Housing Market Recovery Dependent On Reduction Of “Oversupply Of Distressed Homes” (Video)

10 09 2011

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Categories : Bank-Owned, Defaults, Delinquencies, Financing, Foreclosures, Housing Market, Investors, Mortgage Industry, Purchases

Homebuyers Should Not Avoid Short Sales But Have Patience And Few Contingencies With Purchase Financing

19 08 2011

http://renovationlendinginstitute.com/

  • Typically with a short sale, the homeowner is underwater and has experienced a financial hardship such as a job loss.  To limit the damage to his credit rating, a homeowner may attempt to work with his lender to negotiate a short sale.  Not only must the bank approve of the short sale itself, it also must agree to the price, since the bank will accept the difference as a loss.
  • Unlike foreclosures, in which the owner has walked away and the bank is looking to unload a vacant – and sometimes vandalized – property, a short sale isn’t a distressed home that will sell at an extremely low price.  According to data from RealtyTrac, short sales typically sold for nearly 10 percent less than the market price in the first quarter of 2011, whereas foreclosures sold at an average discount of 35 percent.
  • Home buyers wanting to purchase a short sale must have patience.  In most cases, when a buyer makes an offer on a house, he receives a response from the seller within a few days, or even hours.  With a short sale, the bank must approve of the sale and bank representatives are overloaded with cases.  It may take 30 days or longer for a buyer to receive a response from the bank.
  • In a traditional real estate transaction, it is common for a home buyer who currently owns his home to make his offer contingent on selling his current home.  In short sales, most banks will not approve an offer that is contingent on the buyer selling his current home, as too many things can go wrong.
  • Banks also typically won’t consider short-sale offers that have inspection contingencies in them, so buyers can either do an inspection prior to making an offer or forego an inspection altogether.
  • Even with the challenges associated with short sales, buyers should not avoid these transactions. 

For more:  http://realestate.aol.com/blog/2011/08/11/short-sales-are-they-worth-the-trouble/


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Categories : Financing, Foreclosures, Housing Market, Mortgage Industry, Purchases, REO's, Short Sales, Statistics

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

http://renovationlendinginstitute.com/

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

Homeownership In The U.S. Dropped To 66.4% In First Quarter Of 2011, The Lowest Level Since 1998

27 04 2011

The homeownership rate dropped to 66.4% in the first quarter, the lowest level since the Fourth Quarter of 1998, according to the Census Bureau.

  • The rate is down from 67.1% one year ago
  • The decline is “yet more evidence that Americans are now less able and less willing to buy a home
  • The housing crash has more than reversed the increase seen during the boom
  • The Census Bureau estimated a total housing inventory of 131,009 units across the country in the 1st quarter
  • The homeowner vacancy rate on these properties stayed level at 2.6%; the high rate was the first quarter of 2009 at 2.9%
  • Homeownership varied across the U.S., peaking in the Midwest at 70.4% with a low in the West at 60.9%

For more:  http://www.housingwire.com/2011/04/27/homeownership-falls-to-lowest-level-since-1998


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Homebuyers Resist The Lowest Home Prices In 10 Years As Buyers Question “The Safety Of A Home As An Investment”; FHA 203k “ADDS” Value To Homes After Closing

19 04 2011

 

http://renovationlendinginstitute.com/

  • The lowest home prices in 10 years is failing to lure many buyers
  • But have Americans soured on the idea of home ownership?
  • Recent surveys asking “is a home was a safe investment?” showed a drop to 64 percent from 70 percent in the 4th Q of 2010
  • The number was 83 percent in 2003
  • The housing crash clearly has caused permanent changes in the way some people view home ownership
  • Americans stay in their homes for about eight years
  • A homebuyer who bought a home in 2002 and sold in 2010 saw a 4.8 percent increase in value
  • The average annual gain in the past 20 years was 4.2 percent according to databases
  • Housing affordability is now at record levels as of December 2010 according to the National Association of Realtors
  • The median U.S. home price tumbled 32 percent from a 2006 peak to a nine-year low in February
  • The Great Depression saw a 27 percent drop in the first five years

For more:  http://www.bloomberg.com/news/2011-04-19/americans-shun-most-affordable-homes-in-generation-as-owning-loses-appeal.html


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Categories : 203k, Bank-Owned, Federal Government, FHA, First-Time Homebuyer, Home Sales, Homes, Housing Market, Mortgage Industry, Purchases, Realtors, REO's, Statistics, Surveys

Housing Industry Must See Return Of “First-Time Homebuyers” And FHA Financing Including FHA 203k Renovation Loans Are Critical To Stabilization Of Neighborhoods And Home Prices

28 03 2011

 

  • The National Association of Realtors (NAR) reported that last month 34% of existing-home purchases were made by first-time buyers
  • First-time homebuyers were 29% of the market in January, the lowest since NAR surveys began in late 2008
  • First-time buyers make up 40% to 45% of all purchasers in “healthy markets”
  • By purchasing starter homes, they allow those sellers to buy more expensive homes
  • Low mortgage rates and falling prices in many markets have still produced weak existing-home sales
  • Existing home sales were down 2.8% in February 2011 from a year earlier
  • Federal tax credits boosted home sales in 2009 and 2010 and lured some first-time buyers into the market
  • Those credits expired in April 2010, and March 2010 saw 48% of buyers being first-timers
  • Tightened underwriting standards have eliminated many first-time buyers who can’t meet credit or employment history requirements in a still-weak economy
  • These higher credit standards are reflected in loans bought by government-backed mortgage giants Fannie Mae and Freddie Mac
  • In 2010 Freddie Mac’s portfolio had an average credit score of 758
  • That was up from 720 five years ago
  • Many lenders are also requiring higher down payments
  • The best terms kick in with 20% or more down
  • Higher down payments are making FHA loans the only loan available to first-time buyers
  • FHA requires as little as 3.5% down for borrowers with good credit scores
  • FHA loans were 19% of the home purchase market last year vs. 14% a decade before
  • Cash buyers accounted for a record 33% of existing-home sales and this has squeezed out some buyers
  • Sellers often prefer cash offers because they’re more likely to close and will choose those offers over FHA buyers

For more:  http://www.usatoday.com/money/economy/housing/2011-03-28-real-estate-first-time-home-buyers.htm


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Categories : 203k, Fannie Mae, Federal Government, FHA, FHA Access, First-Time Homebuyer, Freddie Mac, Home Sales, Homes, HUD, The 203k Guy

Ninety Percent Of Americans Remain Committed To “Homeownership” And Buying A Home As A Long-Term Investment According To An Allstate-National Journal Poll

18 03 2011

  • Americans still have a deep attachment to homeownership
  • The eighth quarterly Allstate-National Journal HeartlandMonitor Poll found that nearly nine out of 10 homeowners say they would buy their homes again
  • That percentage held true even among homeowners who said their home values had declined
  •  Seven of 10 Americans say they would advise a friend or family member to buy a home as a long-term asset
  • Only 35% of respondents expect their personal financial situations to improve over the next year
  • 75%  of those surveyed said it is still possible for people like them to achieve the American Dream
  • 59% said they currently are living the American Dream
  • Owning your own home as one of the most critical parts of the American Dream, second only to raising a family
  • Only 42% said that government’s push to expand homeownership created more stable communities
  • 51% said these policies made communities less stable because it “encouraged people to take on too much debt” and led to foreclosures
  • 46% said Washington should continue its efforts to promote homeownership through policies such as tax incentives for first-time buyers and the mortgage interest deduction

For more:  http://www.allstatenewsroom.com/channels/News-Releases/releases/new-poll-americans-still-believe-deeply-in-homeownership-as-an-integral-part-of-the-american-dream


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Categories : Bank-Owned, Federal Government, FHA, First-Time Homebuyer, Home Sales, Homes, HUD, Mortgage Industry, Purchases, Realtors, Rehabs, Remodeling, Surveys

Skip Schenker’s “HOT Dog of the Week” Features A HomePath Renovation Home In Santa Ana CA (Video)

15 03 2011

This is a great HomePath Renovation or FHA 203k loan opportunity. All construction funds are financed into the new loan, you can even finance up to 6 mortgage payments while the property is under construction and not habitable. Turn this fixer upper into your dream home. It has a large lot with a separate unit attached to the garage. Get money to put in a new kitchen, flooring, bathrooms, paint, carpet and more.


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Categories : 203k, Fannie Mae, FHA, Financing, First-Time Homebuyer, HomePath Renovation, Hot...Dog of the Week, Purchases, The 203k Guy

“First-Time Homebuyers” Should Complete A “Pre-Approval Checklist” Before Looking For Homes

30 01 2011

PRE-APPROVAL CHECKLIST

 

  • The higher your credit score, the lower your down payment and monthly payments.
  • Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment
  • A score of 700 to 720 will get you a good deal and 750 and above will garner the best rates on the market
  • Have your credit report pulled and make sure there is no old, paid or settled debts pulling score down.
  • Stop applying for new credit 6 months to 1-year before you apply for financing.
  • And keep the moratorium in place until after you close on your home
  • Look for homes that are financially AFFORDABLE
  • For FHA financing your home payment shouldn’t exceed 31 percent of gross monthly income
  • If you have increasing annual income that ratio can go higher
  • For conventional financing home expenses should not exceed 28 percent of gross monthly income
  • Increasing annual income will allow ratio to go higher
  • Again, the housing payment (monthly mortgage payment, hazard insurance, property taxes and mortgage insurance) should be comfortably affordable
  • The down payment will be as little as 3.5 percent to 20 percent, depending on your credit scores and expenses
  • Closing costs can run from $2,300 to $4,000, depending on loan program
  • Down payment assistance programs are available depending on where you intend to live
  • The seller can also pay a portion of the closing costs
  • You should have three to five months’ worth of mortgage payments set aside as reserves AFTER CLOSING
  • If you have higher savings, the lender will also allow your housing payment ratio to be higher
  • Also, consider that you will have to pay 2.5% to 3% of your home’s value annually on upkeep, repairs and maintenance
  • On a $250,000 home, the monthly upkeep can be $520 to $625 per month.

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Categories : 203k, Fannie Mae, FHA, Financing, Homes, Mortgage Industry, Purchases

FundMyRemodel.com Home Values: Freddie Mac Sees Home Prices Rebounding In 2011 As Low Mortgage Rates And Higher Confidence Improves Market

6 12 2010

Accelerating economic recovery, low mortgage rates, a bottoming of home prices and increased affordability of homes at current low prices will be behind the improvement, said Frank Nothaft, the chief economist at the mortgage finance company.

“These forces will support a gradual recovery in the housing and mortgage markets,” he said.

The housing market has been falling since its peak in summer 2006. The subprime crisis, the rapid decline in borrowers’ credit and poor underwriting of loans during the boom have all contributed to depressing home sales and mortgage rates since then.

Housing was expected to recover this year, but economic and employment uncertainty stunted it.

In a bid to keep the flow of money to consumers, the Federal Reserve is expected to keep its federal funds rate at the current range of 0% to 0.25% for most of next year. This is expected to keep rates on 30-year fixed-rate loans below 5% throughout 2011.

Despite this, some analysts expect home prices to drop another 5% to 10% in the next year, and housing to stay depressed until late 2011 or early 2012.

Lower prices on homes and lower mortgage rates over the past couple of years have pushed home-buyer affordability to the highest levels in decades, according to the National Association of Realtors.

Once the economy stabilizes next year and buyers’ confidence returns, “many first-time buyers will be attracted to the housing market in the new year, likely translating into more home sales in 2011 than in 2010,” Nothaft wrote.

The volume of existing homeowners refinancing their mortgage loans is expected to drop next year, he said. Many borrowers, who can, have already lowered their mortgage rates and government programs to support homeowners are set to expire next June.

For more:  http://online.wsj.com/article/BT-CO-20101206-708546.html


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Categories : Freddie Mac, Home Builders, Homes, Purchases

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