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Daily Real Estate News | April 6, 2009 |  Share Finding the Best Mortgage Deal Takes Work
Home buyers who investigate mortgage options themselves as opposed to using a broker are likelier to get a better deal, according to a study for the Department of Housing and Urban Development published last year.
The study found that borrowers paid about $300 to $425 more in fees when they worked with a broker as opposed to working directly with a lender.
But comparison shopping can be tricky. Home buyers should try to devote a whole day to comparison shopping and include at least one credit union, a community bank, multiple national banks and an investment firms.
They should compare one type of loan at a time--for instance, a 30-year, fixed rate with no points. Their research should include a request for a guarantee that both the rate and the good-faith estimate will be exactly as initially presented. This standard could be difficult for a buyer to find, but it’s worth trying to find it, experts say.
Source: The New York Times, Ron Lieber (04/04/2009)
Daily Real Estate News | April 6, 2009 | Share 8 Ways to Spruce Up Your Listing's Curb Appeal
Staging a yard can give a home the all-important, buyer-pleasing curb appeal. Here are some suggestions that are both inexpensive and easy.
- Make it green. Balancing the pH level and feeding the lawn lots of nutrients will give it a lush and healthy look.
- Trim trees and shrubbery. Overgrown branches hide a home’s good looks.
- Mulch everything. Mulch gives flowerbeds visual appeal.
- Edge the beds. Edging makes everything look neat.
- Powerwash the siding, sidewalks and patios. Power washing gets rid of all the winter grunge.
- Plant annuals. Lots of geraniums, impatiens and petunias brighten up the look.
- Plant a garden. If the Obama's can do it, so can everyone else.
- Hang a hammock. It suggests life is easy.
Source: The Wall Street Journal, June Fletcher (04/03/2009)
Daily Real Estate News | April 6, 2009 | Share
FHA Uses Special Teams to Check on Lenders
The FHA's Special Work Assessment Teams have been reactivated to conduct unannounced, onsite reviews of problem lenders, according to HUD Secretary Shaun Donovan and Federal Housing Commissioner Brian Montgomery.
There currently are 36,000 FHA-approved brokers, up from 16,000 in mid-2007, and 3,300 FHA-approved lenders, up 525 percent over the last three years.
In response to rising FHA delinquency rates, HUD's proposed 2010 budget includes funds to hire more staff to handle lender approvals and monitoring.
Source: American Banker, Paul Muolo and Brian Collins (04/06/09)
Daily Real Estate News | March 20, 2009 | Share Mortgage Rates Drop Below 5%
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.98 percent during the week ended March 19 from 5.03 percent the prior year, marking the lowest rate since 4.96 percent in mid-January.
Experts say rates could fall further in response to the Federal Reserve's announcement that it will add $1.2 trillion to the economy to alleviate the credit crisis.
Source: Tulsa World (Okla.) (03/20/09)
Daily Real Estate News | March 16, 2009 | Share FHA Loans Become Popular Choice
Newly discovered FHA loans, which require low down payments but charge higher interest to borrowers with lower credit ratings, have quickly become a wildly popular choice for home buyers.
The loans require a down payment of only 3.5 percent, while conventional loans require down payments of 10 percent or higher.
However, the products also are drawing some unfavorable comparisons to now-abolished subprime loans.
Finance professionals, however, stress that unlike the infamous subprime mortgages of years past, FHA lenders go out of their way to verify income and ensure that they are not approving "liar loans."
Source: Palm Beach Post (Fla.), Jeff Ostrowski (03/16/09)
Daily Real Estate News | March 11, 2009 | Share ZIP Codes Where Housing Sales Are Increasing
Housing sales are improving significantly in key ZIP codes around the country where prices have moderated, according to information compiled for BusinessWeek.com by First American CoreLogic.
ZIP codes in California, Florida, Arizona and Nevada dominated the list, but there were also ZIP codes on the top 25 most-improved sales list from the suburbs around Detroit and Minneapolis and in the metro areas of Atlanta and Chicago.
Inventories are shrinking and prices are stabilizing in several markets, according to the survey. Here are the top 10 ZIP codes with improved home sales:
- 94533, Fairfield, Calif. (Fresno)
- 92376, Rialto, Calif. (Riverside-San Bernardino-Ontario)
- 91342, Slymar, Calif. (Los Angeles-Long Beach-Santa Ana)
- 92126, San Diego, Calif.
- 33914, Cape Coral, Fla. (Fort Meyers)
- 93065, Simi Valley, Calif. (Oxnard-Thousand Oaks-Ventura)
- 95123, San Jose, Calif.
- 85379, Surprise, Ariz. (Phoenix-Mesa-Scottsdale)
- 93722, Fresno, Calif. (Madera)
- 95624, Elks Grove, Calif. (Sacramento-Arden-Arcade-Roseville)
Source: BusinessWeek.com, Prashant Gopal (03/05/2009)
Daily Real Estate News | March 11, 2009 | Share Pricing Disagreement: What Is a Home Worth?
Homebuyers and the real estate professionals they choose to sell their homes don't always agree over what the property is worth, and many buyers think both of them are setting prices too high, according to a survey by HomeGain.com Inc.
The survey found that 63 percent of home owners believe the price their practitioner recommended is too low. About 45 percent of sellers think prices should be 20 percent to 30 percent higher, while 14 percent believe their home should be priced a whopping 30 percent higher.
Meanwhile, 21 percent of home buyers say the homes they are considering are overpriced by up to 10 percent; 32 percent say prices are 10 percent to 20 percent too high; and 6 percent say homes are more than 21 percent over priced. Only 18 percent believe homes are priced fairly.
“Home owners know that prices have fallen, but that somehow doesn’t apply to them because they have ‘upgraded vinyl’” or something, Pamela Frey-Primiani of Keller Williams Realty in Sicklerville, N.J., says. “Sellers have got to be realistic in their expectations. An overpriced home in these times does nothing — no showings, no offers, just whining from sellers that it’s all someone else’s fault that the home hasn’t sold.”
Source: HomeGain.com Inc. (03/05/2009)
Daily Real Estate News | March 11, 2009 | Share
Loan Apps Rise as Rates Dip Below 5 Percent
Average mortgage rates dipped below 5 percent last week, driving mortgage application volume up 11.3 percent to 723.4 from 649.7 the previous week on an adjusted basis, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the index increased 11.6 percent compared with the previous week and was up 5.7 percent compared with the same week a year ago.
The increase was reflected in the government purchase index (mostly FHA), which rose 10.4 percent. The overall purchase index was up 7.1 percent. The refinance share increased to 67.9 percent, up slightly from the previous week when it was at 66.9 percent.
Mortgage rates were down to the second-lowest rate in the history of the survey, with the record low being 4.89 percent for the week ending Jan. 9, 2009.
- 30-year fixed-rate mortgages decreased to 4.96 percent from 5.14 percent;
- 15-year fixed-rate mortgages decreased to 4.54 percent from 4.73 percent;
- 1-year ARMs increased to 6.21 percent
Source: Mortgage Bankers Association (03/11/2009)
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Guide to Avoiding Foreclosure
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There are now hundreds of thousands of families all across America facing foreclosure because they simply cannot afford their mortgage payments, or they owe far more than their house is currently worth. To make matters even worse, the Mortgage Bankers Association reports that approximately 50% of home owners who do lose their homes to foreclosure have never once contacted their lender. Here are direct links to two of the best resource sites available that you can use both to educate yourselves and to share with people in need of learning more about how they can help themselves avoid foreclosure.
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How to Avoid 'Foreclosure Rescue Scams'
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Scam artists are using the housing crisis to take advantage of already distressed property owners While the national housing crisis has put hundreds of thousands of Americans in danger of losing their homes, it has also created a fresh opportunity for scam artists. The so-called foreclosure rescue scams target homeowners facing the possibility of losing their property to foreclosure proceedings. And with foreclosures on the rise, such scams are becoming increasingly common, says Patrick McGilvray, president of TheHomeBuyingCenter.com, which links troubled homeowners with potential buyers. In a recent interview with U.S. News, McGilvray outlined how some of these scams work and explained what consumers can do to protect themselves from being victimized. Excerpts: What are some examples of 'foreclosure rescue scams'?In one scenario, distressed homeowners pay between $1,000 and $10,000 for a company to help them 'negotiate' with their lender to work out a payment, but then nothing happens. In some cases, the property will be signed over to the scammers through persuasion or confusion. A simple refinance or new mortgage application can in fact be documents that actually sign over your home and whatever equity you may have had in it. Why have foreclosure rescue scams become more common lately?
They have become more common lately because of the record numbers of foreclosures across the nation. How do victims first come in contact with these scammers?
Many of these people will seek out help from something they see on TV or on one of the ubiquitous plastic signs on a fence or telephone pole that say something like "Avoid Foreclosure," or "Stop Foreclosure," or even "We Buy Houses." All of these things can have legitimate businesses behind them, but the consumer has little way of checking them out in advance as they typically only have a phone number as a means of contact. Some of the services advertised pose as "credit counselors" or "mortgage consultants" or "real estate investors" or some other title. The key is that they say that they will help people avoid losing a home to foreclosure. What makes people vulnerable to falling victim to a foreclosure rescue scam?
Ignorance and credulity. Many times people are suckered into these scams by someone they know in a church or other social network where trust is established. Homeowners are often quite depressed and emotional when they are faced with the prospect of losing their homes to foreclosure because they believed that being a homeowner was one of the most important things they have ever done. This desire also to maintain a social facade of success and respectability—and people will do almost anything to protect their "identity"—can lead them to make foolish decisions that they might not otherwise make. What are some red flags that consumers should be on the lookout for?
First of all, scammers rely on ignorance and isolation of the victim. They want to keep the person from consulting with family members or trusted advisers like lawyers, accountants, and financial advisers. If someone urges a homeowner facing foreclosure to not talk to anybody else, this is a huge red flag. Second, anybody who asks for money upfront to help deal with the situation is probably up to no good. Third, anybody who asks you to sign documents without giving you ample opportunity to read them thoroughly or have them reviewed by a sophisticated adviser or friend should be viewed with extreme suspicion. If something "just has to be done immediately," it should be walked away from. Do you have any advice to help consumers avoid falling victim to such scams?
Keep your common sense hat on. If something sounds too good to be true, it probably is. P.T. Barnum said "There's a sucker born every minute," and that's very sad, but it also contains a grain of truth. They can also talk to family, friends, and trusted advisers if they're facing a problem. It's sad, but many people will prefer to tell a stranger about their most intimate problems that they would never share with somebody they know because of the shame that they may feel. Just like the first step in a 12-step program is admitting that there is a problem, people facing foreclosure should talk with their family and friends and let them know of the bad situation that they are in. This can stop the isolation that creates the depression that scammers feed on. How can a consumer ensure that a foreclosure rescue program is legitimate and not a scam?
Probably the best option is to check with a HUD counselor. Another might be to check with NeighborWorks America—a nonprofit organization that Congress created—and speak to one of their counselors. Both of these entities should be able to put a homeowner into contact with somebody who could render an opinion about a potential "foreclosure rescue." What should a consumer do once they realize they have been taken by such a scam?
That's tough. Many times a homeowner has already given over money or signed paperwork that they were fraudulently induced to sign. If money has changed hands, the chances of recovering it are slim. A complaint should be made with the local police department or at the local District Attorney's office. If somebody was induced to sign fraudulent loan transfer papers, they might consult someone at their local county recorder's office about possible remedies for them. But time can be of the essence as scammers will quickly try to resell a house that has been taken from a homeowner via fraudulent means. I think the recourse is pretty limited. Some criminals will get caught, prosecuted, and incarcerated, but many more will never get caught. |
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