bye-bye suburbia, study says. Well, not completely. But the study does indicate that several factors are escalating the popularity of urbanization: two-person household growth (including those households without children), fewer baby boomers moving to the suburbs, Gen Y opting/forced to rent rather than own, and public policies that encourage compact development.
However, the author of the study says that urban infill development can’t accommodate all the housing demand from the demographic groups. McIlwain cautions that suburban development "must adapt or it will be obsolete.” A new era is blossoming, “The suburban century is over. This is the urban century."
Copyright © 2010 Realty Times. All Rights Reserved.
Monday, January 18, 2010
90 Day No Flip Rule Waived
Investors are now exempt from the 90-day seasoning rule. The datailed rules can be found here:
90 DAY FLIP RULE WAIVED
This will allow investors that have purchased FHA repos to put them on the MLS or By Owner networks much sooner. This should offer some good properties much sooner, move in ready as compared to Short Sales and Bank Owned - providing the investor cleans up the properties after his purchase.
The incentive for the investor is a quick return on his investment and increases the rate at which foreclosed homes are returned to the market in move in condition.
Let's hope it works as intended!
90 DAY FLIP RULE WAIVED
This will allow investors that have purchased FHA repos to put them on the MLS or By Owner networks much sooner. This should offer some good properties much sooner, move in ready as compared to Short Sales and Bank Owned - providing the investor cleans up the properties after his purchase.
The incentive for the investor is a quick return on his investment and increases the rate at which foreclosed homes are returned to the market in move in condition.
Let's hope it works as intended!
Friday, January 15, 2010
Short Sales a More Usable Tool
By Paul Owers in Lowe's Daily Real Estate News [newsletter@rismedia.com] of 1/15/10
New Guidelines Meant to Make Short Sales a More Usable Tool
Posted By susanne On January 14, 2010 @ 4:47 pm In Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story
[1]RISMEDIA, January 15, 2010—(MCT)—Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida’s housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with RE/MAX Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury’s expedited short sale process emerges between now and April, he said, he’s not going to tell his clients any differently. “It’s a very tough process to get some degree of standards,” Balanoff said of short sales. “I think this will help—it will put more pressure to comply and get quicker results. Three or four months of waiting for an answer is not doing anyone any good—even lenders.”
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn’t expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are “under water,” meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20% of its members’ existing-home sales in December 2009 were short sales. An additional 43% were bank-owned properties, and the remaining 37% were “normal” resales. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April 2010, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000. Sclafani, a psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. “I want to move on, but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales “a more usable tool.” Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen. But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed. “This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”
Some Florida real estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”
A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified. Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association. “That will be a challenge,” he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties. “I think the pressure on the banks is a good thing,” Kellogg said.
(c) 2010, Sun Sentinel
Distributed by McClatchy-Tribune Information Services.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trademarks of LF, LLC.
As noted in the article, there are skeptics re how the banks will actually respond.
New Guidelines Meant to Make Short Sales a More Usable Tool
Posted By susanne On January 14, 2010 @ 4:47 pm In Homeowner's Toolkit, Real Estate, Today's Marketplace, Today's Top Story
[1]RISMEDIA, January 15, 2010—(MCT)—Financially-stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida’s housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with RE/MAX Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury’s expedited short sale process emerges between now and April, he said, he’s not going to tell his clients any differently. “It’s a very tough process to get some degree of standards,” Balanoff said of short sales. “I think this will help—it will put more pressure to comply and get quicker results. Three or four months of waiting for an answer is not doing anyone any good—even lenders.”
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn’t expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are “under water,” meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20% of its members’ existing-home sales in December 2009 were short sales. An additional 43% were bank-owned properties, and the remaining 37% were “normal” resales. While short sales are considered an ideal solution for banks and for “under water” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances—and for the sellers to not have to repay any of the debt. Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale’s proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration’s Making Home Affordable loan modification program are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications. The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April 2010, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000. Sclafani, a psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. “I want to move on, but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales “a more usable tool.” Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen. But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed. “This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”
Some Florida real estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”
A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified. Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association. “That will be a challenge,” he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties. “I think the pressure on the banks is a good thing,” Kellogg said.
(c) 2010, Sun Sentinel
Distributed by McClatchy-Tribune Information Services.
© 2010 by Lowe's®. All rights reserved. Lowe's and the gable design are registered trademarks of LF, LLC.
As noted in the article, there are skeptics re how the banks will actually respond.
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