Tuesday, October 29, 2013

How Do You Feel The Market Is Doing?

When people ask me is the market getting better, what do you hear happening out there, is it true that the R.E. industry will slow down from Nov 1st through Feb etc etc etc. I always tell people to listen to the financial news and the see what the “Pros” are saying. But then I always tell them you can listen to 10 different “So Called” experts and get 7 different answers, so you will have to make your own assumptions.

So I ask you, looking at these 3 stories that came out today, How Would You Say The Market Is Doing?
Go ahead, make your own assumption.

Pending Home Sales Plummet Fourth Month In A Row, on declining home affordability

The number of real estate contracts signed and recorded declined 5.6% from August to September, as home affordability receded under the influence of higher mortgage rate. Lawrence Yun, chief economist for NAR, says this is the first time in 29 months that pending home sales weren't above year-ago levels and that we should anticipate lower home sales in the fourth quarter - with a plateau into next year. "This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014," he said. "Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year."

This is the lowest index level reached since December of last year, and NAR is blaming the influence of declining home affordability, lower consumer confidence and a government shutdown that shook up both construction activity and home sales.

NAR says the Pending Home Sales fell 5.6% to 101.6 in September - from a downwardly revised 107.6 in August - and is 1.2% below September 2012 when it was 102.8. This is the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings, says NAR.

Fannie Mae Raises Its Lending Requirements

It just got a little harder to buy a home. Fannie Mae recently announced that it would reduce the maximum loan-to-value (LTV) ratio for loans it purchases from 97 percent to 95 percent -- meaning that borrowers now have to contribute a minimum 5 percent down payment, instead of 3 percent. This change places yet another barrier in front of low- and moderate-income families, who are already facing a tightening credit box.

Effective November 1, 2013, Fannie Mae's new policy will apply to both standard mortgages and affordability products (such as My Community mortgages). Freddie Mac made the same move several years ago.

 There are three things worth noting, Ninety-five to 97 percent LTV mortgages are a small fraction of recent mortgage originations purchased by Fannie Mae.  Borrowers can still take out loans with LTVs above 95 percent through the FHA, VA, or USDA, so future loans will essentially shift from one set of taxpayer-backed institutions to another.  If the intent was to reduce risk, this was a crude way to accomplish it. The default rate for 95 to 97 percent LTV mortgages is only slightly higher than for 90 to 95 LTV mortgages, and the default rate for high FICO loans with 95 to 97 LTV ratios is lower than the default rate for low FICO loans with 90 to 95 percent LTV ratios.

Bank Of America To Lay Off 4,000 Mortgage Workers

Bank of America is reportedly cutting up to 4,000 mortgage jobs, both on the servicing and origination side of the business. The cuts are due mainly to falling application volume in light of rising interest rates, according to a Reuters report.  About 1,200 of the 4,000 Bank of America employees to be laid off have already been notified, according to the report. Most of those employees work on new loans. Another 2,800 job cuts, mostly on the default servicing side, will come later this year.

Earlier this week, a federal jury in Manhattan found Bank of America liable for fraud in connection with faulty mortgages that Countrywide Financial Corp. - acquired by Bank of America in 2008 - sold to Fannie Mae and Freddie Mac just prior to the housing meltdown.
In that case, Countrywide executive Rebecca Mairone was found liable for one count of fraud. Mairone, now a managing director at JPMorgan, is accused of overseeing a process called the "High Speed Swim Lane," "HSSL" or "Hustle" that was allegedly used by Countrywide in 2007 to speed mortgage originations by side-stepping certain aspects of the application review process. Federal prosecutors allege that this program, in part, is what led to the shoddy loans that were passed onto Fannie Mae and Freddie Mac.    Penalties are yet to be determined.

Wells Fargo, JPMorgan Chase and Citigroup have also recently downsized their mortgage operations - however, a majority of those cuts have been on the servicing side. Looming Basel III regulations that will require banks told hold more money in reserves based on loans outstanding - as well as the increased risk of enforcement action or litigation as a result of these rules - is causing the larger U.S. financial institutions to divest themselves of their mortgage servicing rights.

Thank You
Paul Antonelli
Buying, Selling, New Construction or Avoiding Foreclosure 
We can help you like we've helped hundreds of our other Happy Clients.
14129 Town Loop Blvd., Suite 200, Orlando, FL 32837 
Cell: 321-443-4028          Fax: 866-674-9761

Friday, October 18, 2013

5 Reasons Why You Should Sell Your House Today

1. Demand Is High
The most recent Existing Home Sales Reports by the National Association of Realtors (NAR) show a double digit percent increase in sales year-over year; sales have remained above last year’s levels for over 25 months.  There are buyers out there right now and they are serious about purchasing.
2. Supply Is Beginning to Increase
Total housing inventory is again approaching historic norms of a 5 month supply compared with 4.3 months in January.  Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months.  Selling now while demand is high and before supply increases may garner you your best price.
3. New Construction Is Coming Back
Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block.  As the market is recovering, more and more builders are jumping back in.  These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.
4. Interest Rates Will Again Rise
Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year.  The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by this time next year.
Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
5. It’s Time to Move On with Your Life
Look at the reason you are thinking about selling and decide whether it is worth waiting.  Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

Friday, October 11, 2013

Yeah, Florida’s On The Road To Recovery

Even as everyone is stating over and over again that Florida’s housing market is showing a strong recovery with above average gains in prices and sales, Florida

Once again led the nation in foreclosures completed in the 3rd quarter; no other state was even close, according to Core Logic reports.

Out of the 658,463 foreclosures completed nationwide in the last 12-months, 111,000 of them, (17%),  were in the Sun Shine state, according to data reports.

Michigan ranked as the No. 2 state, with the completion of 60,000 foreclosures, and in the 3rd position is California, they  totaled 58,000 proceedings during the same period.

The top five foreclosure states –included No. 4 Texas, with 43,000 foreclosures finalized, and No. 5 Georgia, where 40,000 were finished. These five states accounted for approximately half of all foreclosures completed nationwide.
Even though Florida cleaned out more foreclosures than any other state, they still have the highest inventory of the foreclosures, Otherwise known as the Shadow inventory or now called the Zombie Inventory, looks like everyone is jumping on the new Zombie craze.  In August Florida is still showing 8% of the mortgaged homes are in pre-foreclosure status.  New Jersey ranked second with 6.2 % of all its mortgaged residences in foreclosure. New York has 4.9 %, Maine has 4.0 % and Connecticut with 3.9 %.

Florida also had the highest rate of severely delinquent mortgages, past due for 90 days or more,  in August with 12.4 % of all mortgaged properties. That’s more than twice the national average delinquency rate of 5.3 % of loans.

Buying, Selling, New Construction or Avoiding Foreclosure
We can help you like we've helped hundreds of our other Happy Clients.
14129 Town Loop Blvd., Suite 200, Orlando, FL 32837
Cell: 321-443-4028          Fax: 866-674-9761

Saturday, October 5, 2013

HUD Announces New Short Sale Requirements

Effective October 1, 2013, HUD has announced the following changes to their Federal Housing Administration (FHA) short sale requirements.
To be eligible, one must successfully complete a short sale under the FHA short sale program. The borrowers must meet the following requirements:

1) They cannot list the property with or sell it to anyone with whom they are related or have a close personal or business relationship. In legal terms, it must be an “arm’s-length” transaction.

2) Any knowing violation of the arm’s-length requirement may be a violation of federal law.

3) Your mortgage must be in default, on the date the short sale transaction closes.

4) Before closing, any additional liens against the property must be released. A lien holder who demands a payment to release its lien must submit a written statement, and an agreement to release the lien if that amount is paid.

5) For a standard pre-foreclosure sale, servicers must use a Deficit Income Test (DIT) to determine a homeowner’s financial hardship. The IRS Collection Financial Standards is used to verify homeowners expenses not reflected in their credit report. Only owner-occupied properties are eligible for the standard pre-foreclosure sale.

6) Homeowners eligible for a streamlined short sale may not be required to submit financial information or have a financial hardship. Principal residences, second homes, investment properties, and service members who have received Permanent Change of Station (PCS) Orders are potentially eligible.

7) The appraisal of one’s property should be completed within approximately ten business days. After the appraisal, the short sale file will be updated and prepared for review. In some cases, approval may be required by the investor and/or FHA, which may take more time.

8) As a new condition, one might be required to make a final payment (sometimes called a cash contribution) before closing. This payment will reduce the deficiency balance.

If one is an owner-occupant, acting in good faith, and successfully selling one’s property, one may be eligible for an incentive of up to $3,000.

The revised FHA short sale addendum must be signed and dated by all parties. Under this addendum, all parties agree that the subject property must be sold through an arm’s-length transaction. An arm’s-length transaction is defined as a short sale between two unrelated parties that is characterized by a selling price and other conditions that would prevail in an open market environment. Also, no hidden terms or special understandings can exist between any of the parties (e.g., buyer, seller, appraiser, sales agent, closing agent, and mortgagee) involved in the transaction.