Check out this quick video update of what is taking place in the Real Estate market, right now…
This month in Real Estate…
May 7, 2011 By
Builders, banks offer free job-loss insurance to home buyers – LA Times
April 8, 2011 By
The insurance programs would make borrowers’ mortgage payments for up to six months if they become unemployed during the coverage period.
By Kenneth R. Harney- March 27, 2011
Reporting from Washington —
Insurance programs that make borrowers’ mortgage payments for up to six months if they lose their jobs during an initial one- to two-year coverage period are gaining popularity. Home builders are offering it to new buyers, and some of the country’s largest banks and mortgage lenders think it’s a win-win idea for shaky economic times.
Better yet, the bank, builder or other sponsor of the plan typically provides it free — no direct, out-of-pocket cost to the consumer — as part of its marketing package. Most programs come with specific dollar ceilings on coverage, often ranging from $2,000 to $2,500 a month. Some limit the amount they’ll pay to principal and interest only. Others cover principal, interest, property taxes and homeowners insurance up to a specific amount.
Although there are no hard statistics on the number of such plans in the marketplace, Teri Cooper, executive vice president of Mortgage Payment Protection Inc. of Heathrow, Fla., one of the largest providers of “involuntary unemployment” policies, estimates that as many as 200,000 buyers are covered by her firm’s Mortgage Guardian programs alone.
Bank of America, which operates a “borrower protection plan” that the bank funds itself, says it has covered thousands of new mortgages — limited to those with initial principal balances less than $500,000. Terry H. Francisco, a spokesman for the bank, said the plan has covered $110 million in monthly payments for unemployed borrowers during the last two years. During 2010, the bank provided 156,000 purchasers with its protection program; as of last December, mortgages covered by the plan totaled $36 billion in loan balances.
Read the full article here
Million-Dollar Homes Face More Audits – Smart Money Blogs
April 6, 2011 By
By Arden Dale
Some people who owe more than $1 million on their homes are coming under the microscope at the Internal Revenue Service over how much of their mortgage interest they can deduct on their tax returns.
The number of taxpayers involved could be in the tens of thousands because in some parts of the country, many homes sell for more than $1 million and even a buyer who puts down 20% or 30% may need to borrow. The amount of interest at stake is substantial, in some cases as much as $50,000 to $60,000 on a $1.1 million mortgage.
The IRS didn’t comment, but the scrutiny follows a period of confusion by taxpayers, advisers and even some IRS agents about how much interest can be deducted, based on what kind of debt the homeowner holds. Tax rules distinguish between two kinds of home debt. There is home acquisition debt, which is a loan used to acquire, construct or substantially improve a qualified home, and is secured by the home. Then there is home equity debt, which is any other kind of loan that is also secured by the home.
Some tax advisers were telling clients it was acceptable to deduct all interest on a single mortgage of up to $1.1 million. Others contended that the limit for mortgages was $1 million, but they could also deduct interest on another $100,000 in a home equity loan, according to Melissa Labant, tax technical manager at the American Institute of Certified Public Accountants.
Click here for the full article.
Proposed settlement would force banks to allow short sales for delinquent homeowners – LA Times
April 5, 2011 By
The proposed deal among banks and government officials is aimed at stabilizing the real estate market and helping underwater borrowers who are months behind on mortgage payments avoid foreclosure.
By Jim Puzzanghera and Alejandro Lazo, Los Angeles Times -March 30, 2011
Reporting from Washington and Los Angeles—
Major banks may be forced to let severely delinquent homeowners sell their houses for less than the loan amounts owed as part of a broad settlement of federal and state investigations into botched foreclosure paperwork, according to government officials involved in the negotiations.
The requirement to allow so-called short sales would be in addition to forcing mortgage servicers to reduce the amount some homeowners owe on their loans, said two officials, who spoke on the condition of anonymity because negotiations are ongoing.
The goal of short sales would be twofold: provide a quicker and more economical way for banks to dispose of distressed real estate and to help stabilize the real estate market by clearing out a backlog of defaulted mortgages that are poised for foreclosure.
They would be used in situations in which borrowers were so underwater that the more costly and time-consuming process of foreclosure would seem to be the only option.
Read the full article here
11.4% of all U.S. homes are vacant – CNN Money
April 4, 2011 By
By Les Christie, staff writerMarch 29, 2011: 2:51 PM ET
NEW YORK (CNNMoney) — There is a correction on this story.
High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.
The national vacancy rate at 11.4% according to a release Tuesday from the Census Bureau.
“Vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.
Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).
The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.
10 fastest-growing U.S. cities
These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.
“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”
But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.
Read the full article here
3 Reasons the Term “Strategic Default” Is Misleading
April 4, 2011 By
In a recent study, the Chicago Booth/Kellogg School Financial Trust Index found that a full 36% of Americans would consider “strategic default”—another term for walking away from your mortgage—if they were underwater (owed more on their home than what it was worth).
Now that more than one in four American homeowners is “underwater,” I feel that it’s important for the community to know the truth about strategic default.
The truth is the foreclosure process carries with it credit issues, current and future employment challenges, issues with security clearance and possible debt collections.
That’s why it is vital to explain the 3 reasons why the term “strategic default” is misleading:
1. There’s nothing strategic about defaulting on purpose, especially when you have options like short sales, mortgage modifications, and refinance (just to name a few) that may keep you from foreclosure.
2. The waiting periods to apply for a new mortgage loan are at least five years less in a short sale vs. a foreclosure.
3. A foreclosure will show up on your credit report every time you apply for a home loan, car loan, new job, etc., and will affect your financial situation for many years to come.
If you are underwater and can no longer afford your mortgage payments, you need to create a genuine strategy to avoid foreclosure, helping to provide stability for you and our community.
If you have any questions about what steps you or someone you care about should take next, contact me today!
IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Buying a first home – WSJ
April 3, 2011 By
By RACHEL LOUISE ENSIGN – Wall Street Journal
Last fall, Gretchen Steinmiller Torres and her husband, Dustin, bought their first place, a $204,000, four-bedroom, 2½-bath house in the suburbs of Columbus, Ohio — even though they didn’t have immediate plans to use much of the space.
“We have a baby room in our house with no baby,” says Ms. Torres, 29 years old, adding that the newly constructed home is in a good school district. Now they just have to grow into it.
Forget the starter home.
With housing prices stagnant and still falling in many parts of the country, and interest rates still relatively low, younger first-time buyers are finding that they can afford more house than they would have a few years ago. And they don’t have the complication of having to unload an existing home that also has dropped in value before they can buy a new one.
But the current market also presents some challenges for younger buyers. Many lenders are requiring higher credit scores and larger down payments. Mortgages insured by the Federal Housing Administration, a popular option for first-time buyers, are getting higher fees. And buyers should prepare to stay put for a while since home prices aren’t expected to rebound any time soon.
The median existing-home price was $158,800 in January, down 3.7% from a year earlier and down 24.7% from January 2007, according to the National Association of Realtors.
Read the full article here
Spring Maintenance: Some helpful thoughts and tips…
March 31, 2011 By
Vacant, Rental and Vacation Homes Not Excluded!
Mother Nature put on quite a show this winter and some homes took a beating. Here are some things to look for as you visit your properties and assess what damage may have been caused by the wind, rain and snow.
Curb Appeal. Check steps, decks and porches for wood rot and peeling paint. If the house is vacant, you may want to use some elbow grease or invest in fresh paint on the porch and a power wash to get rid of the winter grime and dust.
Examine the front door. The rain and winds that we have experience here are rough on wood, and if you have direct sun exposure the combination of these elements can be very damaging to doors finish. Sometimes a simply coat of paint or varnish will make a huge improvement.
Check your rain gutters. Gutters are a breeding ground for insects and mold. Invest a little time and labor in getting these cleared out and cleaned up.
Time to re-caulk and reseal. The elements will reek havoc on your homes seals, seams and joints. Now is a great time to get out and check your window seals, check the vents around your home, along with all the flashings on your roof, and replace any damages, missing or slipping roof tiles.
Leak Alert. Check beneath the house to see if there is any accumulated water. Even if it is raining outside, it should be dry underneath the home. If not, first eliminate the possibility of leaks originating from inside the house by checking the underside of the floor for dripping water or water stains.
If an inside leak is not to blame, look next for seepage from outside the house. Determine the source to prevent any future damage. Make sure you look around for Mold and if there is any sign of that, be quick to get it cleaned up or call the appropriate professionals for help.
Foundation for the future. Inspect the area where the home’s foundation meets the ground for spots where the earth slopes toward the house. Fix any sloping earth so that it directs water away from the house.
Make sure that you always winterize your vacant homes in the fall as this can save you thousands in repairs later…
Distressed Home Sales Rising – O.C. Register
March 31, 2011 By
O.C. Register Reports:
Nearly one out of every two houses sold in Orange County last month was either a bank-owned home or a “short sale,” the California Association of Realtors reported this week.
“Distressed homes” accounted for a greater share of all existing single-family homes sold in O.C. last month compared to both January and to February 2010.
The state Realtor Group reported:
48% of all existing single-family homes sold in O.C. in February were distressed sales — either because they were homes previously seized by lenders through foreclosure or because they were short sales. (Short sales are homes selling for less than the amount owed on their mortgage.)
That compres to 43% of all sales in January and 42% in February 2010.
Statewide, distressed sales accounted for 56% of all existing single-family home sales. That’s up from 54% in January and 55% in February 2010.
Bank-owned homes accounted for 33% of the homes sold statewide, and short sales accounted for 23%.
For some real estate context …
Read the full article here