U.S. Home Sales Fell 0.8% In June To Annual Rate Of 4.77 Million Homes As First-Time Homebuyers Fall To 31% Of Total And Purchase Cancellations Rise To Record 16% As Appraisals Come In Low

20 07 2011

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  • Home sales fell 0.8% in June to a seasonally adjusted annual rate of 4.77 million homes
  • Economists say that 6 million homes per year represent a healthy housing market
  • The sales pace is behind last year’s 4.91 million homes sold — the weakest sales in 13 years
  • Sales have fallen in four of the past five years
  • A record number of homebuyers who signed contracts canceled deals last month, approximately 16%
  • First-time buyers fell to a very low 31% of purchase transactions (they represent 50% in a health market)
  • Declining home prices have kept many people from selling their houses and taking new jobs in growing areas
  •  They have also made people feel less wealthy and that has reduced the consumer spending that drives about 70 percent of economic activity
  • Bigger down payments, tougher lending rules, high debt and a shortage of desirable starter homes are keeping many would-be buyers away
  • Even some with good credit and enough money for a down payment are holding off because they are worried home prices will keep falling

For more:  http://finance.yahoo.com/news/Home-sales-fell-in-June-fewer-apf-154260181.html?x=0&sec=topStories&pos=1&asset=&ccode=


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Categories : Economic Statistics, First-Time Homebuyer, Home Values, Housing Market, Mortgage Industry, Purchases, Statistics

U.S. Housing Prices: S&P/Case-Shiller Home Price Index For Major Metropolitan Areas (April 2011)

12 07 2011

CLICK ON "RED DOTS" TO VIEW HOME PRICES SINCE 2000


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Categories : Economic Statistics, Home Sales, Homes, Housing Market, Purchases

Mortgage Loan Limits Are Set To Move Lower After Sept. 30, 2011 As Several National Lenders Stop Accepting Applications Exceeding New Limits; California (60%) Is Most Affected Market

8 07 2011

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Had the lower limits been in place last year, Fannie and Freddie would have backed 50,000 fewer loans, according to the Federal Housing Finance Agency. The bulk of the affected loans —about 60%—are in California, with another 20% in Massachusetts, New York and New Jersey.

Parts of the country with less expensive homes also would be affected; their limits are scheduled to fall as low as $417,000 for Fannie and Freddie loans and as low as $271,050 for FHA loans.

In anticipation of the expiration of current loan limits on Sept. 30, 2011, Bank of America has decided to stop accepting conventional and government applications for loan amounts that will exceed the permanent loan amounts.  The deadline to submit loan applications was July 1.

According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.

Barring Congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

For more:  www.car.org


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Categories : California, Fannie Mae, Federal Government, FHA, Financing, Freddie Mac, Housing Market, Mortgage Industry, Purchases, Refinance, Underwriting

Homeownership In America: New Book “Reckless Endangerment” Exposes How Fannie Mae “Pursued Profits For Itself” In The Name Of “Expanding Home Ownership” (Video)

6 07 2011

As part of his Making Sen$e series, Paul Solman reports on the new book, “Reckless Endangerment,” which argues that for the past 20 years, Fannie Mae, a government-sponsored enterprise that increases money for homeownership, pursued profits for itself and bought risky loans that inflated a housing bubble that eventually burst.


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Categories : Books, Fannie Mae, Federal Government, First-Time Homebuyer, Housing Market, Mortgage Industry, Purchases, Videos

U.S. Housing Market: Home Price Decline Is Bringing “Price-To-Rent” Ratio Back To Historical Norms Favoring Homebuyers In Long-Term

5 07 2011

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Starting in 2000, rent growth did not keep pace with the steep home price appreciation, pushing the price-to-rent ratio well above the historic average. Many market observers have identified the dislocation between prices and rents as both an indicator of the housing bubble and as a tool for helping to understand the relative affordability of these two housing options.

Home prices have been declining since 2006, forcing the price-to-rent ratio to revert to its long-term average. As of the first quarter of 2011, the price-to-rent ratio is slightly below 1.0, suggesting that on the national level renting is essentially the same as buying economically, although the trend seems to be tilting toward buying going forward.

For more:  http://nreionline.com/finance/news/rent_versus_buy_home_0705/

 


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Categories : FHA, Financing, Homes, Housing Market, Mortgage Industry, Purchases, Reports

FHA Mortgage Underwriting: FHA Requires “Funds Documentation” Including Earnest Money, Large Deposits And Gift Funds

28 06 2011

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Categories : 203k, FHA, Financing, Housing Market, Mortgage Industry, Purchases, Underwriting

FHA Mortgage Underwriting: FHA Waiver On 90-Day Anti-Flipping Rule Requires Minimum 640 FICO, Two Appraisals, Justification Of Legitimate Renovations And Purchase From “Owner Of Record”

27 06 2011

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The FHA (Federal Housing Administration) has extended the temporary waiver of the less than 90-Day Anti-Flipping Rule.  The extension will permit buyers to continue to use FHA financing to purchase HUD-owned properties, bank owned properties and properties resold through private sales through 2011.

  • The minimum credit score to these transactions is 640.
  • Two (2) appraisals are required to support the property value when the increase is greater than 120% in less than 90 days.
  • Justify the increase in value by retaining in the loan file supporting documentation and a second appraisal, which verifies that the seller has completed sufficient legitimate renovation, repair, and rehabilitation work on the subject property to substantiate the increase in value or, in cases where no such work is performed, the appraiser provides appropriate explanation of the increase in property value since the prior title transfer.
  • Property was marketed open and fairly through listing service (MLS).
  • A home inspection ordered in the borrowers name is required when the property value increase is greater than 120%.
  • Multiple flips of the subject property are not permitted.
  • Properties with multiple transfers (more than one), regardless of monetary profit, in the past 12 months, are not eligible for <90 day Credit Waiver.  91-180 days from the last transaction the seller may not sell with an FHA transaction until the 181 day has elapsed.  

Example: Owner A sells to Purchaser B on 12/10.

New Seller B sells to Purchaser C 3/22/11.

Seller C now is selling to Purchaser D on 3/24/11 this would be the 3rd transfer, and the transaction is less than 90 day flip so not eligible for FHA financing. Seller C could not use FHA financing until 12/11 or after.

  •  Receipts for materials and/or contractor bids may be required to show acquisition costs.
  • Changes and overlays:
  1. The second appraisal will impact seller concessions and the second appraisal must be on the GFE at time of application.
  2. The guideline states that the second appraisal is a buyer’s cost that can be paid by a third party (lender, seller, etc.). However, the imortgage rule is that the second appraisal will not be absorbed by the branch.
  3. Property must be purchased from owner of record.
  4. Sale or assignment of sales contract not allowed.
  5. One of the four documents must be provided:
  • Property Sales history report
  • Copy of Recorded Deed from Seller
  • Copy of Property Tax Bill
  • Title commitment or binder

 Common Scenarios:

1. Realtor can sell home, as long as they only play one role in the transaction.  If they are the seller, they can’t be the agent.  Refer to Bulletin attached

2.  If the seller owner who is a Realtor wants to use another realtor in their own office to sell it, then there needs to be a commission to that agent.

3.  If a corporation goes in and acquires and fixes, and sells, that is fine.  If they sell to a realtor to sell, then we have multiple property flips and it is probably not allowed in less than 90 days.

4.  If a contractor purchases a home, and fixes it, and then sells it to a realtor, to sell it, then we have multiple property flips, and it would not be allowed in less than 90 days.


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Categories : 203k, Federal Government, FHA, Financing, Housing Market, Mortgage Industry, Purchases, The 203k Guy, Underwriting

Home Prices Fall 4.6% In May 2011 As First-Time Homebuyers Fall To 35% Of Total Sales; Healthy Housing Market Needs First-Time Homebuyers To Be 50% Of Total Home Sales

21 06 2011

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  • Home sales sank 3.8% last month to a seasonally adjusted annual rate of 4.81 million homes
  • The is the weakest pace since November 2010 according to the National Assoc. of Realtors
  • That is far below the 6 million homes per year sold in healthy housing markets
  • Home sales have fallen in four of the past five years since 2006 and hit a 13-year low in 2010
  • First-time homebuyers fell to 35% of sales
  • First-time homebuyers typically represent 50% of sales in healthy markets
  • The are critical as the improve their properties and invest in their communities which helps home values rise
  • The median sales price for a previously occupied home in May was $166,500, 4.6% lower than one year ago
  • The median price of a new home is nearly 31% higher than the median price for a re-sale, twice the normal markup

For more:  http://www.usatoday.com/money/economy/housing/2011-06-21-home-sales-2011-low_n.htm


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Categories : 203k, Economic Statistics, FHA, Financing, First-Time Homebuyer, Home Sales, Housing Market, Mortgage Industry, Purchases, Realtors, Rehabs, Remodeling

Future Housing Trends: Demographers Cite Shift In Homebuyer Preferences To Homes In Older “Established City Communities” In Need Of Renovation Financing And Away From Newer “Remote Suburban Housing”

17 06 2011

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“…demographers like Arthur Nelson at the University of Utah predicts that there will be 22 million unwanted suburban homes by 2025…”

  • There is a shift from quarter-acre suburban lots to denser neighborhoods and will result in higher property values
  • Established city enclaves and “new urbanist” communities that resemble old-style neighborhoods without the sprawl
  • They are close to public transportation, walkable and loaded with culture and amenities. They personify the new American dream.
  • The sprawling, car-addicted ex-urban areas far from central cities may undergo a slow decline
  • Inner suburbs will do fine and prosper, the next wave of real-estate growth favors vibrant cities and energy-efficient communities
  • Government homeownership policy has over-subsidized suburban growth at the expense of cities and this may well change
  • The FHA 203k Renovation loan is ideal to purchase homes in older, established neighborhoods within established cities
  • In more coastal areas of Southern and Northern California older single-family and 2-4 multifamily unit properties are in dire need of renovation and the FHA 203k loan is perfectly suited to help first-time and experienced homeowners purchase in these traditional city areas

For more:  http://blogs.reuters.com/reuters-wealth/2011/06/17/after-the-housing-bust-whats-next/


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Categories : 2-4 Units, 203k, California, First-Time Homebuyer, Housing Market, Purchases, Rehabs, Remodeling, The 203k Guy

Mortgage Loan Underwriting: Fannie Mae Guidelines Allow For 95% LTV On Purchase And Rate/Term Refinance For 1-Unit Properties; 85% Loan-To-Value For Cash-Out Refinances

13 06 2011


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Categories : Fannie Mae, Mortgage Industry, Purchases, Refinance, Underwriting

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