Showing posts with label HUD property. Show all posts
Showing posts with label HUD property. Show all posts
Thursday, December 30, 2010
Wednesday, December 2, 2009
Wednesday, November 26, 2008
Imporant news regarding FHA Loans
Understanding FHA
By Jason Kotar
RISMEDIA, Oct. 21, 2008-With the Federal governments re-emphasis on the FHA as a key vehicle for resuscitating the real estate market, now is a good time to review FHA in more detail.
Let’s start with some basics. First, the FHA insures loans that approved lenders make, it does not purchase them as Fannie and Freddie do. If a FHA insured home goes into bankruptcy, FHA pays off the mortgage to the Lender, takes ownership of the home, and then proceeds to sell it (a HUD home.)
To mitigate its risk and provide income to offset foreclosures and defray their expenses, FHA charges the borrower insurance premiums, both an up-front and a monthly premium. The up-front premium can be included in the mortgage amount.
FHA loans are available for purchasing or refinancing a 1 to 4 unit, owner occupied home. There a number of FHA programs that cover the gamut of real estate offerings, from your “vanilla” FHA loan to Condos to REO’s to Reverse Mortgages to Rehab to Veteran loans and more. In subsequent articles we will be reviewing these programs in more detail.
Over the last number of months, FHA began implementing some changes to their programs. In addition, the Housing and Economic Recovery Act placed additional changes in FHA practices, some of which modified FHA proposed changes. I have listed some of those changes below.
Converting Existing Homes to Rentals
The FHA changed their underwriting rules to limit the ability of a homeowner to use rental income from a previous residence that it converted to a rental property, when applying for a new mortgage on a second property. Under the new rule, the homeowner must prove sufficient income to make both mortgage payments without the rental income or has an equity position in the rental property that it will not likely result in defaulting on that mortgage. There can be an exception to this rule for employment relocations.
This change mirrors the announcement by Fannie in August. Apparently, homeowners, in increasing numbers, are choosing to vacate their existing principal residence and purchase a new residence. They are then providing misleading information on the rental income of the property being vacated to justify the new mortgage. These changes effectively end “bail and buy” loans.
Moratorium on Risk Based Premiums
The Housing and Economic Recovery Act provided for a one-year moratorium on the implementation of the FHA’s risk based premiums beginning October 1, 2008. The effect of the risk based premium was to increase the premium based on the amount of the down payment.
This will not delay the implementation of an upfront premium as well as well as monthly premiums on all loans.
Seller concessions of 6% are still allowed; however, down payment assistance programs have been eliminated effective October 1, 2008.
Down Payment Requirements
The Housing and Economic Recovery Act also called for an increase in down payment required to 3.5%. That change will not go into effect until January 1, 2009.
As with any loan program, there are a number of stipulations that need to be met to gain approval. That is why it is important to choose the right FHA approved lender. Not all FHA approved lenders service all FHA loan programs.
By Jason Kotar
RISMEDIA, Oct. 21, 2008-With the Federal governments re-emphasis on the FHA as a key vehicle for resuscitating the real estate market, now is a good time to review FHA in more detail.
Let’s start with some basics. First, the FHA insures loans that approved lenders make, it does not purchase them as Fannie and Freddie do. If a FHA insured home goes into bankruptcy, FHA pays off the mortgage to the Lender, takes ownership of the home, and then proceeds to sell it (a HUD home.)
To mitigate its risk and provide income to offset foreclosures and defray their expenses, FHA charges the borrower insurance premiums, both an up-front and a monthly premium. The up-front premium can be included in the mortgage amount.
FHA loans are available for purchasing or refinancing a 1 to 4 unit, owner occupied home. There a number of FHA programs that cover the gamut of real estate offerings, from your “vanilla” FHA loan to Condos to REO’s to Reverse Mortgages to Rehab to Veteran loans and more. In subsequent articles we will be reviewing these programs in more detail.
Over the last number of months, FHA began implementing some changes to their programs. In addition, the Housing and Economic Recovery Act placed additional changes in FHA practices, some of which modified FHA proposed changes. I have listed some of those changes below.
Converting Existing Homes to Rentals
The FHA changed their underwriting rules to limit the ability of a homeowner to use rental income from a previous residence that it converted to a rental property, when applying for a new mortgage on a second property. Under the new rule, the homeowner must prove sufficient income to make both mortgage payments without the rental income or has an equity position in the rental property that it will not likely result in defaulting on that mortgage. There can be an exception to this rule for employment relocations.
This change mirrors the announcement by Fannie in August. Apparently, homeowners, in increasing numbers, are choosing to vacate their existing principal residence and purchase a new residence. They are then providing misleading information on the rental income of the property being vacated to justify the new mortgage. These changes effectively end “bail and buy” loans.
Moratorium on Risk Based Premiums
The Housing and Economic Recovery Act provided for a one-year moratorium on the implementation of the FHA’s risk based premiums beginning October 1, 2008. The effect of the risk based premium was to increase the premium based on the amount of the down payment.
This will not delay the implementation of an upfront premium as well as well as monthly premiums on all loans.
Seller concessions of 6% are still allowed; however, down payment assistance programs have been eliminated effective October 1, 2008.
Down Payment Requirements
The Housing and Economic Recovery Act also called for an increase in down payment required to 3.5%. That change will not go into effect until January 1, 2009.
As with any loan program, there are a number of stipulations that need to be met to gain approval. That is why it is important to choose the right FHA approved lender. Not all FHA approved lenders service all FHA loan programs.
Monday, November 10, 2008
Short sale press release
Today’s homeowner can rest assured that there are options when being faced with a foreclosure situation.
Reinstatement, forbearance, rent out the property, mortgage modification, refinance or sell the home are the typical options that could fit a homeowner trying to avoid foreclosure. Each one of these options bring its fair share of pros and cons.
There are record numbers of defaulted loans that are impacting North Texas.
"I’m seeing more and more families and individuals who are having a problem keeping up with their mortgage payments in the North Texas area," said J.J. Chapa, a Broker with Keller Williams Realty. "These scenarios are caused by a myriad of different individual issues. It is causing real estate professionals to think outside the box when it comes to finding solutions for these homeowners."
Some causes of default are the typical scenarios; job loss, medical debts, divorce to name a few. The biggest culprit, however, is the adjusting rates from adjustable rate mortgage (ARM) loans.
"The ARM was not the best product for many homebuyers," Chapa said. "However, the consumer is in the ARM and when that monthly payment goes from $1000 a month to $1400 a month, something is gonna give."
What typically "gives" is the owner. Most of the time, they don’t understand their options. Most owners believe that their only option is to let the property foreclose.
The short sale has become one way to save an individual or family from a foreclosure.
Reinstatement, forbearance, rent out the property, mortgage modification, refinance or sell the home are the typical options that could fit a homeowner trying to avoid foreclosure. Each one of these options bring its fair share of pros and cons.
There are record numbers of defaulted loans that are impacting North Texas.
"I’m seeing more and more families and individuals who are having a problem keeping up with their mortgage payments in the North Texas area," said J.J. Chapa, a Broker with Keller Williams Realty. "These scenarios are caused by a myriad of different individual issues. It is causing real estate professionals to think outside the box when it comes to finding solutions for these homeowners."
Some causes of default are the typical scenarios; job loss, medical debts, divorce to name a few. The biggest culprit, however, is the adjusting rates from adjustable rate mortgage (ARM) loans.
"The ARM was not the best product for many homebuyers," Chapa said. "However, the consumer is in the ARM and when that monthly payment goes from $1000 a month to $1400 a month, something is gonna give."
What typically "gives" is the owner. Most of the time, they don’t understand their options. Most owners believe that their only option is to let the property foreclose.
The short sale has become one way to save an individual or family from a foreclosure.
Thursday, October 30, 2008
Dallas Fort Worth homes will hold their values
By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
One of the biggest worries for today’s homebuyer is the continued drop in home prices.
While cheaper housing costs are appealing, many consumers fret that prices will keep falling after they buy.
Texans shouldn’t be so concerned, according to a new report by the Center for Economic and Policy Research and the National Low Income Housing Coalition.
The analysis of the 100 largest U.S. home markets shows that Dallas-Fort Worth homebuyers are more likely to preserve home equity during the next four years.
Houston, D-FW and San Antonio are among the tops in the country in this forecast.
The study is based on a purchase of homes priced at 75 percent of the median price, which is about $150,000 in D-FW. The home purchase is financed at between 6 and 8 percent interest.
By 2012, the purchaser of a mid-priced home in Houston, D-FW and San Antonio will have, on average, more than $80,000 in equity in the house, the researchers predict.
While such forecasts are often academic, the trend it highlights toward higher home equity here is important. Almost a third of the metropolitan areas in the report are forecast to see a net decline in home equity during the same period.
The study concludes that home prices in “many communities have yet to hit bottom and significant price declines must be reckoned with.”
The remaining downside is worst in regions of the country that saw big run-ups in home prices before the current decline.
The researchers warn that it would be a mistake for governments to try and stop the current housing market correction and “maintain what are historically unprecedented high home prices.”
The positive outlook for Texas home equity growth isn’t a surprise to Mark Dotzour, top economist with Texas A&M University’s Real Estate Center.
“It confirms that there never was a price bubble in any Texas city and consequently the likelihood of equity increase is higher,” Dr. Dotzour said. “I find it interesting that their policy decision is to recommend that government allows prices to continue to fall.”
Median preowned home prices have fallen by between 2 percent and 3 percent in North Texas since peaking in mid-2007.
During the last year, nationwide home sales prices have dropped by more than 15 percent.
WHERE'S THE EQUITY?
Forecast of average home equity a buyer of a home priced at 75 percent of the median price could see during the next four years. From a comparison of 100 largest U.S. housing markets.
GREATEST INCREASES
McAllen
$90,795
Houston
$82,735
Dallas-Fort Worth
$81,338
San Antonio
$81,308
Rochester, N.Y.
$78,947
SHARPEST DECLINES
San Jose
-328,394
San Francisco
-226,489
Los Angeles
-168,069
Bridgeport, Conn.
-164,671
Oxnard, Calif.
$148,076
One of the biggest worries for today’s homebuyer is the continued drop in home prices.
While cheaper housing costs are appealing, many consumers fret that prices will keep falling after they buy.
Texans shouldn’t be so concerned, according to a new report by the Center for Economic and Policy Research and the National Low Income Housing Coalition.
The analysis of the 100 largest U.S. home markets shows that Dallas-Fort Worth homebuyers are more likely to preserve home equity during the next four years.
Houston, D-FW and San Antonio are among the tops in the country in this forecast.
The study is based on a purchase of homes priced at 75 percent of the median price, which is about $150,000 in D-FW. The home purchase is financed at between 6 and 8 percent interest.
By 2012, the purchaser of a mid-priced home in Houston, D-FW and San Antonio will have, on average, more than $80,000 in equity in the house, the researchers predict.
While such forecasts are often academic, the trend it highlights toward higher home equity here is important. Almost a third of the metropolitan areas in the report are forecast to see a net decline in home equity during the same period.
The study concludes that home prices in “many communities have yet to hit bottom and significant price declines must be reckoned with.”
The remaining downside is worst in regions of the country that saw big run-ups in home prices before the current decline.
The researchers warn that it would be a mistake for governments to try and stop the current housing market correction and “maintain what are historically unprecedented high home prices.”
The positive outlook for Texas home equity growth isn’t a surprise to Mark Dotzour, top economist with Texas A&M University’s Real Estate Center.
“It confirms that there never was a price bubble in any Texas city and consequently the likelihood of equity increase is higher,” Dr. Dotzour said. “I find it interesting that their policy decision is to recommend that government allows prices to continue to fall.”
Median preowned home prices have fallen by between 2 percent and 3 percent in North Texas since peaking in mid-2007.
During the last year, nationwide home sales prices have dropped by more than 15 percent.
WHERE'S THE EQUITY?
Forecast of average home equity a buyer of a home priced at 75 percent of the median price could see during the next four years. From a comparison of 100 largest U.S. housing markets.
GREATEST INCREASES
McAllen
$90,795
Houston
$82,735
Dallas-Fort Worth
$81,338
San Antonio
$81,308
Rochester, N.Y.
$78,947
SHARPEST DECLINES
San Jose
-328,394
San Francisco
-226,489
Los Angeles
-168,069
Bridgeport, Conn.
-164,671
Oxnard, Calif.
$148,076
Friday, September 26, 2008
Dallas housing market: Nations strongest market
With news of the Federal Reserve rate cut, anxieties about a declining housing market and a possible recession are spreading across the country. The good news for Dallasites is that the Dallas housing market is the strongest of any major city in the United States.
A recent PMI Group study reported that the risk of U.S. housing price declines remained low in many areas of the South, Midwest and Northwest. Among the 50 largest metropolitan statistical areas, Texas cities were the lowest and most stable in risk outlook during 2007.
Home prices in Dallas have avoided the speculative bubble that rapidly drove so much of America's real estate to record prices and record unsold inventory levels. To this point, home prices in the Dallas area increased a steady 17% over the last five years, while the U.S. averaged an extreme 53.5% increase during the same time period, according to the Office of Federal Housing Enterprise Oversight. Inevitably, the rest of the country now suffers from rising mortgage foreclosures, falling housing prices and weekly real estate auctions.
Dallas has consistently outpaced the rest of the country on nearly every important economic stability indicator and is currently running counter to national housing trends. There are three reasons why.
First, prices have remained stable in Dallas because the Metroplex has both favorable zoning regulations and an ample land supply, factors that allow the market to keep up with demand. Few restrictions and land availability give builders easy access to enter or leave the market depending on changing market conditions. This competition has proven to be highly responsive to the market and therefore effective in creating price and supply stability.
A second factor that supports the continued housing demand and stable home prices is that Dallas continues to experience a robust job market. For a city's housing growth to be stable and healthy, the demand must be reflective of internal job and income growth. Texas is adding jobs at the rate of almost 250,000 per year -- nearly double the rates of Florida, Arizona and New York. The Dallas metro area alone added more than 90,000 jobs last year, leading the nation as one of the top 10 cities in employment growth. An influx of jobs, incomes and availability of living space helps keep new and used house prices in the Metroplex safe from excessive price increases and corrections.
The third reason Dallas has avoided the current housing crisis is its physical location, central to both U.S. coasts and Mexico. The Dallas/Fort Worth International Airport, mild climate and prime location have helped attract diverse industries and a number of major corporate relocations. The Texas economy is one of the most diverse in the country, with major players in key long-term growth sectors, notably transportation, aerospace and defense, financial services, high-tech electronics, retail and wholesale trade.
To ensure that strong housing trends continue here, proactive steps have been initiated that keep our city's housing supply aligned with new consumer demands. For example, the Uptown housing landscape now accommodates buyers with many new housing options. Twenty years ago, few condos or high-end rentals were offered because there was inadequate infrastructure to support demand. As demand increased, zoning expanded to permit much higher densities with a mix of commercial, rental and retail properties in the area, transforming Uptown into an exciting urban experience.
Dallas developers have demonstrated real responsiveness to the needs of the market. Condo ownership and high-end apartment rentals are now a convenient alternative to single-family homes. Baby boomers who want to downsize and young adults who want to be close to Dallas' cultural offerings are creating a need for new development opportunities.
The Dallas residential market, especially for condominiums, is still emerging: Dallas is the fourth largest city in the country, but only the 16th largest condominium market. Condominiums typically account for 7.7% of the housing stock in the top 50 U.S. markets. In Dallas, however, they represent only 4.4% of available housing.
Condos eventually will be one of the strongest sectors in the marketplace, but the housing slowdown has affected the middle-market condo and luxury condo market, although some of the slowdown appears to be psychological.
Condos selling for less than $400,000 have been affected by the tightening mortgage supply, but decreasing rates should provide some relief. Condos priced at $650,000 to more than $1 million also have slowed as buyers sit on the sidelines. Drexel Development Co. continues to sell about three condos a month, compared to four a month in 2007.
Dallas, by virtue of its robust job growth, land resources and location, has avoided the major housing problems that beset other U.S. cities and can leverage continued economic success by viewing its land as a reusable resource and evolving its housing market to keep up with changing lifestyle demands.
EDELMAN is president of Drexel Development Co., which builds luxury apartments and condominiums.
A recent PMI Group study reported that the risk of U.S. housing price declines remained low in many areas of the South, Midwest and Northwest. Among the 50 largest metropolitan statistical areas, Texas cities were the lowest and most stable in risk outlook during 2007.
Home prices in Dallas have avoided the speculative bubble that rapidly drove so much of America's real estate to record prices and record unsold inventory levels. To this point, home prices in the Dallas area increased a steady 17% over the last five years, while the U.S. averaged an extreme 53.5% increase during the same time period, according to the Office of Federal Housing Enterprise Oversight. Inevitably, the rest of the country now suffers from rising mortgage foreclosures, falling housing prices and weekly real estate auctions.
Dallas has consistently outpaced the rest of the country on nearly every important economic stability indicator and is currently running counter to national housing trends. There are three reasons why.
First, prices have remained stable in Dallas because the Metroplex has both favorable zoning regulations and an ample land supply, factors that allow the market to keep up with demand. Few restrictions and land availability give builders easy access to enter or leave the market depending on changing market conditions. This competition has proven to be highly responsive to the market and therefore effective in creating price and supply stability.
A second factor that supports the continued housing demand and stable home prices is that Dallas continues to experience a robust job market. For a city's housing growth to be stable and healthy, the demand must be reflective of internal job and income growth. Texas is adding jobs at the rate of almost 250,000 per year -- nearly double the rates of Florida, Arizona and New York. The Dallas metro area alone added more than 90,000 jobs last year, leading the nation as one of the top 10 cities in employment growth. An influx of jobs, incomes and availability of living space helps keep new and used house prices in the Metroplex safe from excessive price increases and corrections.
The third reason Dallas has avoided the current housing crisis is its physical location, central to both U.S. coasts and Mexico. The Dallas/Fort Worth International Airport, mild climate and prime location have helped attract diverse industries and a number of major corporate relocations. The Texas economy is one of the most diverse in the country, with major players in key long-term growth sectors, notably transportation, aerospace and defense, financial services, high-tech electronics, retail and wholesale trade.
To ensure that strong housing trends continue here, proactive steps have been initiated that keep our city's housing supply aligned with new consumer demands. For example, the Uptown housing landscape now accommodates buyers with many new housing options. Twenty years ago, few condos or high-end rentals were offered because there was inadequate infrastructure to support demand. As demand increased, zoning expanded to permit much higher densities with a mix of commercial, rental and retail properties in the area, transforming Uptown into an exciting urban experience.
Dallas developers have demonstrated real responsiveness to the needs of the market. Condo ownership and high-end apartment rentals are now a convenient alternative to single-family homes. Baby boomers who want to downsize and young adults who want to be close to Dallas' cultural offerings are creating a need for new development opportunities.
The Dallas residential market, especially for condominiums, is still emerging: Dallas is the fourth largest city in the country, but only the 16th largest condominium market. Condominiums typically account for 7.7% of the housing stock in the top 50 U.S. markets. In Dallas, however, they represent only 4.4% of available housing.
Condos eventually will be one of the strongest sectors in the marketplace, but the housing slowdown has affected the middle-market condo and luxury condo market, although some of the slowdown appears to be psychological.
Condos selling for less than $400,000 have been affected by the tightening mortgage supply, but decreasing rates should provide some relief. Condos priced at $650,000 to more than $1 million also have slowed as buyers sit on the sidelines. Drexel Development Co. continues to sell about three condos a month, compared to four a month in 2007.
Dallas, by virtue of its robust job growth, land resources and location, has avoided the major housing problems that beset other U.S. cities and can leverage continued economic success by viewing its land as a reusable resource and evolving its housing market to keep up with changing lifestyle demands.
EDELMAN is president of Drexel Development Co., which builds luxury apartments and condominiums.
Monday, September 22, 2008
Exciting service upgrades
My office has upgraded our virtual tour technology and will be parterning with Just Snooping.com to bring an even better marketing piece to market our awesome listings.
Look for new exciting changes to the virtual tour technology on all listings from today on. Samples are coming.
Our office is always looking at how we can improve on how we market our listings. We are one of the only offices that is still having tremendous success getting our listings sold. Our comprehensive marketing package is the reason why. This upgrade makes our marketing package even stronger.
Look for new exciting changes to the virtual tour technology on all listings from today on. Samples are coming.
Our office is always looking at how we can improve on how we market our listings. We are one of the only offices that is still having tremendous success getting our listings sold. Our comprehensive marketing package is the reason why. This upgrade makes our marketing package even stronger.
Friday, August 29, 2008
New blog site for foreclosures
I would like to announce a new website that will help in educating families and individuals who may be struggling to make their mortgage payments on time.
www.JJStopsforeclosure.com
This site is a wonderful resource to educate yourself on your options if you are struggling with a mortgage due to an adjusting rate (ARM), divorce or any other financial catastrophy that you may be enduring.
If you are not struggling, you may know someone that is. Pass on this much needed information.
www.JJStopsforeclosure.com
This site is a wonderful resource to educate yourself on your options if you are struggling with a mortgage due to an adjusting rate (ARM), divorce or any other financial catastrophy that you may be enduring.
If you are not struggling, you may know someone that is. Pass on this much needed information.
Monday, August 11, 2008
Danger of buying a house FSBO....
What are the dangers of buying a house FSBO
-You'll probably overpay for the house without an agent
-The seller probably won't disclose what he legally needs to disclose and theres no one there to make him
-Comps for the area where you are buying figure in real estate commissions...
-Peronsality with FSBO get in way of negotiations in many instances
-Good Realtors can negotiate better terms for their buyer clients
-Buyin a house (scheduling inspections, escrow, managing process is a full time job etc.)
There are exceptions to these....however, consider, I just met with a couple that bought a FSBO 2 years ago....the seller never disclosed that the house had serious foundation problems....the buyer didn't know to look....did my listing presentation and told them they needed to have someone look at the foundation and the bill comes to over $12,000...long story short, they are going to get to save up for foundation repairs on a house that they overpaid for 2 years ago....
Same goes with people that go into the builder...a good agent who sees real estate EVERYDAY (not a friend who's trying to break in the business, or a gal in Sunday school that does it on the side) is worth their weight in commissions....BUT, you have to find a good agent...a buyers agent works on your behalf and owes you fiduciary responsibility throughought the transaction....
-You'll probably overpay for the house without an agent
-The seller probably won't disclose what he legally needs to disclose and theres no one there to make him
-Comps for the area where you are buying figure in real estate commissions...
-Peronsality with FSBO get in way of negotiations in many instances
-Good Realtors can negotiate better terms for their buyer clients
-Buyin a house (scheduling inspections, escrow, managing process is a full time job etc.)
There are exceptions to these....however, consider, I just met with a couple that bought a FSBO 2 years ago....the seller never disclosed that the house had serious foundation problems....the buyer didn't know to look....did my listing presentation and told them they needed to have someone look at the foundation and the bill comes to over $12,000...long story short, they are going to get to save up for foundation repairs on a house that they overpaid for 2 years ago....
Same goes with people that go into the builder...a good agent who sees real estate EVERYDAY (not a friend who's trying to break in the business, or a gal in Sunday school that does it on the side) is worth their weight in commissions....BUT, you have to find a good agent...a buyers agent works on your behalf and owes you fiduciary responsibility throughought the transaction....
Friday, August 8, 2008
Before school rush
Every year, there is a before school rush in real estate. People wanting to get moved before school starts back up. This year, like everything else, it has been a little slower than years past. The tremendous heat has also played a role in people staying indoors instead of looking at new houses.
I, however, have been very busy. I have seen that before school rush in addition to many investors coming out to begin buying the some of the best real estate deals that I think we'll see for a long time. If you are a buyer, you need to get off the fence and get into the market now.
I, however, have been very busy. I have seen that before school rush in addition to many investors coming out to begin buying the some of the best real estate deals that I think we'll see for a long time. If you are a buyer, you need to get off the fence and get into the market now.
Monday, August 4, 2008
Analysts: U.S. mortgage defaults to accelerate, peak in a couple of years
07:24 AM CDT on Monday, August 4, 2008
Associated Press
The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.
Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.
The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.
The mortgage troubles have been exacerbated by an economy that is still struggling. Reports last week showed another drop in home prices, slower-than-expected economic growth and a huge loss at General Motors. On Friday, the Labor Department reported that the unemployment rate in July climbed to a four-year high.
While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.
Defaults are likely to accelerate because many homeowners' monthly payments are rising rapidly. The higher bills come as home prices continue to decline and banks tighten their lending standards, making it harder for people to refinance loans or sell their homes. Of particular concern are “alt-A” loans, many of which were made to people with good credit scores without proof of their income or assets.
“Subprime was the tip of the iceberg,” said Thomas H. Atteberry, president of First Pacific Advisors, a investment firm in Los Angeles that trades mortgage securities. “Prime will be far bigger in its impact.”
In a conference call with analysts last month, James Dimon, the chairman and chief executive of JPMorgan Chase, said he expected losses on prime loans at his bank to triple in the coming months and described the outlook for them as “terrible.”
Delinquencies on mortgages tend to peak three to five years after loans are made, said Mark Fleming, the chief economist at First American CoreLogic, a research firm. Not surprisingly, subprime loans from 2005 appear closer to the end of defaults than those made in 2007, for which default rates continue to rise steeply.
“We will hit those points in a few years, and that will help in many ways,” Fleming said, referring to the loans made later in the housing boom. “We just have to survive through this part of the cycle.”
Associated Press
The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.
Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.
The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.
The mortgage troubles have been exacerbated by an economy that is still struggling. Reports last week showed another drop in home prices, slower-than-expected economic growth and a huge loss at General Motors. On Friday, the Labor Department reported that the unemployment rate in July climbed to a four-year high.
While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.
Defaults are likely to accelerate because many homeowners' monthly payments are rising rapidly. The higher bills come as home prices continue to decline and banks tighten their lending standards, making it harder for people to refinance loans or sell their homes. Of particular concern are “alt-A” loans, many of which were made to people with good credit scores without proof of their income or assets.
“Subprime was the tip of the iceberg,” said Thomas H. Atteberry, president of First Pacific Advisors, a investment firm in Los Angeles that trades mortgage securities. “Prime will be far bigger in its impact.”
In a conference call with analysts last month, James Dimon, the chairman and chief executive of JPMorgan Chase, said he expected losses on prime loans at his bank to triple in the coming months and described the outlook for them as “terrible.”
Delinquencies on mortgages tend to peak three to five years after loans are made, said Mark Fleming, the chief economist at First American CoreLogic, a research firm. Not surprisingly, subprime loans from 2005 appear closer to the end of defaults than those made in 2007, for which default rates continue to rise steeply.
“We will hit those points in a few years, and that will help in many ways,” Fleming said, referring to the loans made later in the housing boom. “We just have to survive through this part of the cycle.”
Monday, June 30, 2008
DFW Housing Prices per Dallas News
Dallas home prices fell 3.4 percent in April from a year earlier
11:15 PM CDT on Tuesday, June 24, 2008
By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
Dallas home prices took another dip in the latest measure of the U.S. housing market.
Local home prices fell 3.4 percent in April from a year earlier in the Standard & Poor's/Case-Shiller home price index released Tuesday.
The local decline is much lower than the 15.3 percent falloff in prices for the 20 cities surveyed in the monthly report. It was the largest nationwide drop in home prices on record.
Across the country, home prices have retreated to levels last seen in August 2004.
Every city in the benchmark Case-Shiller April report saw prices lower than a year ago.
Las Vegas and Miami had the biggest price declines, down more than 26 percent from last year.
The smallest decline was in Charlotte, N.C. – down 0.1 percent.
But there were small gains in some markets in April compared with March, including a 1.1 percent increase in Dallas.
"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," Standard & Poor's David Blitzer said.
"If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets," Mr. Blitzer said.
Case-Shiller tracks the prices of typical single-family homes in each metropolitan area.
The index survey does not include condominiums and townhouses. It only covers pre-owned properties – no new construction.
The Case-Shiller researchers compare "arms-length sales" of specific single-family homes over time.
Also Tuesday, the Office of Federal Housing Enterprise Oversight reported that its home price index showed a 4.6 percent nationwide decline in prices for the 12 months ending in April.
But in the region that includes Texas, prices were up 1.9 percent from a year ago.
Agency surveys don't include all houses sold in the market and only those with mortgages of less than $417,000.
A report released this week by Harvard University's Joint Center for Housing Studies suggests that a turnaround in the nation's depressed housing market is a ways off.
Harvard's State of the Nation's Housing 2008 study described the current housing recession as "the worst in a generation."
11:15 PM CDT on Tuesday, June 24, 2008
By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
Dallas home prices took another dip in the latest measure of the U.S. housing market.
Local home prices fell 3.4 percent in April from a year earlier in the Standard & Poor's/Case-Shiller home price index released Tuesday.
The local decline is much lower than the 15.3 percent falloff in prices for the 20 cities surveyed in the monthly report. It was the largest nationwide drop in home prices on record.
Across the country, home prices have retreated to levels last seen in August 2004.
Every city in the benchmark Case-Shiller April report saw prices lower than a year ago.
Las Vegas and Miami had the biggest price declines, down more than 26 percent from last year.
The smallest decline was in Charlotte, N.C. – down 0.1 percent.
But there were small gains in some markets in April compared with March, including a 1.1 percent increase in Dallas.
"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," Standard & Poor's David Blitzer said.
"If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets," Mr. Blitzer said.
Case-Shiller tracks the prices of typical single-family homes in each metropolitan area.
The index survey does not include condominiums and townhouses. It only covers pre-owned properties – no new construction.
The Case-Shiller researchers compare "arms-length sales" of specific single-family homes over time.
Also Tuesday, the Office of Federal Housing Enterprise Oversight reported that its home price index showed a 4.6 percent nationwide decline in prices for the 12 months ending in April.
But in the region that includes Texas, prices were up 1.9 percent from a year ago.
Agency surveys don't include all houses sold in the market and only those with mortgages of less than $417,000.
A report released this week by Harvard University's Joint Center for Housing Studies suggests that a turnaround in the nation's depressed housing market is a ways off.
Harvard's State of the Nation's Housing 2008 study described the current housing recession as "the worst in a generation."
Saturday, June 28, 2008
Hope for housing is hope for the economy
Has anyone not noticed the cost of gas and milk has topped $4.00 a gallon? There is a growing chorus of voices chanting the "Inflation Is Here" mantra. Even though the White House and Federal Reserve are not quite ready to join in, the facts are prices in many sectors of the economy are on the rise.
This past week Warren Buffett, the quiet billionaire investor behind Berkshire Hathaway (BRK, Fortune 500), joined in the debate, "I think inflation is really picking up.It's huge right now, whether it's steel of oil.we see it everywhere."
Normally, the Fed will raise rates to discourage the acceleration of inflation. So, why is this cycle any different, why is the Fed likely to keep rates on hold for the near future?
Rising interest rates are the enemy of housing. The glut of unsold housing is a block to economic growth and any upward movement of rates will stunt economic recovery and prolong the current stall. In order for housing and commercial real estate, for that matter, to recover we must maintain a financial environment friendly to lending and borrowing. And it will take time for the demand for housing to absorb the excess inventory. A 6-month inventory is considered a buyer's market. Today, there is a 10.7-month supply.
The Joint Center for Housing Studies at Harvard University recently released their "The State of the Nation's Housing 2008" which finds that over the next decade the country is poised for a increase in housing demand.
"The good news is that we still have a growing population.As long as you have more households, more people are going to need places to live," says Nicolas Retsinas, director of the Center.
"If household formation continues at pace, prices will recover and starts will rise again," says economist Karl Case, of Wellesley College and the consulting firm of Fiserv CSW.
According to Harvard study there are three social trends that will have major influence on the housing market over the next 10 years:
.People are marrying and divorcing more often - this is the fastest growing household type.
.The "echo boomers" are aging and about to enter the housing market.
.There is an increase in the life expectancy for "baby boomers."
.There is a projected annual immigration of 1.2 million.
The study finds from 2010 to 2020, the U.S. household count will grow by an average of more than 1.4 million per year.
Keeping rates low will feed the economy as these households enter the market.
This past week Warren Buffett, the quiet billionaire investor behind Berkshire Hathaway (BRK, Fortune 500), joined in the debate, "I think inflation is really picking up.It's huge right now, whether it's steel of oil.we see it everywhere."
Normally, the Fed will raise rates to discourage the acceleration of inflation. So, why is this cycle any different, why is the Fed likely to keep rates on hold for the near future?
Rising interest rates are the enemy of housing. The glut of unsold housing is a block to economic growth and any upward movement of rates will stunt economic recovery and prolong the current stall. In order for housing and commercial real estate, for that matter, to recover we must maintain a financial environment friendly to lending and borrowing. And it will take time for the demand for housing to absorb the excess inventory. A 6-month inventory is considered a buyer's market. Today, there is a 10.7-month supply.
The Joint Center for Housing Studies at Harvard University recently released their "The State of the Nation's Housing 2008" which finds that over the next decade the country is poised for a increase in housing demand.
"The good news is that we still have a growing population.As long as you have more households, more people are going to need places to live," says Nicolas Retsinas, director of the Center.
"If household formation continues at pace, prices will recover and starts will rise again," says economist Karl Case, of Wellesley College and the consulting firm of Fiserv CSW.
According to Harvard study there are three social trends that will have major influence on the housing market over the next 10 years:
.People are marrying and divorcing more often - this is the fastest growing household type.
.The "echo boomers" are aging and about to enter the housing market.
.There is an increase in the life expectancy for "baby boomers."
.There is a projected annual immigration of 1.2 million.
The study finds from 2010 to 2020, the U.S. household count will grow by an average of more than 1.4 million per year.
Keeping rates low will feed the economy as these households enter the market.
Monday, June 23, 2008
1st Quarter report from NTREIS Collin County
Collin County employement increased by about 1000 jobs in the first quarter. The housing market:
- Average sales price of home $238,100.00
- 11,608 homes on the market (up from 8,382 from the qtr. before)
- 2,527 homes sod down from 2,620 from the qtr. before
- 351 new homes built down from 892 from the qtr before
- average days on the market is 91 up from 86 from the qtr before
Saturday, June 21, 2008
Showing houses in the heat with children
The temperature is definatley starting to reach the tripple digits here in the DFW area. This can pose challenges for those that aren't used to looking at homes in the heat. I recomend looking in the mornings and lateevenings to avoid the heat stresses that accompany looking for a home.
If you have your house listed and have no electric in your home to run the a/c, you might as well mark your home as "UNSOLD". Buyers do not spend time in hot houses. No matter how great you think your home is, if it's not cool, the buyer has a perception that the house has cooling issues.
Also, if you have small children, try to find someone to watch them. When I was a kid, I would have hated being dragged around all day long looking at houses. It will help you, as a buyer, conentrate on your home search too!
If you have your house listed and have no electric in your home to run the a/c, you might as well mark your home as "UNSOLD". Buyers do not spend time in hot houses. No matter how great you think your home is, if it's not cool, the buyer has a perception that the house has cooling issues.
Also, if you have small children, try to find someone to watch them. When I was a kid, I would have hated being dragged around all day long looking at houses. It will help you, as a buyer, conentrate on your home search too!
Tuesday, June 10, 2008
Marketing plan for your home!
In this stagnant real estate market, you CAN get your home sold! What does it take? Well, price is going to be the most important aspect of getting a home sold, HOWEVER, a well crafted marketing plan is just as important.
My marketing plan examines every avenue that a buyer will find your house for sale. Yard signs, print advertising, direct mail, point of sale marketing, call capture systems, extensive online marketing are just some of the many tools that my team uses to get homes sold successfully.
My marketing plan examines every avenue that a buyer will find your house for sale. Yard signs, print advertising, direct mail, point of sale marketing, call capture systems, extensive online marketing are just some of the many tools that my team uses to get homes sold successfully.
Friday, May 16, 2008
Fun night
Ok...I'm not a horse race person, but, I have to say Lone Star Park is very nice. I just wanted to thank North American Title for inviting me to their suite last night. Great food, and a great dessert bar made a great ending to an otherwise long real estate workday.
I was able to catch up with some old real estate friends. Their consensus about the market is basically what mine has been so it's good to get some validation. While the market isn't as dreadful as the media would have you believe, it is definatley requiring more work to get deals put together and closed.
Sellers have to be more patient in our current market. Buyers have to be more realistic. Are there good deal out there? Sure! But those that buy real estate for a living already know where they are and are typically one step ahead. Do sellers really have $40k in equity that they are just going to give buyers? No. Would you? They'll hold out for a better market or just sell to a buyer who understands that there may be some wiggle room on price but not $40k worth of wiggle room.
Tomorrow, I would like to discuss the importance of choosing a lender that has a good reputation.
I was able to catch up with some old real estate friends. Their consensus about the market is basically what mine has been so it's good to get some validation. While the market isn't as dreadful as the media would have you believe, it is definatley requiring more work to get deals put together and closed.
Sellers have to be more patient in our current market. Buyers have to be more realistic. Are there good deal out there? Sure! But those that buy real estate for a living already know where they are and are typically one step ahead. Do sellers really have $40k in equity that they are just going to give buyers? No. Would you? They'll hold out for a better market or just sell to a buyer who understands that there may be some wiggle room on price but not $40k worth of wiggle room.
Tomorrow, I would like to discuss the importance of choosing a lender that has a good reputation.
Tuesday, April 29, 2008
Process for buying a HUD foreclosure
Who doesn’t love a bargain? For the thrifty capitalist, investing in HUD foreclosures—residential properties owned by the U.S. Department of Housing and Urban Development—appears to be exactly that. Furthermore, the possibility that HUD foreclosure homes might become increasingly available in the coming years should pique renewed interest among investors; however, investors should be aware of limitations in the process of purchasing HUD foreclosures that may or may not fit their personal aims for the investment.
A HUD foreclosure, or HUD home, is a single family or multi-family residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage, according to hud.gov. In the wake of the subprime lending crisis, FHA-insured mortgage loans are becoming more popular among homebuyers who experience difficulty in qualifying for traditional bank loans. An increase in the number of FHA-insured loans distributed to homebuyers is likely to be accompanied by an eventual increase in HUD foreclosures. As a result, investors could stand to reap high profit margins resulting from the affordability and availability of HUD homes on the market.
Most HUD properties are hardly dream homes, however, and are almost never found in high-cost urban areas. FHA-insured mortgages for properties in high-cost areas such as New York and Los Angeles must not exceed a maximum loan limit of $362,790, according the FHA.com—a prohibitively low amount when compared to the actual selling prices of most homes in those areas. Furthermore, all HUD homes are sold as is, and selling prices are discounted based on the extent of repairs and renovations that need to be done.
The process of buying a HUD foreclosure is significantly different than that of purchasing a traditional home. HUD homes are sold through a bidding process that puts investors in line behind intended owner-occupants. During the first 10 days that a HUD home is listed for sale, only owner-occupants are permitted to place bids; if a successful bid is not accepted by the time the initial priority period has elapsed, bidding is opened to investors as well.
HUD homes for sale are posted on Internet listing sites by special HUD-contracted management companies. Bids for HUD homes must be placed through a HUD-registered broker or agent and are usually submitted electronically.
In addition, HUD will pay for some closing and sales commission costs. According to Harrington, Moran and Barksdale, Inc. (HBMI), a company that markets and manages HUD single family homes for several states, HUD will pay up to 5 percent for broker commission costs and up to 3 percent for standard closing items, excluding the closing agent fee. HUD will pay the entire closing agent fee if buyers use HUD closing agents; conversely, buyers who choose to use a non-HUD agent must pay the fees and work with a HUD agent on some legal items.
Although HUD will pay broker commissions and other closing costs, the amount that HUD has to pay is subtracted from the net worth of the bid. Therefore, a bid offer that includes a broker commission of 2 percent would be viewed as more favorable than the same bid amount that includes a 5 percent commission.
Consumers must provide an earnest money deposit to their real estate broker by the time of electronic bidding; deposits can be as low as $500 for properties selling for less than $50,000, according to ForeclosuresToGo.com. Earnest money deposits for winning bids are immediately submitted to the HUD closing agent.
Once a bid is won, the purchaser must close within a time period specified by the closing agent and the correct sales contract must be submitted quickly—within 48 hours for most states. A strict settlement deadline is set, usually 30 to 60 days from the date of the accepted contract.
Investing in HUD foreclosures offers affordability and potential for good returns, but investors, as always, should do their research and exercise patience when dealing with a bidding process that generally caters to owner-occupant buyers. For more information on purchasing HUD homes and internet listing sites, email J.J. at JJ@JJChapa.com .
A HUD foreclosure, or HUD home, is a single family or multi-family residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage, according to hud.gov. In the wake of the subprime lending crisis, FHA-insured mortgage loans are becoming more popular among homebuyers who experience difficulty in qualifying for traditional bank loans. An increase in the number of FHA-insured loans distributed to homebuyers is likely to be accompanied by an eventual increase in HUD foreclosures. As a result, investors could stand to reap high profit margins resulting from the affordability and availability of HUD homes on the market.
Most HUD properties are hardly dream homes, however, and are almost never found in high-cost urban areas. FHA-insured mortgages for properties in high-cost areas such as New York and Los Angeles must not exceed a maximum loan limit of $362,790, according the FHA.com—a prohibitively low amount when compared to the actual selling prices of most homes in those areas. Furthermore, all HUD homes are sold as is, and selling prices are discounted based on the extent of repairs and renovations that need to be done.
The process of buying a HUD foreclosure is significantly different than that of purchasing a traditional home. HUD homes are sold through a bidding process that puts investors in line behind intended owner-occupants. During the first 10 days that a HUD home is listed for sale, only owner-occupants are permitted to place bids; if a successful bid is not accepted by the time the initial priority period has elapsed, bidding is opened to investors as well.
HUD homes for sale are posted on Internet listing sites by special HUD-contracted management companies. Bids for HUD homes must be placed through a HUD-registered broker or agent and are usually submitted electronically.
In addition, HUD will pay for some closing and sales commission costs. According to Harrington, Moran and Barksdale, Inc. (HBMI), a company that markets and manages HUD single family homes for several states, HUD will pay up to 5 percent for broker commission costs and up to 3 percent for standard closing items, excluding the closing agent fee. HUD will pay the entire closing agent fee if buyers use HUD closing agents; conversely, buyers who choose to use a non-HUD agent must pay the fees and work with a HUD agent on some legal items.
Although HUD will pay broker commissions and other closing costs, the amount that HUD has to pay is subtracted from the net worth of the bid. Therefore, a bid offer that includes a broker commission of 2 percent would be viewed as more favorable than the same bid amount that includes a 5 percent commission.
Consumers must provide an earnest money deposit to their real estate broker by the time of electronic bidding; deposits can be as low as $500 for properties selling for less than $50,000, according to ForeclosuresToGo.com. Earnest money deposits for winning bids are immediately submitted to the HUD closing agent.
Once a bid is won, the purchaser must close within a time period specified by the closing agent and the correct sales contract must be submitted quickly—within 48 hours for most states. A strict settlement deadline is set, usually 30 to 60 days from the date of the accepted contract.
Investing in HUD foreclosures offers affordability and potential for good returns, but investors, as always, should do their research and exercise patience when dealing with a bidding process that generally caters to owner-occupant buyers. For more information on purchasing HUD homes and internet listing sites, email J.J. at JJ@JJChapa.com .
Friday, April 18, 2008
Todays Dallas Morning news
According to NTREIS, the downtown continues to spread with home sale prices continuing to slump.
Additionally, the foreclosure outbreak is beginning to affect higher end homes.
Links to article click here
Additionally, the foreclosure outbreak is beginning to affect higher end homes.
Links to article click here
Thursday, January 17, 2008
Sellers: Prepare to negotiate
The dream scenario for someone selling his or her home is a long line of prospective buyers shouting at the top of their lungs in a protracted bidding war for the home. Unfortunately, that rarely happens. Since the odds are against that taking place, it is best to have a firm grip on what you will consider an acceptable offer for your home.
Here are some questions to ask when evaluating offers:
Is the offer at or near the asking price? Is the offer above the asking price?
Has the buyer included money-eating discounts and costs in the fine print of the offer?
What are the alternatives to the buyer's offer?
Is there time to wait for other offers?
What if no other offers are received?
What if several offers are received?
The best way to sort through the questions is to rely on the advice of a real estate professional, someone who is familiar with the market and the factors that influence it.
Buyers (and sellers) have three choices in any proposed real estate transaction:
No thanks
I'll take it
I'm interested, but here's my offer.
The third choice, the one most frequently used, will initiate a series of counteroffers between the buyer and seller. A counteroffer is nothing more than a new offer. Negotiating is a natural part of any real estate deal. Unlike traditional negotiations, there should not be a "winner" or "loser" in the process. Both sides need to be ready to compromise. Remember, it's not winner take all, and a seller should not take personally any comments made by a buyer. It's just business, pure and simple.
Buyers should be treated with respect, and homeowners should never lose sight of their best interest or their baseline transaction requirement, the standards unique to each owner and which must be met for the home to be sold.
You want your home to attract multiple offers, giving you some flexibility when it comes to choosing a buyer. It is important if you use a real estate agent to make sure your listing agreement provides that your home be included in the Multiple Listing Service (MLS) within 24 hours.
A buyer is not obligated to accept the highest offer. You might want to sell to a better-qualified buyer or seek more attractive terms.
You are free to counter as many offers as you want, but experts advise caution. If you accidentally accept more than one offer, you'll legally be obligated to sell the home to two buyers. Experts advise using a standard counteroffer form that stipulates the counteroffer isn't accepted until the buyer signs it and you accept it.
Here are some questions to ask when evaluating offers:
Is the offer at or near the asking price? Is the offer above the asking price?
Has the buyer included money-eating discounts and costs in the fine print of the offer?
What are the alternatives to the buyer's offer?
Is there time to wait for other offers?
What if no other offers are received?
What if several offers are received?
The best way to sort through the questions is to rely on the advice of a real estate professional, someone who is familiar with the market and the factors that influence it.
Buyers (and sellers) have three choices in any proposed real estate transaction:
No thanks
I'll take it
I'm interested, but here's my offer.
The third choice, the one most frequently used, will initiate a series of counteroffers between the buyer and seller. A counteroffer is nothing more than a new offer. Negotiating is a natural part of any real estate deal. Unlike traditional negotiations, there should not be a "winner" or "loser" in the process. Both sides need to be ready to compromise. Remember, it's not winner take all, and a seller should not take personally any comments made by a buyer. It's just business, pure and simple.
Buyers should be treated with respect, and homeowners should never lose sight of their best interest or their baseline transaction requirement, the standards unique to each owner and which must be met for the home to be sold.
You want your home to attract multiple offers, giving you some flexibility when it comes to choosing a buyer. It is important if you use a real estate agent to make sure your listing agreement provides that your home be included in the Multiple Listing Service (MLS) within 24 hours.
A buyer is not obligated to accept the highest offer. You might want to sell to a better-qualified buyer or seek more attractive terms.
You are free to counter as many offers as you want, but experts advise caution. If you accidentally accept more than one offer, you'll legally be obligated to sell the home to two buyers. Experts advise using a standard counteroffer form that stipulates the counteroffer isn't accepted until the buyer signs it and you accept it.
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