Thursday, April 26, 2012
Tuesday, April 24, 2012
Friday, April 20, 2012
What Constitutes A Good Home Inspection?
No matter if you are buying a house or selling a house, they both have to be inspected. Mortgage Daily News has put together a great article highlighting the things an inspector will be checking for on a home inspection.
"According to the Society, a home inspection is a visual assessment of a home's structure and systems. In some cases, in practice at least, an inspection should extend beyond the visual to the operational, but an inspection should look at the following which is based in part on ASHI Standards of Practice and in part on experience with dozens of inspectors in several states." [Read more]
Source: Mortgage Daily News
Wednesday, April 18, 2012
Friday, April 13, 2012
Economy Sparks Remodeling: How To Ensure A Successful Project
"Springtime generates a lot of home improvement activity. Many buyers are out shopping for their new home. With the purchase of their home, the desire to remodel often comes next. For others, the drastically fluctuating housing prices are causing homeowners to stay put and that’s causing them to want to remodel their existing footprint.
Whether it’s a room addition or the renovation of a kitchen to upgrade amenities and make the space feel more comfortable to suit your needs, precautionary steps to get the most out of your remodeling project will create the best outcome.
Some of the most popular remodeling projects have to do with creating homes that are livable for all ages. The National Association of Home Builders says, in 2010, that 62 percent of surveyed builders were working on “aging in place” modifications.
That means granny flats or in-law apartments (extra rooms with kitchenettes) are becoming staples in homes. As baby boomers ease into their golden years this type of remodeling project will continue to grow. Entry-level bedrooms are also popular additions due to the ease of access for the elderly.
Some remodeling companies are now requiring their staff to become Certified Aging in Place specialists so they can offer expertise in designing and modifying buildings and homes for the elderly. Another hot trend is using outdoor living space to expand the home’s square footage. What’s hot in outside remodels? It may be expensive but natural stone is all the rage. Gourmet grilling kitchens, fireplaces, flat screen TVs with surround sound and big comfy couches turn the backyard into a cozy space to relax and entertain.
But regardless of which type of remodel you’re planning to do, finding the right contractor for the job is vital and that can be a difficult task.
The National Homebuilders Association offers some tips for homeowners to help them navigate the process. Here are some important precautionary measures to take before your hire a remodeler.
Check with NAHB.org to find a remodeler who is a member of the National Association of Homebuilders. You can also check with the Better Business Bureau at BBB.org to look up the company’s rating. Of course, family and friends can also offer referrals but checking with professional associations can help provide background information that a friend might not be able to.
Another great way to find a remodeler is to scope out the companies who are working in the neighborhood or an area that you like. Try to stop in and see if you’re able to tour the house and speak with the homeowners. Be sure to ask questions about how smoothly the overall project went and if the crew kept the area clean during the project." [Read more]
Whether it’s a room addition or the renovation of a kitchen to upgrade amenities and make the space feel more comfortable to suit your needs, precautionary steps to get the most out of your remodeling project will create the best outcome.
Some of the most popular remodeling projects have to do with creating homes that are livable for all ages. The National Association of Home Builders says, in 2010, that 62 percent of surveyed builders were working on “aging in place” modifications.
That means granny flats or in-law apartments (extra rooms with kitchenettes) are becoming staples in homes. As baby boomers ease into their golden years this type of remodeling project will continue to grow. Entry-level bedrooms are also popular additions due to the ease of access for the elderly.
Some remodeling companies are now requiring their staff to become Certified Aging in Place specialists so they can offer expertise in designing and modifying buildings and homes for the elderly. Another hot trend is using outdoor living space to expand the home’s square footage. What’s hot in outside remodels? It may be expensive but natural stone is all the rage. Gourmet grilling kitchens, fireplaces, flat screen TVs with surround sound and big comfy couches turn the backyard into a cozy space to relax and entertain.
But regardless of which type of remodel you’re planning to do, finding the right contractor for the job is vital and that can be a difficult task.
The National Homebuilders Association offers some tips for homeowners to help them navigate the process. Here are some important precautionary measures to take before your hire a remodeler.
Check with NAHB.org to find a remodeler who is a member of the National Association of Homebuilders. You can also check with the Better Business Bureau at BBB.org to look up the company’s rating. Of course, family and friends can also offer referrals but checking with professional associations can help provide background information that a friend might not be able to.
Another great way to find a remodeler is to scope out the companies who are working in the neighborhood or an area that you like. Try to stop in and see if you’re able to tour the house and speak with the homeowners. Be sure to ask questions about how smoothly the overall project went and if the crew kept the area clean during the project." [Read more]
Thursday, April 12, 2012
Mortgage Rates Fall to Record Lows
"Mortgage rates fell this week, with the 15-year fixed rate hitting yet another record low, amid news of weak job growth during the month of March.
Borrowers seeking 15-year mortgages, a popular choice for those looking to refinance, were rewarded with an average interest rate of just 3.11% this week, down from last week's 3.21% and more than one percentage point lower than a year earlier, according to Freddie Mac (FMCC, Fortune 500)'s weekly mortgage rate survey.
The rate on 30-year fixed mortgage also fell, to 3.88% from 3.98% the week before, just short of its own record low of 3.87%, set back in February.
The declines were a reversal from a few weeks ago when it appeared as if interest rates would start to creep up. Frank Nothaft, Freddie's chief economist, attributed the drop to concerns over the economy brought on by a weak jobs report for the month of March that was released last week." [Read more]
Borrowers seeking 15-year mortgages, a popular choice for those looking to refinance, were rewarded with an average interest rate of just 3.11% this week, down from last week's 3.21% and more than one percentage point lower than a year earlier, according to Freddie Mac (FMCC, Fortune 500)'s weekly mortgage rate survey.
The rate on 30-year fixed mortgage also fell, to 3.88% from 3.98% the week before, just short of its own record low of 3.87%, set back in February.
The declines were a reversal from a few weeks ago when it appeared as if interest rates would start to creep up. Frank Nothaft, Freddie's chief economist, attributed the drop to concerns over the economy brought on by a weak jobs report for the month of March that was released last week." [Read more]
Monday, April 9, 2012
Banks Upbeat About Mortgage Performance, Looser Credit Looms
"Mortgage lenders aren't rolling out the red carpet on home loans just yet, but with fewer delinquencies and defaults, there's optimism looser credit for home loans has become a topic of board room chatter.
FICO's first quarter survey of bank risk professionals found sentiments about loan repayment and credit availability more upbeat than in the last quarter.
The survey, conducted for FICO by the Professional Risk Managers' International Association (PRMIA), found fewer lenders expecting a rise in delinquencies on home loans, as well as car loans and small business loans, than at any time since FICO launched its survey in early 2010. The survey also examined sentiments on student loans and credit cards.
"As unemployment falls, even modestly, and four years of de-leveraging begin to pay dividends, bankers are allowing themselves to feel some optimism," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. FICO is a leader in credit scoring systems.
The survey found the number of respondents expecting mortgage delinquencies to rise during the next six months was 12 percentage points lower than last quarter – dropping from 47 to 35 percent. Similarly, only 33.1 percent expect increases in home equity line delinquencies, compared to 44.3 percent last quarter. The overall trend in both categories has been trending more optimistic for the past eight quarters, FICO reported. Viewed another way, the number of respondents who believe mortgage and home equity line delinquencies will decrease hit an all time high, 26 percent and 23.1 percent respectively." [Read more]
FICO's first quarter survey of bank risk professionals found sentiments about loan repayment and credit availability more upbeat than in the last quarter.
The survey, conducted for FICO by the Professional Risk Managers' International Association (PRMIA), found fewer lenders expecting a rise in delinquencies on home loans, as well as car loans and small business loans, than at any time since FICO launched its survey in early 2010. The survey also examined sentiments on student loans and credit cards.
"As unemployment falls, even modestly, and four years of de-leveraging begin to pay dividends, bankers are allowing themselves to feel some optimism," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. FICO is a leader in credit scoring systems.
The survey found the number of respondents expecting mortgage delinquencies to rise during the next six months was 12 percentage points lower than last quarter – dropping from 47 to 35 percent. Similarly, only 33.1 percent expect increases in home equity line delinquencies, compared to 44.3 percent last quarter. The overall trend in both categories has been trending more optimistic for the past eight quarters, FICO reported. Viewed another way, the number of respondents who believe mortgage and home equity line delinquencies will decrease hit an all time high, 26 percent and 23.1 percent respectively." [Read more]
Friday, April 6, 2012
The Housing Recovery
"Economists and real estate experts have discussed, debated, and driven home the important role a housing recovery has in helping the overall economy recovery.
In a recent speech during the 2012 National Association of Homebuilders International Builders' Show, Federal Reserve Chairman Ben Bernanke emphasized the need for just that, a housing recovery.
Despite the end of the recession in 2009, many American households continue to struggle. The unemployment rate remains elevated, hovering between 8 and 9 percent. Home prices are on the downturn, falling over 4 percent in the last year, and distressed properties still dominate many markets.
Additionally, potential would-be buyers have been sidelined by tightened credit standards, including the need for excellent credit and at least 20 percent down.
Bernanke commented on today's conditions, noting, "Though some progress has been made in reversing the losses in jobs and income sustained during the recession, the pace of expansion has been frustratingly slow and the unemployment rate remains very high by historical standards. The state of the housing sector has been a key impediment to a faster recovery."
Existing-home sales and new construction have seen minor rises in recent data studies, but the pace has not been enough to offset the large inventory glut of home.
In his speech Bernanke gave an overview of the state of housing. He showed how the past few years have seen a big disparity between supply of single-family homes and demand for these homes. Supply has far outweighed demand. This has left lots of unoccupied homes.
He said, "While this figure has declined slightly during the past few years, it is nonetheless up dramatically from the first half of the 2000s, when readings of about 1-1/4 million vacant homes were the norm."
Additionally, "In each of the past few years, roughly 2 million homes have entered the foreclosure process, and many of these homes have been put up for sale, crowding out much of the need for new building."
Declines is home prices have meant a reduction in homeowner equity by more than 50 percent from the peak of the boom. That translates to a loss of $7 trillion in household wealth. Even more troublesome is the group of 12 million homeowners who are now upside down in their mortgages." [Read more]
In a recent speech during the 2012 National Association of Homebuilders International Builders' Show, Federal Reserve Chairman Ben Bernanke emphasized the need for just that, a housing recovery.
Despite the end of the recession in 2009, many American households continue to struggle. The unemployment rate remains elevated, hovering between 8 and 9 percent. Home prices are on the downturn, falling over 4 percent in the last year, and distressed properties still dominate many markets.
Additionally, potential would-be buyers have been sidelined by tightened credit standards, including the need for excellent credit and at least 20 percent down.
Bernanke commented on today's conditions, noting, "Though some progress has been made in reversing the losses in jobs and income sustained during the recession, the pace of expansion has been frustratingly slow and the unemployment rate remains very high by historical standards. The state of the housing sector has been a key impediment to a faster recovery."
Existing-home sales and new construction have seen minor rises in recent data studies, but the pace has not been enough to offset the large inventory glut of home.
In his speech Bernanke gave an overview of the state of housing. He showed how the past few years have seen a big disparity between supply of single-family homes and demand for these homes. Supply has far outweighed demand. This has left lots of unoccupied homes.
He said, "While this figure has declined slightly during the past few years, it is nonetheless up dramatically from the first half of the 2000s, when readings of about 1-1/4 million vacant homes were the norm."
Additionally, "In each of the past few years, roughly 2 million homes have entered the foreclosure process, and many of these homes have been put up for sale, crowding out much of the need for new building."
Declines is home prices have meant a reduction in homeowner equity by more than 50 percent from the peak of the boom. That translates to a loss of $7 trillion in household wealth. Even more troublesome is the group of 12 million homeowners who are now upside down in their mortgages." [Read more]
Thursday, April 5, 2012
April Showers: FHA Bans Borrowers With Credit Disputes, Raises Insurance Premiums
"The joke was on you April 1, if you applied for a Federal Housing Administration (FHA) home loan and had an outstanding credit dispute of $1,000 or more pop up.
Beginning April 1, the FHA began tossing home loan purchase applications in the circular file if the applicant had an ongoing credit dispute or collections action of $1,000 or more on his or her credit report.
To pass muster you must either pay off the outstanding balance of the disputed account or document a payment arrangement the lender must submit to the FHA before you close the deal.
You can't pay down a disputed amount to an amount below $1,000 to skirt the new rule.
The payments arranged for the accounts will be included in the calculations of your debt-to-income ratios.
You are exempt from the rule if the disputed amounts are less than $1,000 or more than two years old. Also exempt for the rule are disputes arising from identity theft, credit card theft or unauthorized use, provided you can produce proof you filed an identity theft or police report to dispute the fraudulent charges.
A similar existing rule applies to court-ordered judgments for debts you owe. You must pay them off or document a payment plan before closing.
Entry-level home builders told John Burns Real Estate Consulting the new rule would have disqualified 60 to 84 percent of buyers who were luckily already under contract at some new home communities.
Higher FHA loan costs
The rule comes prior to the FHA's hike in mortgage insurance premiums, due April 9.
Then, the FHA will increase its annual mortgage insurance premium by 0.10 percent. If the loan-to-value is 95 percent or less the rate will rise from 1.10 percent to 1.20 percent. If the loan-to-value is greater than 95 percent, the premium will rise from 1.15 percent to 1.25 percent. Upfront premiums will also increase by 0.75 percent from 1 percent to 1.75 percent.
The FHA has been hiking insurance premiums over the past 18 months, increasing a typical borrower's mortgage payment by $95 a month.
The new rules don't apply to certain special streamline refinance loans or reverse mortgages.
Last month, President Obama announced a lower-cost FHA streamlined refinancing program for certain homeowners with existing Federal Housing Administration (FHA) loans. Fees for the new FHA loan have been substantially reduced.
Effective June 11, 2012, for qualifying borrowers, the cost for the upfront mortgage insurance on FHA loans will be reduced to 0.01 percent of the loan amount, down from 1 percent, according to a White House fact sheet.
The annual mortgage insurance amount will be reduced from 1.15 percent to only 0.55 percent per year. Qualifying borrowers must be current on an existing FHA-insured mortgage signed on or before May 31, 2009.
FHA troubles
The FHA is making purchase mortgages more costly and tougher to get to raise $1 billion to help offset losses to its insurance fund. Congress mandated that the fund keep 2 percent of its portfolio in reserve. Last year, the level slipped to only a little more than 0.2 percent.
The fund is available on top of $29 billion the agency holds to pay expected claims. The FHA is also due another $1 billion from the National Mortgage Settlement.
FHA backs mortgages that cover as much as 96.5 percent of a home's value. The loans virtually replaced toxic subprime loans which were popular during boom times." [Read more]
Beginning April 1, the FHA began tossing home loan purchase applications in the circular file if the applicant had an ongoing credit dispute or collections action of $1,000 or more on his or her credit report.
To pass muster you must either pay off the outstanding balance of the disputed account or document a payment arrangement the lender must submit to the FHA before you close the deal.
You can't pay down a disputed amount to an amount below $1,000 to skirt the new rule.
The payments arranged for the accounts will be included in the calculations of your debt-to-income ratios.
You are exempt from the rule if the disputed amounts are less than $1,000 or more than two years old. Also exempt for the rule are disputes arising from identity theft, credit card theft or unauthorized use, provided you can produce proof you filed an identity theft or police report to dispute the fraudulent charges.
A similar existing rule applies to court-ordered judgments for debts you owe. You must pay them off or document a payment plan before closing.
Entry-level home builders told John Burns Real Estate Consulting the new rule would have disqualified 60 to 84 percent of buyers who were luckily already under contract at some new home communities.
Higher FHA loan costs
The rule comes prior to the FHA's hike in mortgage insurance premiums, due April 9.
Then, the FHA will increase its annual mortgage insurance premium by 0.10 percent. If the loan-to-value is 95 percent or less the rate will rise from 1.10 percent to 1.20 percent. If the loan-to-value is greater than 95 percent, the premium will rise from 1.15 percent to 1.25 percent. Upfront premiums will also increase by 0.75 percent from 1 percent to 1.75 percent.
The FHA has been hiking insurance premiums over the past 18 months, increasing a typical borrower's mortgage payment by $95 a month.
The new rules don't apply to certain special streamline refinance loans or reverse mortgages.
Last month, President Obama announced a lower-cost FHA streamlined refinancing program for certain homeowners with existing Federal Housing Administration (FHA) loans. Fees for the new FHA loan have been substantially reduced.
Effective June 11, 2012, for qualifying borrowers, the cost for the upfront mortgage insurance on FHA loans will be reduced to 0.01 percent of the loan amount, down from 1 percent, according to a White House fact sheet.
The annual mortgage insurance amount will be reduced from 1.15 percent to only 0.55 percent per year. Qualifying borrowers must be current on an existing FHA-insured mortgage signed on or before May 31, 2009.
FHA troubles
The FHA is making purchase mortgages more costly and tougher to get to raise $1 billion to help offset losses to its insurance fund. Congress mandated that the fund keep 2 percent of its portfolio in reserve. Last year, the level slipped to only a little more than 0.2 percent.
The fund is available on top of $29 billion the agency holds to pay expected claims. The FHA is also due another $1 billion from the National Mortgage Settlement.
FHA backs mortgages that cover as much as 96.5 percent of a home's value. The loans virtually replaced toxic subprime loans which were popular during boom times." [Read more]
Wednesday, April 4, 2012
Real Estate Outlook: Labor Market Improvements
"The health and recovery of the real estate market is closely related to the health of the labor market. This much has been seen since the beginning of the recession and continues today.
Will the labor market continue to improve or are the recent declines in the unemployment rate simply a temporary respite from an otherwise struggling jobs market?
Federal Reserve Chairman Ben Bernanke spoke last week on this subject at the National Association for Business Economics Annual Conference in Washington, D.C.
He noted that job creation has seen an uptick recently and layoffs in the public sector are moderating. He also made clear that today's job market may have seen improvements, but it is weak in relation to historical normal.
"The positive signs from the labor market have shown through to measures of labor utilization," he said. "After hovering around 9 percent for much of last year, the unemployment rate has moved down since September to 8.3 percent in February, and the share of employment represented by people working part time for economic reasons, an indicator of underutilization, has declined modestly."
The real question on most homeowners minds, however, is whether or not the recent improvements will lead to further declines in unemployment. The answer to continued labor market rises: more-rapid economic growth.
"A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed. Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force," he said. "Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained." This means keep tuned, the market could have a few surprises left up its sleeve.
Pending homes sales continued to struggle as well, falling by 0.5 percent for the month of February. This rate is above February 2011 by a healthy 9.2 percent and leads us into a more hopeful Spring season.
Lawrence Yun, NAR chief economist, said we're seeing the continuation of an uneven but higher sales pattern. "The spring home buying season looks bright because of an elevated level of contract offers so far this year," he said. "If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that's what we're expecting with sales rising 7 to 10 percent in 2012."
Regional activity was mixed. The Northeast fell 0.6 percent, but is a whopping 18.4 percent above year ago levels. The South fell 3.0 percent and the West decline 2.6 percent. The Midwest, however, saw a large 6.5 percent jump in pending home sales and is now 19.0 percent above February 2011." [Read more]
Will the labor market continue to improve or are the recent declines in the unemployment rate simply a temporary respite from an otherwise struggling jobs market?
Federal Reserve Chairman Ben Bernanke spoke last week on this subject at the National Association for Business Economics Annual Conference in Washington, D.C.
He noted that job creation has seen an uptick recently and layoffs in the public sector are moderating. He also made clear that today's job market may have seen improvements, but it is weak in relation to historical normal.
"The positive signs from the labor market have shown through to measures of labor utilization," he said. "After hovering around 9 percent for much of last year, the unemployment rate has moved down since September to 8.3 percent in February, and the share of employment represented by people working part time for economic reasons, an indicator of underutilization, has declined modestly."
The real question on most homeowners minds, however, is whether or not the recent improvements will lead to further declines in unemployment. The answer to continued labor market rises: more-rapid economic growth.
"A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed. Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force," he said. "Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained." This means keep tuned, the market could have a few surprises left up its sleeve.
Pending homes sales continued to struggle as well, falling by 0.5 percent for the month of February. This rate is above February 2011 by a healthy 9.2 percent and leads us into a more hopeful Spring season.
Lawrence Yun, NAR chief economist, said we're seeing the continuation of an uneven but higher sales pattern. "The spring home buying season looks bright because of an elevated level of contract offers so far this year," he said. "If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that's what we're expecting with sales rising 7 to 10 percent in 2012."
Regional activity was mixed. The Northeast fell 0.6 percent, but is a whopping 18.4 percent above year ago levels. The South fell 3.0 percent and the West decline 2.6 percent. The Midwest, however, saw a large 6.5 percent jump in pending home sales and is now 19.0 percent above February 2011." [Read more]
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