Homebuyers Expect Market to Improve
July 16, 2008 | Filed Under Real Estate News, Mortgage and Finance | 1 Comment
Will a new U.S. president help turn around the housing market? Many homebuyers seem to think so. A new Harris Interactive survey commissioned by Move, Inc., finds that 44 percent of homebuyers believe the housing market will improve once a new president takes office next January.Nearly half (48 percent) of women and 41 percent of men think a new chief executive will bolster the housing market.
However, 81 percent of homebuyers are still nervous about the housing market and cite several barriers to owning a home, including cost of a down payment (28 percent), their annual income level (20 percent), lack of confidence in the economy (26 percent), and high home prices (31 percent), especially in the Western states (39 percent).
Despite these reservations, desire for homeownership remains strong, the survey finds. While 41 percent of current homeowners plan to purchase again, 80 percent of all renters plan to purchase a home someday and 47 percent plan to do so within the next five years.
Fed Announces New Rules for Mortgage Lenders
July 16, 2008 | Filed Under Mortgage and Finance | Leave a Comment
The Federal Reserve Board on Monday announced rule changes for home mortgage lenders to help protect consumers from deceptive lending practices. The new rules, which amend Regulation Z of the Truth in Lending Act, adds four key protections for higher-priced mortgage loans.
-Prepayment penalties will be banned if the payment can change in the initial four years. For other higher-priced loans, the prepayment penalty period cannot last more than two years.
-Creditors must verify income and assets to determine repayment ability.
-Lenders must establish escrow accounts for property taxes and homeowner’s insurance.
-Lenders are prohibited from making a loan without regard to the borrowers’ ability to repay the loan from income and assets other than the home’s value.
In addition, the following rules apply to all mortgage loans regardless of price:
-Mortgage lenders cannot coerce an real estate appraiser to misstate a home’s value;
-Mortgage companies must provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for a loan;
-Loan companies will be prohibited from certain practices, such as pyramiding late fees. They will also be required to credit loan payments as of the receipt date and provide a payoff statement within a reasonable time period.
All of the rules, except the escrow requirement, will take effect October 1, 2009.
April Existing-Home Sales Fall, Inventory Rises
May 23, 2008 | Filed Under Real Estate News, Real Estate Trends and Statistics, Real Estate Investment, Mortgage and Finance | Leave a Comment
Existing-home sales fell to a seasonally adjusted annual rate of 4.89 million units in April, which is 1.0 percent below the 4.94 million units in March and 17.5 percent below the 5.93 million-unit level a year ago, NAR announced this morning. The median existing-home price in April was $202,300, down 8.0 percent from April 2007.
Total housing inventory increased 10.5 percent last month to 4.55 million homes available for sale. This represents an 11.2-month supply, up from a 10.0-month supply available last month.
Existing-home sales increased month-over-month in the West by 6.4 percent, remained unchanged in the South, and decreased in the Northeast and Midwest by 4.4 percent and 6.0 percent respectively. All regions saw decreases from a year ago: 15.3 percent in the West; 18.6 percent in the South; 14.7 percent in the Northeast; and 19.7 percent in the Midwest.
NAR President Richard F. Gaylord pointed to some good signs in the market. “In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their ‘declining market’ policies, effective June 1,” he said in a statement. “This means consumers across the country will have access to safe, affordable financing with down payments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer.”
The Ever Rosy National Association of Realtors
May 19, 2008 | Filed Under Real Estate News, Real Estate Trends and Statistics, Real Estate Investment, Mortgage and Finance, Boston Real Estate | 1 Comment
In my last few posts I have been going after some local journalists for not localizing their real estate articles. Well, today I am going after one of my own, Mr. Lawrence Chen, Chief Economist for the National Association of Realtors. In a recent statement, Mr. Chen denied we are facing a national recession. I guess he got me on a technicality there, as the definition of a recession is two concecutive quarters of negative GDP growth…but he can’t be serious about the second part of his statement. Mr. Chen predicted across the board growth with markets such as Miami, Pheonix and Las Vegas seeing a possible 50 percent value increase by the end of 2008. Really? Miami, Pheonix and Las Vegas? These are some of the hardest hit cities in the country in terms of real estate values, partically due to subprime loans. They also don’t seem to have a bottom in sight, certainly not a 50 percent upswing by December.
Now everyday I preach that real estate is local, but this is our National representative. I know that the Boston Real Estate Market has far outperformed the national average lately, which is why I get so annoyed with local jouranlists who simply repackage national news. At the same time, Mr. Chen has continued to deny a national downturn even thought the numbers cannot be interpreted any other way. I will be the first one to realize there are always two sides to the coin. A depreciated area with high foreclosures can have some very lucrative investments for buyers who want to make it big. However, Mr. Chen will not even admit there is another side of the coin. His persistance at denying the obvious makes all Realtors look bad, and Mr. Chen, that’s personal!
Foreclosures Continue to Rise in April
May 19, 2008 | Filed Under Real Estate News, Real Estate Trends and Statistics, Real Estate Investment, Mortgage and Finance | 1 Comment
Foreclosure filings increased 4 percent in April from the previous month and were up 65 percent compared to April 2007, according to a report released this morning by RealtyTrac, an online marketer of foreclosure properties. The 243,353 foreclosure filings that were reported in April — including default notices, auction sale notices and bank repossessions — is the highest monthly total since RealtyTrac began tracking foreclosures in January 2005.
The April national foreclosure rate stood at one foreclosure filing for every 519 households. Nevada, California and Arizona posted the highest state foreclosure rates for the month, while North Dakota, West Virginia and South Dakota had the lowest rates.
Many Americans Don’t Understand Homeownership: Survey
May 9, 2008 | Filed Under Real Estate News, Mortgage and Finance | Leave a Comment
A new survey by the National Foundation for Credit Counseling and MSN Money finds that many Americans struggle to understand mortgages and the home-buying process, and they lack basic financial skills and resources to cope with economic hard times. One in 10 Americans with a mortgage, or about 10 million adults, reported being late or missing a mortgage payment in the past year. One in four Americans said they do not know enough about owning a home to consider buying one.
Some Cities Still Boast Low Foreclosure, Unemployment Rates
April 12, 2008 | Filed Under Real Estate News, Mortgage and Finance | Leave a Comment
MainStreet.com compared U.S. foreclosure data from RealtyTrac to employment rates supplied by the Bureau of Labor Statistics to compile a list of five cities that are surviving the mortgage and foreclosure problems best. All five cities had low foreclosure rates and a February unemployment rate lower than or equal to the national average of 4.8 percent. They are: Lubbock, Texas; Charlottesville, Va.; York/Hanover, Pa.; Tuscaloosa, Ala.; and Burlington, Vt.
Zillow Enters the Mortgage Business
April 8, 2008 | Filed Under Real Estate News, Mortgage and Finance | 2 Comments
This might seem like an odd time for a company to break into the mortgage lending business, but that is exactly what online real estate marketer Zillow.com is doing. The company announced that its Zillow Mortgage Marketplace will offer borrowers an open forum to request custom loan quotes directly from registered lenders, anonymously and without hassle. The Marketplace also includes a public feedback system where borrowers can rate the lenders they choose to contact. The process makes it easier for borrowers to compare multiple loan quotes and make more informed decisions about their lender and loan, the company says.
Borrowers complete an online Request for a Quote (RFQ) with their financial details, but are not required to provide any personal information about themselves, such as their name, address, phone number or Social Security number. Once they submit their request, lenders that are registered with Zillow can submit loan quotes. The borrower decides which lender(s) to contact, if any, thereby maintaining control of the entire process.
Fannie Mae Tightens Mortgage Rules
April 5, 2008 | Filed Under Real Estate News, Mortgage and Finance | Leave a Comment
Fannie Mae will soon require a minimum credit score of 580 for most loans that it buys on an individual basis, the company announced earlier this week. The new rule is one of several new lending standards that Fannie Mae is implementing to stem the tide of default-related losses. In the past, Fannie Mae did not require a minimum credit score. The company said that it will still acquire loans with lower credit scores in certain circumstances.
Other rule changes include:
• Increasing the time period needed for borrowers to re-establish their credit history after a foreclosure from four years to five years.
• Allowing loan service firms — the companies that collect loan payments — to increase the forbearance period from four months to as much as six months to give borrowers more time to seek alternatives to foreclosure. Fannie Mae hopes the move will reduce the number of loans that it needs to recognize as losses.
• Adding fees for riskier types of loans.
Mortgage Scams Target Homeowners
March 30, 2008 | Filed Under Real Estate News, Mortgage and Finance | Leave a Comment
Earlier this week, federal prosecutors charged 19 suspects in a nationwide mortgage scam that robbed cash-strapped homeowners of their home equity and title, reports the Los Angeles Times. The defendants defrauded homeowners using foreclosure rescue pitches and so-called equity stripping schemes to steal $12.6 million and obtain the titles to more than 100 homes. In one variation of the alleged crime, the defendants contacted homeowners who were behind on their mortgage payments and offered to help them avoid foreclosure.
Financial institutions are on pace to report 60,000 incidents of suspected mortgage fraud this year, up from 28,000 in 2005, the Times reports. The FBI says “house stealing,” which involves both identity theft and mortgage fraud, is the newest crime hurting homeowners. In one variation of the scam, crooks target a property — often a vacation home or rental property — and steal the owner’s identity. After they transfer the property deed to themselves, they sell it and pocket the profits, without the knowledge of the original owners.
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