Archive for the 'Real Estate New' Category
Beyond The Headlines
September 24th, 2009 categories: Buyer's Advice, Real Estate New
Beyond the Headlines
C.A.R. Mortgage Update
This week’s C.A.R. Mortgage Update contains information about changes to FHA lending standards; Obama administration’s steps to shore up the Federal Housing Administration program; three large banks issuing more than half of U.S. residential mortgages and its impact on taxpayers; changes to mortgage interest reporting; and the possibility of a new wave of foreclosures as many option ARMs reset to higher rates.
FHA will tighten credit standards
Although the Federal Housing Administration (FHA) has confirmed that as of Sept. 30 it will fall short of its legal requirement to maintain supplementary reserves of 2 percent of the loans it insures, FHA Commissioner David Stevens says that it will not be seeking a taxpayer bailout.
Instead, to help mitigate losses, the FHA will tighten credit standards to rebuild the cushion to 2 percent or more, without raising the premiums borrowers pay or seeking an increase in its down-payment requirement of 3.5 percent.
Under the new rules, lenders making FHA-insured loans would need to show net worth of at least $1 million, an increase from $250,000. The agency is seeking to ensure that lenders have funds available to compensate the FHA if their loans fail to meet quality standards.
The FHA also will impose a maximum loan value of 125 percent of the current estimated home value on refinanced loans, in line with Fannie Mae and Freddie Mac.
Appraisals will be valid for no more than four months, a decrease from the previous six to 12 months validation period. The FHA also plans to implement appraisal changes adopted earlier this year by Fannie and Freddie. Mortgage brokers or bank employees paid on commission won’t be allowed to order appraisers.
To read the full story, please click here:
http://online.wsj.com/article/SB125328361187423115.html
To view additional articles about new home loans, loan refinances, or loan modifications, please visit the following:
Obama bolsters program that insures home loans
To read the full story, please click here:
http://money.cnn.com/2009/09/18/news/economy/FHA_housing_trouble/index.htm?postversion=2009091815
Uncle Sam bets the house on mortgages
To read the full story, please click here:
http://online.wsj.com/article/SB125322329116020929.html
A reckoning on option ARMs
To read the full story, please click here:
http://www.nytimes.com/2009/09/20/realestate/20mort.html?_r=1&ref=realestate
Feds plan to tinker with mortgage interest reporting
To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-lew20-2009sep20,0,1828223.story
Beyond the Headlines
Chicago Tribune
Short sales spread across real estate market, leaving frustration in their wake
As more homeowners find themselves underwater — owing more on their mortgage than their home is currently worth — and unable to make the monthly mortgage payments, many are turning to short sales, which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a win win situation for all parties, because they enable home buyers to purchase properties in desirable neighborhoods and at favorable prices.
KEEP THIS IN MIND
• Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank does not receive the full amount owed on the mortgage, it also does not incur the costs of foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is less damaging to their credit scores than a foreclosure. However, many real estate experts say that the majority of banks are reluctant to approve short sales, and often let properties go into foreclosure, even when there are reasonable offers on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financial hardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.
• Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained, as most owners may still live in the home.
• Short sales often are more time intensive than traditional transactions and often require additional paperwork. Due to the large number of offers on short sales, many take as long as a few months to receive approval. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, sellers should work closely with their REALTOR® to provide all of the necessary paperwork.
• Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator between the seller and the lender, and lead to a successful transaction.
• It is important to remember that in a short sale, although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Home buyers should work closely with their REALTOR® to submit realistic offers.
To read the full story, please click here:
http://www.chicagotribune.com/classified/realestate/chi-sun-short-sales-0920sep20,0,5529436.story
In Other News…
San Francisco Chronicle
U.S. home prices rise 0.3 percent in July
U.S. home prices rose slightly in July from a month earlier, according to a government index, further evidence the housing market is stabilizing.
To read the full story, please click here:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/22/financial/f072850D08.DTL&type=realestate
CNN Money
1.4 million Americans score $8,000 tax credit
More than 1.4 million Americans have already claimed the new tax credit for first-time home buyers, according to a report from the Internal Revenue Service.
To read the full story, please click here:
The Wall Street Journal
Want the home buyer tax credit? Don’t shop for furniture
With the deadline on the first-time home buyer tax credit looming, plenty of buyers are under contract and looking to close before Nov. 30. Excited to move into a new home, some of these first-timers start hitting the stores shopping for new furniture, appliances, or curtains. Big mistake,
To read the full story, please click here:
http://blogs.wsj.com/developments/2009/09/18/want-the-home-buyer-tax-credit-dont-shop-for-furniture/
Los Angeles Times
Homeowners who “strategically default” on loans a growing problem
Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to “strategically default”—abruptly and intentionally pull the plug and abandon the mortgage—compared with lower-scoring borrowers.
To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story
San Francisco Chronicle
$30 billion home loan time bomb set for 2010
Next year, many option ARM payments will begin to readjust, slamming borrowers with dramatically higher monthly mortgage bills. Analysts say that could unleash the next big wave of foreclosures—and home-loan data show that the risky loans were heavily used in the Bay Area.
To read the full story, please click here:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/20/MNOR19N2B1.DTL&type=realestate
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Merrill Lynch CEO Earns $83 Million in Compensation
December 22nd, 2008 categories: Buyer's Advice, Market Reports, Real Estate New, Realtors, Seller's Advice
Bailout Banks paid $1.6 Billion in compensation to 600 top executives – in salaries, Bonuses etc.. in 2007
Bailout Package
Lloyd Blankfein CEO – Goldman Sacs
2008 Compensation
$54 Million
Goldman Sacs Govt.
Bailout: $10 Billion
John Thain CEO – Merrill Lynch
2008 Compensation
$83 Million
Merrill Lynch Govt.
Bailout: $10 Billion
This information is from their SECC filings – disclosing all their perks, golf memberships etc..
Apparently John Thain only worked for 1/2 a year with a signing bonus of $15 million who gave up his bonuses for huge stock options. Goldman Sacs says they will give up their bonuses but how much of this will be a token because most of what they have been saying is that they need some of this money to retain Talent & that they cannot bring in the Executives they need if they cannot offer them high salaries. Aren’t these the guys that created the mess we are ?????????
SIX FINANCIAL COMPANIES THAT GOT $270 BILLION STILL OWN CORPORATE JETS.
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Foreclosure Update
October 15th, 2008 categories: Buyer's Advice, Real Estate New, Seller's Advice
16,352 Notices of Default were filed in September, down from 42,790 in August, a decrease of 61.8% from August 2008, and a decrease of 36.4% from a year earlier.
Notices of Trustee Sale:
Filings decreased 47.3% from August to a total of 19,116 filings.
Filings increased 33.9% from September 2007.
Properties sold at auction increased 163.2% from the prior year, to 23,409 sales with a combined loan balance of $9.75 Billion. A 12.4% drop from August 2008
Lenders took back 95% of the properties taken to auction, with a combined loan value of $9.19 Billion. 5% probably taken at the Court house Steps.
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Richard Branson Launches Eco-Consulting Group
September 4th, 2008 categories: Green Events, Neighborhood and City events/highlights, Real Estate New
Branson Plans to create a Zero Carbon Resort and emerges also with an Eco-Consulting Group. Branson plans to turn Mosquito Island in the British Virgin Islands into the most environmentally friendly resort in the world. Located off Virgin Gorda close to his Necker Island, an uninhibited Island, imagines it being a beachfront with restaurants and 20 villas powered by solar and wind.
Thermal airflows will completely rid the need for air conditioners in the restaurant’s, while food will come from an organic orchard on which vehicles will run on biofuel.
The response from the government has been enormously positive to become the most environmentally friendly island.
Branson also says he is creating an eco consulting group called Virgin Green Owls. Which will advise governments and corporations in carbon neutral projects beginning in August.
Following the British government’s criticism of British Airways last year.
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Housing and Economic Recovery Act 2008
August 31st, 2008 categories: Buyer's Advice, Real Estate New, Seller's Advice
Federal Tax Credit and what it means?
The amount is 10% of the purchase price of the home up to a maximum of $7500. It will be a credit on your personal income tax return in a calendar year following the year of closing on your property. The year after that you will be required to pay it back in equal installments over the next 15 years. Also, if you sell your home during 15 year payback period it will be recaptured when it is sold. If the home is sold at a loss the debt is completely forgiven.
So, if a home costs $67,000 the credit to you will be $6700.
If the home costs $125,000 the credit to you will be $7500.
Who is eligible?
The tax credit is for First Time Home Buyers only. But, the interesting thing is that you cannot have owned a home in the last three years but who may have done so previously.
- If your 1040 filing status is single or head of the household you are eligible for the Tax benefits if your income is no more than $75,000. First
time home buyers who file a joint return cannot have more than $150,000 in income. - Incomes between $75,001 – $94,999 (single) or $150,001 – $169,999 joint returns are eligible for only partial Tax Credit. (Which is so much better than nothing)?
- Incomes that are greater than $95,000 (single) or $170,000 (joint return) are not eligible.
- To claim the Federal Tax Credit on your single or joint tax Returns for the purchase of a Single Family Home – between April 9th, 2008 through July 1, 2009. You should also contact your Tax Advisor.
- You are required to pay back the Tax Credit without any interest in equal installments of 6.67% of the total credit each year for the 15yrs beginning the year after the Tax Credit has been claimed.
Examples:
If your Tax Liability was $5000 after The Tax Credit was added you would receive a total of $2500. The refund amount is the $7500 – $5000.
If your Tax refund was $2000 after The Tax Credit was added you would receive a total of $9500.
If you claim your Tax credit of $7500 in 2009 on your Federal Income Tax Return for a closing that occurred in 2008, obviously the Credit will be received in 2009 so repayments will begin in 2010 with a payment amount of approx $500 a year.
Information reliable but not guaranteed
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Lenders Responding to Short-Sales
June 22nd, 2008 categories: Real Estate New
Why do Banks say they want to help troubled homeowners? but they delay the buyer that could save the Seller and the Lender themselves.
Lenders are taking much longer to react, respond - anything, Give us a “Yes” or a “No’. I have offers in on properties and still I am waiting for responses. I had a response on a property we had an offer on three months ago and the response was Yes. Guess what? My client had already moved into a new home.
What is a short sale? Basically - homeowner who cannot keep up with their loan asks the lender can they sell their home for less than what is owed on the home’s mortgage, and forgive the balance of the unpaid debt.
So if a borrower has a mortgage balance of $450,000 and finds a buyer who will pay $400,000 , the lender then agrees on $400,000 and guess what? Happy Seller, Happy Buyer and Happy Lender.
In a Short-Sale, everyone wins. Sellers avoid foreclosure which destroys their credit, and lenders recoup more of their costs instead of trying to evict an owner and then sell the property.
Do we not have a fiduciary responsibility to our buyer clients, who come to us wanting a better property in a buyers market for a killer price, and less hassle. Are short sales working against getting a bargain… ??? Are lenders in denial … ???
What concerns me more is do Agents really know what they are doing in a short sale..??? Over half tell me that sending in the HARDSHIP PACKAGE IS NOT DONE UNTIL THEY GET AN OFFER. Are you kidding me.
Make sure when your clients do make an offer on a Short Sale that you still preview other homes out there. DO NOT WAIT.
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