Lovethisarea
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Maybe people shouldn't be able to take out large home equity loans when value skyrockets under a certain time period (or maybe not at all!) and maybe people buying 2nd homes should be putting 50% + down on their 2nd homes.
Guess who's buying most of these short sales? Glad that investors are getting great deals! Investors played a big role in driving up prices, then many walked away driving prices down and now many are buying the home you owe $300,000 on, for $150,000 or less.
To pay off the extra $150,000+ the homeowner owes I'm guessing it would take 15-20 yrs... if your 35 you will only be 50-55 and then you can start over right? I feel so bad for those in this situation with children... I hope prices go back up but it's just hard to believe they will ever be what they were.
Things have definitely changed thats for sure.
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Lovethisarea
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bobthebuilder wrote:
Maybe they don't cover this in high school anymore but if you aren't buying a house to hold on to it for a while, then maybe you should have rented instead. People who are mobile should keep related investments liquid and put their long term money into things that aren't affected by their lifestyle.
It's pretty basic stuff.
Someone should have let the investors know. Maybe the banks should go after the investors that walked away to get their losses back.... I've heard more investors have been walking away then homeowners.
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Lovethisarea
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Bambi wrote:
Just a quick insert here az. We used to view our homes as long term investments. Meaning, we rode out these ups and downs as we stayed in our homes longer...30 years or more and at least for the economic life of the loan. Now, we're a much more mobile society, living only short term in most places. So, it's kind of like the stock market. You invest long term, you stay in and go with the ups and downs. You invest short term, the risks are higher and so are the consequences.
But.....since the majority of our population operates from the short term perspective, and our population is so enormous now, perhaps assistance is needed to keep us afloat, as we ride this out. The banks are cutting their losses by selling for alot less than the original mtg....cashing out. Why not allow their investors to stay in, modifying that mortgage for the person who has a proven track record? The current owner. That's not government intervention. That's the lender intervening on behalf of the consumer. And the payoff is greater, as it didn't sell for $45k, but continued at $90k. with the original owner.
That's the perspective I look at it from.
I would be very surprised if the banks would do that. I tried to get the current interest rate for my loan and they wouldn't even do that. As for their "programs" we have a Conventional loan and they are only for FHA loans. I was actually told by my bank that people in my situation that owe more then their homes are worth and have conventional loans usually just Short Sale! How nice is that? My bank actually telling me I should short sale! I don't get it... why would they WANT me to do that?
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Lovethisarea
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azsunshine wrote:
Lovethisarea wrote: If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
IMO The banks are to blame for lending money to people who couldn't afford the payment at that time. The banks didn't lend for more than it was worth (at the time). Everything is timing. Should you be able to go back to the grocery store for the steak you ate last year just because the prices are down now--no! Say you had a used vehicle you sold to your neighbor last year and you graciously let him pay by the month--should he be able to come back to you now and say he wants your car at 50% less than what you agreed to?
Also if the economy were to come back say next year full boom again prices are at 400 K for a house--should the bank that graciously lowered your principal be out that money when you sell it for 400K? Reducing mortgages is way better than foreclosure IMO just put some restrictions if the economy comes back and they sell within a certain time period.
A House is the biggest investment that most will ever make in their lives... a steak and a car is not.
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bobthebuilder
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Maybe they don't cover this in high school anymore but if you aren't buying a house to hold on to it for a while, then maybe you should have rented instead. People who are mobile should keep related investments liquid and put their long term money into things that aren't affected by their lifestyle.
It's pretty basic stuff.
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Bambi
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Just a quick insert here az. We used to view our homes as long term investments. Meaning, we rode out these ups and downs as we stayed in our homes longer...30 years or more and at least for the economic life of the loan. Now, we're a much more mobile society, living only short term in most places. So, it's kind of like the stock market. You invest long term, you stay in and go with the ups and downs. You invest short term, the risks are higher and so are the consequences.
But.....since the majority of our population operates from the short term perspective, and our population is so enormous now, perhaps assistance is needed to keep us afloat, as we ride this out. The banks are cutting their losses by selling for alot less than the original mtg....cashing out. Why not allow their investors to stay in, modifying that mortgage for the person who has a proven track record? The current owner. That's not government intervention. That's the lender intervening on behalf of the consumer. And the payoff is greater, as it didn't sell for $45k, but continued at $90k. with the original owner.
That's the perspective I look at it from.
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azsunshine
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Lovethisarea wrote: If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
IMO The banks are to blame for lending money to people who couldn't afford the payment at that time. The banks didn't lend for more than it was worth (at the time). Everything is timing. Should you be able to go back to the grocery store for the steak you ate last year just because the prices are down now--no! Say you had a used vehicle you sold to your neighbor last year and you graciously let him pay by the month--should he be able to come back to you now and say he wants your car at 50% less than what you agreed to?
Also if the economy were to come back say next year full boom again prices are at 400 K for a house--should the bank that graciously lowered your principal be out that money when you sell it for 400K? Reducing mortgages is way better than foreclosure IMO just put some restrictions if the economy comes back and they sell within a certain time period.
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Lovethisarea
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If it is our responsibility to stick with our mortgages, it is the banks responsibility to come to a compromise! It may be our fault for buying a home for more then it was worth but, it is also the banks fault for lending us more then our homes are worth. They made a bad investment just as much as we did. Maybe they should have done more research before lending so many people twice as much as what they would have 1 year prior, to buy a home. We're not going to suffer in this alone.... we aren't the only ones to blame.
Those who bought during the boom are stuck paying a mortgage from when things were good, things are bad now...... wages are down (and unemployment is up), 401k's are way down, etc.
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azsunshine
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Lovethisarea wrote: Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000
It sucks that the only people that will get a break is the ones that either walk away or somehow get the bank to lower their principal. Why shouldn't everyone get a lower principal? IN MY OPINION ONLY the ones that just walk away or get a lower principal should have the original principal back again if they sell say within 7 years. The ones that walk away should have a floating lein placed with the amount of shortage placed on their new home -time period say 7 years. That may stop the people that just get a different home because "hey the neighbors are only paying 700 to my 1500" when they could and should keep their obligation AND the ones that really can't pay well guess they need to rent for 7 years.
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Bambi
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Lovethisarea wrote: Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000.
Here's your culprit. The foreclosures and the banks lack of ability to modify loans. The main risk to our growth outlook is that the home loan modification process is still not as streamlined as hoped. Unless it improves, the number of foreclosures will exceed the 3.6 million anticipated foreclosure sales this year and next, and the housing correction will be longer and more painful than projected.
We have homes in short sale escrows now because the lenders qualified them according to their own old standards for loan modifications, forcing the owners to sell their homes via short sales. For the price these lenders are getting for these short sales, they could have qualified the previous owners for that amount and modify it. The banks and lenders are still not following the rules. I think they are looking for the shortest and easiest way out and that is to bring in a cash sale, rack up the losses and walk. That's killing our values. And we out here in our area are suffering loss of equity more than any other area in the State.
We still have a 1400 sq. ft. nearly new home in Magic Ranch in escrow. It originally sold for $175k. It's under contract now for $45k. That original owner couple could have stayed in that home if the bank had agreed to modify it down tos even $90k, much less $45k. But they refused and went the easy way....look for a cash buyer by short saling it, and take it off the books. They are still going by the old rules and standards. So people are tired of dealing with them, so they "walk" hoping to start over in another time and place. It's getting to be a pattern now; walk if the bank won't modify it. We're in a Anti deficiency state so no harm done. That rule is changing and so is the criteria, so it won't be that easy to do after September.
That may force the banks to modify instead, reducing the debt, and the payment, allowing the present owner to stay in their home at half the payment, which they can now afford. However, these modifications need to be substantive to be effective. A large share of loan modifications, nearly 46%, left the monthly loan payment unchanged or higher. There has to be a higher share of modifications with reduced monthly payments for it to work, and it isn't happening. Less than 2% of modifications saw a reduction in principal. Yet, to take it to the next step and short sale it, the principal is reduced close to 50% for the new buyers.
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starleen
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Bambi wrote: Now; this one's for Sarah Palin..... 
Sarah Palin is not quitting. As a result of the relentless and frivolous ethics suits against her, which have been costing the State of Alaska money and time and costing her personally to the tune of half a million, she is removing herself from the formal Alaska political scene to distract her enemies from the nest, much like a sandpiper.
"When predators or humans are close to the nest, many sandpipers will exhibit a distraction display, calling vociferously, running nearby on the ground, and sometimes feigning a broken wing, all the while attempting to lure the intruder safely away from the nest."
http://science.jrank.org/pages/5957/Sandpipers.html
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starleen
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2 cents wrote: Think about it a little further and you will see that WE are at fault for electing those buffoons and allowing them to stay in office when they did not do our bidding.
Agreed. Elections have consequences, blah blah blah.
As for predicting foreclosure rates, can we look to the rising unemployment rate as a factor? It is a "lagging indicator" and many dominoes will fall as people are laid off.
Last edited on Fri Jul 17th, 2009 06:21 am by starleen
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Lovethisarea
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Do you think there will be a second wave of Foreclosures?
I did some research through the assessor, there are 21 homes on my street. 4 are new owners who bought in 08' and 09', the other 17 are original owners. Out of the 4 new owners 3 paid more then their home is worth... between 10,000 and 55,000. The 17 original owners paid between 101,000-165,000 more then their homes are worth. This is according to assessor values. Only 3 homes are currently for sale on my street.
I am not so worried about the 3 of 21 who paid 10-55 thousand more then their homes are worth... it is the 17 of 21 who paid 101-165 thousand more then their homes are worth. I am one of them and I have to say it doesn't seem to make much sense that I pay $2,000 a month for my mortgage when rent for my home would be about $1,000.
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Bambi
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Anyone considering filing for foreclosure should read this.
SB 1271 - Anti-Deficiency Law Change
One of over 200 bills pushed through the legislature in less than a month was a big change to an existing law that provided protection to borrowers in some cases against a deficiency judgment when their property went through foreclosure. Below is some background information on the legislation that has the lending and real estate industries a buzz with its intended and unintended consequences.
SB 1271 - Serious Changes to Arizona's Anti-Deficiency Statute
SB 1271 was sponsored by Senator Sylvia Allen, a REALTOR® from the White Mountains area of our state. The legislation started out in January as a bill dealing with jail districts and property tax limits. In June a strike-everything amendment gutted the original bill and changed its direction entirely. The Arizona Bankers Association argued successfully that the changes provided in the legislation were necessary because abuses in the current law were costing Arizona-based banks millions in losses. There was significant sympathy for the Arizona community banks in making the changes provided by this legislation. In other words, the legislators found it very easy to hold property investors liable for their debts while arguing that homeowners would still retain their deficiency protection if they lived in the home for six consecutive months. The legislation sailed out of the Senate by a unanimous vote but just barely received enough votes to pass the Arizona House of Representatives. The Governor signed the bill on the last day to sign or veto the legislation.
The current law - Arizona Revised Statutes (A.R.S.) § 33-814 currently states that within 90 days after the date of sale of a trust property under a trust deed, a legal action may be brought to recover a deficiency judgment against the borrower (trustor) who has now had their property foreclosed. The deficiency judgment must be for an amount equal to the sum of the total amount owed as of the date of the sale either by the fair market value of the trust property as determined by the court or the sale price at the trustee's sale, whichever is higher. The current law prohibits a lender from seeking a deficiency judgment against the trustor (foreclosed property owner) if the trust property is 2.5 acres or less and is used as a single one-family or single two-family dwelling.
The law effective September 30, 2009 - SB 1271 amended A.R.S. § 33-814 (G) to require that the trustor must have "utilized" the property for six consecutive months and a certificate of occupancy must have been issued. What does this likely mean? Various attorneys are opining different theories. My interpretation of the statute is that after September 30, 2009, properties sold at trustee's sale likely will not qualify for the anti-deficiency exemption unless the trustor lived in the single one-family or single two-family dwelling for at least six consecutive months. The legislative Fact Sheet, as transmitted to the Governor, states that SB 1271: Prohibits a deficiency judgment against a trustor pursuant to a trustee's sale of a trust property that is 2.5 acres or less and is used as a single one-family or single two-family dwelling if both of the following apply:
- The trustor has lived in the trust property for at least six consecutive months.
- A certificate of occupancy has been issued for the property.
Places the burden of proof on the trustor to demonstrate that the statutory requirements to prohibit a deficiency judgment are met.
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Bambi
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Could it be the beginning of an upward mobility?
Southern California median home sales price surges in June
By Peter Y. Hong - Los Angeles Times
Southern California home prices may have finally hit bottom, with median values rising last month for the first significant increase in two years, new data show.
Along with the 6.4% rise in prices from May, fewer than half of the sales were foreclosures -- the first time that has happened in nine months.
"I think we can now say with fair degree of confidence the pace of real home price declines has slowed dramatically," said Los Angeles economist Christopher Thornberg, who was an early predictor of the housing bubble.
But Thornberg and other analysts cautioned that the housing market remained wobbly and prices wouldn't rise substantially in many neighborhoods for months or even years. The median price of $265,000 is far below the 2007 peak of $505,000.
What's more, California is struggling with one of the highest unemployment rates in the nationand mortgage defaults are continuing to rise. A surge in new foreclosures could squelch any potential recovery in the housing market.
Foreclosures have dominated the Southland residential market for months, with most of the activity centered in distressed areas such as the Inland Empire. By contrast, last month's gain was driven by sales of higher-end homes in the six-county region, which pulled up median prices.
That presents a mixed picture. Although prices have firmed at the low end of the market, they are still falling in affluent communities, the home sales data released by MDA DataQuick on Wednesday show.
The high-end market did not suffer the rapid shock of subprime mortgage defaults and foreclosures that hammered the housing market's lower end. Sales stagnated as wealthier sellers held out for higher prices.
Now, however, some sellers "are realizing the market's not going to just bounce back" and are starting to sell homes for less than they had recently hoped to get, said T.J. Culbertson, a Beverly Hills real estate broker.
That has drawn buyers to the leafy suburbs, looking for deals.
"Sales in many higher-cost neighborhoods couldn't have gotten much lower, so this recent uptick in activity should come as no surprise," MDA DataQuick President John Walsh said. "The recession and problem mortgages are fueling more high-end distress, hence more high-end bargains."
The percentage of homes that sold in June for more than $500,000 rose to about 20% of all homes purchased, up from 18% in May.
The median home sales price has been leveling off all year, hovering around $250,000 for five months before June's 6.4% increase over May's $249,000 median price.
June's median, though, was 26% below that of June 2008, and prices remain at 2002 levels. The median is the point at which half the homes sold for more and half for less.
In a positive sign, only 45% of the homes sold had been foreclosed upon, DataQuick said, the lowest percentage since July 2008. Foreclosures peaked at 57% of total sales in February, and in May still accounted for half of home sales.
That trend of declining foreclosure sales could be reversed if a large backlog of Southern California homes in the foreclosure process end up being repossessed.
In May, 9.5% of California mortgages were in default, up sharply from 5.8% in May 2008, according to First American CoreLogic Inc. The actual number of foreclosures has been slowed thanks to government moratoriums and voluntary efforts by lenders, but that could change if banks are overwhelmed by escalating defaults.
But Culbertson, the real estate broker, said the freeze in mortgage financing for so-called jumbo loans was starting to thaw. Banks also appear more willing than they were last year to complete short sales, in which a home is sold for less than its mortgage amount.
The share of Southland home purchase loans above $417,000 rose to 14.8% in June, the highest since 15.6% last August and up from 12% in May, DataQuick reported.
The typical monthly mortgage payment for Southern California buyers last month was $1,193, up from $1,052 in May. Adjusted for inflation, current payments are 46% below typical payments in the spring of 1989, the peak of the prior real estate cycle.
Escrow closed on a total of 23,262 new and resale houses and condominiums in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties last month. That was up 12% from 20,775 in May and up 29% from a year earlier.
Los Angeles County's median home price in June was $320,000, up from $300,000 in May but down about 23% from a year earlier.
In Orange County, the median price went from $410,000 in May to $418,000 in June, DataQuick said. That's 11% below year-earlier levels.
The median price in San Diego County rose from $295,000 in May to $314,000 in June, or about 15% below year-earlier levels.
Year over year, the biggest price drop in June was in San Bernardino County, where the $140,000 median price was off almost 42% from a year earlier. That was still a slight increase over May's $137,000.
Elsewhere, the June median in Riverside County fell 33% from a year earlier to $185,000. In Ventura County, the median dropped 13% to $365,000.
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Bambi
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Good points.
Especially as I listen to the news and discover that these big lending institutions are making record breaking profits again, in the billions. Chase, AIG. All used our money to loan out at a higher interest rate, resulting in huge profits. Which is ok, as long as we are paid back with interest and that money is filtered down to main street. That still isn't happening like it should. We're back to the lack of balance again, where the rich get richer and the poor get poorer. There's a "kink" in the system imo, and it needs to be worked out as our population is growing and growing and growing....309,000,000. I personally feel a great deal of reform is necessary for us to continue running a capitalist society, which I am for. And arguments are ensuing everywhere, for and against. And as I observe and listen to these arguments, I see what appears to be a generation gap. A new generation attempting to take over the old generation of thought and policy. And the Present belongs to that new generation, as we (old timers) will die off, taking our values and moralities with us.
Regarding the announcement today of foreclosures up 33% from last year. Foreclosures, unlike short sales, can take up to a year to go to sale. So, if a person turns over the keys to the lender, responsibility does not end there. If the home sits for a year, and the bank does nothing to maintain it, you are still responsible to the HOA for the fees to "keep it up" on the exterior. Lenders seldom pay HOA's., even though a trustee has been appointed. And, some sales don't even occur. The lender may be out shopping for another lender to take it over. At that juncture, no amount of the sale is recorded....it will show $0 in the records. Protecting values? Maybe...maybe not.
Point being, the couple who lost their job last year, had a home in foreclosure for a year because they couldn't make the payments. In the meantime, they are both gainfully employed again and renting, leaving the baggage behind for another to work out. So when we read about these foreclosures today, it does not necessarily represent a continuum of job losses. But.....if the foreclosure left other debt such as HOA fees and second mortgages that were not purchase money loans, you will probably have a knock on your door by a process server with a summons to appear in Justice Court, to defend your actions. IF you don't show up, then judgment by default may be rendered against you for the relief demanded in the complaint.
Best route to take, to make sure all debts are addressed and resolved is a short sale. And those are still happening in our area.
Now; this one's for Sarah Palin.....
Last edited on Thu Jul 16th, 2009 04:50 pm by Bambi
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2 cents
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Ummmm, on who's watch did the meltdown happen and which of the parties professes that if we would just put all of our faith and trust in big business and let big business run everything that they will self-regulate and everyone will prosper and everything will be just the best hunky-dory that the world has ever seen? Perhaps one would better use a broad brush when painting the guilt graffitti on the wall and include the majority of the wizards in DC starting back to Reagan and perhaps beyond. Think about it a little further and you will see that WE are at fault for electing those buffoons and allowing them to stay in office when they did not do our bidding.
jmo, 2
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starleen
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Bambi wrote: We've said all along that the Credit Rating Agencies were the cause of the meltdown.
The cause of the meltdown was a democratic congress mandanting loose lending requirements for Freddie and Fannie. If anything, the Credit Rating Agencies (who are the devil's spawn) would have reduced the housing meltdown, but the banks were all about loose lending and no doc loans.
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Bambi
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Tighter Mortgage Rules Driving Down Sales
Sales of foreclosed properties are driving home sales in some areas.
But mortgage lending rules have tightened to the point that qualified buyers are being turned away in droves.
“The credit pendulum is stuck at ‘stupid,’” said Lou S. Barnes, an owner of
Boulder West Financial Services, a Colorado mortgage bank.
“I am turning down loans every day that my grandfather in his Ponca City, Okla., savings and loan in 1935 would have been happy to make,” Barnes told The New York Times. “And he was tough.”
Mortgage loan denials, analysts say, are occurring for several reasons.
First, Fannie Mae dominates the lending market to the extent that its rules set lending standards. And recently, Fannie toughened its policies, reducing the amount of value of a borrower’s stocks and bonds to 70 percent when figuring the borrower’s assets.
Previously, Fannie Mae calculated these at 100 percent.
Secondly, banks now want down payments of at least 20 percent.
Thirdly, the credit score required to obtain a home mortgage has been drastically raised, blocking those with income adequate to pay the loan but who have a few problems in their credit history.
Finally, the self-employed, including medical and dental professionals, often take so many deductions that their taxable income doesn’t meet the new standards.
Chris George, president of CMG Mortgage, predicted that no-docs and other non-traditional loans will be back within the next six months as lenders gain confidence.
“As with injuries, as with your credit, as with the economy, time heals all wounds,” George told the Market Ticker.
© 2009 Newsmax. All rights reserved.
Last edited on Wed Jul 15th, 2009 04:54 pm by Bambi
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Bambi
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Another Goodie that just came across the air. I checked it out and it's interesting information.
HUD Allows Buyers to "Work Off" Down Payment - 07.14.09
Watch Video
We've said all along that the Credit Rating Agencies were the cause of the meltdown. HUD has a cool Sweat Equity Program
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Bambi
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Talking about Real Estate......... I just came back from dropping my grand daughter off at the Brunswick Bowling Alley in Gilbert. First time I've been there. They don't build bowling alleys like they used to. That place is huge.
Anyway, my point is this. I am going to contact them and see if they would be interested in doing one of two things.
1. Take over one of the huge vacant stores in Q.C.'s marketplace. Costs to change it and per sq. ft. amount will have to be factored in to see if it's worth it to them.
2. Find a spot out here in Pinal for them. That would benefit all of us. There are grants available for bowling alleys, but not sure if grants are available in unincorporated areas.
If you have contacts, information, or anything to help me locate a site, pass it on. Our area needs one of these in a very bad way. Indoor entertainment for the whole family. Bowling leagues for various groups. Games, food, pool tables etc., are all available. In my youth, I wasn't allowed in a Bowling alley. My parent's thought of it as a place of ill repute where alcohol was served. And no one could bowl on Sundays, as the blue laws were in full operation back then. Times have sure changed. What was wrong then is right today.
Brunswick Zone XL
http://www.bowlbrunswick.com
Although you aren't likely to find any Lebowski-types in this shiny new "recreational center," what you will find is the latest in technology and amenities. Gone is the endless waiting in lines - get your lane assignment (or pager if there's a wait) and an attendant comes to you for shoes and anything else your heart desires. Instead of hard plastic chairs, 16 of the 44 lanes have cushy couches. The bar is huge, with six pool tables, televisions, karaoke and DJ s. There's even a real-life kitchen, not just a fryer, where you can get everything from the usual pizza and a burger to a healthy salad. One of the coolest features is the one-touch bumper control, which lets you decide who needs some gutter assistance. And there are coupons on the Web site.
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Bambi
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Hi boys. Good to hear from a couple of my best buds on here.
Gypsy? Sounds kind of like an interesting profession to me at my age. Beats being a Walmart Greeter.
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2 cents
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Hi B! I thought the gypsies had carried you away. I'm glad they brought you back if even for just a little bit here and there.
2
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Thank you Bambi for keeping us current on the latest mortgage news.
I always enjoy reading your encouraging words.
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Bambi
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Some people have asked if I would at least continue sending feeds to the Real Estate topic I started. I'd be more than happy to do this. I am appreciative and would love to share the knowledge about my area of expertise. I'm grateful that many are reading and educating themselves on the ongoing changes in policies and issues that concern us all. There are some great opportunities awaiting us out there.
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How to Finance a Fixer Upper House With an FHA 203(K) Program
The astronomical housing prices in many areas can make home buying a frustrating experience. Buyers on a budget may find they have a choice between houses that are too small for their needs or rundown dumps. Among the latter, however, are a great many housing nightmares that could be turned into dream homes with a bit of work. Even if you don't do any of the work yourself, you can often buy a fixer-upper and rehabilitate it for quite a bit less than you would spend on a comparable house in "perfect" condition. Paying for the house and the repairs, however, can be a bit tricky, as many lenders won't finance a house that needs a lot of work. Fortunately, the U.S. Federal Housing Administration (FHA)--a division of the Department of Housing and Urban Development (HUD)--has the Section 203(k) program, a mortgage insurance program specially tailored for this situation. While this article focuses on how to use the program to purchase a home, 203(k) loans can also be used to refinance your existing mortgage in order to rehabilitate a house you already own.
Steps
- Determine how much house you can afford. Talk to a lender to see what loan amount you can be approved for based on your income and expenses. Most importantly, figure out yourself how much you can realistically afford. It's not uncommon to be approved for a loan that will stretch your budget to the point of foreclosure.
- Find a house with potential. Look for a house you like in a neighborhood you like. The 203(k) program currently cannot be used by investors, so you'll need to live in the house (or be a qualified non-profit agency). Together with your real estate agent, perform a preliminary feasibility analysis, in which you identify the repairs necessary, estimate the cost of these repairs, and estimate the market value of the home after the repairs. You can save yourself some money by doing this before you order appraisals or estimates, since you may determine that the cost of repairs is too high.
- Execute a contract for the sale of the home. In order to proceed with the 203(k) application process, you'll need a sales contract with a clause stating that the sale is contingent on your ability to obtain financing through the program.
- Apply for the loan. Contact a HUD-approved lender to apply for the loan. You can obtain a list of approved lenders at the nearest HUD field office or on HUD's website.
- Get an estimate of how much the work will cost. The amount of a 203(k) loan cannot be increased during construction, so it's essential to get an accurate estimate of how much the work will cost. For fastest results, get an estimate from a HUD-approved contractor or fee consultant. You can find approved consultants on HUD's website.
- Get an appraisal. Actually, you'll generally need two appraisals: one for the current value of the home and another to estimate the value after the repairs. The loan amount may not exceed the lesser of either the value of the home in its existing condition plus the cost of repairs and 6 months' worth of mortgage payments; or 110% of the estimated value of the home after repairs. The amount of the loan is also subject to maximum FHA mortgage limits, which vary from place to place.
- Find a contractor. The 203(k) program requires that the repairs be performed by a qualified contractor. Most people opt to hire a licensed contractor (typically the one from which they got the estimate), but if you're qualified to do the work you can save yourself some money by doing it yourself. Keep in mind, however that you can only be paid for materials if you're doing the work yourself. If this ends up costing less than the contractor's estimate, the excess money can be used for additional improvements or it will be applied to the principal of the loan. Also make sure that you'll be able to complete the repairs within the maximum allotted 6 months after the purchase. If you won't be able to complete the repairs yourself, hire a HUD-approved contractor.
- Close on the home. If everything is approved, you can purchase the home with as little as 3% down. If you're unable to occupy the home immediately, you can use the extra six months of mortgage payments which may be included in your loan to pay the mortgage while you're also paying to live elsewhere.
- Make sure to get the work done on time. You have six months after the purchase in which to complete the repairs. The repair fund is held in escrow and is disbursed in installments to the contractor (or to you, if you're doing the work yourself). A HUD-approved inspector must review the progress before each disbursement is made.
- Get a final inspection. Once work is completed according to the initial plans, get the final inspection. If there is money left over, it must be applied toward the principal of the loan.
Tips
- The 203(k) program is not for everybody. For example, if you're solely looking to invest in the home and then "flip" it, you won't qualify, and you also won't qualify if the cost of the house plus repairs exceeds HUD's maximum mortgage limit in your area. If this is the case, there are some other options, including Fannie Mae's Homestyle loan and home equity loans on your existing home. A few private lenders also offer programs for these "handyman specials," but they have their own, often stringent, qualifying standards.
- The minimum repair amount necessary is $5,000. Beyond this, a wide variety of repairs are eligible for the loan, including energy conservation and renewable energy upgrades and even moving an existing house onto the foundation of a home you intend to demolish.
- Even with the best planning and estimates, major home remodeling or rehab almost always costs more than you expect. As a rule of thumb, add 10% to whatever your estimated cost is. 203(k) loans require at least a 10% contingency reserve for such unexpected expenses.
- The program allows borrowers who are qualified to do the work themselves to provide their own cost estimate for the repairs. The estimate must be the same as one you would get from a contractor, however, and the HUD process for doing the estimate yourself takes several months (as opposed to a couple weeks for an independent consultant), so you're better off having a fee consultant or contractor provide the estimate, even if you plan on doing the work yourself.
- Once work is completed the 203(k) mortgage is eligible to be refinanced as an FHA 203(b) loan, which may result in lower payments.
- The market value of a home depends largely on its location, so it's usually best to find a fixer-upper home in a desirable location, rather than one in an area with a depressed housing market.
More good information: http://az.gov/webapp/portal/
Last edited on Tue Jul 14th, 2009 06:38 pm by Bambi
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Bambi2 wrote: Harney: Will tough mortgage rules hurt real estate recovery?
By Kenneth Harney - Washington Post
WASHINGTON - Real estate may be showing signs of a turnaround in many local markets but the nation's largest mortgage players continue to ratchet up their underwriting rules, making home purchases more difficult for some buyers.
Mortgage giant Fannie Mae, for example, issued a laundry list of tougher policies June 8 that could directly affect thousands of buyers in the coming months, especially those involved in job-related transfers.
Reversing a long-standing policy, Fannie no longer will permit mortgage applicants to count the income of so-called "trailing spouses" toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.
If the main breadwinner's income isn't sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted.
Brian Faith, a spokesman for Fannie Mae, said "given the current economic and job market instability, the company has opted to discontinue consideration of trailing secondary wage-earner income in the interest of safer underwriting, since this income would only be anticipated and undocumented."
Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie's decision
"makes the current challenging relocation environment even more so. Some transfers will either have to qualify on the basis of one income" - forcing couples to "buy less house than they wanted" - or "they may be required to rent for an extended period of time until the spouse or couple is re-employed. If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider" whether they want to make the job shift at all.
Worldwide ERC estimates that about 800,000 households in the United States move in a typical year because of job transfers.
Freddie Mac, which with Fannie Mae accounts for 70 percent-plus of all new mortgage volume, still counts trailing spouse or co-borrower income for loan applications, but under strict guidelines:
? The amount of the trailing co-borrower income cannot exceed 33 percent of the total qualifying income for the mortgage application.
? That income cannot be from self-employment.
? The trailing spouse must have been continuously employed in the same occupation for at least two years preceding the relocation.
? And the co-borrower must provide a statement of intent to find employment in the new location. The loan officer or lender must also analyze that local employment market and verify that there are adequate opportunities and earnings potential for the co-borrower.
As part of its June 8 tightening of underwriting rules, Fannie Mae also announced that it plans to discount the values of all borrowers' stock, bond, mutual fund and retirement fund holdings that are claimed toward the applicants' financial reserves needed to qualify for a mortgage. While Fannie previously counted 100 percent of the claimed or documented value of stocks, bonds and mutual funds toward reserves, under its revised policy it will discount them by 30 percent.
Good info Bambi. It's about time!
imo, 2
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Bambi2
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Harney: Will tough mortgage rules hurt real estate recovery?
By Kenneth Harney - Washington Post
WASHINGTON - Real estate may be showing signs of a turnaround in many local markets but the nation's largest mortgage players continue to ratchet up their underwriting rules, making home purchases more difficult for some buyers.
Mortgage giant Fannie Mae, for example, issued a laundry list of tougher policies June 8 that could directly affect thousands of buyers in the coming months, especially those involved in job-related transfers.
Reversing a long-standing policy, Fannie no longer will permit mortgage applicants to count the income of so-called "trailing spouses" toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.
If the main breadwinner's income isn't sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted.
Brian Faith, a spokesman for Fannie Mae, said "given the current economic and job market instability, the company has opted to discontinue consideration of trailing secondary wage-earner income in the interest of safer underwriting, since this income would only be anticipated and undocumented."
Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie's decision
"makes the current challenging relocation environment even more so. Some transfers will either have to qualify on the basis of one income" - forcing couples to "buy less house than they wanted" - or "they may be required to rent for an extended period of time until the spouse or couple is re-employed. If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider" whether they want to make the job shift at all.
Worldwide ERC estimates that about 800,000 households in the United States move in a typical year because of job transfers.
Freddie Mac, which with Fannie Mae accounts for 70 percent-plus of all new mortgage volume, still counts trailing spouse or co-borrower income for loan applications, but under strict guidelines:
? The amount of the trailing co-borrower income cannot exceed 33 percent of the total qualifying income for the mortgage application.
? That income cannot be from self-employment.
? The trailing spouse must have been continuously employed in the same occupation for at least two years preceding the relocation.
? And the co-borrower must provide a statement of intent to find employment in the new location. The loan officer or lender must also analyze that local employment market and verify that there are adequate opportunities and earnings potential for the co-borrower.
As part of its June 8 tightening of underwriting rules, Fannie Mae also announced that it plans to discount the values of all borrowers' stock, bond, mutual fund and retirement fund holdings that are claimed toward the applicants' financial reserves needed to qualify for a mortgage. While Fannie previously counted 100 percent of the claimed or documented value of stocks, bonds and mutual funds toward reserves, under its revised policy it will discount them by 30 percent.
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Bambi2
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Neighbors are forcing neighbors into foreclosure
By Paul J. Weber - Associated Press
IRVING, Texas - Thousands of Americans who have generally kept up with their mortgages are still in danger of losing their homes because they made a fateful trade-off in this shaky economy - they let their homeowner association dues slide.
Many homeowners are learning to their surprise that condo and neighborhood associations that oversee security patrols, mow lawns, plant flowers and clean the community swimming pool may have the right to foreclose when dues aren't paid. That right is often written into the purchase agreement signed by the homeowner.
Among those who have been threatened with foreclosure is Lacey Pilat, who lost her job catering lavish corporate parties and nearly lost her two-story house in this Dallas suburb.
"Basically, our landscaper was foreclosing on the house," said Steve Pilat, her husband. "That's the way we looked at it."
These foreclosure actions do not necessarily pit neighbor against neighbor. Many homeowner associations have turned the job of collecting member dues over to outside management companies. And to them, it's strictly business, not personal.
Homeowner association boards and their management companies defend the practice, saying maintaining the neighborhood preserves everyone's property values.
"We have compassion for those folks. At the same time, we feel for the rest of the homeowners who are paying their dues," said Andrew Schlegel, executive vice president for Merit Property Management, which manages more than 140,000 California homes in community associations.
In California, associations can foreclose only after 12 months of missed fees or $1,800 in back dues.
"No one wants to do this," Schlegel said. "It's only coming up when people are completely obstinate about it."
In fact, most people end up saving their homes. Homeowner association boards - particularly those that have lost many of their dues-paying members to the housing collapse and the slumping economy - often work with down-on-their-luck neighbors to come up with some sort of compromise. That's what happened with the Pilats.
Gauging the number of foreclosures nationwide by homeowner association is difficult. But in Texas, foreclosure attempts initiated by homeowner associations in 19 counties are up 30 percent from two years ago, according to Dallas-based Foreclosure Listing Services.
In the San Antonio area alone, foreclosure actions by homeowner associations jumped to 170 in April from 21 in April 2008, according to RexReport.com.
In Florida, attorney Bob Tankel, who represents hundreds of homeowner and condo associations, said he has increased his staff from three to 16 in the past 18 months to handle a mounting caseload of 3,500 open collections. About one-fifth of those cases have reached foreclosure, he said.
In California, Schlegel said more than 6 percent of the homes that his company manages are in some stage of delinquency with regard to membership dues, up from around 1 percent in previous years.
More than 59 million people live in more than 300,000 association-governed communities nationwide, according to the Community Associations Institute, the nation's largest group for homeowners and condo boards.
Near Sacramento unemployed state employee Pam Spanier was served with a foreclosure notice after falling more than seven months behind on her $115 monthly dues, which pay for Internet access and a golf-cart security patrol. She owes a total of $2,100, including attorney fees and fines. She is still in her home.
"I'm going to continue to look for a job and hope for a miracle," she said. "If it forecloses, it forecloses."
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Bambi2
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I received this from my Legislation newsletter from my Realtor Association. I thought it had some good information for the consumer also, so I'll share this part with you. Be sure to click on the new FEMA maps.
And Now for a Little Bit of Good News!
We are happy to report that our efforts are having a positive impact on the discussions to expand the sales tax base to include services. The Governor's office, and now House and Senate Republican leadership have stated their opposition to the sales tax being extended to included services. We are now working with the Democratic side of the legislature on their latest budget proposal to bring about bipartisan oppostion to the service tax issue.
Senate Bill 1148 - For Sale Signs
SB1148 passed out of the Senate 27-0 yesterday. This bill applies to non HOA subdivisions that have CCRs or other community rules that restrict or prohibit For Sale sign usage. This bill compliments the gains made by SB 1062 that went into effect in the Fall of 2007. As a result of SB 1062, a homeowner living in an HOA governed by these statutes will be permitted to display an industry-standard size for sale sign on the owner's property, even if such signs are prohibited in the HOA governing documents.
FEMA Unveils New Digital Flood Maps
The Federal Emergency Management Agency, FEMA, will unveil some of its new digital flood maps this week. The preliminary flood maps were designed as part of a nationwide flood map modernization program that should provide greater detail and make it easier for property owners to view the information. The flood elevations are used by FEMA to set rates for the National Flood Insurance Program. For additional information or to find a flood map for your area, please Click Here.
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starleen
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Bambi2 wrote: Housing starts jumped by 17% to 532,000 in May.
Compared to what? It's all relative. But a false sense of hope is better than no hope at all, I suppose.
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Bambi2
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Housing starts jumped by 17% to 532,000 in May and crushed estimates of 485,000. Building permits also popped up to 518,000 above expectations of 508,000. All in all, both point in a positive direction for the overall housing market.
Housing Starts are used in the United States as an indicator of the state of the economy. Housing Starts are the number of privately owned new homes (technically housing units) on which construction has been started over some period. Housing starts are an important economic indicator because they show how much money the general public has. If there is a rise in housing starts it likely means there is more money in the economy.
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Bambi2
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Bambi2 wrote: Another piece of good information to make us become more confident.
Many REALTORS business's are booming! Sales are Way UP and listings are Way DOWN! Sure, we have a long ways to go with all the foreclosures that are still coming onto the market but they seem to be absorbed as quickly. It wasn't too long ago listings were at 58,000+ and now they're at 34,000+. That is a HUGE drop, even with the foreclosures. Buyers are out there. Let's continue moving those homes!!
FYI:
1. HVCC is here in full force. All conventional loans must now have appraisals done through a third party system. The costs have gone up and it looks like the appraisal quality has gone down. Don't be surprised if this program flows over to the FHA loans down the road.
2. $8,000 tax credit refund for 1st time home buyers can now be used for the down payment! The mortgagee letter form HUD just came out at the beginning of the week and so far no one has really figured out exactly what they are allowing. There are a lot of restrictions on this but it is possible to get the buyer's a down payment loan against this tax credit refund. As soon as we figure it out I'll let you know. In the mean time, please be cautious about what you might hear about this program.
Bud Levy. Mortgage consultant.
Correction on the above post from Bud Levy........
Rates have been under a lot of pressure lately for several reasons. The debt load has gotten to be tremendous, the stock market is doing much better and foreign countries are unsure about our economic future and our ability to make good on the bonds we're selling. Some people believe this will turn around shortly however the trend doesn't look promising for lower rates. We might have seen the bottom of the rate scale already and should consider that 5.5% to 6.0% range is really Pretty Darn Good!
I always want to bring you the most accurate information and I need to clarify what I stated the other day about the tax credit refund being used for a down payment. A long time REALTOR, good friend and loyal follower of the Mortgage Market Update quickly notified me that the tax credit refund could not be used for FHA's 3.5% initial down payment. And he is Correct! The mortgagee letter that came out states that at the bottom of the letter, obviously changed at the last minute. The refund can be used for closing costs or for an ADDITIONAL down payment over and above the initial 3.5%. Honestly, this program has so many stipulations in order to use this money ahead of time I'm afraid that this will not work. Anyway, that's the clarification and thanks, good friend for setting me straight!
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Bambi2
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2 cents wrote: Between you and me B, I'm glad to see the third party appraisals. Should decrease the high appraisals made to meet the asking price. Seen that too many times. Even had it happen on a refi that I did. Of course that didn't hurt too bad but it is an example of liers figure and figures lie.
imo, 2
You are right on the mark 2. Good assessment.
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Between you and me B, I'm glad to see the third party appraisals. Should decrease the high appraisals made to meet the asking price. Seen that too many times. Even had it happen on a refi that I did. Of course that didn't hurt too bad but it is an example of liers figure and figures lie.
imo, 2
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Bambi2
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Another piece of good information to make us become more confident.
Many REALTORS business's are booming! Sales are Way UP and listings are Way DOWN! Sure, we have a long ways to go with all the foreclosures that are still coming onto the market but they seem to be absorbed as quickly. It wasn't too long ago listings were at 58,000+ and now they're at 34,000+. That is a HUGE drop, even with the foreclosures. Buyers are out there. Let's continue moving those homes!!
FYI:
1. HVCC is here in full force. All conventional loans must now have appraisals done through a third party system. The costs have gone up and it looks like the appraisal quality has gone down. Don't be surprised if this program flows over to the FHA loans down the road.
2. $8,000 tax credit refund for 1st time home buyers can now be used for the down payment! The mortgagee letter form HUD just came out at the beginning of the week and so far no one has really figured out exactly what they are allowing. There are a lot of restrictions on this but it is possible to get the buyer's a down payment loan against this tax credit refund. As soon as we figure it out I'll let you know. In the mean time, please be cautious about what you might hear about this program.
Bud Levy. Mortgage consultant.
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Bambi2
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Pinal County's GIS Maps have been added to the IMAPP program thru ARMLS. So realtors can have another tool to improve their searches.
County Assessor Geographic Information Systems Department
... Assessor > Pages > GIS.aspx. All County. Departments. Administrative Services ... The Pinal County Assessors Office has taken a lead role in the development of ...pinalcountyaz.gov/Departments/Assessor/P...
Assessor - Home
GIS. Land / Agriculture. Manufactured Housing. Personal Property. Research & Equalization ... Pinal County is an Equal Opportunity Employer M/F/H/V ...pinalcountyaz.gov/Departments/Assessor/P...
Assessor - Parcel Info Search
GIS. Land / Agriculture. Manufactured Housing. Personal Property. Research ... The Pinal County Assessor's Office disclaims any responsibility or liability for ...pinalcountyaz.gov/Departments/Assessor/P...
more...
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By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 13 mins ago WASHINGTON – The number of U.S. homebuyers who agreed to purchase a previously occupied home in April posted the largest monthly jump in nearly eight years, a sign that sales are finally coming to life after a long and painful slump.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts' forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.
Economists were encouraged by the report, and stock indexes advanced modestly.
"This is yet another positive indication that the bottoming process is forming," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "Now if only prices would stabilize."
Economists surveyed by Thomson Reuters expected the index would edge up to 85 from a reading of 84.6 in March. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.
http://news.yahoo.com/s/ap/20090602/ap_on_bi_ge/us_economy
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Bambi2
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Obama signs mortgage bill into law
by Philip Elliot - Associated Press
WASHINGTON - President Barack Obama said homeowners facing foreclosure would have a second chance under a measure he signed into law on Wednesday, but he added consumers still must live within their means.
The law encourages banks to spare homeowners from foreclosure and cracks down on lenders who take advantage of them. The bill passed Congress earlier this week and Obama bypassed a promised five-day waiting period to make it law.
"There are Americans desperate to find a job or unable to make ends meet, despite work in multiple jobs, Americans who pay their bills on time but can't keep their heads above water," Obama said in the White House's East Room.
"Americans living in fear that they're one illness or one accident away from losing their home, hardworking Americans who did all the right things, met all of their responsibilities, yet still find the American dream slipping out of reach."
The law - officially called the Helping Families Save Their Homes Act - expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.
Because of strict eligibility requirements, only about 50 homeowners are refinancing through the program compared to the 400,000 people it was estimated to help.
"Too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try," Obama said. "And this bill removes those hurdles, getting folks into sustainable and affordable mortgages and, more importantly, keeping them in their homes."
The lending industry helped scuttle a tougher measure that would have forced lenders to reduce the monthly payments of owners in bankruptcy.
Obama also blamed greed among lenders and irresponsibility among borrowers for part of the financial crisis that has led to 1.3 million jobs lost since February.
"Now, much of what caused this crisis was an era of recklessness, where short-term gains were too often prized over long-term prosperity," Obama said. "And too often in our nation's capital, we said the right words, we patted ourselves on the back, but ultimately failed to do what we were actually sent here to do - and that is to stand up to the special interests and stand up for the American people."
The bill also extends through 2013 an increase in deposit insurance by the FDIC from $100,000 to $250,000.
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Bambi2
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.....Good precautionary advice to consumers........
I wanted to give you a quick update on the HUD ruling regarding builders requiring buyers to use their lenders to take advantage of combined incentives packages.
HUD Sec of Public affairs Shaun Donovan announced today that they are withdrawing their current “required use” definition after reviewing public feedback. It seems that they are going to dive into this a bit deeper in order to provide a “clearer and more effective” ruling on this matter. Not sure of a timeline at this point but it does seem that HUD is going to work on eliminating this practice. Here are some key excerpts from the press release –
“We will implement the new RESPA rules as part broader reforms to the mortgage process. Needed consumer protections are too important to allow confusion over one specific provision to hold up needed RESPA reforms.”
Donovan indicated after a thorough review of more than 1,200 public comments, HUD will propose a new 'required use' definition to help consumers shop effectively and safely for homes and mortgages, free from the influence of disingenuous discounts and incentives that steer consumers to the use of affiliated businesses.”
Last edited on Tue May 12th, 2009 09:55 pm by Bambi2
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More good news...............
Pending home sales climb, lifting recovery hopes
by By Peter Y. Hong - Los Angeles Times
A reported bounce in U.S. home sales Monday boosted hopes that the housing downturn was nearing its end and that the broader economy was moving toward recovery.
The National Assn. of Realtors said its pending home sales index, which tracks signed contracts for home purchases nationwide, rose 3% in March over February's level, and was up 1% from the same month a year earlier.
The news helped to push stocks up: The Dow Jones industrial average rose 214.33 points, or 2.6%, to 8,426.74, while the Standard & Poor's 500 index rose 29.72 points, or 3.4%, to 907.24.
The pending sales index is a leading indicator of home sales totals, which are calculated after the lengthy home purchase process is completed.
"It's consistent with the other recent evidence of stabilization at the low end of the housing market," said UCLA finance professor Stuart Gabriel, who directs the university's Ziman Center for Real Estate.
The Realtor group attributed the gain to low home prices and a federal tax credit for home purchases.
"This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit," said Lawrence Yun, the group's chief economist. Yun said, however, that "we need several months of sustained growth to demonstrate a recovery in housing."
The rise in the index may indicate a return to normal seasonal housing market patterns. Home sales typically rise in March from February, but last year the pending sales index dropped 1% from February, and the index of contracts in March 2008 was down 20% from March 2007.
In Southern California, the median home sale price has held steady at $250,000 from January through March -- less than half the peak median price set in 2007, according to San Diego research firm MDA DataQuick.
The sharp plunge in Southern California home prices prompted Jeffrey Mezger, chief executive of builder KB Home, to call a market bottom Monday, an assertion he also made in late March.
"If you go to Southern Cal, for example, we're seeing a floor in pricing," Mezger said in an analysts' conference call Monday. "We don't see prices going down right now, which is a good thing, because then you can set a baseline."
KB Home constructs lower-priced homes in California and has found itself competing with previously owned homes that are in foreclosure. Various studies show higher-priced homes have not fallen as much in price in Southern California but are selling at a slower pace.
"We don't yet really see a significant rebound in sales in those marketplaces," UCLA's Gabriel said of higher-priced areas. He said financing for large mortgages remains difficult to obtain, and sellers often have the means to hang on to homes rather than sell them for less than they would like.
Also boosting the stock market was news that construction spending rose slightly in March from February. Construction spending in March totaled $969.7 billion, 0.3% above the February level, according to the Census Bureau. The March total was down 11.1% from the same month a year earlier.
The rise in construction spending was not, however, due to home building. Private residential construction was down 4.2% in March from February and was 34% lower compared with March 2008.
Public construction spending in March, which was up 1.1% from February and 2.6% from March 2008, drove the total up.
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Bambi2
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Good news. Thanks. Even if it's just a little bit of positive news, it brings confidence to me. This if for First Time Home Buyers.
The Basics: 2009 First-Time Home Buyer Tax Credit
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Here is the site that has the Federal Form for the Credit. http://www.irs.gov/pub/irs-pdf/f5405.pdf
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azcats_01
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Home sales on the rise, percentage of foreclosures down
Amy Morrison/Phoenix Business Journal
http://www.bizjournals.com/phoenix/stories/2009/05/11/daily23.html?t=printable
Local home sales are picking up, while the percentage of foreclosed homes among those sales is dropping, according to the Realty Studies department at Arizona State University.
Data for April shows 9,100 existing homes sold in Maricopa County. That’s up from 8,610 recorded sales in March and a 30 percent jump from the 6,395 sales recorded in April of last year.
Foreclosure activity in April represented 27 percent of all sales, down sharply from 51 percent two months earlier.
Researchers at ASU attribute the slowdown in foreclosure sales to stop-gap measures lenders instituted while waiting for new loan modification programs from the federal government.
“There is increasing hope that the housing troubles are beginning to ebb and the bottom, along with recovery, is in sight,” said Jay Butler, director of Realty Studies in the Morrison School of Management and Agribusiness at ASU’s Polytechnic campus. “However, many problems continue to exist that could hinder the timing of any recovery.”
The rise in home sales is tracking lower prices, according to researchers. The median price for traditional sales in April was $125,000 -- down 44 percent from $225,000 a year ago. Foreclosed properties had a median price of $145,965 -- down nearly 20 percent from one year ago.
ASU researchers point to two reasons why the median price for foreclosed homes is higher than traditional transactions. First, more expensive homes are being foreclosed on. Second, last year about 33 percent of traditional sales involved foreclosed homes being resold with a median price markdown of 15 percent.
However, since the beginning of 2009, the percentage of traditional sales involving previously foreclosed homes has risen to 55 percent with a median markdown of 25 percent.
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Bambi2
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I was checking out some statistics from the Cromford Report.........
The Cromford Report™ provides detailed information to track the history and current status of the Greater Phoenix residential resale market and offers unique insight into its future direction.
Updated daily and usually published online within a few hours, this site is intended for anyone interested in the state of the market and how it affects their investments and livelihood. Our ARMLS has now incorporated it into our MLS system.
I came upon the annual average sales price per sq. ft. in the Valley for 41 cities. I discovered Pinal is not on there, as Countys are not a part of it. Gold Canyon isn't a chartered city, but is included as it has it's own post office and zip.
Here are a few of the cities and their ranking......
#1 was Paradise Valley. Annual average sales price per sq. ft. 1 year ago? $472.01 . Todays sales price per sq. ft is $371.58 A -21% change.
#14 was Gilbert. Last years sales price pr.sq.ft was $147.55. Todays: $111.97 a 24% change.
#31 was Queen Creek. Last year? $101.72. This years? $70.43. -31% change.
I'll send the website address to Jeff so he can sort it out, if necessary.
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Bambi2
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I think we all need a refreshing course on budgeting our finances. It requires alot of discipline. Especially telling the kids NO as they beg for certain sweet cereals or candy or even toys, as you go down the grocery isle.
Here's some good information on the availability of different government loan options.
Ø FHA Loans
o Very Flexible Guidelines as long as there are compensating factors!
o 3.5% Down Payment Required
o .55% Monthly Mortgage Insurance
o 1.75% Up Front Mortgage Insurance Premium Financed Into Loan
o Gift Funds are acceptable for down payment
o Generally, you can only have 1 FHA loan
o Seller can pay up to 6% of Closing Costs
Ø USDA Rural Housing Loans
o Only TRUE 100% Financing Program Available Today!
o Property must be eligible: check address at: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
o Income limits apply – can also check on the above website; limits based on the number of people in the household
o Generally available in Queen Creek, Maricopa, Anthem, Buckeye
o Can finance closing costs into the loan if house appraises higher than purchase price
o 2% Guarantee Fee financed into the loan
Ø VA Loans
o $0 down Home Loan for Veterans of the Armed Forces!
o Who is eligible: Those who served active duty in the Armed Forces for a required time
o What do they need: Clear Certificate of Eligibility
o What is needed to get a certificate: DD214 with proper discharge
o Can only have one VA loan at a time
o There are VA funding fees that get financed into the loan that range from 1.25% to 3.3%
o Maximum financing: $417,000 for $0 down; above, must pay 25% difference
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bobthebuilder
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I'm in the process of killing a couple of credit cards and a car payment. Should be done by July next year. After that, I'll be rich!
Well, not rich, but definitely will have a lot more money every month for fun stuff.
Sometimes it's just good to cut back on the eating out and wasteful spending and knuckle down and pay off the debt. This seems to be a good time for that. At least for me.
You would be surprised how having a good written budget instills confidence. I honestly didn't realize how much money I had been wasting. A lot of the stress of this recession has dissipated over the last couple months just because of that.
.
Last edited on Tue May 5th, 2009 04:34 pm by bobthebuilder
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Bambi2
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You're right up to a point Starleen. Positive results bring confidence. Confidence brings people out of their shells of depression and makes them "want to get out" and buy something for themselves, that they have been putting off. That purchase, compounded by others, brings more demand for inventory and employees, and thus the upward cycle begins, until we hit another crisis.
I've been on this roller coaster in terms of business since the early 70's. We're climbing that trestle now that goes up.
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starleen
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Bambi2 wrote: FYI: I just pulled supply and demand statistics for the entire market and the months’ supply has dropped.
Market Dynamics of Our entire MLS Residential Inventory.
In April of 2007. the number of Properties for sale was 56,766. In April of 2008, it was 59,312. For April of 2009, we have only 44,033 properties on the market.
In April/2007, 5,526 properties were under contract. April, 08, 5,621. This April, 09, 11,712 are under contract.
Number of properties sold in 4/07 was 5,474. On 4/08, solds were 4,806. Today's April solds is 8,526.
We're doing better. More Positive signs.
Positive signs for realtors and mortgage brokers and title companies, but otherwise mostly a result of foreclosure and desperation sales and normal seasonal data.
I don't like the drive by media reports that only compare this year to last year, or this month to last month. At one time, the same media were reporting record sales and price increases and adding fuel to the bubble. Now, even though the data only equals nearly what it was before the land rush, four-five years ago, it is being reported as a positive result.
I've heard predictions of a dead cat bounce, like the stock market uptick and this faux real estate rebound - to be followed by the real deal, a true economic crash.
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Bambi2
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FYI: I just pulled supply and demand statistics for the entire market and the months’ supply has dropped.
Market Dynamics of Our entire MLS Residential Inventory.
In April of 2007. the number of Properties for sale was 56,766. In April of 2008, it was 59,312. For April of 2009, we have only 44,033 properties on the market.
In April/2007, 5,526 properties were under contract. April, 08, 5,621. This April, 09, 11,712 are under contract.
Number of properties sold in 4/07 was 5,474. On 4/08, solds were 4,806. Today's April solds is 8,526.
We're doing better. More Positive signs.
Last edited on Mon May 4th, 2009 11:59 pm by Bambi2
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