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Academy Mortgage
840 E. McKellips Road #110
#100
Mesa, AZ 85203
Phone: (480)861-7841CELL
Fax: (480)237-5413
http://www.azlowestrate.com
For today's interesting article on Home sales.
Home sales up
By Jim Woodard
Existing-home sales increased 10 percent to a seasonally adjusted annual rate of 4.53 million in September from a downward revised 4.12 million in August, according to the National Association of Realtors. However, it remained 19.1 percent below the 5.60 million-unit pace in September of last year when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.
Home sales up Existing-home sales increased 10 percent to a seasonally adjusted annual rate of 4.53 million in September from a downward revised 4.12 million in August, according to the National Association of Realtors. However, it remained 19.1 percent below the 5.60 million-unit pace in September of last year when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.
The national median existing-home price for all housing types was $171,700 in September, which is 2.4 percent below a year ago. Distressed homes accounted for 35 percent of sales in September compared with 34 percent in August; they were 29 percent in September 2009. Housing affordability conditions today are 60 percentage points higher than during the housing boom, so it has become a very strong buyers' market, especially for families with long-term plans.
New home sales are also up. Sales of newly built, single-family homes rose 6.6 percent in September to a seasonally adjusted annual rate of 307,000 units, their best pace since June, according to data released by the U.S. Commerce Department.
"The fact that new-home sales are finally moving in the right direction - albeit slowly - is definitely good news following an exceptionally quiet summer at builders' sales offices and model homes," said Bob Jones, chairman of the National Association of Home Builders.
Impact from foreclosure freeze The recent freeze on home foreclosures by major banks and mortgage firms nationwide is having a mixed impact on home sales generally. It's deterring some prospective home buyers of foreclosed properties who are worried about legal problems related to the freeze, but will boost sales of low- and medium-priced homes, analysts say.
In the wake of the freeze, some buyers are indeed switching their focus from distressed properties to conventional higher priced homes. The overall result of the freeze remains to be seen. Congressional hearings on the subject are scheduled this month (November).
Background: Many mistakes in foreclosure proceedings are causing buyers to have misgivings about property titles and the right of home possession, said Richard DeKaser, chief economist at Woodley Park Research in Washington, as reported by the Bloomberg Professional. Confidence in the legality of repossessions will cut foreclosure sales more than a reduction of available properties because the market already is flooded with repossessed homes, he said.
Bank of America Corp., the largest U.S. lender, extended its freeze on foreclosures to all 50 states as concern spread among federal and state officials that homes are being seized based on faulty data. JPMorgan Chase & Co. and Ally Financial Inc.'s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false information to speed the process.
On October 18, Bank of America announced plans to resume seizing more than 100,000 homes in those 23 states. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed. At this writing, other major banks also announced plans to resume their foreclosure processing, possibly at their peril.
On October 27, Wells Fargo admitted mistakes were made in paperwork for thousands of their mortgages slated for foreclosure. Those mistakes will be corrected by mid-November, a spokesman said. In the meantime, the bank is continuing to process foreclosures.
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In the wake of the freeze, some buyers are indeed switching their focus from distressed properties to conventional higher priced homes. The overall result of the freeze remains to be seen. Congressional hearings on the subject are scheduled this month (November).
Background: Many mistakes in foreclosure proceedings are causing buyers to have misgivings about property titles and the right of home possession, said Richard DeKaser, chief economist at Woodley Park Research in Washington, as reported by the Bloomberg Professional. Confidence in the legality of repossessions will cut foreclosure sales more than a reduction of available properties because the market already is flooded with repossessed homes, he said.
Bank of America Corp., the largest U.S. lender, extended its freeze on foreclosures to all 50 states as concern spread among federal and state officials that homes are being seized based on faulty data. JPMorgan Chase & Co. and Ally Financial Inc.'s GMAC Mortgage unit stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false information to speed the process.
On October 18, Bank of America announced plans to resume seizing more than 100,000 homes in those 23 states. It said it has a legal right to foreclose despite accusations that documents used in the process were flawed. At this writing, other major banks also announced plans to resume their foreclosure processing, possibly at their peril.
On October 27, Wells Fargo admitted mistakes were made in paperwork for thousands of their mortgages slated for foreclosure. Those mistakes will be corrected by mid-November, a spokesman said. In the meantime, the bank is continuing to process foreclosures.
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New rules are finally in place for appraisers - at least for those appraising homes that will be financed by mortgages to be purchased by Fannie Mae and Freddie Mac. A replacement for the Home Valuation Code of Conduct for appraisers has been in the works for a long time. Recently, the new Home Valuation Code of Conduct was implemented.
The new rules, now effective, establish standards for solicitation, selection, compensation, and practitioner independence when it comes to home appraisals. The goal is to ensure appraisers' work is conducted autonomously, without pressure from lenders and real estate agents to manipulate property valuations. Appraisers must be licensed or certified by the state in which the property to be appraised is located.
A seller is not allowed to obtain or use a second appraisal in connection with a mortgage financing transaction unless there is reason to believe the original appraisal is "flawed or tainted." Sellers must provide the borrower with a copy of the appraisal report on the subject property at no additional cost and at least three days prior to the closing of the mortgage. However, the borrower can be required to reimburse the seller for the cost of the appraisal. The seller cannot accept any appraisal report completed by an appraiser selected, retained, or compensated by any other third party, including mortgage brokers and real estate agents.
There must be separation of a seller's sales/mortgage production functions and appraisal functions. In other words, an employee of the seller in sales or mortgage production shall have no involvement in the appraisal.
The new rules, now effective, establish standards for solicitation, selection, compensation, and practitioner independence when it comes to home appraisals. The goal is to ensure appraisers' work is conducted autonomously, without pressure from lenders and real estate agents to manipulate property valuations. Appraisers must be licensed or certified by the state in which the property to be appraised is located.
A seller is not allowed to obtain or use a second appraisal in connection with a mortgage financing transaction unless there is reason to believe the original appraisal is "flawed or tainted." Sellers must provide the borrower with a copy of the appraisal report on the subject property at no additional cost and at least three days prior to the closing of the mortgage. However, the borrower can be required to reimburse the seller for the cost of the appraisal. The seller cannot accept any appraisal report completed by an appraiser selected, retained, or compensated by any other third party, including mortgage brokers and real estate agents.
There must be separation of a seller's sales/mortgage production functions and appraisal functions. In other words, an employee of the seller in sales or mortgage production shall have no involvement in the appraisal.
Purchase mortgage originations to grow
The Mortgage Bankers Association projects an increase in purchase originations. It will be driven by modest increases in home sales and stabilizing home prices. In contrast, MBA refinance originations are expected to fall as mortgage rates gradually increase throughout 2011 and 2012.
"Economic growth in 2010 has been subdued and this trend will likely continue for most of 2011. Households remain cautious given the weak job market. On top of that, uncertainty regarding tax rates for next year, and the potential for tax withholding to increase at the beginning of the year, lead us to forecast that consumer spending will remain weak, particularly in the first half of 2011," said Jay Brinkmann, MBA's Chief Economist.
The Mortgage Bankers Association projects an increase in purchase originations. It will be driven by modest increases in home sales and stabilizing home prices. In contrast, MBA refinance originations are expected to fall as mortgage rates gradually increase throughout 2011 and 2012.
"Economic growth in 2010 has been subdued and this trend will likely continue for most of 2011. Households remain cautious given the weak job market. On top of that, uncertainty regarding tax rates for next year, and the potential for tax withholding to increase at the beginning of the year, lead us to forecast that consumer spending will remain weak, particularly in the first half of 2011," said Jay Brinkmann, MBA's Chief Economist.
Use of "Deed in lieu of Foreclosure" A Deed in lieu of Foreclosure is an action that is being used by increasing numbers of troubled homeowners. It's a way to immediately release most or all personal indebtedness associated with a defaulted mortgage loan, while avoiding the public notoriety of a foreclosure proceeding. Also, it has less negative impact on the homeowner's credit as compared with a foreclosure.
A Deed in lieu of Foreclosure is a deed instrument in which a mortgagor (borrower) conveys all interest in a real property to the mortgagee (lender) to satisfy a loan that is in default and avoid foreclosure proceedings. Advantages to a lender include a reduction in the time and cost of a repossession and lower risk of borrower revenge (theft and vandalism of the property before sheriff eviction), among other factors.
A Deed in lieu of Foreclosure is a deed instrument in which a mortgagor (borrower) conveys all interest in a real property to the mortgagee (lender) to satisfy a loan that is in default and avoid foreclosure proceedings. Advantages to a lender include a reduction in the time and cost of a repossession and lower risk of borrower revenge (theft and vandalism of the property before sheriff eviction), among other factors.
Commercial market improving Leasing market conditions improved in the third quarter at a pace ranging from barely detectable to brisk, according to a report from Grubb & Ellis Commercial Real Estate. The apartment market fit the latter description as the vacancy rate fell to 7.1 percent from 7.8 percent in the second quarter, one of the sharpest drops on record, according to data-provider Reis.
The office, industrial and retail markets all recorded a very modest drop of 10 basis points in their third-quarter vacancy rates. Asking rental rates typically lag vacancy, and at this early stage of the recovery cycle, landlords have little pricing power with the exception of some apartments and selected high-quality office and retail properties in primary markets.
The office, industrial and retail markets all recorded a very modest drop of 10 basis points in their third-quarter vacancy rates. Asking rental rates typically lag vacancy, and at this early stage of the recovery cycle, landlords have little pricing power with the exception of some apartments and selected high-quality office and retail properties in primary markets.
Private Transfer Fee update Transfer fees have long plagued the home-selling process in local markets. Legislators see these fees as a needed source of funds in their municipalities. Such fees can be structured in ways that are particularly harmful to home buyers and sellers.
For example, private transfer fees (PTFs) are considered a consumer rip-off technique by many consumer groups and state legislators. It has been barred in some states. These fees differ from other fees imposed by local government authorities to raise revenue for public services when properties change hands. In a private transfer fee arrangement, a developer or property owner records a long-term covenant requiring payments to trustees or other private parties every time a resale occurs.
Typically, a developer might impose a 1% fee that must be paid by the seller every time a home is resold during the next 99 years. The money flows from the closing to a trustee, who distributes shares of it to private investors and others, including the developer in some cases.
Recently, Congressman Phil Gingrey introduced The Homebuyer Enhanced Fee Disclosure Act of 2010 (HR 6332) -- a bill to facilitate and standardize disclosure of private transfer fees. This might minimize the frequency of abusive transfer fees.
The Mortgage Bankers Association recently issued the following statement regarding the transfer fee:
"MBA opposes the practice of private third parties imposing private transfer fee covenants on residential real estate for the purpose of extracting future income. We do, however, believe that distinctions among PTFs are necessary because of the unintended consequences of prohibiting all PTFs. Our members do not oppose private transfer fee covenants that are typical and customary, nominal in amount, limited in duration, and provide a direct or indirect benefit to the homeowner, such as fees to HOAs or fees to conserve open spaces or parks within the homeowner's development."
For example, private transfer fees (PTFs) are considered a consumer rip-off technique by many consumer groups and state legislators. It has been barred in some states. These fees differ from other fees imposed by local government authorities to raise revenue for public services when properties change hands. In a private transfer fee arrangement, a developer or property owner records a long-term covenant requiring payments to trustees or other private parties every time a resale occurs.
Typically, a developer might impose a 1% fee that must be paid by the seller every time a home is resold during the next 99 years. The money flows from the closing to a trustee, who distributes shares of it to private investors and others, including the developer in some cases.
Recently, Congressman Phil Gingrey introduced The Homebuyer Enhanced Fee Disclosure Act of 2010 (HR 6332) -- a bill to facilitate and standardize disclosure of private transfer fees. This might minimize the frequency of abusive transfer fees.
The Mortgage Bankers Association recently issued the following statement regarding the transfer fee:
"MBA opposes the practice of private third parties imposing private transfer fee covenants on residential real estate for the purpose of extracting future income. We do, however, believe that distinctions among PTFs are necessary because of the unintended consequences of prohibiting all PTFs. Our members do not oppose private transfer fee covenants that are typical and customary, nominal in amount, limited in duration, and provide a direct or indirect benefit to the homeowner, such as fees to HOAs or fees to conserve open spaces or parks within the homeowner's development."
Smaller homes a long-term trend A new look at housing starts based on data from the Census Bureau finds that single-family homes in the U.S. continued to get smaller last year, and the downward trend is likely to last significantly beyond the end of the recession. From a peak of 2,268 square feet in 2006, the median size of new single-family homes dropped consistently through last year, when the size was down to an even 2,100, according to a special study by economists at the National Association of Home Builders.
In the early 1980s, when mortgage interest rates climbed to astronomical heights, home sizes experienced a similar decline, but only temporarily. Today's downsizing trend is likely to last longer, the report says.
"A new housing market is emerging, and even with the recession in the rear view mirror we expect the popularity of smaller homes to persist," said Bob Jones, chairman of NAHB. "Builders are responding to a new mindset among home buyers that has been shaped not just by a weak economy, and it is transforming the product they deliver."
The current decline in home size can be attributed to factors such as the desire to keep energy costs down, the amount of equity in existing homes available to be rolled over into new ones, tighter credit standards, less interest in buying a home as an investment and a growing presence of first-time buyers.
In the early 1980s, when mortgage interest rates climbed to astronomical heights, home sizes experienced a similar decline, but only temporarily. Today's downsizing trend is likely to last longer, the report says.
"A new housing market is emerging, and even with the recession in the rear view mirror we expect the popularity of smaller homes to persist," said Bob Jones, chairman of NAHB. "Builders are responding to a new mindset among home buyers that has been shaped not just by a weak economy, and it is transforming the product they deliver."
The current decline in home size can be attributed to factors such as the desire to keep energy costs down, the amount of equity in existing homes available to be rolled over into new ones, tighter credit standards, less interest in buying a home as an investment and a growing presence of first-time buyers.
HART program helps home buyers HART -- the Housing Action Resource Trust -- program is a non-profit housing organization offering help to home buyers who qualify for FHA "first mortgage" loans. A first mortgage does not mean "first-time home buyers only," but rather those who are getting the initial mortgage and not applying for a second mortgage or home equity loan.
Home buyers who have pre-approval for an FHA loan or have an approved FHA loan qualify for HART. This program is designed for those who have the right credit and employment to qualify for an FHA loan but lack the money for a down payment and/or closing costs.
In an effort to comply with pending legislation affecting FHA backed loans, HART now requires the final FHA Underwriting Approval rules to apply to HART applications. For more information, contact an FHA-approved lender or mortgage broker.
Home buyers who have pre-approval for an FHA loan or have an approved FHA loan qualify for HART. This program is designed for those who have the right credit and employment to qualify for an FHA loan but lack the money for a down payment and/or closing costs.
In an effort to comply with pending legislation affecting FHA backed loans, HART now requires the final FHA Underwriting Approval rules to apply to HART applications. For more information, contact an FHA-approved lender or mortgage broker.
Homeownership still a primary goal for families A survey of U.S. adults in September found that many people continue to be very conservative about how they spend money. However, about 17 percent say they expect to have more money to move to a different home. That percentage is virtually unchanged since last year. Those who expect to buy a new house or condo are up from 7 percent in May to 10 percent in September. The survey was conducted by Harris Interactive.
Foreclosure of second homes Some owners of second (or vacation) homes are averting this potential problem by renting their property to vacationing families. The owners are finding that renting is a viable source of needed income to stave off the danger of foreclosure.
HomeAway.com, an online vacation rental site, found that one in five second home owners new to the vacation rental market cited economic conditions, including the need to generate additional income, a recent job loss, the inability to sell the home, or the risk of foreclosure, as the reason for renting their property. The average second home owner generates more than $35,000 in rental income annually, it was reported.
HomeAway.com, an online vacation rental site, found that one in five second home owners new to the vacation rental market cited economic conditions, including the need to generate additional income, a recent job loss, the inability to sell the home, or the risk of foreclosure, as the reason for renting their property. The average second home owner generates more than $35,000 in rental income annually, it was reported.
Government expanding program for renters Thousands of non-elderly Americans with disabilities will receive housing assistance to enable them to access affordable housing, according to the Department of Housing and Urban Development (HUD). Public housing authorities across the U.S. will distribute approximately 4,300 rental assistance vouchers to this population.
HUD is awarding nearly $33 million to fund these vouchers through its Rental Assistance for Non-Elderly Persons with Disabilities Program. The grants are part of the $40 million HUD made available last April to help public housing authorities across the country fund rental vouchers for non-elderly persons with disabilities.
HUD is awarding nearly $33 million to fund these vouchers through its Rental Assistance for Non-Elderly Persons with Disabilities Program. The grants are part of the $40 million HUD made available last April to help public housing authorities across the country fund rental vouchers for non-elderly persons with disabilities.
Acceptability of "walking away" from mortgage Most consumers say it's "unacceptable" for homeowners to stop making their mortgage payments and abandon their homes, according to a Pew Research Center survey. More than a third (36%) say the practice of walking away from a home mortgage is acceptable, at least under certain circumstances. Nearly six-in-ten (59%) believe it is wrong for homeowners to deliberately stop paying their mortgages and surrender their homes to the mortgage lender, according to the survey. But two-in-ten (19%) say it's acceptable and an additional 17% volunteer that it depends on the circumstances.
Mortgage interest tax deductions Consumers are adamantly against any effort to take away the tax deduction of interest payments from their home mortgage. Americans overwhelmingly oppose any such action by Congress, according to a new nationwide survey of likely voters commissioned by the National Association of Home Builders. Nearly 80 percent support retaining federal tax incentives to promote homeownership. These incentives have been in the tax code since the introduction of federal income taxes in 1913
Jim Woodard writes a nationally syndicated newspaper column on real estate news and trends, carried in about 240 U.S. newspapers - along with freelance features. Reproduction of this report, in part or entirety, is prohibited without the express permission of the author. E-mail: storyjim@aol.com. Web site: www.jimwoodard.net
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