Posts Tagged with "mortgage"
90 Day FHA Rule is Waived
Wednesday, January 20, 2010 - By Gate Arty
HUD has taken a major step to stabilize the real estate market by waiving the “90 day flip rule” effective February 1st, 2010. Currently, FHA prohibits insuring a mortgage on a home owned by the seller for less than 90 days. Originally the 90 day rule was put in place to protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at INFLATED prices to unsuspecting borrowers. This act will give FHA borrowers access to a broader array of recently foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities. To qualify these conditions must be met:
• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
This waiver will be a major coup for real estate investors because the pool of available buyers is substantially increased. Before, investors had to wait 90 days before listing a property in MLS or hold a property for 90 days before selling to a FHA buyer – something most are unwilling to do because of holding costs & risks associated with delayed closings. This should be a major shot in the arm & should drastically reduce the “days on market” for home inventory.
Tags: buying, fha, home value, HUD, mls, mortgage, real estate. real estate investor, selling
del.icio.us
Reddit
FacebookGrowing Number of Foreclosures
Tuesday, January 12, 2010 - By Gate Arty
Statistics from Lender Processing Services indicate that as of November 30th 2009, one in every 7.5 homeowners either fell into delinquency or foreclosure. The total number of delinquencies reached a record high of 9.97%, a 5.46% increase from the previous month and a 21.29% increase from November 2008. Loans falling into more severe delinquent categories reached 5.01% through November, compared to 1.52% of loans improved toward a current status. That's compared to November’s mortgage monitor report, when 4.02% of current mortgages through December 2008 fell into delinquency by October 2009. The states with the most non-current loans were Florida, Nevada and Mississippi. Those with the fewest were North Dakota, South Dakota and Alaska.
High-Water Mark for Foreclosures
Friday, October 16, 2009 - By Gate Arty
Foreclosures are at an ALL-TIME HIGH. In the 3rd quarter of this year 937,84 homes received a foreclosure letter. How do you put this in perspective? Well, that means that 1 in every 136 homes were in foreclosure. That’s a 5% increase from the 2nd quarter. It’s also a whopping 24% leap from this point in 2008! These numbers represent the worst 3 month stretch in terms of foreclosures ever. The foreclosure toll this year is reported to be 623,852 & climbing. Perhaps with these numbers on the rise, banks will begin being more cooperative with short-sales? Wouldn't that be rational? Either way, the real estate investors will be back in full-force to pick up REO properties & pre-foreclosures that are indeed priced to sell. Check out investing opportunities at MidFloridaREO.com.
High-End Mortgage Foreclosures
Tuesday, October 13, 2009 - By Gate Arty
Recent statistics have shown that the trend of foreclosures is now hitting the top-tier of mortgages. In June 30% of foreclosures involved homes that were in the top 1/3 of local residential values. When the foreclosure crisis began 3 years ago, this figure was around 16%. On the opposite end of the spectrum, the bottom 1/3 of the residential market only accounts for 35% of foreclosures now. This figure is way down from 55% in 2006.
Tags: finance, foreclosures, home values, mortgage, statistics
Homes Sales Increase Again
Thursday, August 13, 2009 - By Gate Arty
Homes sales increased 3.8% in the 2nd quarter of 2009 from the 1st quarter. The annual adjusted rate was 4.76 million in the 2nd quarter & 4.58 million in the first quarter. What is accounting for this rise in activity? No doubt, the great values in the housing market are beginning to capture the attention of prospective home buyers. The $8000 tax credit that will expire on November 30th is also a major motivation. The median sales price in the first quarter was $174,100, which represents a decrease of 16% below this time one year ago. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” said Lawrence Yun, NAR’s chief economist.
Foreclosure News - 2nd Quarter 2009
Thursday, August 13, 2009 - By Gate Arty
Foreclosures continue to be the driving force in today’s real estate market. In the 2nd quarter, foreclosures & distressed sales accounted for over a third of all sales! According to recent statistics, the rate of foreclosures jumped another 7% in July from June. This also represents a 32% increase from the same time period last year. More than 360,000 homes with mortgages received foreclosure filings in July. This was the highest point since January 2005. California, Florida, Arizona, & Nevada accounted for an astounding 57% of July foreclosures nationwide! Many factors contribute to the tidal wave of foreclosures like: tighter lending guidelines & unemployment, but chiefly responsible is the negative home equity that many homeowners now have. Many homeowners are finding it “easier” to go into foreclosure than ride out the market waiting for values to rebound or restructure the loan.
Home Sales Rise in May 2009
Tuesday, June 23, 2009 - By Gate Arty
The National Association of Realtors announced that existing home sales rose to 4.77 million units in May 2009. This represents a rise of 2.4% over from April. This is promising because it’s the second straight month that sales have risen, undoubtedly spurred by attractive mortgage interest rates. The NAR announced that this is the first month-on-month increase since August/September 2005. The total hosing inventory stood at 3.80 million units, which represents nearly a 9.6 month supply, down from 10.1 in April.
Market Activity Affected by Economy
Wednesday, May 27, 2009 - By Gate Arty
As the unemployment rate hovers around 9%, most economists expect that the rate of foreclosures will account for approximately 60% of mortgage defaults this year alone. The next wave of foreclosures is expected to include not only the “sub-prime” mortgages, but also those who have been traditionally financially healthy, but have been affected by job-loss. As a result of these foreclosures, housing prices are expected to decline overall. Do not expect to see price declines at ALL price points however. Many realtors have expressed that in some of the moderate price ranges, prices have become so attractive that buyers are jumping back into the fray in waves. In many instances buyers & sellers are once again involved in “multiple offer negotiations.” This has been scarce since the real estate boom of 2006. The home price decline that has resulted from the increasing number of foreclosures, tighter lending standards, & large supply of unsold inventory will eventually spur activity. With mortgage interest rates still at all-time lows, many buyers are viewing NOW as the time to act upon golden buying opportunities. According to Standard & Poor's/Case-Shiller Home Price Indices, home prices in the U.S. fell by 18.7% in March from a year earlier.
Tags: buying a home, economy, finance, home prices, mortgage, real estate, realtors, selling a home
Commercial Mortgages Down
Thursday, May 14, 2009 - By Gate Arty
The Mortgage Bankers Association’s (MBA) Quarterly Survey reports that commercial mortgage loan originations continued to drop in the first quarter of 2009. At this point, they are an astounding 70% lower than during the same period in 2008, and down 26% from the fourth quarter of 2008. The 70% overall decrease in commercial lending activity during the first quarter was driven by decreases in originations for all property types. When compared to the first quarter of 2008, the decrease included:
• 88% decrease in loans for hotel properties
• 80% decrease in loans for health care properties
• 76% decrease in loans for retail properties
• 66% decrease in loans for office properties
• 61% decrease in multifamily property loans
• 50% decrease in industrial property loans
Tags: commercial real estate, finance, mortgage
Fannie Mae Loosens Up
Tuesday, March 10, 2009 - By Gate Arty
Effective March 1st, Fannie Mae (which guarantees approximately half of the $12 TRILLION of the United State’s mortgage market) loosened loan restrictions on real estate investors & secondary home buyers. This move is seen as a major coup for real estate investors that wanted back IN the real estate market, but were essentially locked out. The new guidelines allow these borrowers to obtain Fannie Mae-secured financing for up to 10 properties. Most recently the amended limit was only 4 properties. Meaning, if you had already four mortgages, you could not buy another property with Fannie-backed financing. In essence, making it nearly impossible to buy & borrow. There are, of course, stricter financial underwriting guidelines. Some things to expect are:
• No foreclosures or bankruptcies in the last 7 years.
• A minimum credit score of 720 when the four property threshold is exceeded.
• Heightened reserve requirements that are tied to the type of property being purchased. For example, a multi-family dwelling (duplex, triplex, etc.) would have stricter reserve requirements than a single-family home.
• A borrower MUST have at least 25% down on a second home & at least 30% down on an investment property.
In spite of these stricter guidelines, this is great news for professional real estate investors, and is a major step toward loosening the credit flow stranglehold on the housing market. Now Freddie Mac, the other major player & insurer of mortgages, needs to follow suit.
Houses More Affordable Than Ever
Wednesday, March 04, 2009 - By Gate Arty
The National Association of Realtors has reported that the Housing Affordability Index jumped 13.6% in January to a record high of 166.8. Another sign that buyers bold enough to jump into the market will be rewarded. Not to mention the tax benefit they will receive for doing so prior to the end of the year! The aforementioned index measures the relationship between home prices, income, & mortgage interest rates. The index is the best it has ever been since monitoring of this relationship began back in 1970.
The "NEW" housing tax CREDIT
Tuesday, February 17, 2009 - By Gate Arty
The American Recovery and Reinvestment Act of 2009 is now in effect. A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, that offered a $7500 deduction that had to be repaid, the new $8000 figure credit does NOT have to be repaid. The high points of the tax credit are as follows:
- It is for first-time home buyers only. A first-time home buyer is defined as as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
- This is a tax credit & does not have to be repaid. For example, If you owe $5,000 in taxes & qualify for the $8,000 credit, then you would get a REFUND of $3,000! A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. Windfall!
- The duration of this program is only for homes purchased between January 1st, 2009 to December 1st, 2009. Act NOW!
- There is an income imit. It is $75,000 for singles & $150,000 for married couple's combined incomes.
When Will Real Estate Values Rise?
Wednesday, October 08, 2008 - By Gate Arty
Historically-speaking, home values have ultimately risen after dramatic declines. No kidding, right? Although there isn't any widely known or accepted scientific methodology to pinpoint the top or bottom of any market, experts tend to agree that the following signs indicate an upswing:
1. Real estate values stop declining and begin holding steady or selling side-ways. Although it may seem like commonsense, determining the sales price of a home isn't as easy as it may initially appear. It is important to evaluate sale prices across different segments of the market. For example, luxury homes continue to fall (and thereby lower the mean selling price of all homes in the area) while affordable homes have already showed signs of holding steady.
2. Inflation. While inflation tends to hurt those on fixed incomes, or those who put money into savings accounts, it tends to help those who own commodities and hard assets like real estate, since the price of goods and services tend to rise in relation to inflation.
3. Lack of alternative investments. One of the reasons real estate gained such a great deal of appeal in recent years was a lack of viable alternative investments. Following the burst of the "dot-com" bubble, investors were seeking new ways to obtain greater returns on their money. Savvy investors always gravitate toward the segment which provides the best return on investment. Real estate has experienced a major decline, but so has each and every other form of investment, right?
4. Eased lending standards. The availability of credit and affordable low-interest rates is yet another major impetus toward creating rising real estate values. Credit-availability allows potential home buyers to obtain mortgages. Increased mortgage output in the lending industry, leads to more sales in the real estate sector, creating more demand for housing, thus eventually increasing property values.
The Housing and Economic Recovery Act of 2008 & FHA
Wednesday, September 17, 2008 - By Gate Arty
The Housing and Economic Recovery Act of 2008 (HERA) is beginning to be implemented by FHA. As of October 1, 2008 HERA will mandate FHA to require a minimum of 3.5% in down payment, up from the current 2.25% down payment. Accordingly, mortgages with new FHA case numbers assigned on or after January 1, 2009, will require a down payment of 3.5% of the lesser of the appraised value or purchase price, PLUS ANY CLOSING COSTS TO BE PAID BY THE BORROWER. The seller will still be able to pay up to 6% of the sale price towards the borrowers closing costs and prepaids. FHA does allow gifts from relatives and government down payment and/or closing cost assistance (Keystone/SHIP), but no longer allows seller-funded down payment assistance (Nehemiah and Ameridream) as of October 1, 2008.
Asset Protection & the FDIC
Wednesday, September 10, 2008 - By Gate Arty
After the failure of IndyMac Bank, many people have wondered how safe their accounts really are. While the Federal Deposit Insurance Corporation (FDIC) guarantees most bank deposits, here are some important details to remember.
What types of accounts are covered?
The FDIC protects checking and savings accounts, certificates of deposits (CDs), Christmas club accounts, and money-market savings accounts. However, Stocks, Bonds, and mutual fund shares...even those purchased through an FDIC bank...are not protected.
What are the limits of FDIC insurance?
Bank accounts that have less than $100,000 in them and certain retirement accounts (IRAs held in CDs and money market accounts) that have less than $250,000 are fully protected by the FDIC even if the bank fails. If you want to exceed these account limits, you can keep your deposits fully protected by:
Dividing your money among several different bank companies. Note that dividing your money among several different branches of the same bank does not guarantee full protection. If you prefer to keep your money in the same bank company, you can still be fully protected if you divide your money among various "ownership categories". Ownership categories include a personal account in your name, a personal account in your spouse's name, a joint account co-owned by you and someone else, and a trust account that names someone other than you as a beneficiary.
What are some common ways customers end up with uncovered deposits?
If you purchase a CD through an investment broker, this CD will often be placed with a bank at which you already have an account. If the CD and your other accounts exceed the $100,000 limit, you may not be full protected. Before purchasing CD's through a broker, ask where they will be placed.
In addition, keep track of the interest your accounts earn so you don't exceed the limits this way.
What will happen if your bank fails?
In most cases, depositors can fully access their funds by the next business day. Typically, failed banks are closed on Fridays, and funds are available by the following Monday. People can also usually use their ATM cards and write checks over that weekend as well. And for customers whose accounts exceeded the FDIC limit, all hope is not lost. Though this amount has varied, they can generally expect to recover 70 cents on the dollar of their uncovered funds after the bank's assets are sold.
The good news is that the vast majority of US banks are secure, but the above information will help you stay fully protected. For more information, visit www.fdic.gov.
Downpayment Reform
Monday, August 04, 2008 - By Gate Arty
The new Housing and Economic Recovery Act of 2008 contains a provision that forbids FHA from insuring mortgages in which the downpayment comes directly, or indirectly, from an interested third party (such as the seller), beginning October 1, 2008.
On Thursday, July 31, 2008, the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 (H.R. 6694) was introduced by several members of Congress. Representatives Maxine Waters, Gary Miller, Al Green and Christopher Shays sponsored this bill that if passed and signed into law will allow downpayment assistance to continue indefinitely.
Housing and Economic Recovery Act of 2008
Friday, August 01, 2008 - By Gate Arty
On July 30th, President Bush signed the Housing and Economic Recovery Act of 2008. All provision details are not yet available, but the major components included broad authority for the Treasury Department to safeguard the nation’s two largest mortgage finance giants (Fannie Mae and Freddie Mac) and a plan to help hundreds of thousands of troubled homeowners avoid foreclosure.
As anticipated, all seller-funded DPA programs will be abolished October 1st, 2008. Meaning the minimum cash investment requirement will increase to 3.5% of the purchase price.
More news to come on this as it becomes available!
Tags: business, down payment, economy, fannie mae, finance, freddie mac, mortgage, real estate
Down-Payment Assistance Eliminated?
Wednesday, July 23, 2008 - By Gate Arty
Mortgage programs that offer down-payment assistance (DPA) assisted nearly $80,000 people buy homes in the depressed market of 2007. The Senate and House of Representatives are fast-tracking legislation that would likely abolish DPA programs. The repercussions could be devastating to the already ultra-sensitive real estate market.
DPA programs are operated by nonprofit organizations. These organizations provide buyers with money for their down-payment. In turn, home sellers reimburse the organizations and pay an administrative fee. These loans are insured by the Federal Housing Administration (FHA).
Mortgages with DPA account for almost 40% of FHA’s volume! It has been estimated that if DPA programs are eliminated, the direct impact on real estate could result in an estimated $50 billion in lost real estate sales & mortgages, not to mention the loss of jobs in the building & lending sectors of the real estate industry.
Fannie Mae & Freddie Mac Concerns
Monday, July 14, 2008 - By Gate Arty
Concerns about the solvency of both Fannie Mae and Freddie Mac, which guarantee over $5 trillion of the nation's $12 trillion in mortgage debt, sent the stocks of both companies into a tailspin this past week. Fannie Mae, open the day trading at $23.00 previously had a 52 week high of $41.65. Freddie Mac opened at $23.50 today with a 52-week high of $45.50. The Federal Reserve voted Sunday to allow Fannie and Freddie to borrow directly from the central bank.
Add to this the announcement that IndyMac Bancorp shut its doors, which marks the first time in 15 years that a bank with over $10 billion has collapsed. The Federal Deposit Insurance Corporation seized control of the bank late Friday. IndyMac focused on deposits and originating home mortgages.
Tags: fannie mae, fdic, federal reserve, finance, freddie mac, mortgage
Mortgage Insurance
Friday, July 11, 2008 - By Gate Arty
Three mortgage insurance (MI) companies filed for bankruptcy this week. Mortgage insurance is insurance to offset losses in the case where a mortgagor (borrower) is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. Mortgage insurance is typically required on loans where the borrower has less than a 20% down payment.
Remaining mortgage insurers have been tightening their standards and offering borrowers fewer ways to avoid purchasing mortgage insurance. The MI companies have begun categorizing more and more of the country as a "declining market," raising the requirements and making such insurance more difficult to obtain. Stated simply, without MI, buyers will have to put more money down to qualify for loans - perhaps 10%.
During the previous housing boom, borrowers were often able to avoid mortgage insurance by taking out two loans: one that covered four-fifths of the home's purchase price and a second "piggyback" loan that covered the traditional 20-percent down payment. With this type of lending practice now being non-existent, potential home buyers need MI to buy, and the overall buying pool has consequently significantly decreased.
Tags: bankruptcy, finance, foreclosure, insurance, loan, loans, mortgage, property value
100% Financing options?
Friday, July 11, 2008 - By Gate Arty
With the mortgage & lending industries further tightening their lending requirements & guidelines, it is becoming increasingly difficult for home buyers to qualify for homes. Are there still low down payment options available? The USDA / Rural Development program is certainly a very viable option for certain buyers in certain areas. The advantages of a USDA loan are:
- No down payment & 100% financing
- Loan not limited by contract amount
- No PMI
- No need for "seasoned funds"
- No maximum purchase price
- Not limited to first-time buyers
The property does have to be in an area that qualifies as rural. To check if a property qualifies, click: USDA.
Tags: down payment, finance, insurance, mortgage, usda loans
What about taxes?
Saturday, April 19, 2008 - By Gate Arty
Those of you that like to do your research on-line know that you can look up real estate tax information at the Polk County Property Appraiser website. Were you also aware that you could estimate taxes? For example, if you were considering purchasing a home for a value in excess of its current "tax accessed value," you could input the property location & new price & thus arrive at an approximate tax range. This would be extremely helpful for those trying to stay on a tight budget. Knowing what taxes will be, will give you an idea of what to expect come tax time, or what you will need to escrow (along with insurance) in your mortgage. Also consider that you may also file for exemptions that will reduce your tax liability. For a list of these exemptions go to this site: Exemption Eligibility
Here are some additional links that will assist you in the area of real estate taxes:
Debt Forgiveness
Friday, April 11, 2008 - By Gate Arty
In my last post, I described the short sale process. Some have expressed concerns about the effect the resulting debt-forgiveness of a short sale has on your tax situation. In prior years, any form of debt-forgiveness on a mortgage was considered earned income. Now, however, the Mortgage Forgiveness Debt Relief Act of 2007 allows a 3-year window for homeowners to refinance their mortgage with no tax penalty on any debt relief that is received. This act will increase the incentive for borrowers & lenders to work together to refinance loans , and realtors to negotiate short sales to avoid foreclosure. This act only applies to principal (homestead) property.
Click here for more information on the Mortgage Forgiveness Debt Relief Act.
What is a short sale?
Wednesday, April 09, 2008 - By Gate Arty
A "short sale" or "pre-foreclosure" occurs when a bank (or lien-holder) agrees to accept a discounted pay-off of a mortgage. In other words, the bank(s) will release the lien(s) that is secured on the real estate, upon receipt of LESS money than is actually owed. Why would any bank accept less than what is owed? Well, it must make financial sense for this to occur. Here's a scenario . . .assuming there is an offer, of course!
First off, the mortgage(s) in question is typically in some stage of default. The bank, faced with a mortgage that is not being paid, must decide whether selling at a discount makes better financial sense than actually going through a long & costly foreclosure process. In our current real estate climate (because of the increasing alarming rate of bank foreclosed properties), most institutions are deciding that short sales are a viable route. Remember, banks and other lending institutions are not in the business of owning real estate. They want good mortgages. Foreclosures are not only time-consuming, but they are expensive.
The bank will not accept just any offer, however. They will have the property appraised to establish approximate market value. If they can negotiate a sales price "close" to that figure, a short sale may then be consummated. If the short-sale offer is not considered valuable enough, then they may opt to foreclose, and eventually sell the property on the retail market once they obtain "possession." This is what we know of as a foreclosure property.
Short sales represent a tremendous purchase opportunity for buyers and especially investors. Since most transactions occur on a distressed level, many sales prices occur below appraised value giving the buyer "instant equity."
Mortgage rates
Monday, March 17, 2008 - By Gate Arty
Long-term mortgage interest rates were down again Monday, and the benchmark 10-year Treasury bond yield sank to 3.31 percent.
The 30-year fixed-rate average dropped to 5.74 percent, and the 15-year fixed rate fell to 5.09 percent. The 1-year adjustable rate dipped to 5.07 percent.
Tags: finance, interest rates, mortgage
- March 2010 (1)
- February 2010 (3)
- January 2010 (5)
- November 2009 (2)
- October 2009 (2)
- September 2009 (1)
- August 2009 (8)
- July 2009 (2)
- June 2009 (9)
- May 2009 (10)
- April 2009 (13)
- March 2009 (10)
- February 2009 (6)
- January 2009 (6)
- December 2008 (1)
- November 2008 (8)
- October 2008 (7)
- September 2008 (14)
- August 2008 (11)
- July 2008 (9)
- May 2008 (2)
- April 2008 (8)
- March 2008 (5)
- Arts and Culture (32)
- Business (63)
- Buying (68)
- Central Florida (69)
- CSX Rail (2)
- Downtown Lakeland (42)
- Events and Activities (51)
- First Friday (15)
- Florida Southern College (2)
- Foreclosure (35)
- Lake Hollingsworth (4)
- Lake Mirror (18)
- Lake Morton (5)
- Lakeland (71)
- Mayfaire by-the-Lake (4)
- Mortgage and Finance (46)
- Pre-Foreclosure (14)
- Public Parks (31)
- Public Safety (6)
- Real Estate (90)
- Schools (5)
- Selling (68)
- Short Sales (9)
- Sports (6)
- Sun n' Fun Fly-In (2)
- Tax Issues (10)
- Virtual Tours (38)
View RSS/XML Feed