In lead follow-up, real estate agents must first determine the value of that lead. Value is determined by considering the level of effort it will require to turn a lead into a committed client, plus the level of service to ensure they make a purchase.
Agents should first determine whether the lead actually needs and wants their service – not just whether they’re interested in making a purchase. Next, determine if the lead has the funds and credit to proceed.
Finally, agents need a way to categorize their leads based on length of time to closing and the client’s commitment to working with a real estate agent. Do that by separating leads into columns – those who will commit to working with an agent, probably will work with an agent, and possibly will work with an agent. The level of service accorded any single lead, then, is based on their category.
Source: Realty Times (08/27/10) Zeller, Dirk
Source: INFORMATION, INC. Bethesda, MD
Tuesday, August 31, 2010
When insurers stop writing insurance
If Hurricane Earl flirts with the Florida coast, many property insurers will stop writing new policies. That, in turn, impacts homebuyers who need insurance to finalize their mortgage. Without insurance, they can’t get mortgage money; and without mortgage money, they can’t close.
Insurers have in-house rules about issuing new policies. For example, Florida’s property insurer, Citizens Property Insurance, stops writing policies in a wide area if a hurricane threatens. Some insurers rely on the National Weather Service to issue a storm watch or warning. If that happens, they stop writing policies in the potentially impacted areas.
In all cases, a homebuyer heading to closing while a hurricane threatens should contact his or her property insurance carrier to determine that company’s rules.
Source: Florida Realtors®
Insurers have in-house rules about issuing new policies. For example, Florida’s property insurer, Citizens Property Insurance, stops writing policies in a wide area if a hurricane threatens. Some insurers rely on the National Weather Service to issue a storm watch or warning. If that happens, they stop writing policies in the potentially impacted areas.
In all cases, a homebuyer heading to closing while a hurricane threatens should contact his or her property insurance carrier to determine that company’s rules.
Source: Florida Realtors®
5 reasons homeownership trumps renting
The seemingly endless run of bad housing news is discouraging some potential homebuyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains, and a lot to do with personal comfort and satisfaction.
Here are five of them:
• Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.
• Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.
• Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.
• Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.
• Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.
Source: The New York Times, Ron Lieber (08/27/2010)
Source: INFORMATION, INC.
Here are five of them:
• Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.
• Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.
• Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.
• Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.
• Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.
Source: The New York Times, Ron Lieber (08/27/2010)
Source: INFORMATION, INC.
Could we see another buyer tax credit?
Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN’s “State of the Union” that the administration would “do everything we can” to stabilize the U.S. housing market.
“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said. “That’s why we are taking additional steps to move forward.”
Whether HUD will resurrect the first-time homebuyer tax credit is up in the air. “All I can tell you is that we are watching very carefully,” Donovan said on the show. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”
Gov. Charlie Crist appeared on the same show and supported a new version of the homebuyer tax credit, saying it would “help enormously,” noting that Florida has the nation’s third highest foreclosure rate.
Donovan also said the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.
Source: Bloomberg, Holly Rosenkrantz (08/29/2010)
Source: INFORMATION, INC. Bethesda, MD
“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said. “That’s why we are taking additional steps to move forward.”
Whether HUD will resurrect the first-time homebuyer tax credit is up in the air. “All I can tell you is that we are watching very carefully,” Donovan said on the show. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”
Gov. Charlie Crist appeared on the same show and supported a new version of the homebuyer tax credit, saying it would “help enormously,” noting that Florida has the nation’s third highest foreclosure rate.
Donovan also said the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.
Source: Bloomberg, Holly Rosenkrantz (08/29/2010)
Source: INFORMATION, INC. Bethesda, MD
Monday, August 30, 2010
New mortgage-oversight bureau will need time to settle in
The financial reform bill signed into law by President Obama may look like a giant cornucopia of helpful changes for homebuyers and loan applicants, not the least of which will be the creation of a powerful Consumer Financial Protection Bureau to ride herd on the mortgage lending industry.
But how soon will anyone see hard, tangible results of the law? When will the bureau begin writing new rules and cracking down on problems and abuses in everything from home real-estate settlements to credit scores to “truth in lending” and equal credit opportunity?
At the moment, it looks like it will be a while, even if the president nominates a director for the consumer protection bureau quickly and the Senate confirms her or him without partisan bloodletting or a filibuster. On the other hand, mortgage industry leaders say some of the core changes promised by the legislation are either already in effect, such as stricter underwriting and documentation practices, or should be soon.
Here is a quick overview of what to expect and when: The reform law itself contains deadlines for action, but they may not be as immediate as some consumers would prefer. Treasury Secretary Tim Geithner is carrying the ball, and he has had a team at work for weeks drafting the basic structure of the new consumer bureau, which will eventually be housed inside the Federal Reserve.
Under the law, Geithner has a deadline of Sept. 19 to designate a “transfer date” when key legal and regulatory authorities shift from such agencies as the Federal Trade Commission, the Department of Housing and Urban Development, and the Fed to the new consumer bureau. In effect, that will be the date the bureau, with initial funding projected at $500 million a year, springs to life with a staff and full set of teeth. By law it must be no earlier than next Jan. 17.
At a White House briefing, Deputy Treasury Secretary Neal Wolin asked for understanding about the huge task ahead of creating an entirely new agency that must take over responsibility for consumer protection statutes on the books for decades. “This will take some time,” he said, “but it’s worth it.”
Consumer advocates say they get Wolin’s point but still expect the White House to move the new agency into functional shape fast. Travis Plunkett, legislative director for the Consumer Federation of America, said, “Yes, they need to do this right. But the sooner they can get the doors open, the sooner the public will feel the tangible benefits.”
What sort of tangible benefits might begin to flow once the bureau takes official form? One of the earliest and most widely anticipated changes in the real estate field will involve appraisals on homes. The law requires the agency to quickly come up with new interim rules on appraisal accuracy and independence designed to replace the controversial “Home Valuation Code of Conduct” rules imposed by Fannie Mae and Freddie Mac in 2009.
That alone should bring relief to buyers, sellers, realty agents and builders who have complained about inept, deal-breaking appraisals fostered by the code. In a companion move, the reform law also sets standards for appraisal management companies that function as third-party vendors for many lenders, and who have been criticized for assigning valuations to inexperienced appraisers who are unfamiliar with local conditions and willing to work for low fees.
Another early tangible benefit: A national hotline system that will allow aggrieved mortgage borrowers and others to lodge complaints and alert the bureau to unfair and deceptive practices.
The new agency will also assume control of a key consumer protection statute known as RESPA (the Real Estate Settlement Procedures Act) that seeks to prevent under-the-table kickbacks and padded fees by lenders, title companies, realty agents and builders. RESPA governs the transaction cost disclosures that millions of borrowers receive at application the “good faith estimates” as well as the standard closing form known as the HUD-1.
Among the early projects expected from the new bureau will be a rewrite and streamlining of the existing home purchase disclosures and a tie-in with a revised truth-in-lending disclosure, possibly all wrapped up in a single plain-language package.
Also high on the to-do list: Rules requiring all loan officers to make good faith verifications that mortgage applicants possess the ability to repay the loans they’re seeking. This may sound pretty basic, but it was an alien concept inside some mortgage companies during the heydays of the boom.
Not only did they not worry about who could afford what. There was no federal watchdog on the scene to make sure they did. Now there will be.
Source: Chicago Daily Herald, Ken Harney, via ProQuest Information and Learning Company; All Rights Reserved. kenharney@earthlink.net
But how soon will anyone see hard, tangible results of the law? When will the bureau begin writing new rules and cracking down on problems and abuses in everything from home real-estate settlements to credit scores to “truth in lending” and equal credit opportunity?
At the moment, it looks like it will be a while, even if the president nominates a director for the consumer protection bureau quickly and the Senate confirms her or him without partisan bloodletting or a filibuster. On the other hand, mortgage industry leaders say some of the core changes promised by the legislation are either already in effect, such as stricter underwriting and documentation practices, or should be soon.
Here is a quick overview of what to expect and when: The reform law itself contains deadlines for action, but they may not be as immediate as some consumers would prefer. Treasury Secretary Tim Geithner is carrying the ball, and he has had a team at work for weeks drafting the basic structure of the new consumer bureau, which will eventually be housed inside the Federal Reserve.
Under the law, Geithner has a deadline of Sept. 19 to designate a “transfer date” when key legal and regulatory authorities shift from such agencies as the Federal Trade Commission, the Department of Housing and Urban Development, and the Fed to the new consumer bureau. In effect, that will be the date the bureau, with initial funding projected at $500 million a year, springs to life with a staff and full set of teeth. By law it must be no earlier than next Jan. 17.
At a White House briefing, Deputy Treasury Secretary Neal Wolin asked for understanding about the huge task ahead of creating an entirely new agency that must take over responsibility for consumer protection statutes on the books for decades. “This will take some time,” he said, “but it’s worth it.”
Consumer advocates say they get Wolin’s point but still expect the White House to move the new agency into functional shape fast. Travis Plunkett, legislative director for the Consumer Federation of America, said, “Yes, they need to do this right. But the sooner they can get the doors open, the sooner the public will feel the tangible benefits.”
What sort of tangible benefits might begin to flow once the bureau takes official form? One of the earliest and most widely anticipated changes in the real estate field will involve appraisals on homes. The law requires the agency to quickly come up with new interim rules on appraisal accuracy and independence designed to replace the controversial “Home Valuation Code of Conduct” rules imposed by Fannie Mae and Freddie Mac in 2009.
That alone should bring relief to buyers, sellers, realty agents and builders who have complained about inept, deal-breaking appraisals fostered by the code. In a companion move, the reform law also sets standards for appraisal management companies that function as third-party vendors for many lenders, and who have been criticized for assigning valuations to inexperienced appraisers who are unfamiliar with local conditions and willing to work for low fees.
Another early tangible benefit: A national hotline system that will allow aggrieved mortgage borrowers and others to lodge complaints and alert the bureau to unfair and deceptive practices.
The new agency will also assume control of a key consumer protection statute known as RESPA (the Real Estate Settlement Procedures Act) that seeks to prevent under-the-table kickbacks and padded fees by lenders, title companies, realty agents and builders. RESPA governs the transaction cost disclosures that millions of borrowers receive at application the “good faith estimates” as well as the standard closing form known as the HUD-1.
Among the early projects expected from the new bureau will be a rewrite and streamlining of the existing home purchase disclosures and a tie-in with a revised truth-in-lending disclosure, possibly all wrapped up in a single plain-language package.
Also high on the to-do list: Rules requiring all loan officers to make good faith verifications that mortgage applicants possess the ability to repay the loans they’re seeking. This may sound pretty basic, but it was an alien concept inside some mortgage companies during the heydays of the boom.
Not only did they not worry about who could afford what. There was no federal watchdog on the scene to make sure they did. Now there will be.
Source: Chicago Daily Herald, Ken Harney, via ProQuest Information and Learning Company; All Rights Reserved. kenharney@earthlink.net
HUD awards $312M in disaster recovery grants
The U.S. Department of Housing and Urban Development (HUD) awarded nearly $312 million to 13 states to reduce the human, physical and economic toll of future disasters. The grants are provided through HUD’s Disaster Recovery Enhancement Fund (DREF) encourage states to undertake activities and long-term strategies that focus on reducing damages from future natural disasters.
Florida is one of the grant states and will receive $26,616,675.
“An ounce of prevention today can spare communities a world of hurt tomorrow,” says HUD Secretary Shaun Donovan. “We’re making a serious investment in our future by making certain that when disaster strikes, the impacted communities in these states can weather the storm.”
According to an independent study by the National Institute of Building Sciences, every dollar spent on disaster mitigation activities saves taxpayers $4 in future disaster recovery expenses. The 13 states that received funding through the DREF invested nearly $876 million in disaster mitigation, which, according to HUD, translates into a total anticipated return on investment of more than $3.5 billion.
DREF funds can be used toward projects meeting unmet disaster recovery needs, including:
• Buyout payments for homeowners living in high-risk areas
• Optional relocation payments to encourage residents to move to safer locations
• Home improvement grants to reduce damage risks (property elevation, reinforced garage doors and windows, etc.)
• Improving and enforcing building codes
• Developing forward-thinking land-use plans that reduce development in high-risk areas.
Source: Florida Realtors®
Florida is one of the grant states and will receive $26,616,675.
“An ounce of prevention today can spare communities a world of hurt tomorrow,” says HUD Secretary Shaun Donovan. “We’re making a serious investment in our future by making certain that when disaster strikes, the impacted communities in these states can weather the storm.”
According to an independent study by the National Institute of Building Sciences, every dollar spent on disaster mitigation activities saves taxpayers $4 in future disaster recovery expenses. The 13 states that received funding through the DREF invested nearly $876 million in disaster mitigation, which, according to HUD, translates into a total anticipated return on investment of more than $3.5 billion.
DREF funds can be used toward projects meeting unmet disaster recovery needs, including:
• Buyout payments for homeowners living in high-risk areas
• Optional relocation payments to encourage residents to move to safer locations
• Home improvement grants to reduce damage risks (property elevation, reinforced garage doors and windows, etc.)
• Improving and enforcing building codes
• Developing forward-thinking land-use plans that reduce development in high-risk areas.
Source: Florida Realtors®
New mortgage-oversight bureau will need time to settle in
The financial reform bill signed into law by President Obama may look like a giant cornucopia of helpful changes for homebuyers and loan applicants, not the least of which will be the creation of a powerful Consumer Financial Protection Bureau to ride herd on the mortgage lending industry.
But how soon will anyone see hard, tangible results of the law? When will the bureau begin writing new rules and cracking down on problems and abuses in everything from home real-estate settlements to credit scores to “truth in lending” and equal credit opportunity?
At the moment, it looks like it will be a while, even if the president nominates a director for the consumer protection bureau quickly and the Senate confirms her or him without partisan bloodletting or a filibuster. On the other hand, mortgage industry leaders say some of the core changes promised by the legislation are either already in effect, such as stricter underwriting and documentation practices, or should be soon.
Here is a quick overview of what to expect and when: The reform law itself contains deadlines for action, but they may not be as immediate as some consumers would prefer. Treasury Secretary Tim Geithner is carrying the ball, and he has had a team at work for weeks drafting the basic structure of the new consumer bureau, which will eventually be housed inside the Federal Reserve.
Under the law, Geithner has a deadline of Sept. 19 to designate a “transfer date” when key legal and regulatory authorities shift from such agencies as the Federal Trade Commission, the Department of Housing and Urban Development, and the Fed to the new consumer bureau. In effect, that will be the date the bureau, with initial funding projected at $500 million a year, springs to life with a staff and full set of teeth. By law it must be no earlier than next Jan. 17.
At a White House briefing, Deputy Treasury Secretary Neal Wolin asked for understanding about the huge task ahead of creating an entirely new agency that must take over responsibility for consumer protection statutes on the books for decades. “This will take some time,” he said, “but it’s worth it.”
Consumer advocates say they get Wolin’s point but still expect the White House to move the new agency into functional shape fast. Travis Plunkett, legislative director for the Consumer Federation of America, said, “Yes, they need to do this right. But the sooner they can get the doors open, the sooner the public will feel the tangible benefits.”
What sort of tangible benefits might begin to flow once the bureau takes official form? One of the earliest and most widely anticipated changes in the real estate field will involve appraisals on homes. The law requires the agency to quickly come up with new interim rules on appraisal accuracy and independence designed to replace the controversial “Home Valuation Code of Conduct” rules imposed by Fannie Mae and Freddie Mac in 2009.
That alone should bring relief to buyers, sellers, realty agents and builders who have complained about inept, deal-breaking appraisals fostered by the code. In a companion move, the reform law also sets standards for appraisal management companies that function as third-party vendors for many lenders, and who have been criticized for assigning valuations to inexperienced appraisers who are unfamiliar with local conditions and willing to work for low fees.
Another early tangible benefit: A national hotline system that will allow aggrieved mortgage borrowers and others to lodge complaints and alert the bureau to unfair and deceptive practices.
The new agency will also assume control of a key consumer protection statute known as RESPA (the Real Estate Settlement Procedures Act) that seeks to prevent under-the-table kickbacks and padded fees by lenders, title companies, realty agents and builders. RESPA governs the transaction cost disclosures that millions of borrowers receive at application the “good faith estimates” as well as the standard closing form known as the HUD-1.
Among the early projects expected from the new bureau will be a rewrite and streamlining of the existing home purchase disclosures and a tie-in with a revised truth-in-lending disclosure, possibly all wrapped up in a single plain-language package.
Also high on the to-do list: Rules requiring all loan officers to make good faith verifications that mortgage applicants possess the ability to repay the loans they’re seeking. This may sound pretty basic, but it was an alien concept inside some mortgage companies during the heydays of the boom.
Not only did they not worry about who could afford what. There was no federal watchdog on the scene to make sure they did. Now there will be.
Source: Chicago Daily Herald, Ken Harney, via ProQuest Information and Learning Company; All Rights Reserved. kenharney@earthlink.net
But how soon will anyone see hard, tangible results of the law? When will the bureau begin writing new rules and cracking down on problems and abuses in everything from home real-estate settlements to credit scores to “truth in lending” and equal credit opportunity?
At the moment, it looks like it will be a while, even if the president nominates a director for the consumer protection bureau quickly and the Senate confirms her or him without partisan bloodletting or a filibuster. On the other hand, mortgage industry leaders say some of the core changes promised by the legislation are either already in effect, such as stricter underwriting and documentation practices, or should be soon.
Here is a quick overview of what to expect and when: The reform law itself contains deadlines for action, but they may not be as immediate as some consumers would prefer. Treasury Secretary Tim Geithner is carrying the ball, and he has had a team at work for weeks drafting the basic structure of the new consumer bureau, which will eventually be housed inside the Federal Reserve.
Under the law, Geithner has a deadline of Sept. 19 to designate a “transfer date” when key legal and regulatory authorities shift from such agencies as the Federal Trade Commission, the Department of Housing and Urban Development, and the Fed to the new consumer bureau. In effect, that will be the date the bureau, with initial funding projected at $500 million a year, springs to life with a staff and full set of teeth. By law it must be no earlier than next Jan. 17.
At a White House briefing, Deputy Treasury Secretary Neal Wolin asked for understanding about the huge task ahead of creating an entirely new agency that must take over responsibility for consumer protection statutes on the books for decades. “This will take some time,” he said, “but it’s worth it.”
Consumer advocates say they get Wolin’s point but still expect the White House to move the new agency into functional shape fast. Travis Plunkett, legislative director for the Consumer Federation of America, said, “Yes, they need to do this right. But the sooner they can get the doors open, the sooner the public will feel the tangible benefits.”
What sort of tangible benefits might begin to flow once the bureau takes official form? One of the earliest and most widely anticipated changes in the real estate field will involve appraisals on homes. The law requires the agency to quickly come up with new interim rules on appraisal accuracy and independence designed to replace the controversial “Home Valuation Code of Conduct” rules imposed by Fannie Mae and Freddie Mac in 2009.
That alone should bring relief to buyers, sellers, realty agents and builders who have complained about inept, deal-breaking appraisals fostered by the code. In a companion move, the reform law also sets standards for appraisal management companies that function as third-party vendors for many lenders, and who have been criticized for assigning valuations to inexperienced appraisers who are unfamiliar with local conditions and willing to work for low fees.
Another early tangible benefit: A national hotline system that will allow aggrieved mortgage borrowers and others to lodge complaints and alert the bureau to unfair and deceptive practices.
The new agency will also assume control of a key consumer protection statute known as RESPA (the Real Estate Settlement Procedures Act) that seeks to prevent under-the-table kickbacks and padded fees by lenders, title companies, realty agents and builders. RESPA governs the transaction cost disclosures that millions of borrowers receive at application the “good faith estimates” as well as the standard closing form known as the HUD-1.
Among the early projects expected from the new bureau will be a rewrite and streamlining of the existing home purchase disclosures and a tie-in with a revised truth-in-lending disclosure, possibly all wrapped up in a single plain-language package.
Also high on the to-do list: Rules requiring all loan officers to make good faith verifications that mortgage applicants possess the ability to repay the loans they’re seeking. This may sound pretty basic, but it was an alien concept inside some mortgage companies during the heydays of the boom.
Not only did they not worry about who could afford what. There was no federal watchdog on the scene to make sure they did. Now there will be.
Source: Chicago Daily Herald, Ken Harney, via ProQuest Information and Learning Company; All Rights Reserved. kenharney@earthlink.net
5 things to know about Facebook Places and your privacy
Facebook has brought the geo-tracking phenomenon to the masses. But there are pitfalls.
And, even if you’re not on Facebook, there are some things you need to know about the new check-in service Places to protect your privacy.
Location services like Foursquare and Gowalla – which allow users to “check in” to places, sharing their precise current location with a group of friends using GPS technology on smart phones – have grown considerably this year, but have nowhere near Facebook’s market-leading 500 million-plus active users.
For some, Facebook has been a safe way to stay in touch with friends in a mostly closed environment. The dawning of Places, though, calls some of that into question.
The unveiling of Places last week set off some hand-wringing over the increasing intrusions the social Web is making into our everyday lives.
All Facebook users are now, by default, part of the Places ecosystem. And, even if you’re not a Facebook member, someone in your home could create a listing on your behalf – whether you want him to or not.
Here’s what you need to know to be safe and informed.
1. Friends can share your location
Facebook lets your friends check you in to locations without your consent.
This means that when you’re out for a night on the town, a friend can check in and tell Facebook everyone he or she is with. Then, all your Facebook connections know where you are, even if you didn’t want to share your location with the whole World Wide Web.
To turn off this feature, head deep into your privacy settings and disable the entry called “Friends can check me in Places.”
2. Strangers can see you nearby
Even if you choose to be seen only by your friends, you could still be showing up to strangers when they check into the same location under a section called “People Here Now.” This is intended to show Facebook users who else is at the coffee shop, movie theater, restaurant, etc.
You can disable this under “Things I share” in Facebook’s privacy settings.
3. Place listings are public
It’s important to know that Facebook Place listings – the pages created when you check into a new place – are public. So, if you create a listing to check into your house when you get home from work, that page – say, “Mark W. Smith’s house” – is searchable on the Web even for those who aren’t connected with you on Facebook or even have a Facebook account.
Each page also automatically includes a handy interactive map – powered by Microsoft’s Bing – to locate the exact location. So don’t check into your house if you don’t want the entire Internet knowing exactly where you live.
If you’re curious if a listing has been created for your home or other private place, launch touch.facebook.com on a GPS-enabled smart phone. Under Places, you’ll be able to see a listing of nearby Facebook locations.
4. Opportunities for businesses
Facebook allows business owners to manage the page that pools the check-ins of its patrons. Page owners can then use that page to keep customers updated on new services, merchandise, menu items, etc.
First you have to prove to Facebook that you own the business you’re trying to manage online. To do so, click the link that says, “Is this your business?” and follow the instructions to take ownership. You’ll need to supply proof by attaching a digital copy of a business license or certificate of incorporation.
5. Integration should be coming
Facebook says it is partnering with the previous location leaders Foursquare and Gowalla so that users of those services can send their location to Facebook Places automatically. These connections have not yet been enabled, though, and it’s unclear how willing other location services will be to play nice with Facebook, which will almost undoubtedly render their services obsolete.
Source: Detroit Free Press. Distributed by McClatchy-Tribune Information Services.
And, even if you’re not on Facebook, there are some things you need to know about the new check-in service Places to protect your privacy.
Location services like Foursquare and Gowalla – which allow users to “check in” to places, sharing their precise current location with a group of friends using GPS technology on smart phones – have grown considerably this year, but have nowhere near Facebook’s market-leading 500 million-plus active users.
For some, Facebook has been a safe way to stay in touch with friends in a mostly closed environment. The dawning of Places, though, calls some of that into question.
The unveiling of Places last week set off some hand-wringing over the increasing intrusions the social Web is making into our everyday lives.
All Facebook users are now, by default, part of the Places ecosystem. And, even if you’re not a Facebook member, someone in your home could create a listing on your behalf – whether you want him to or not.
Here’s what you need to know to be safe and informed.
1. Friends can share your location
Facebook lets your friends check you in to locations without your consent.
This means that when you’re out for a night on the town, a friend can check in and tell Facebook everyone he or she is with. Then, all your Facebook connections know where you are, even if you didn’t want to share your location with the whole World Wide Web.
To turn off this feature, head deep into your privacy settings and disable the entry called “Friends can check me in Places.”
2. Strangers can see you nearby
Even if you choose to be seen only by your friends, you could still be showing up to strangers when they check into the same location under a section called “People Here Now.” This is intended to show Facebook users who else is at the coffee shop, movie theater, restaurant, etc.
You can disable this under “Things I share” in Facebook’s privacy settings.
3. Place listings are public
It’s important to know that Facebook Place listings – the pages created when you check into a new place – are public. So, if you create a listing to check into your house when you get home from work, that page – say, “Mark W. Smith’s house” – is searchable on the Web even for those who aren’t connected with you on Facebook or even have a Facebook account.
Each page also automatically includes a handy interactive map – powered by Microsoft’s Bing – to locate the exact location. So don’t check into your house if you don’t want the entire Internet knowing exactly where you live.
If you’re curious if a listing has been created for your home or other private place, launch touch.facebook.com on a GPS-enabled smart phone. Under Places, you’ll be able to see a listing of nearby Facebook locations.
4. Opportunities for businesses
Facebook allows business owners to manage the page that pools the check-ins of its patrons. Page owners can then use that page to keep customers updated on new services, merchandise, menu items, etc.
First you have to prove to Facebook that you own the business you’re trying to manage online. To do so, click the link that says, “Is this your business?” and follow the instructions to take ownership. You’ll need to supply proof by attaching a digital copy of a business license or certificate of incorporation.
5. Integration should be coming
Facebook says it is partnering with the previous location leaders Foursquare and Gowalla so that users of those services can send their location to Facebook Places automatically. These connections have not yet been enabled, though, and it’s unclear how willing other location services will be to play nice with Facebook, which will almost undoubtedly render their services obsolete.
Source: Detroit Free Press. Distributed by McClatchy-Tribune Information Services.
Friday, August 27, 2010
NAR: Commercial conditions favor business growth
Commercial real estate sectors, hurt by weak job growth, are offering incentives in many areas that are conducive to business expansion, according to the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said fallout from the recession continues to impact commercial real estate. "Vacancy rates are beginning to level off in some sectors, but rent discounts and moderate levels of landlord concessions are widespread," he said. "This is very much a tenant's market, which is quite favorable for businesses that are considering expansion. It's also encouraging that there is a modest improvement in the sentiment of commercial real estate practitioners."
The Society of Industrial and Office Realtors' "SIOR Commercial Real Estate Index," an attitudinal survey of more than 600 local market experts, finds vacancy rates are beginning to level, but rents remain depressed, and subleasing space is high.
The SIOR index, measuring 10 variables, rose 2.8 percentage points to 41.0 in the second quarter, but remains well below a level of 100 that represents a balanced marketplace. This is the third consecutive quarterly improvement after nearly three years of decline; the last time the commercial market was in equilibrium at the 100 level was in the third quarter of 2007.
Fifty-seven percent of respondents expect improvements in the office and industrial sectors in the third quarter.
Commercial real estate development remains stagnant in all regions with low investment activity; 88 percent of respondents said it is virtually nonexistent in their markets, but development acquisitions are beginning to grow in many areas in what is described as a buyer's market.
Looking at the overall market, vacancy rates will shift modestly in the coming year according to NAR's latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.
Office Markets
Vacancy rates in the office sector, with high levels of available sublease space, are expected to increase from 16.7 percent in the second quarter of this year to 17.0 percent in the second quarter of 2011, and then ease later next year. The markets with the lowest office vacancy rates in the second quarter were New York City, Honolulu and Long Island, N.Y., with vacancies around the 9 to 11 percent range.
Annual office rent should fall 2.7 percent this year and decline another 2.1 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be a negative 13.6 million square feet this year and then a positive 22.6 million in 2011.
Industrial Markets
Industrial vacancy rates are likely to decline from 14.1 percent in the second quarter of 2010 to 13.7 percent in the second quarter of 2011, and then continue to ease modestly as the year progresses.
The areas with the lowest industrial vacancy rates in the second quarter were Los Angeles, San Francisco and Kansas City, with vacancies ranging between 8 and 11 percent.
Annual industrial rent is estimated to drop 5.4 percent this year, and to decline another 4.7 percent in 2011. Net absorption of industrial space in 58 markets tracked is seen at a negative 31.7 million square feet this year and a positive 157.2 million in 2011.
Retail Markets
Retail vacancy rates should hold steady at 13.1 percent in both the second quarter of this year and in the second quarter of 2011, with a level pattern for most of next year.
Markets with the lowest retail vacancy rates in the second quarter include San Francisco, Honolulu and Miami, with vacancies of 7 to 8 percent. Average retail rent is expected to decline 2.6 percent in 2010 and then flatten out, slipping 0.1 percent next year. Net absorption of retail space in 53 tracked markets is forecast to be a negative 2.3 million square feet this year and then a positive 6.4 million in 2011.
Multifamily Markets
The apartment rental market – multifamily housing – is benefiting from modestly higher demand. Multifamily vacancy rates are likely to decline from 6.0 percent in the second quarter of this year to 5.6 percent in the second quarter of 2011.
Areas with the lowest multifamily vacancy rates in the second quarter include San Jose, Calif.; Pittsburgh; and Philadelphia, with vacancies of less than 4 percent.
With additions from new construction, average rent should slip 0.6 percent in 2010, and then hold even in 2011. Multifamily net absorption is expected to be 105,200 units in 59 tracked metro areas this year, and another 138,000 in 2011.
Source: Florida Realtors®
Lawrence Yun, NAR chief economist, said fallout from the recession continues to impact commercial real estate. "Vacancy rates are beginning to level off in some sectors, but rent discounts and moderate levels of landlord concessions are widespread," he said. "This is very much a tenant's market, which is quite favorable for businesses that are considering expansion. It's also encouraging that there is a modest improvement in the sentiment of commercial real estate practitioners."
The Society of Industrial and Office Realtors' "SIOR Commercial Real Estate Index," an attitudinal survey of more than 600 local market experts, finds vacancy rates are beginning to level, but rents remain depressed, and subleasing space is high.
The SIOR index, measuring 10 variables, rose 2.8 percentage points to 41.0 in the second quarter, but remains well below a level of 100 that represents a balanced marketplace. This is the third consecutive quarterly improvement after nearly three years of decline; the last time the commercial market was in equilibrium at the 100 level was in the third quarter of 2007.
Fifty-seven percent of respondents expect improvements in the office and industrial sectors in the third quarter.
Commercial real estate development remains stagnant in all regions with low investment activity; 88 percent of respondents said it is virtually nonexistent in their markets, but development acquisitions are beginning to grow in many areas in what is described as a buyer's market.
Looking at the overall market, vacancy rates will shift modestly in the coming year according to NAR's latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by CBRE Econometric Advisors.
Office Markets
Vacancy rates in the office sector, with high levels of available sublease space, are expected to increase from 16.7 percent in the second quarter of this year to 17.0 percent in the second quarter of 2011, and then ease later next year. The markets with the lowest office vacancy rates in the second quarter were New York City, Honolulu and Long Island, N.Y., with vacancies around the 9 to 11 percent range.
Annual office rent should fall 2.7 percent this year and decline another 2.1 percent in 2011. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is projected to be a negative 13.6 million square feet this year and then a positive 22.6 million in 2011.
Industrial Markets
Industrial vacancy rates are likely to decline from 14.1 percent in the second quarter of 2010 to 13.7 percent in the second quarter of 2011, and then continue to ease modestly as the year progresses.
The areas with the lowest industrial vacancy rates in the second quarter were Los Angeles, San Francisco and Kansas City, with vacancies ranging between 8 and 11 percent.
Annual industrial rent is estimated to drop 5.4 percent this year, and to decline another 4.7 percent in 2011. Net absorption of industrial space in 58 markets tracked is seen at a negative 31.7 million square feet this year and a positive 157.2 million in 2011.
Retail Markets
Retail vacancy rates should hold steady at 13.1 percent in both the second quarter of this year and in the second quarter of 2011, with a level pattern for most of next year.
Markets with the lowest retail vacancy rates in the second quarter include San Francisco, Honolulu and Miami, with vacancies of 7 to 8 percent. Average retail rent is expected to decline 2.6 percent in 2010 and then flatten out, slipping 0.1 percent next year. Net absorption of retail space in 53 tracked markets is forecast to be a negative 2.3 million square feet this year and then a positive 6.4 million in 2011.
Multifamily Markets
The apartment rental market – multifamily housing – is benefiting from modestly higher demand. Multifamily vacancy rates are likely to decline from 6.0 percent in the second quarter of this year to 5.6 percent in the second quarter of 2011.
Areas with the lowest multifamily vacancy rates in the second quarter include San Jose, Calif.; Pittsburgh; and Philadelphia, with vacancies of less than 4 percent.
With additions from new construction, average rent should slip 0.6 percent in 2010, and then hold even in 2011. Multifamily net absorption is expected to be 105,200 units in 59 tracked metro areas this year, and another 138,000 in 2011.
Source: Florida Realtors®
Fannie Mae to prohibit ‘appraisal cutting'
Fannie Mae is banning a common practice known as "appraisal cutting," starting next week.
When lenders selling loans to the firm challenge a valuation, the underwriter will have to contact the appraiser directly. If the lender is unable to settle the dispute, its only option will be to order a second appraisal.
Lenders will be unable to simply cut the value of the appraisal or shop around for the best appraisal.
Source: American Banker, Kate Berry and Marc Hochstein (08/26/10)
When lenders selling loans to the firm challenge a valuation, the underwriter will have to contact the appraiser directly. If the lender is unable to settle the dispute, its only option will be to order a second appraisal.
Lenders will be unable to simply cut the value of the appraisal or shop around for the best appraisal.
Source: American Banker, Kate Berry and Marc Hochstein (08/26/10)
FEMA flood insurance seeks bailout
The Federal Emergency Management Agency is seeking $19 billion in federal bailout funds to cover a flood insurance program observers call badly flawed.
"If this were a private insurer, it would be bankrupt," said Insurance Information Institute President Robert Hartwig, USA Today reported Thursday.
Flood safety specialist David Conrad, an environmentalist with the National Wildlife Federation, said FEMA's flood insurance "does seem to fit Albert Einstein's definition of insanity – to somehow expect something different when you do the same thing over and over again."
The program is flawed by a lack of political willpower to force homeowners repeatedly making claims to move or to elevate their homes, the newspaper said.
As a result, thousands of homeowners have received benefits that were many times over the value of their home. Owners of a home in Mississippi worth $69,900 have been awarded $663,000 in benefits since 1978 on 34 separate flood claims, the newspaper said.
The program also "artificially inflates the value" of older homes – on average by $24,000 – by providing discounts to owners of homes built before 1975, a FEMA report from 2006 says.
While the program losses an average of nearly $1 billion each year, "there's always been a few in Congress that have had enough political muscle" to keep rates low and restrictions loose, former FEMA Assistant Administrator David Maurstad said.
Source: The Associated Press, Alex Veiga, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
"If this were a private insurer, it would be bankrupt," said Insurance Information Institute President Robert Hartwig, USA Today reported Thursday.
Flood safety specialist David Conrad, an environmentalist with the National Wildlife Federation, said FEMA's flood insurance "does seem to fit Albert Einstein's definition of insanity – to somehow expect something different when you do the same thing over and over again."
The program is flawed by a lack of political willpower to force homeowners repeatedly making claims to move or to elevate their homes, the newspaper said.
As a result, thousands of homeowners have received benefits that were many times over the value of their home. Owners of a home in Mississippi worth $69,900 have been awarded $663,000 in benefits since 1978 on 34 separate flood claims, the newspaper said.
The program also "artificially inflates the value" of older homes – on average by $24,000 – by providing discounts to owners of homes built before 1975, a FEMA report from 2006 says.
While the program losses an average of nearly $1 billion each year, "there's always been a few in Congress that have had enough political muscle" to keep rates low and restrictions loose, former FEMA Assistant Administrator David Maurstad said.
Source: The Associated Press, Alex Veiga, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Number of underwater mortgages in U.S. fell in 2Q
Real estate data provider CoreLogic says the number of U.S. homes with mortgages that exceed what the property is worth declined slightly in the second quarter versus the first three months of this year.
The firm said Thursday there were 11 million homes with so-called underwater mortgages at the end of June. That's down from 11.2 million at the end of March.
The firm attributed the decline primarily to homes being repossessed by lenders.
In all, 23 percent of U.S. homes with mortgages were underwater at the end of June.
Nevada had the highest rate of underwater mortgages of any state at 68 percent, followed by Arizona at 50 percent and Florida at 46 percent.
Source: The Associated Press, Alex Veiga, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The firm said Thursday there were 11 million homes with so-called underwater mortgages at the end of June. That's down from 11.2 million at the end of March.
The firm attributed the decline primarily to homes being repossessed by lenders.
In all, 23 percent of U.S. homes with mortgages were underwater at the end of June.
Nevada had the highest rate of underwater mortgages of any state at 68 percent, followed by Arizona at 50 percent and Florida at 46 percent.
Source: The Associated Press, Alex Veiga, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Keep Track, What You Own Home Inventory
What You Own Home Inventory is a free software that assists you in taking inventory of your possessions. Easy to use intuitive interface helps you organize your inventory by room and category. You can add multiple pictures of your items, rooms and household as you go along. When you are done, you can save your file and print a report.
Download What You Own home inventory software and start taking your inventory today!
Learn More Here: http://www.whatyouown.org/
Download What You Own home inventory software and start taking your inventory today!
Learn More Here: http://www.whatyouown.org/
Tips for Getting Your Home Ready for Fall
Now that summer is beginning to wind down and cooler weather is on its way, it’s time to get some of the routine home maintenance out of the way before it gets too cold. If you don’t prepare your home in the fall season, and clean up the yard, when spring comes along, you could be left with an unsightly mess. Lisa Udy, a Realtor in Utah offers the following tips to prepare your home for the cold months ahead.
Clean out the rain gutters – If you have rain gutters on your home, fall is the best time to get them cleaned. Cleaning rain gutters isn’t that difficult of a task, it’s just a tedious one. The easiest way to get rid of the junk is to use a high pressure hose, and then use a small trowel to get rid of the rest of the debris. Once you have gotten rid of all the debris, give your gutters a final spray.
Take care of your pots and planters – If you’re like most homeowners, you have some planters or potted plants sitting around the yard. Before it gets too cold, be sure to empty the dirt out of any pots or planters and put them in a place where they won’t freeze. If you don’t empty or store your planters, there’s a good chance they will either crack or fall apart.
Rake the leaves – Keeping your yard free of leaves is an important task for homeowners. If you have numerous trees in your yard and piles of leaves that you don’t take care of, you might find that your grass is dead once spring arrives. Leaves can smother your lawn and replacing a lawn can cost a lot of money, so it’s a good rule of thumb to get rid of the leaves in the fall.
Weed and feed the lawn – The best time to weed and feed the lawn is in the fall. If you add weed killer in the fall, the weeds will store the poison in their roots during the winter season, and will prevent a breakout in the spring. By feeding your lawn with fertilizer in the fall, you are promoting healthy root growth, and this will help your lawn grow greener and faster in the spring.
Give your tools a tune-up – Once you have finished your fall maintenance chores, make sure you clean your tools and store them in a dry place so they will be in working order once spring arrives. Be sure to store metal shovels with the head upwards, as this will help detour rusting when it dries. Sheers need to be oiled up, wheel barrels should be left upside down and don’t forget to spray off the underside of the lawnmower.
By Paige Tepping RISMEDIA
Clean out the rain gutters – If you have rain gutters on your home, fall is the best time to get them cleaned. Cleaning rain gutters isn’t that difficult of a task, it’s just a tedious one. The easiest way to get rid of the junk is to use a high pressure hose, and then use a small trowel to get rid of the rest of the debris. Once you have gotten rid of all the debris, give your gutters a final spray.
Take care of your pots and planters – If you’re like most homeowners, you have some planters or potted plants sitting around the yard. Before it gets too cold, be sure to empty the dirt out of any pots or planters and put them in a place where they won’t freeze. If you don’t empty or store your planters, there’s a good chance they will either crack or fall apart.
Rake the leaves – Keeping your yard free of leaves is an important task for homeowners. If you have numerous trees in your yard and piles of leaves that you don’t take care of, you might find that your grass is dead once spring arrives. Leaves can smother your lawn and replacing a lawn can cost a lot of money, so it’s a good rule of thumb to get rid of the leaves in the fall.
Weed and feed the lawn – The best time to weed and feed the lawn is in the fall. If you add weed killer in the fall, the weeds will store the poison in their roots during the winter season, and will prevent a breakout in the spring. By feeding your lawn with fertilizer in the fall, you are promoting healthy root growth, and this will help your lawn grow greener and faster in the spring.
Give your tools a tune-up – Once you have finished your fall maintenance chores, make sure you clean your tools and store them in a dry place so they will be in working order once spring arrives. Be sure to store metal shovels with the head upwards, as this will help detour rusting when it dries. Sheers need to be oiled up, wheel barrels should be left upside down and don’t forget to spray off the underside of the lawnmower.
By Paige Tepping RISMEDIA
Thursday, August 26, 2010
Economic outlook: Jobs key to home sales
Millions of Americans – and others, perhaps – are watching mortgage interest rates hit historical lows and mumbling about how very bad the timing is.
With the housing market flush with foreclosed properties and long-term interest rates scraping 4.5 percent – 30- and 15-year loans set record lows six weeks in a row this summer – the American Dream of a domicile with a white picket fence in a quiet neighborhood is within the grasp of more people than ever, if only affordability could be a little better timed.
As home sales held their own last year, the National Association of Realtors® pointed out that the $8,000 first-time homebuyer federal tax credit was, indeed, priming the pump. And the numbers were telling. As the first deadline for the tax credit came and went, a crush of buyers lined up for loans. When Congress extended the credit through April of this year, sales went through a second cycle of popularity, which ended predictably and precisely as the tax credit again came to a close.
In July, without the government’s help, the sale of existing homes fell 27.2 percent compared to June with the annual rate of home sales plunging to 3.83 million, well below expectations. The NAR, which released the figures, promptly pointed out that this new reality was how the market looked without the emperor’s new clothes – without, that is to say, the artifice of a tax credit to parade down Main Street.
By the numbers, first-time homebuyers fell to 38 percent of all buyers in July from 43 percent in the previous month.
In that sense, it is easy to shed crocodile tears for the tax credit, but some pundits are looking past that and hoping the government will stay out of the way and let the market do its ugly thing. Home prices held up in July, a silver lining in the collapse that may be temporary, as many expected prices to start falling.
The Washington Post quoted Mizuho Securities Chief Economist Steven Ricchiuto as saying, “Homes are still being priced without taking into proper consideration the balance sheet of the consumer. What consumer would buy them when they can’t afford them?”
That’s right: What the NAR calls a high rate of affordability now is the very definition of moot. After all, even consumers know you don’t apply for a loan when you are out of work.
The tax credit? Congress can slap that back into place before their morning coffee cools down. What needs fixing now is the job market, rising employment rates being, perhaps, the surest cure to deflation in an otherwise haphazard arsenal of government options.
Source: United Press International 2010, Anthony Hall
With the housing market flush with foreclosed properties and long-term interest rates scraping 4.5 percent – 30- and 15-year loans set record lows six weeks in a row this summer – the American Dream of a domicile with a white picket fence in a quiet neighborhood is within the grasp of more people than ever, if only affordability could be a little better timed.
As home sales held their own last year, the National Association of Realtors® pointed out that the $8,000 first-time homebuyer federal tax credit was, indeed, priming the pump. And the numbers were telling. As the first deadline for the tax credit came and went, a crush of buyers lined up for loans. When Congress extended the credit through April of this year, sales went through a second cycle of popularity, which ended predictably and precisely as the tax credit again came to a close.
In July, without the government’s help, the sale of existing homes fell 27.2 percent compared to June with the annual rate of home sales plunging to 3.83 million, well below expectations. The NAR, which released the figures, promptly pointed out that this new reality was how the market looked without the emperor’s new clothes – without, that is to say, the artifice of a tax credit to parade down Main Street.
By the numbers, first-time homebuyers fell to 38 percent of all buyers in July from 43 percent in the previous month.
In that sense, it is easy to shed crocodile tears for the tax credit, but some pundits are looking past that and hoping the government will stay out of the way and let the market do its ugly thing. Home prices held up in July, a silver lining in the collapse that may be temporary, as many expected prices to start falling.
The Washington Post quoted Mizuho Securities Chief Economist Steven Ricchiuto as saying, “Homes are still being priced without taking into proper consideration the balance sheet of the consumer. What consumer would buy them when they can’t afford them?”
That’s right: What the NAR calls a high rate of affordability now is the very definition of moot. After all, even consumers know you don’t apply for a loan when you are out of work.
The tax credit? Congress can slap that back into place before their morning coffee cools down. What needs fixing now is the job market, rising employment rates being, perhaps, the surest cure to deflation in an otherwise haphazard arsenal of government options.
Source: United Press International 2010, Anthony Hall
How the Foreclosure Crisis Costs You Money
Foreclosure may seem like someone else's problem, but when it happens in your neighborhood, it's going to cost you money, too.
If you need one single reason to be glad Uncle Sam is helping your neighbors avoid losing their houses to foreclosure, look no further than the value of your own home. You are personally going to pay the price of your neighbors' misfortune if the bank takes back their house.
Each foreclosure within 660 feet (1/8th mile) of your house can drop your home's value (http://www.responsiblelending.org/mortgage-lending/research-analysis/soaring-spillover-3-09.pdf) by a factor of almost 0.75%, according to the Center for Responsible Lending, a consumer watchdog group.
The closer a foreclosure is to your house, the bigger the impact. A university of Connecticut study suggests one foreclosure within 300 feet of your home will lower your property value (http://www.business.uconn.edu/Realestate/publications/pdf%20documents/406%20contagion_080715.pdf) by 1%.
If you live in a neighborhood with few vacant homes and a foreclosure occurs within 250 feet, a University of California, Berkeley study (http://fungcenter.berkeley.edu/projects/documents/A.Szeidl.pdf) suggests you could lose 2.2% of your home value.
Do troubled owners deserve help?
Some people think the homeowners facing foreclosure got themselves into trouble because they bought more house than they could afford with toxic mortgages for which they never should have been approved. At least one study of the 2007 and 2008 foreclosure crisis (http://newswire.uark.edu/Article.aspx?ID=14076) suggests that was indeed the case.
Foreclosures become comparable sales
Even if you don't feel compassion for those facing foreclosure, you might feel sorry for yourself. Homebuyers and mortgage lenders use foreclosures as comparable properties to value your home when you sell or refinance. And the discount at which foreclosures sell is a hefty 27% on average (http://kuznets.fas.harvard.edu/~campbell/papers/forcedsales_web.pdf).
Although most appraisers adjust the value of your home upward compared with a foreclosure, a homebuyer may consider the foreclosure equally valuable to your home and base his offer on that instead of your property's real worth. If that happens, your real estate agent can argue that non-distress sale comparables and better condition make your property worth more.
Foreclosures lower tax revenues
Drops in property values brought on by foreclosures don't just hurt your property value; they also cut away at the whole property tax base, the source of revenue for local government. Elected officials then have to either charge you higher taxes or cut services to make up for the shortfall.
What you can do about foreclosures
To limit foreclosure damage in your community, ask local officials to pass laws forcing lenders to maintain the properties they now own and to pay the taxes and homeowners association dues on them.
If the town isn't forcing lenders to maintain a foreclosure in your neighborhood, organize a volunteer effort to cut and trim the shrubs at vacant houses on a round-robin basis, and report vandals or squatters to the police. A well-kept foreclosed home will attract more buyers than one with a weed-filled yard. Take trespassing laws into account as you organize your effort.
If you're selling or refinancing and the appraiser uses foreclosures as comparable sales to determine the value of your property, ask your real estate agent to make sure the appraiser accounts for the distressed nature of those sales and the condition of the properties as they compare to yours. Ask your agent to seek out other comparable sales the appraiser might have missed, which show your home in a much better light.
Syndicated housing columnist Lew Sichelman lives in a ranch house on the western shore of the Chesapeake Bay and has been writing about housing for more than 40 years.
Source: houselogic.com
If you need one single reason to be glad Uncle Sam is helping your neighbors avoid losing their houses to foreclosure, look no further than the value of your own home. You are personally going to pay the price of your neighbors' misfortune if the bank takes back their house.
Each foreclosure within 660 feet (1/8th mile) of your house can drop your home's value (http://www.responsiblelending.org/mortgage-lending/research-analysis/soaring-spillover-3-09.pdf) by a factor of almost 0.75%, according to the Center for Responsible Lending, a consumer watchdog group.
The closer a foreclosure is to your house, the bigger the impact. A university of Connecticut study suggests one foreclosure within 300 feet of your home will lower your property value (http://www.business.uconn.edu/Realestate/publications/pdf%20documents/406%20contagion_080715.pdf) by 1%.
If you live in a neighborhood with few vacant homes and a foreclosure occurs within 250 feet, a University of California, Berkeley study (http://fungcenter.berkeley.edu/projects/documents/A.Szeidl.pdf) suggests you could lose 2.2% of your home value.
Do troubled owners deserve help?
Some people think the homeowners facing foreclosure got themselves into trouble because they bought more house than they could afford with toxic mortgages for which they never should have been approved. At least one study of the 2007 and 2008 foreclosure crisis (http://newswire.uark.edu/Article.aspx?ID=14076) suggests that was indeed the case.
Foreclosures become comparable sales
Even if you don't feel compassion for those facing foreclosure, you might feel sorry for yourself. Homebuyers and mortgage lenders use foreclosures as comparable properties to value your home when you sell or refinance. And the discount at which foreclosures sell is a hefty 27% on average (http://kuznets.fas.harvard.edu/~campbell/papers/forcedsales_web.pdf).
Although most appraisers adjust the value of your home upward compared with a foreclosure, a homebuyer may consider the foreclosure equally valuable to your home and base his offer on that instead of your property's real worth. If that happens, your real estate agent can argue that non-distress sale comparables and better condition make your property worth more.
Foreclosures lower tax revenues
Drops in property values brought on by foreclosures don't just hurt your property value; they also cut away at the whole property tax base, the source of revenue for local government. Elected officials then have to either charge you higher taxes or cut services to make up for the shortfall.
What you can do about foreclosures
To limit foreclosure damage in your community, ask local officials to pass laws forcing lenders to maintain the properties they now own and to pay the taxes and homeowners association dues on them.
If the town isn't forcing lenders to maintain a foreclosure in your neighborhood, organize a volunteer effort to cut and trim the shrubs at vacant houses on a round-robin basis, and report vandals or squatters to the police. A well-kept foreclosed home will attract more buyers than one with a weed-filled yard. Take trespassing laws into account as you organize your effort.
If you're selling or refinancing and the appraiser uses foreclosures as comparable sales to determine the value of your property, ask your real estate agent to make sure the appraiser accounts for the distressed nature of those sales and the condition of the properties as they compare to yours. Ask your agent to seek out other comparable sales the appraiser might have missed, which show your home in a much better light.
Syndicated housing columnist Lew Sichelman lives in a ranch house on the western shore of the Chesapeake Bay and has been writing about housing for more than 40 years.
Source: houselogic.com
Fla. insurance head seeks sinkhole data
Florida Insurance Commissioner Kevin McCarty has asked the state’s commercial and residential property insurance industry to collect claims data related to sinkholes.
During the past legislative session, state insurance regulators identified increased sinkhole claims as one of the cost drivers affecting homeowners’ rates. Recently, insurers have reported a substantial increase in the frequency of these claims in areas throughout Florida. To learn more about sinkhole activity, including frequency and severity of claims, as well as geographic location, state regulators have asked for data on sinkhole claims opened in Florida between 2006 and 2010.
According to the Florida Office of Insurance Regulation, the data collected will help regulators more clearly define:
• The types of claims being filed
• Testing procedures to determine the legitimacy of claims
• Costs of inspections
• Geographic location of claims
• Legal fees and public adjuster fees
• Amount of structural loss
State insurance officials will use the results to determine potential regulatory actions, according to McCarty.
Source: Florida Realtors®
During the past legislative session, state insurance regulators identified increased sinkhole claims as one of the cost drivers affecting homeowners’ rates. Recently, insurers have reported a substantial increase in the frequency of these claims in areas throughout Florida. To learn more about sinkhole activity, including frequency and severity of claims, as well as geographic location, state regulators have asked for data on sinkhole claims opened in Florida between 2006 and 2010.
According to the Florida Office of Insurance Regulation, the data collected will help regulators more clearly define:
• The types of claims being filed
• Testing procedures to determine the legitimacy of claims
• Costs of inspections
• Geographic location of claims
• Legal fees and public adjuster fees
• Amount of structural loss
State insurance officials will use the results to determine potential regulatory actions, according to McCarty.
Source: Florida Realtors®
DocuSign electronic signature service now available in Form Simplicity
Form Simplicity, a web-based forms application tool for Realtors, announced it has partnered with DocuSign, a leader in electronic signature technology. With the DocuSign integration, Form Simplicity now provides users an end‐to‐end online real estate forms process, expediting real estate transactions by eliminating the need for paper processing.
“Form Simplicity maximizes agent productivity. With the addition of DocuSign, the standard in electronic signature, we anticipate the adoption rate will continue to increase rapidly,” says Joe Ballarino, president and COO of Real Estate Industry Solutions, a wholly owned subsidiary of Florida Realtors. “Now Form Simplicity users will have unparalleled convenience and ease of use to quickly send forms to clients for electronic signature.
“With real estate forms signed in minutes, not days, DocuSign real estate professionals achieve higher sales, increase client satisfaction and maintain a competitive edge,” Ballarino adds.
Accessible from any Internet‐connected device, DocuSign supports virtually any document and form, and provides broad user-authentication options, data collection and secure document/data storage and retrieval. Realtors using Form Simplicity and DocuSign can negotiate in real time and use included collaboration tools.
Source: Florida Realtors®
“Form Simplicity maximizes agent productivity. With the addition of DocuSign, the standard in electronic signature, we anticipate the adoption rate will continue to increase rapidly,” says Joe Ballarino, president and COO of Real Estate Industry Solutions, a wholly owned subsidiary of Florida Realtors. “Now Form Simplicity users will have unparalleled convenience and ease of use to quickly send forms to clients for electronic signature.
“With real estate forms signed in minutes, not days, DocuSign real estate professionals achieve higher sales, increase client satisfaction and maintain a competitive edge,” Ballarino adds.
Accessible from any Internet‐connected device, DocuSign supports virtually any document and form, and provides broad user-authentication options, data collection and secure document/data storage and retrieval. Realtors using Form Simplicity and DocuSign can negotiate in real time and use included collaboration tools.
Source: Florida Realtors®
Wednesday, August 25, 2010
Form Simplicity signs agreement with tax data provider
Form Simplicity, a web-based forms program that is a member benefit to Florida Realtors®, announces it has secured access to Florida tax data for Realtors to use within the Form Simplicity application. Users will soon be able to use common public record data to auto-populate their transactions.
“This is a nice addition to our offering that pairs well with our MLS data integration,” says Joe Ballarino, president and chief operations officer of Real Estate Industry Solutions, the developer of Form Simplicity and a wholly owned subsidiary of Florida Realtors. “The tax data is especially useful for creating listings where MLS data may not be available.”
Form Simplicity is a member benefit to all Florida Realtors. Within the program, users may print out a web form and take it with them, or create a web-based transaction. When creating a web-based transaction, users can automate transactions through preset ‘data populated’ packages, use an MLS data import feature, and use a synchronization feature that allows users to type information into one field and then have it automatically update the same field on all forms within a single transaction.
To begin using Form Simplicity, members of Florida Realtors can visit Forms.FloridaRealtors.org (http://www.FloridaRealtors.org/forms) and login with the same login information used to access floridarealtors.org. Click the “help” button to watch a demo on how to use the program, or attend a one-hour live training webinar. Training webinars cover Form Simplicity’s basic functionalities with the final 10 minutes devoted to broker features.
Source: Florida Realtors®
“This is a nice addition to our offering that pairs well with our MLS data integration,” says Joe Ballarino, president and chief operations officer of Real Estate Industry Solutions, the developer of Form Simplicity and a wholly owned subsidiary of Florida Realtors. “The tax data is especially useful for creating listings where MLS data may not be available.”
Form Simplicity is a member benefit to all Florida Realtors. Within the program, users may print out a web form and take it with them, or create a web-based transaction. When creating a web-based transaction, users can automate transactions through preset ‘data populated’ packages, use an MLS data import feature, and use a synchronization feature that allows users to type information into one field and then have it automatically update the same field on all forms within a single transaction.
To begin using Form Simplicity, members of Florida Realtors can visit Forms.FloridaRealtors.org (http://www.FloridaRealtors.org/forms) and login with the same login information used to access floridarealtors.org. Click the “help” button to watch a demo on how to use the program, or attend a one-hour live training webinar. Training webinars cover Form Simplicity’s basic functionalities with the final 10 minutes devoted to broker features.
Source: Florida Realtors®
July new home sales fall to slowest pace on record
Sales of new homes dropped sharply last month to the slowest pace on record, the latest sign that the economic recovery is fading.
The Commerce Department says new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963.
Economists surveyed by Thomson Reuters had expected a pace of 330,000.
June’s sales figures were revised downward to an annual pace of 315,000. May’s figures were revised upward and are now the second-slowest pace on record.
The median sales price in July was $204,000. That was down 4.8 percent from a year earlier and down 6 percent from June.
Source: The Associated Press, Alan Zibel, AP real estate writer.
The Commerce Department says new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963.
Economists surveyed by Thomson Reuters had expected a pace of 330,000.
June’s sales figures were revised downward to an annual pace of 315,000. May’s figures were revised upward and are now the second-slowest pace on record.
The median sales price in July was $204,000. That was down 4.8 percent from a year earlier and down 6 percent from June.
Source: The Associated Press, Alan Zibel, AP real estate writer.
Re-defaults on modified mortgage loans falling
Homeowners who had mortgages modified recently are faring better than those who did so earlier in the housing crisis, according to a report released Tuesday, possibly debunking predictions of a huge wave of defaults to come.
The State Foreclosure Prevention Working Group warned of other troubling signs, however, on the same day that a separate industry report showed the most severe July sales drop-off for previously occupied homes in 15 years.
The group of 12 state attorneys general and state banking regulators said Tuesday that foreclosures still easily outpace the number of loan modifications. Modifications lower monthly payments and reduce the odds of losing a home.
Nearly three years into the foreclosure crisis, the group of state officials also found that nearly 63 percent of homeowners who are at least 60 days behind on their mortgage payments aren’t taking part in either government or private foreclosure prevention programs.
Banking officials warned that lenders must aggressively seek out homeowners who are teetering on the edge, even if it means short-term pain for banks.
“There is still a tremendous amount of work to be done to prevent unnecessary foreclosures,” said Neil Milner, president and CEO of the Conference of State Bank Supervisors, which is part of the working group. “Servicers must continue to perform meaningful outreach to those homeowners who are seriously delinquent and to perform modifications with significant principal reduction.”
The working group compared delinquencies for mortgages modified last year with those revised in 2008, and whether borrowers were keeping up with payments six months after terms were changed. Borrowers getting modifications in 2009 were nearly 50 percent less likely to end up at least 60 days behind than those with modifications in 2008. About 15 percent among the 2009 group ended up becoming seriously delinquent six months after modification, versus nearly 31 percent for the 2008 group.
The reduction “suggests that dire predictions of high re-default rates may not come true,” the report said, noting some analysts have predicted re-default rates as high as 75 percent.
The report said recent modifications that reduce principal balances on loans have a lower default rate than those that merely cut the interest component of monthly payments.
But most banks don’t trim the overall balance when they modify loans, according to the report. Only one in five modifications reduced the loan amount, with 70 percent of those studied in this year’s first quarter actually increasing the total by adding service charges and late payments to the loan balance, the report said.
However, through adjustments of interest rates, about 89 percent of first-quarter modifications involved some reduction in monthly payments, the report said. Nearly 78 percent cut payments 10 percent or more.
But the absence of loan balance reduction in most modifications will hamper future foreclosure prevention efforts, the report said. The authors noted that home prices have declined more than 30 percent from their 2006 peak, and nearly one-quarter of homeowners owe more than their homes are worth.
The group said it “anticipates hundreds of thousands of foreclosures will occur later this year absent additional improvements in foreclosure prevention efforts.”
Michael Fratantoni, vice president of research and economics with the Mortgage Bankers Association, said modifications must strike a balance between helping borrowers stay in their homes, and enabling lenders and investors to avoid taking big losses.
Reducing a loan amount in a mortgage modification “can be the tool to get you there to that balance, but sometimes it isn’t,” Fratantoni said.
He said a key reason many at-risk borrowers don’t take part in foreclosure prevention programs is they simply don’t pick up their phone or otherwise respond when lenders contact them about mortgage modification.
“It really is a bit of a two-way street,” he said.
The state officials’ report examined mortgage modification trends at nine nonbank mortgage companies servicing 4.6 million loans nationwide as of March. Since the group of state officials began collecting data in October 2007, those nine companies have completed more than 2.3 million foreclosures. That’s about three times greater than the 760,000 loan modifications they completed.
As of March 31, the nine servicers reported 778,000 borrowers were late at least 60 days on their payments.
On Friday, the Treasury Department said nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out. Economists said the report suggests the $75 billion government effort is failing to slow the tide of foreclosures, which are expected to grow well into next year.
Source: The Associated Press, Mark Jewell, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The State Foreclosure Prevention Working Group warned of other troubling signs, however, on the same day that a separate industry report showed the most severe July sales drop-off for previously occupied homes in 15 years.
The group of 12 state attorneys general and state banking regulators said Tuesday that foreclosures still easily outpace the number of loan modifications. Modifications lower monthly payments and reduce the odds of losing a home.
Nearly three years into the foreclosure crisis, the group of state officials also found that nearly 63 percent of homeowners who are at least 60 days behind on their mortgage payments aren’t taking part in either government or private foreclosure prevention programs.
Banking officials warned that lenders must aggressively seek out homeowners who are teetering on the edge, even if it means short-term pain for banks.
“There is still a tremendous amount of work to be done to prevent unnecessary foreclosures,” said Neil Milner, president and CEO of the Conference of State Bank Supervisors, which is part of the working group. “Servicers must continue to perform meaningful outreach to those homeowners who are seriously delinquent and to perform modifications with significant principal reduction.”
The working group compared delinquencies for mortgages modified last year with those revised in 2008, and whether borrowers were keeping up with payments six months after terms were changed. Borrowers getting modifications in 2009 were nearly 50 percent less likely to end up at least 60 days behind than those with modifications in 2008. About 15 percent among the 2009 group ended up becoming seriously delinquent six months after modification, versus nearly 31 percent for the 2008 group.
The reduction “suggests that dire predictions of high re-default rates may not come true,” the report said, noting some analysts have predicted re-default rates as high as 75 percent.
The report said recent modifications that reduce principal balances on loans have a lower default rate than those that merely cut the interest component of monthly payments.
But most banks don’t trim the overall balance when they modify loans, according to the report. Only one in five modifications reduced the loan amount, with 70 percent of those studied in this year’s first quarter actually increasing the total by adding service charges and late payments to the loan balance, the report said.
However, through adjustments of interest rates, about 89 percent of first-quarter modifications involved some reduction in monthly payments, the report said. Nearly 78 percent cut payments 10 percent or more.
But the absence of loan balance reduction in most modifications will hamper future foreclosure prevention efforts, the report said. The authors noted that home prices have declined more than 30 percent from their 2006 peak, and nearly one-quarter of homeowners owe more than their homes are worth.
The group said it “anticipates hundreds of thousands of foreclosures will occur later this year absent additional improvements in foreclosure prevention efforts.”
Michael Fratantoni, vice president of research and economics with the Mortgage Bankers Association, said modifications must strike a balance between helping borrowers stay in their homes, and enabling lenders and investors to avoid taking big losses.
Reducing a loan amount in a mortgage modification “can be the tool to get you there to that balance, but sometimes it isn’t,” Fratantoni said.
He said a key reason many at-risk borrowers don’t take part in foreclosure prevention programs is they simply don’t pick up their phone or otherwise respond when lenders contact them about mortgage modification.
“It really is a bit of a two-way street,” he said.
The state officials’ report examined mortgage modification trends at nine nonbank mortgage companies servicing 4.6 million loans nationwide as of March. Since the group of state officials began collecting data in October 2007, those nine companies have completed more than 2.3 million foreclosures. That’s about three times greater than the 760,000 loan modifications they completed.
As of March 31, the nine servicers reported 778,000 borrowers were late at least 60 days on their payments.
On Friday, the Treasury Department said nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out. Economists said the report suggests the $75 billion government effort is failing to slow the tide of foreclosures, which are expected to grow well into next year.
Source: The Associated Press, Mark Jewell, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Tuesday, August 24, 2010
Investors turn to flipping for quick profits
Private equity firms and other groups of wealthy people are purchasing foreclosures at distressed prices, rehabbing them and selling them for a quick profit.
This used to be a game for amateurs, but because of the lack of other investment opportunities, the money-management pros have stepped in.
The influx of new players is pushing up auction prices and making it harder to make a profit. The average discount at auctions – the difference between a home’s sale price and its actual value – is 21.6 percent, down from 28 percent in January 2009, according to ForeclosureRadar.
“In crisis there’s opportunity,” says Rick Hudson, president of investment firm Prosperity Group Real Estate in Irvine, Calif. “Right now there’s huge opportunity with flipping houses.”
Source: Los Angeles Times, Walter Hamilton and Alejandro Lazo (08/20/2010)
Source: INFORMATION, INC. Bethesda, MD
This used to be a game for amateurs, but because of the lack of other investment opportunities, the money-management pros have stepped in.
The influx of new players is pushing up auction prices and making it harder to make a profit. The average discount at auctions – the difference between a home’s sale price and its actual value – is 21.6 percent, down from 28 percent in January 2009, according to ForeclosureRadar.
“In crisis there’s opportunity,” says Rick Hudson, president of investment firm Prosperity Group Real Estate in Irvine, Calif. “Right now there’s huge opportunity with flipping houses.”
Source: Los Angeles Times, Walter Hamilton and Alejandro Lazo (08/20/2010)
Source: INFORMATION, INC. Bethesda, MD
6,000 properties in South Fla. under $50K
Thousands of South Florida homes can be picked up for about the same cost as a new Ford Mustang GT500 as the real estate crash continues to put the brakes on pricing.
A report released earlier this month by the Miami-based real estate and consultant firm Condo Vultures found 5,400 townhouses and condominiums, and 600 single-family homes in Miami-Dade, Broward and Palm Beach counties have list prices of $50,000 or less.
Peter Zalewski, a principal with Condo Vultures, said he compiled the data from the Multiple Listing Service because he had several clients who didn’t want to spend more than $50,000 on investment properties.
Although a close observer of the South Florida market, Zalewski said he was surprised at the number of bargain-basement listings.
At the peak of the real estate boom, Zalewski said he paid $25,000 for a parking space at his condominium, which “wasn’t even a very good space. Today, with that same money, I could theoretically go out and buy a property,” he said. “It’s really reflective of how this market has changed so dramatically.”
Broward County had the most properties available under $50,000 with 2,400 listings.
Palm Beach County was the runner-up, listing 2,100 cut-rate properties.
Zalewski acknowledged that some of the homes are in senior communities and that the majority are distressed properties – either bank-owned or short sales. Many are condos that have been abandoned by investors who paid sky-high prices during the boom.
At the Palm Beach Grande in suburban West Palm Beach west of the Turnpike, units were bought for up to $180,000 when the former apartment complex went condo conversion in 2006. A one-bedroom unit purchased in April went for $24,900.
According to Condo Vultures, Palm Beach County has 21 single-family homes, and 437 condos currently listed with sales prices between $20,000 and $29,999.
“Before, you thought under $100,000 was a great value, now you have all these opportunities for under $50,000,” Zalewski said.
Nancy Jennings, broker at Keller Williams Wellington, said her agents are busy with customers looking for those kinds of deals.
“I had a call this morning from a buyer in Ohio who wants to find something in the $30,000 to $35,000 range,” Jennings said. “We’ll find him something for sure.”
Zalewski cautioned that some of the cheap listings are banks offering teaser prices on short sales. Still, he found that about 7,000 South Florida residences have been bought since the beginning of the year for $50,000 or less.
“Many of these buyers are all-cash investors who are focused on accumulating rental properties,” he said.
Source: The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
A report released earlier this month by the Miami-based real estate and consultant firm Condo Vultures found 5,400 townhouses and condominiums, and 600 single-family homes in Miami-Dade, Broward and Palm Beach counties have list prices of $50,000 or less.
Peter Zalewski, a principal with Condo Vultures, said he compiled the data from the Multiple Listing Service because he had several clients who didn’t want to spend more than $50,000 on investment properties.
Although a close observer of the South Florida market, Zalewski said he was surprised at the number of bargain-basement listings.
At the peak of the real estate boom, Zalewski said he paid $25,000 for a parking space at his condominium, which “wasn’t even a very good space. Today, with that same money, I could theoretically go out and buy a property,” he said. “It’s really reflective of how this market has changed so dramatically.”
Broward County had the most properties available under $50,000 with 2,400 listings.
Palm Beach County was the runner-up, listing 2,100 cut-rate properties.
Zalewski acknowledged that some of the homes are in senior communities and that the majority are distressed properties – either bank-owned or short sales. Many are condos that have been abandoned by investors who paid sky-high prices during the boom.
At the Palm Beach Grande in suburban West Palm Beach west of the Turnpike, units were bought for up to $180,000 when the former apartment complex went condo conversion in 2006. A one-bedroom unit purchased in April went for $24,900.
According to Condo Vultures, Palm Beach County has 21 single-family homes, and 437 condos currently listed with sales prices between $20,000 and $29,999.
“Before, you thought under $100,000 was a great value, now you have all these opportunities for under $50,000,” Zalewski said.
Nancy Jennings, broker at Keller Williams Wellington, said her agents are busy with customers looking for those kinds of deals.
“I had a call this morning from a buyer in Ohio who wants to find something in the $30,000 to $35,000 range,” Jennings said. “We’ll find him something for sure.”
Zalewski cautioned that some of the cheap listings are banks offering teaser prices on short sales. Still, he found that about 7,000 South Florida residences have been bought since the beginning of the year for $50,000 or less.
“Many of these buyers are all-cash investors who are focused on accumulating rental properties,” he said.
Source: The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
Florida’s existing condo sales rise in July
Sales of existing condominiums in Florida rose 11 percent in July, with a total of 5,557 condos sold statewide compared to 4,991 units sold in July 2009, according to the latest housing data released by Florida Realtors®.
Eleven of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in July, according to Florida Realtors. The statewide existing condo median sales price last month was $87,200; in July 2009 it was $108,500 for a 20 percent decrease. The national median existing condo price was $181,300 in June, according to the National Association of Realtors® (NAR).
Meanwhile, in the year-to-year comparison for existing home sales, a total of 13,589 single-family existing homes sold statewide last month compared to 15,762 homes sold in July 2009 for a decrease of 14 percent. Florida’s median existing-home sales price in July was $138,000; a year earlier, it was $147,600 for a decrease of 7 percent. The median is the midpoint; half the homes sold for more, half for less.
“The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market,” said Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “As we move past this second dip, which is evident in the July data, the continued recovery of the state’s housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.
“A healthy housing market depends upon a healthy Florida economy, and in particular, an improving labor market,” Snaith added. “Job growth and a declining unemployment rate will help sales continue to grow while at the same time reducing the number of foreclosures in Florida.”
2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville, noted that the Gulf oil spill, along with uncertainty over its impact, has affected the state’s housing market.
“Along with many local businesses in the Florida Panhandle and in other Gulf Coast states, real estate has experienced significant economic harm following the Deepwater Horizon drilling rig explosion and oil spill,” Davis said. “The announcement that a special allocation from the BP Oil Spill Fund is now available to help the claims of real estate professionals’ – Realtors and licensees – over loss of income or sales due to the Gulf oil spill is a positive action that will help bolster the state’s fragile economy recovery.”
The national median sales price for existing single-family homes in June 2010 was $184,200, up 1.3 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $331,150 in June; in California, it was $311,950; in Maryland, it was $265,268; and in New York, it was $220,750.
More jobs continue to be key to the housing sector’s recovery, according to NAR’s latest industry outlook. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” said NAR Chief Economist Lawrence Yun.
The interest rate for a 30-year fixed-rate mortgage averaged 4.56 percent in July, down from the 5.22 percent averaged in July 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Eleven of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in July, according to Florida Realtors. The statewide existing condo median sales price last month was $87,200; in July 2009 it was $108,500 for a 20 percent decrease. The national median existing condo price was $181,300 in June, according to the National Association of Realtors® (NAR).
Meanwhile, in the year-to-year comparison for existing home sales, a total of 13,589 single-family existing homes sold statewide last month compared to 15,762 homes sold in July 2009 for a decrease of 14 percent. Florida’s median existing-home sales price in July was $138,000; a year earlier, it was $147,600 for a decrease of 7 percent. The median is the midpoint; half the homes sold for more, half for less.
“The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market,” said Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “As we move past this second dip, which is evident in the July data, the continued recovery of the state’s housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.
“A healthy housing market depends upon a healthy Florida economy, and in particular, an improving labor market,” Snaith added. “Job growth and a declining unemployment rate will help sales continue to grow while at the same time reducing the number of foreclosures in Florida.”
2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville, noted that the Gulf oil spill, along with uncertainty over its impact, has affected the state’s housing market.
“Along with many local businesses in the Florida Panhandle and in other Gulf Coast states, real estate has experienced significant economic harm following the Deepwater Horizon drilling rig explosion and oil spill,” Davis said. “The announcement that a special allocation from the BP Oil Spill Fund is now available to help the claims of real estate professionals’ – Realtors and licensees – over loss of income or sales due to the Gulf oil spill is a positive action that will help bolster the state’s fragile economy recovery.”
The national median sales price for existing single-family homes in June 2010 was $184,200, up 1.3 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $331,150 in June; in California, it was $311,950; in Maryland, it was $265,268; and in New York, it was $220,750.
More jobs continue to be key to the housing sector’s recovery, according to NAR’s latest industry outlook. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” said NAR Chief Economist Lawrence Yun.
The interest rate for a 30-year fixed-rate mortgage averaged 4.56 percent in July, down from the 5.22 percent averaged in July 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Source: Florida Realtors®
Tenants of foreclosed homes often unsure of options
Erin Kennedy-Florez was 10 months into a one-year lease on a home in Richmond, Calif., when she found a notice on her door saying the home was being foreclosed.
She said she called her landlord, who told her that he was trying to refinance the house and to keep paying him rent.
“I was paying the rent, but he was not paying the mortgage,” Kennedy-Florez said.
Soon after, the house went into foreclosure, and Kennedy-Florez immediately heard from a law firm representing Freddie Mac, the federal real estate lending agency that held the note on the home.
“I had to decide whether I still wanted to be living there while they were showing it (to potential buyers),” she said.
Kennedy-Florez’s situation reflects a problem that tenants rights’ groups say has been flying under the radar since the home foreclosure crisis began in 2008. They say thousands of renters have lost security deposits, paid rent to former landlords who no longer owned the house, and agreed to move on short notice because they didn’t know their rights.
Kennedy-Florez accepted a cash settlement to move three weeks after the foreclosure in November 2009. She received the check the day she moved out but struggled to come up with the security deposit for a new rental in El Cerrito, Calif.
The landlord still owed her a $3,200 security deposit and has been paying it back in $100 and $200 installments, she said.
“I jumped at the first place I could find,” she said. “I’m hoping this place isn’t shaky, too.”
Kennedy-Florez’s former landlord said the home had been foreclosed but that he had paid back the security deposit in full. He did not want to be named because of privacy concerns.
Some of foreclosure situations probably have been resolved to the satisfaction of landlords and renters alike, said Gabe Treves, program coordinator with rights group Tenants Together, which is based in San Francisco.
But Treves said his agency has helped 3,000 renters squeezed between landlords who are behind on their mortgage payments and lenders trying to recover their investments.
“The vast majority of the tenants we talk to are having their rights violated,” Treves said. “Banks are being very aggressive in trying to get the tenants out, because they are stuck on the idea that if tenants vacate the home that they can sell it.”
Wells Fargo Bank is committed to following all rules that protect tenants who are living in foreclosures, spokesman Jason Menke said. At the same time, Wells Fargo is in the business of lending money for home purchases, not in managing rentals, he said.
“Generally, it’s our object to get a new owner into the house as quickly as possible,” Menke said. “It’s in our best interest and that of the community to return properties to the market.”
California Attorney General Jerry Brown launched an investigation into the issue last month, partly in response to the Tenants Together report. Brown sent a letter in June to California banks, lenders, investors and law firms asking them to explain their procedures for dealing with tenants in foreclosed properties in an effort to find out whether laws are being broken.
Tenants are protected by a 2009 federal law that allows them to stay in their units for 90 days after a foreclosure notice is posted, but they have other rights as well:
• Renters can insist on staying in their units until the end of their leases, except when the new owner of a single-family home wants to move in.
• They can require banks and their agents to put all communication in writing.
• They are not required to take cash incentives to move out before the law requires.
• Harassment, such as changing locks without a court order, entering the home without permission or shutting off utilities, is illegal.
Wells Fargo sends tenants a letter outlining their legal options if it forecloses on the house where they live, Menke said. The bank often offers cash incentives for tenants to move out before the three-month period has passed. The bank also honors lease agreements as long as the tenant has a copy of the lease. But if the bank sells the house, tenants have 90 days from the sale to move, said Wells Fargo spokeswoman Mary Berg.
“If the new owner wants to move in, then the tenant is no longer protected unless the new buyer decides to keep the renters there,” Berg said.
Source: Los Angeles Times
She said she called her landlord, who told her that he was trying to refinance the house and to keep paying him rent.
“I was paying the rent, but he was not paying the mortgage,” Kennedy-Florez said.
Soon after, the house went into foreclosure, and Kennedy-Florez immediately heard from a law firm representing Freddie Mac, the federal real estate lending agency that held the note on the home.
“I had to decide whether I still wanted to be living there while they were showing it (to potential buyers),” she said.
Kennedy-Florez’s situation reflects a problem that tenants rights’ groups say has been flying under the radar since the home foreclosure crisis began in 2008. They say thousands of renters have lost security deposits, paid rent to former landlords who no longer owned the house, and agreed to move on short notice because they didn’t know their rights.
Kennedy-Florez accepted a cash settlement to move three weeks after the foreclosure in November 2009. She received the check the day she moved out but struggled to come up with the security deposit for a new rental in El Cerrito, Calif.
The landlord still owed her a $3,200 security deposit and has been paying it back in $100 and $200 installments, she said.
“I jumped at the first place I could find,” she said. “I’m hoping this place isn’t shaky, too.”
Kennedy-Florez’s former landlord said the home had been foreclosed but that he had paid back the security deposit in full. He did not want to be named because of privacy concerns.
Some of foreclosure situations probably have been resolved to the satisfaction of landlords and renters alike, said Gabe Treves, program coordinator with rights group Tenants Together, which is based in San Francisco.
But Treves said his agency has helped 3,000 renters squeezed between landlords who are behind on their mortgage payments and lenders trying to recover their investments.
“The vast majority of the tenants we talk to are having their rights violated,” Treves said. “Banks are being very aggressive in trying to get the tenants out, because they are stuck on the idea that if tenants vacate the home that they can sell it.”
Wells Fargo Bank is committed to following all rules that protect tenants who are living in foreclosures, spokesman Jason Menke said. At the same time, Wells Fargo is in the business of lending money for home purchases, not in managing rentals, he said.
“Generally, it’s our object to get a new owner into the house as quickly as possible,” Menke said. “It’s in our best interest and that of the community to return properties to the market.”
California Attorney General Jerry Brown launched an investigation into the issue last month, partly in response to the Tenants Together report. Brown sent a letter in June to California banks, lenders, investors and law firms asking them to explain their procedures for dealing with tenants in foreclosed properties in an effort to find out whether laws are being broken.
Tenants are protected by a 2009 federal law that allows them to stay in their units for 90 days after a foreclosure notice is posted, but they have other rights as well:
• Renters can insist on staying in their units until the end of their leases, except when the new owner of a single-family home wants to move in.
• They can require banks and their agents to put all communication in writing.
• They are not required to take cash incentives to move out before the law requires.
• Harassment, such as changing locks without a court order, entering the home without permission or shutting off utilities, is illegal.
Wells Fargo sends tenants a letter outlining their legal options if it forecloses on the house where they live, Menke said. The bank often offers cash incentives for tenants to move out before the three-month period has passed. The bank also honors lease agreements as long as the tenant has a copy of the lease. But if the bank sells the house, tenants have 90 days from the sale to move, said Wells Fargo spokeswoman Mary Berg.
“If the new owner wants to move in, then the tenant is no longer protected unless the new buyer decides to keep the renters there,” Berg said.
Source: Los Angeles Times
4 Twitter Tips that Will Keep You Texting
As a real estate professional, you’re on the go all the time. As such, things like SMS text messaging have probably become second nature to you. So why not use this same technology to keep up with Twitter too.
Here are four texting tips from Twitter on how to maximize its technology and your use of SMS:
Fast Follow. Anyone in the U.S. can receive Tweets on their phone even if they haven’t signed up for Twitter. This is a simple way for people to get information they care about in real-time. For example, let’s say you want to get Tweets from New York City’s office of emergency management (@NotifyNYC). Just text ‘follow NotifyNYC’ to 40404 in the US.
Try it out the next time you see a Twitter @username at a restaurant or store, on a billboard or on TV, or if you hear one mentioned on the radio. If you want to appear in a user’s followers list or start to get followers, you’ll need to create a Twitter account. You can SMS by texting ‘signup’ to Twitter at 40404.
Fast Following without creating an account is currently available only in the U.S., but we're working with carriers to bring it to other countries.
Set SMS alerts: From your computer, wherever you see a user on Twitter.com, you can hover over their name or avatar, and click on the phone icon that appears in the hovercard. Whenever they tweet, you'll get it as an SMS message on your phone.
It's just as easy to set alerts from your phone. Send ‘on [username]’ or ‘off [username]’ to 40404 in the U.S.
Tell Twitter to be quiet. Turn text messages on or off by sending ‘on’ or ‘off’ to Twitter. You can also go to our settings page if you want to turn off text message updates during a certain time period.
Keep up with the latest Tweet. If you text 'Get [username]’, that user’s most recent Tweet will be sent to your phone, even if you don’t follow them. There are a bunch of other fun commands you can use with Twitter on your phone.
By Stephanie Andre; RISMEDIA, August 24, 2010
Here are four texting tips from Twitter on how to maximize its technology and your use of SMS:
Fast Follow. Anyone in the U.S. can receive Tweets on their phone even if they haven’t signed up for Twitter. This is a simple way for people to get information they care about in real-time. For example, let’s say you want to get Tweets from New York City’s office of emergency management (@NotifyNYC). Just text ‘follow NotifyNYC’ to 40404 in the US.
Try it out the next time you see a Twitter @username at a restaurant or store, on a billboard or on TV, or if you hear one mentioned on the radio. If you want to appear in a user’s followers list or start to get followers, you’ll need to create a Twitter account. You can SMS by texting ‘signup’ to Twitter at 40404.
Fast Following without creating an account is currently available only in the U.S., but we're working with carriers to bring it to other countries.
Set SMS alerts: From your computer, wherever you see a user on Twitter.com, you can hover over their name or avatar, and click on the phone icon that appears in the hovercard. Whenever they tweet, you'll get it as an SMS message on your phone.
It's just as easy to set alerts from your phone. Send ‘on [username]’ or ‘off [username]’ to 40404 in the U.S.
Tell Twitter to be quiet. Turn text messages on or off by sending ‘on’ or ‘off’ to Twitter. You can also go to our settings page if you want to turn off text message updates during a certain time period.
Keep up with the latest Tweet. If you text 'Get [username]’, that user’s most recent Tweet will be sent to your phone, even if you don’t follow them. There are a bunch of other fun commands you can use with Twitter on your phone.
By Stephanie Andre; RISMEDIA, August 24, 2010
Monday, August 23, 2010
Market growing for ‘quality time’ homes
Second homes, whether in the mountains or at the beach, have long had a strong family appeal. In recent years, savvy developers have been building communities aimed at families in the same way they once built for avid golfers, skiers or tennis players. Many of the homes are being bought because of family-friendly amenities and are used as a place for family gatherings, especially during holidays.
“Family-friendly definitely sells now,” says Steve Adelson, a partner in Discovery Land Co., which develops luxury second-home communities with a family focus. “In today’s market, the speculators are gone, and our buyers are real users. For people to be able to afford these kinds of homes, they usually have worked hard, spent a lot of time in the office, and on vacation they really want quality time with their families.”
Indicative of the appeal: Discovery has sold over $600 million worth of real estate this year, despite the economy.
The best family-centric communities have extensive supervised programs for kids, clubhouses and sports, activities and classes. Facilities and programs tend to be elaborate:
• At California’s Martis Camp, near Lake Tahoe, the “Family Barn” has a bowling alley, movie theater, soda fountain and stage. An outdoor sports complex offers croquet, lawn bowling, basketball courts, a soccer field, softball diamond and barbecue area. A separate “folk school” offers classes in photography and pottery.
• Colorado’s Snowmass resort has a multilevel, ski-in and ski-out “Treehouse Kids’ Adventure Center.”
• In addition to 35 miles of bike paths, a kids’ camp, three golf courses, equestrian and fly-fishing, Oregon’s Sunriver Resort has a domed astronomical observatory with a retractable roof and 13 telescopes. In summer, educational programs and viewings are conducted daily.
• Colorado’s Beaver Creek ski resort built a gondola for its kids’ ski school, has a skating rink, performing arts area and free cookies for skiers.
• At Idaho’s Gozzer Ranch, children make their own movie that’s “screened” for parents, complete with a red carpet and popcorn.
Most communities also offer simpler activities, which Adelson calls “Norman Rockwellian,” such as bingo nights and campfire steak cookouts. The best have put a summer camp twist on second-home ownership.
Source: USA TODAY, a division of Gannett Co. Inc., Larry Olmsted.
“Family-friendly definitely sells now,” says Steve Adelson, a partner in Discovery Land Co., which develops luxury second-home communities with a family focus. “In today’s market, the speculators are gone, and our buyers are real users. For people to be able to afford these kinds of homes, they usually have worked hard, spent a lot of time in the office, and on vacation they really want quality time with their families.”
Indicative of the appeal: Discovery has sold over $600 million worth of real estate this year, despite the economy.
The best family-centric communities have extensive supervised programs for kids, clubhouses and sports, activities and classes. Facilities and programs tend to be elaborate:
• At California’s Martis Camp, near Lake Tahoe, the “Family Barn” has a bowling alley, movie theater, soda fountain and stage. An outdoor sports complex offers croquet, lawn bowling, basketball courts, a soccer field, softball diamond and barbecue area. A separate “folk school” offers classes in photography and pottery.
• Colorado’s Snowmass resort has a multilevel, ski-in and ski-out “Treehouse Kids’ Adventure Center.”
• In addition to 35 miles of bike paths, a kids’ camp, three golf courses, equestrian and fly-fishing, Oregon’s Sunriver Resort has a domed astronomical observatory with a retractable roof and 13 telescopes. In summer, educational programs and viewings are conducted daily.
• Colorado’s Beaver Creek ski resort built a gondola for its kids’ ski school, has a skating rink, performing arts area and free cookies for skiers.
• At Idaho’s Gozzer Ranch, children make their own movie that’s “screened” for parents, complete with a red carpet and popcorn.
Most communities also offer simpler activities, which Adelson calls “Norman Rockwellian,” such as bingo nights and campfire steak cookouts. The best have put a summer camp twist on second-home ownership.
Source: USA TODAY, a division of Gannett Co. Inc., Larry Olmsted.
Congress still considering wind insurance
The Multiple Peril Insurance Act, sponsored by U.S. Rep. Gene Taylor (D-Miss.), continues to make appearances in Congress. The legislation has failed to make it through the U.S. Senate, and most recently was pulled from a vote in the U.S. House before the August recess.
The bill would add wind coverage to an already indebted National Flood Insurance Program (NFIP).
Lawmakers have grown concerned that coastal homeowners cannot find affordable coverage, but others say premiums should reflect the risks associated with living on the coast. The NFIP already owes the government about $18 billion, and the program may never repay taxpayers.
Much of the program’s claims stem from repeatedly damaged homes on the coast, with 1 percent of covered homes accounting for nearly 30 percent of claims. Adding wind coverage to the program will only exacerbate the problem, critics say, and push more of the cost burden onto inland homeowners.
Experts agree that property owners and developers need to adopt smarter building standards and mitigation methods to reduce risks and damage along the coast.
Source: FrumForum (08/22/10) Jenkins, David
Source: INFORMATION, INC. Bethesda, MD
The bill would add wind coverage to an already indebted National Flood Insurance Program (NFIP).
Lawmakers have grown concerned that coastal homeowners cannot find affordable coverage, but others say premiums should reflect the risks associated with living on the coast. The NFIP already owes the government about $18 billion, and the program may never repay taxpayers.
Much of the program’s claims stem from repeatedly damaged homes on the coast, with 1 percent of covered homes accounting for nearly 30 percent of claims. Adding wind coverage to the program will only exacerbate the problem, critics say, and push more of the cost burden onto inland homeowners.
Experts agree that property owners and developers need to adopt smarter building standards and mitigation methods to reduce risks and damage along the coast.
Source: FrumForum (08/22/10) Jenkins, David
Source: INFORMATION, INC. Bethesda, MD
Nearly 50 percent leave Obama mortgage-aid program
Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out.
The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday’s report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.
“The government program as currently structured is petering out. It is taking in fewer homeowners, more are dropping out and fewer people are ending up in permanent modifications,” said Mark Zandi, chief economist at Moody’s Analytics.
Besides forcing people from their homes, foreclosures and distressed home sales have pushed down on home values and crippled the broader housing industry. They have made it difficult for homebuilders to compete with the depressed prices and discouraged potential sellers from putting their homes on the market.
Approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the government program have been cut loose through July, according to the Treasury report. That’s about 48 percent of the ones who had enrolled since March 2009. And it is up from more than 40 percent through June.
Another 421,804, or roughly 32 percent of those who started the program, have received permanent loan modifications and are making their payments on time.
RealtyTrac reported that the number of U.S. homes lost to foreclosure surged in July to 92,858 properties, up 9 percent from June. The pace of repossessions has been increasing and the nation is now on track to having more than 1 million homes lost to foreclosure by the end of the year. That would eclipse the more than 900,000 homes repossessed in 2009, the firm says.
Lenders have historically taken over about 100,000 homes a year, according to RealtyTrac.
Zandi said the government effort will likely end up helping only about 500,000 homeowners lower their monthly payments on a permanent basis. That’s a small percentage of the number of people who have already lost their homes to foreclosure or distressed sales like short sales - when lenders let homeowners sell for less than they owe on their mortgages.
Zandi predicts another 1.5 million foreclosures or short sales in 2011.
“We still have a lot more foreclosures to come and further home price declines,” Zandi said. He said home prices, which have already fallen 30 percent since the peak of the housing boom, would drop by another 5 percent by next spring.
Many borrowers have complained that the government program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork.
The banking industry said borrowers weren’t sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.
Obama officials dispute that they pressured banks. They have defended the program, saying lenders are making more significant cuts to borrowers’ monthly payments than before the program was launched. And some of the largest mortgage companies in the program have offered alternative programs to those who fell out.
Homeowners who qualify can receive an interest rate as low as 2 percent for five years and a longer repayment period. Those who have successfully navigated the program to reach permanent modifications have seen their monthly payments cut on average by about $500.
Homeowners first receive temporary modifications and those are supposed to become permanent after borrowers make three payments on time and complete all the required paperwork. That includes proof of income and a letter explaining the reason for their troubles. But in practice, the process has taken far longer.
The more than 100 participating mortgage companies get taxpayer incentives to reduce payments. As of mid-June only $490 million had been spent out of a potential $75 billion the government has made available to help stem the wave of foreclosures.
Source: The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP Real Estate Writers Alan Zibel in Washington and Alex Veiga in Los Angeles contributed to this report.
The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday’s report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.
“The government program as currently structured is petering out. It is taking in fewer homeowners, more are dropping out and fewer people are ending up in permanent modifications,” said Mark Zandi, chief economist at Moody’s Analytics.
Besides forcing people from their homes, foreclosures and distressed home sales have pushed down on home values and crippled the broader housing industry. They have made it difficult for homebuilders to compete with the depressed prices and discouraged potential sellers from putting their homes on the market.
Approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the government program have been cut loose through July, according to the Treasury report. That’s about 48 percent of the ones who had enrolled since March 2009. And it is up from more than 40 percent through June.
Another 421,804, or roughly 32 percent of those who started the program, have received permanent loan modifications and are making their payments on time.
RealtyTrac reported that the number of U.S. homes lost to foreclosure surged in July to 92,858 properties, up 9 percent from June. The pace of repossessions has been increasing and the nation is now on track to having more than 1 million homes lost to foreclosure by the end of the year. That would eclipse the more than 900,000 homes repossessed in 2009, the firm says.
Lenders have historically taken over about 100,000 homes a year, according to RealtyTrac.
Zandi said the government effort will likely end up helping only about 500,000 homeowners lower their monthly payments on a permanent basis. That’s a small percentage of the number of people who have already lost their homes to foreclosure or distressed sales like short sales - when lenders let homeowners sell for less than they owe on their mortgages.
Zandi predicts another 1.5 million foreclosures or short sales in 2011.
“We still have a lot more foreclosures to come and further home price declines,” Zandi said. He said home prices, which have already fallen 30 percent since the peak of the housing boom, would drop by another 5 percent by next spring.
Many borrowers have complained that the government program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork.
The banking industry said borrowers weren’t sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.
Obama officials dispute that they pressured banks. They have defended the program, saying lenders are making more significant cuts to borrowers’ monthly payments than before the program was launched. And some of the largest mortgage companies in the program have offered alternative programs to those who fell out.
Homeowners who qualify can receive an interest rate as low as 2 percent for five years and a longer repayment period. Those who have successfully navigated the program to reach permanent modifications have seen their monthly payments cut on average by about $500.
Homeowners first receive temporary modifications and those are supposed to become permanent after borrowers make three payments on time and complete all the required paperwork. That includes proof of income and a letter explaining the reason for their troubles. But in practice, the process has taken far longer.
The more than 100 participating mortgage companies get taxpayer incentives to reduce payments. As of mid-June only $490 million had been spent out of a potential $75 billion the government has made available to help stem the wave of foreclosures.
Source: The Associated Press, Martin Crutsinger, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP Real Estate Writers Alan Zibel in Washington and Alex Veiga in Los Angeles contributed to this report.
Florida real estate professionals receive $16 million from special BP fund
Florida Realtors and four other state Realtor organizations successfully negotiated with Kenneth Feinberg, the claims administrator for the BP Oil Spill Fund, to set aside money to pay claims to real estate professionals for loss of income or loss of sales due to the Gulf oil spill. Of that, $16 million is currently available to pay claims to real estate professionals in Florida.
“Many real estate claims for loss of income due to the oil spill have been in limbo, leaving people with no way to pay their bills, take care of their families or keep their businesses going,” said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. “Providing this special allocation is a positive, responsive action on Mr. Feinberg’s part – one that will help people move forward and reclaim their lives.”
Claims are being handled by NCA, a claims administration firm contracted by Florida Realtors. Licensees may file claims beginning today online, by fax, or in person at one of five regional offices.
The Florida fund will cover losses from individuals and brokerages resulting from cancelled sales contracts and depressed market conditions. Only brokers or brokerage firms may file claims for loss of commission for a specific transaction.
Claims from individuals and businesses related to property management and rentals – including residential and commercial transactions – should be filed with Feinberg’s Gulf Coast Claims Facility.
Eligibility is based on proximity to the coast and proof of loss of commission or income as a result of the oil spill, among other things. The fund is available to all real estate licensees with active licenses at the time of the loss, not just Realtors. The maximum amount per claimant is $12,000, and claims will be paid immediately upon approval.
“Documentation is key to having your claim approved,” says Margy Grant, vice president of Corporate Legal Services/Corporate Counsel for the Florida Realtors. “Depending on the claim, these include, but are not limited to, copies of former tax returns, cancelled sales contracts or sales listings, a detailed list of previous sales transactions, personal statement of economic need, documentation of unemployment compensation and monthly sales records.”
Until now, real estate claims related to lost sales were not included in Feinberg’s protocol for payments from the $20 billion BP Gulf Coast Claims Fund. Representatives of Gulf Coast Realtor associations – Florida, Alabama, Mississippi, Louisiana and Texas – met several times with Feinberg to make the case that real estate brokers and agents have been financially harmed by the oil spill.
“This historic agreement between the real estate industry and the BP Fund is a model for public/private partnerships,” says Davis. “It will help restore economic vitality to the Florida Panhandle and ensure that a unique culture and way of life continues into the future.”
Source: Florida Realtors®
“Many real estate claims for loss of income due to the oil spill have been in limbo, leaving people with no way to pay their bills, take care of their families or keep their businesses going,” said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. “Providing this special allocation is a positive, responsive action on Mr. Feinberg’s part – one that will help people move forward and reclaim their lives.”
Claims are being handled by NCA, a claims administration firm contracted by Florida Realtors. Licensees may file claims beginning today online, by fax, or in person at one of five regional offices.
The Florida fund will cover losses from individuals and brokerages resulting from cancelled sales contracts and depressed market conditions. Only brokers or brokerage firms may file claims for loss of commission for a specific transaction.
Claims from individuals and businesses related to property management and rentals – including residential and commercial transactions – should be filed with Feinberg’s Gulf Coast Claims Facility.
Eligibility is based on proximity to the coast and proof of loss of commission or income as a result of the oil spill, among other things. The fund is available to all real estate licensees with active licenses at the time of the loss, not just Realtors. The maximum amount per claimant is $12,000, and claims will be paid immediately upon approval.
“Documentation is key to having your claim approved,” says Margy Grant, vice president of Corporate Legal Services/Corporate Counsel for the Florida Realtors. “Depending on the claim, these include, but are not limited to, copies of former tax returns, cancelled sales contracts or sales listings, a detailed list of previous sales transactions, personal statement of economic need, documentation of unemployment compensation and monthly sales records.”
Until now, real estate claims related to lost sales were not included in Feinberg’s protocol for payments from the $20 billion BP Gulf Coast Claims Fund. Representatives of Gulf Coast Realtor associations – Florida, Alabama, Mississippi, Louisiana and Texas – met several times with Feinberg to make the case that real estate brokers and agents have been financially harmed by the oil spill.
“This historic agreement between the real estate industry and the BP Fund is a model for public/private partnerships,” says Davis. “It will help restore economic vitality to the Florida Panhandle and ensure that a unique culture and way of life continues into the future.”
Source: Florida Realtors®
Friday, August 20, 2010
Homeowner confidence in real estate market dips
Homeowners are more pessimistic about the short-term future of home values in their local market than they have been in the past three quarters, according to the Zillow second-quarter Homeowner Confidence Survey. One-third (33 percent) believe home values in their local housing market have not yet reached a bottom, while 38 percent believe they have already reached a bottom.
When asked about local home values over the next six months, more than one-quarter (28 percent) of U.S. homeowners said home values would decrease, up from 20 percent in the first quarter. Additionally, less than one-third (30 percent) believes home values in their local market will increase, down from 42 percent in the first quarter.
Despite the increasing pessimism, a large number of homeowners anxiously await the opportunity to sell. Five percent of U.S. homeowners say they are very likely to put their home on the market in the next six months if they see signs of a real estate market turnaround. This translates into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.
Looking backward, homeowners also became slightly more pessimistic about the performance of their own homes’ values in the past year. Less than a quarter (24 percent) of homeowners said their home had increased in value in the past year, compared to 27 percent in the first quarter. In reality, 34 percent of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports.
“As homeowners have been inundated recently with news of declining home sales post-tax credit, it’s no surprise that they would become more pessimistic about the future of home values,” said Dr. Stan Humphries, chief economist at Zillow.com. “Homeowners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.
“Given this sentiment, we’re surprised so many homeowners believe their market has already bottomed. Although our Q2 reports indicated signs of stabilization in 30 percent of markets we cover, we’re concerned that this was at least partly due to the homebuyer tax credits. We’re already seeing payback for the credits in the form of declining home sales, and this trend will push up inventory levels and exert downward pressure on home values. Add in the inventory from the millions of sidelined sellers and we’ll take more steps back. Our forecast remains largely unchanged: We’re in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years.”
Homeowner perception by region
Looking further into the future, the majority of homeowners believe their own homes’ values will either increase (27 percent) or stay the same (35 percent) in the next 12 months, while 12 percent expect a decrease and 26 percent don’t know.
Of those who expect their home’s value to increase, the median expectation is a rise of 6 percent, although that varies by geography. Northeastern and Western homeowners who expect an increase anticipate a median rise of 10 percent, while Southern and Midwestern homeowners expect a median increase of 5 percent. Those who expect their home’s value to decrease in the next year anticipate a median decrease of 10 percent.
Source: Florida Realtors®
When asked about local home values over the next six months, more than one-quarter (28 percent) of U.S. homeowners said home values would decrease, up from 20 percent in the first quarter. Additionally, less than one-third (30 percent) believes home values in their local market will increase, down from 42 percent in the first quarter.
Despite the increasing pessimism, a large number of homeowners anxiously await the opportunity to sell. Five percent of U.S. homeowners say they are very likely to put their home on the market in the next six months if they see signs of a real estate market turnaround. This translates into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.
Looking backward, homeowners also became slightly more pessimistic about the performance of their own homes’ values in the past year. Less than a quarter (24 percent) of homeowners said their home had increased in value in the past year, compared to 27 percent in the first quarter. In reality, 34 percent of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports.
“As homeowners have been inundated recently with news of declining home sales post-tax credit, it’s no surprise that they would become more pessimistic about the future of home values,” said Dr. Stan Humphries, chief economist at Zillow.com. “Homeowners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.
“Given this sentiment, we’re surprised so many homeowners believe their market has already bottomed. Although our Q2 reports indicated signs of stabilization in 30 percent of markets we cover, we’re concerned that this was at least partly due to the homebuyer tax credits. We’re already seeing payback for the credits in the form of declining home sales, and this trend will push up inventory levels and exert downward pressure on home values. Add in the inventory from the millions of sidelined sellers and we’ll take more steps back. Our forecast remains largely unchanged: We’re in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years.”
Homeowner perception by region
Looking further into the future, the majority of homeowners believe their own homes’ values will either increase (27 percent) or stay the same (35 percent) in the next 12 months, while 12 percent expect a decrease and 26 percent don’t know.
Of those who expect their home’s value to increase, the median expectation is a rise of 6 percent, although that varies by geography. Northeastern and Western homeowners who expect an increase anticipate a median rise of 10 percent, while Southern and Midwestern homeowners expect a median increase of 5 percent. Those who expect their home’s value to decrease in the next year anticipate a median decrease of 10 percent.
Source: Florida Realtors®
Buy Owner service is in liquidation
The Buy Owner broker-free real estate firm, known for its familiar “Thanks, Buy Owner” advertisements, has filed for liquidation as the housing market continues to struggle.
The Deerfield Beach-based company will continue to operate with a reduced staff as a buyer is sought for its assets, which could include the purchase of the firm in its entirety, minus its debt.
“The phones, as far as people interested in the service, remain very active, and we are signing up new clients everyday,” said Philip J. von Kahle, managing director for Michael Moecker & Associates, which is the assignee for Buy Owner. “There is still a very valuable core business here.”
Buy Owner president and CEO Scott A. Eckert lives in Boca Raton.
The company filed last month for an assignment for the benefit of creditors in Broward County, which is similar to a Chapter 7 federal bankruptcy but in state court. As assignee, the Fort Lauderdale-based Michael Moecker & Associates, is responsible for maximizing the assets of the company so creditors can get paid.
Von Kahle said the combination of a down real estate market and a large Bank of America loan that recently required payment led to the liquidation filing. According to court documents, Buy Owner owes about $3.9 million to Bank of America, and $1.2 million in back pay to its executives, including Eckert. It has 33 shareholders.
Buy Owner, founded in 1984, charges fees to sellers based on how much exposure they want on its website, and what features, such as custom fliers or talking yard signs, they choose. It is free to buyers.
The company has franchises in Atlanta, Chicago, Dallas, Jacksonville, New Orleans, Orlando, Philadelphia and Tampa.
“I don’t think the company could scale down quick enough because it got so big,” said von Kahle. “It appears to me the loan from Bank of America was the straw that broke the camel’s back.”
A 2009 Florida Realtors report found about 10 percent of homes sold last year did so without the help of a Realtor.
Leyza Blanco, an attorney with Miami-based GrayRobinson, P.A. who is representing Michael Moecker & Associates, said she has filed a motion to allow for liquidation of the business as a whole, rather than its parts. Because Buy Owner is a service-based company, that could maximize profits, Blanco said.
“There’s not a lot of tangible assets that you can just take apart and sell,” she said.
Creditors have until Nov. 23 to file claims against the company.
Source: The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
The Deerfield Beach-based company will continue to operate with a reduced staff as a buyer is sought for its assets, which could include the purchase of the firm in its entirety, minus its debt.
“The phones, as far as people interested in the service, remain very active, and we are signing up new clients everyday,” said Philip J. von Kahle, managing director for Michael Moecker & Associates, which is the assignee for Buy Owner. “There is still a very valuable core business here.”
Buy Owner president and CEO Scott A. Eckert lives in Boca Raton.
The company filed last month for an assignment for the benefit of creditors in Broward County, which is similar to a Chapter 7 federal bankruptcy but in state court. As assignee, the Fort Lauderdale-based Michael Moecker & Associates, is responsible for maximizing the assets of the company so creditors can get paid.
Von Kahle said the combination of a down real estate market and a large Bank of America loan that recently required payment led to the liquidation filing. According to court documents, Buy Owner owes about $3.9 million to Bank of America, and $1.2 million in back pay to its executives, including Eckert. It has 33 shareholders.
Buy Owner, founded in 1984, charges fees to sellers based on how much exposure they want on its website, and what features, such as custom fliers or talking yard signs, they choose. It is free to buyers.
The company has franchises in Atlanta, Chicago, Dallas, Jacksonville, New Orleans, Orlando, Philadelphia and Tampa.
“I don’t think the company could scale down quick enough because it got so big,” said von Kahle. “It appears to me the loan from Bank of America was the straw that broke the camel’s back.”
A 2009 Florida Realtors report found about 10 percent of homes sold last year did so without the help of a Realtor.
Leyza Blanco, an attorney with Miami-based GrayRobinson, P.A. who is representing Michael Moecker & Associates, said she has filed a motion to allow for liquidation of the business as a whole, rather than its parts. Because Buy Owner is a service-based company, that could maximize profits, Blanco said.
“There’s not a lot of tangible assets that you can just take apart and sell,” she said.
Creditors have until Nov. 23 to file claims against the company.
Source: The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
$656.8 million to help struggling homeowners on hold
Florida has $656.8 million to help struggling homeowners, but distribution of the federal aid is likely on hold statewide until early 2011.
The money, awarded through the Obama administration’s “Hardest Hit” program will pay the mortgage of unemployed or underemployed borrowers for up to 18 months as they seek new jobs or training. Originally announced in February, Florida got another infusion of hardest hit money last week that will increase those helped from 12,000 to 20,000.
The Florida Housing Finance Corporation is now working to amend its plan for the money and hopes to submit it to the Treasury Department for approval by Sept. 1. The original plan had relied on lenders to waive or delay nine months of mortgage payments if a homeowner received nine payments from Florida’s hardest hit money.
On Thursday, Florida housing officials said they could not get lenders to sign on for the state program. A federal plan that requires banks to forgive, temporarily or permanently, 90 days worth of mortgage payments for unemployed homeowners who seek a loan modification was announced after Florida had developed its plan. Banks didn’t want to agree to both mortgage forgiveness plans.
“With that intervening federal program, we were unable to get the match from the lenders we were looking for,” said David Westcott, director of homeownership programs for the Florida Housing Finance Corporation.
Florida’s new plan will pay up to the full 18 months for eligible borrowers, but the delay to get approval means a required 90-day trial program is also being pushed back. That trial, expected to begin this fall, will be held in Lee County, with only Lee County residents eligible.
Despite the holdups, Westcott said the state is happy to have the money. “This means more money to help more people for a longer period of time,” he said.
For information on the hardest hit fund, go to www.floridahousing.org.
Source: The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.
The money, awarded through the Obama administration’s “Hardest Hit” program will pay the mortgage of unemployed or underemployed borrowers for up to 18 months as they seek new jobs or training. Originally announced in February, Florida got another infusion of hardest hit money last week that will increase those helped from 12,000 to 20,000.
The Florida Housing Finance Corporation is now working to amend its plan for the money and hopes to submit it to the Treasury Department for approval by Sept. 1. The original plan had relied on lenders to waive or delay nine months of mortgage payments if a homeowner received nine payments from Florida’s hardest hit money.
On Thursday, Florida housing officials said they could not get lenders to sign on for the state program. A federal plan that requires banks to forgive, temporarily or permanently, 90 days worth of mortgage payments for unemployed homeowners who seek a loan modification was announced after Florida had developed its plan. Banks didn’t want to agree to both mortgage forgiveness plans.
“With that intervening federal program, we were unable to get the match from the lenders we were looking for,” said David Westcott, director of homeownership programs for the Florida Housing Finance Corporation.
Florida’s new plan will pay up to the full 18 months for eligible borrowers, but the delay to get approval means a required 90-day trial program is also being pushed back. That trial, expected to begin this fall, will be held in Lee County, with only Lee County residents eligible.
Despite the holdups, Westcott said the state is happy to have the money. “This means more money to help more people for a longer period of time,” he said.
For information on the hardest hit fund, go to www.floridahousing.org.
Source: The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.
Thursday, August 19, 2010
3 rules for marketing videos
When putting content together for a marketing video, Vscreen co-founder Stephen Schweickart says real estate pros must keep three pieces of advice in mind as it pertains to bullet points or script.
1. For starters, keep the video brief: 60 to 90 seconds at most. It is critical, however, to make every word and every second count during that time. Content must be engaging or the agent will lose viewers’ attention and interest. To draw them in, the dialogue should tell viewers upfront what the video is about or use a relevant question to set the scene.
2. Fast and clear conveyance of information is key, says Schweickart. That means avoiding the use of jargon, complex terminology and overly long sentences or overloading viewers with too much information at once. It’s more effective to design a multi-part series so that viewers must return to get more information.
3. Include a “call for action” within the marketing message. It behooves the practitioner to withhold something so that interested parties have a reason to contact them.
Source: RISMedia, Stephen Schweickart (08/17/10)
1. For starters, keep the video brief: 60 to 90 seconds at most. It is critical, however, to make every word and every second count during that time. Content must be engaging or the agent will lose viewers’ attention and interest. To draw them in, the dialogue should tell viewers upfront what the video is about or use a relevant question to set the scene.
2. Fast and clear conveyance of information is key, says Schweickart. That means avoiding the use of jargon, complex terminology and overly long sentences or overloading viewers with too much information at once. It’s more effective to design a multi-part series so that viewers must return to get more information.
3. Include a “call for action” within the marketing message. It behooves the practitioner to withhold something so that interested parties have a reason to contact them.
Source: RISMedia, Stephen Schweickart (08/17/10)
Fed: Give borrowers time to change their minds
The Federal Reserve released a proposal Monday to give mortgage applicants three days to change their minds.
The proposal was part of a 930-page document that clarifies and finalizes the new financial reform law.
The Fed’s document says that for closed-end loans secured by real property or a dwelling, a creditor must:
• Refund any appraisal or other fees paid by the consumer (other than a credit report fee) if the consumer decides not to proceed with a closed-end mortgage transaction within three business days of receiving the early disclosures (fees imposed after this three-day period would not be refundable).
• Disclose the right to a refund of fees to consumers before they apply for a closed-end mortgage loan.
The Fed says this proposal will make it easier and cheaper for consumers to comparison shop. It also acknowledged that borrowers who want to close a transaction in a hurry would be handicapped because most lenders will delay sending out an appraiser for a few days.
Other proposals affecting homebuyers included:
• A ban on yield-spread premiums, which encourage mortgage brokers to push buyers toward more profitable mortgages.
• A requirement for lenders to tell borrowers when their mortgage is sold or transferred.
• An explanation of the effects of balloon payments, adjustable loan payment fluctuations and minimum payments on loan balances.
Source: Bankrate.com, Holden Lewis (08/17/2010)
Source: 2010 INFORMATION, INC.
The proposal was part of a 930-page document that clarifies and finalizes the new financial reform law.
The Fed’s document says that for closed-end loans secured by real property or a dwelling, a creditor must:
• Refund any appraisal or other fees paid by the consumer (other than a credit report fee) if the consumer decides not to proceed with a closed-end mortgage transaction within three business days of receiving the early disclosures (fees imposed after this three-day period would not be refundable).
• Disclose the right to a refund of fees to consumers before they apply for a closed-end mortgage loan.
The Fed says this proposal will make it easier and cheaper for consumers to comparison shop. It also acknowledged that borrowers who want to close a transaction in a hurry would be handicapped because most lenders will delay sending out an appraiser for a few days.
Other proposals affecting homebuyers included:
• A ban on yield-spread premiums, which encourage mortgage brokers to push buyers toward more profitable mortgages.
• A requirement for lenders to tell borrowers when their mortgage is sold or transferred.
• An explanation of the effects of balloon payments, adjustable loan payment fluctuations and minimum payments on loan balances.
Source: Bankrate.com, Holden Lewis (08/17/2010)
Source: 2010 INFORMATION, INC.
1 out of 4 renters never plans to own a home
According to Trulia.com’s American Dream survey on attitudes toward homeownership, 27 percent of renters do not plan to buy a home – ever. Of those renters who do plan to purchase someday, 68 percent said it would be more than two years before they do.
“Large numbers of people delaying their plans to buy a home, or not planning to buy at all, could have an enormous domino delaying effect on economic recovery in the U.S.,” says Pete Flint, CEO of Trulia. “Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home.”
According to the study, many Americans still maintain a core belief in the inherent value of owning a home: 72 percent believe homeownership is part of their American Dream. While it’s a decline from 77 percent six months ago, it shows that the American Dream of homeownership is still alive.
Nearly one in five Americans (19 percent) said that their attitude toward homeownership has grown more negative over the last six months; however, more Americans – 23 percent – said that their attitude toward owning a home has grown more positive in the same time frame.
Tipping factors: From renter to buyer in one year
Seventy-nine percent of renters who plan to buy homes one day said something could inspire them to buy a home within the next 12 months. The changes in circumstance most frequently cited as the “tipping factors” were: being able to save enough money for a downpayment, getting a new job, getting a promotion/raise, and interest rates staying low or getting even lower.
The McMansion Era is over
According to the survey, Americans are also veering away from the “McMansions” that grew popular before the recession. Adults who might buy a house displayed a preference for smaller homes, with only 9 percent saying their ideal home size is more than 3,200 square feet – the same number of who said they’d like their home to be between 800 and 1,400 square feet. Fifty-five percent of Americans would prefer a home between 1,401 and 2,600 square feet.
Harris Interactive conducted this July 2010 survey online within the United States via its QuickQuery online omnibus service on behalf of Trulia between July 22-26, 2010, among 2,055 U.S. adults aged 18 years and older. The sample included 1,345 homeowners and 663 renters. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.
Source: Florida Realtors®
“Large numbers of people delaying their plans to buy a home, or not planning to buy at all, could have an enormous domino delaying effect on economic recovery in the U.S.,” says Pete Flint, CEO of Trulia. “Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home.”
According to the study, many Americans still maintain a core belief in the inherent value of owning a home: 72 percent believe homeownership is part of their American Dream. While it’s a decline from 77 percent six months ago, it shows that the American Dream of homeownership is still alive.
Nearly one in five Americans (19 percent) said that their attitude toward homeownership has grown more negative over the last six months; however, more Americans – 23 percent – said that their attitude toward owning a home has grown more positive in the same time frame.
Tipping factors: From renter to buyer in one year
Seventy-nine percent of renters who plan to buy homes one day said something could inspire them to buy a home within the next 12 months. The changes in circumstance most frequently cited as the “tipping factors” were: being able to save enough money for a downpayment, getting a new job, getting a promotion/raise, and interest rates staying low or getting even lower.
The McMansion Era is over
According to the survey, Americans are also veering away from the “McMansions” that grew popular before the recession. Adults who might buy a house displayed a preference for smaller homes, with only 9 percent saying their ideal home size is more than 3,200 square feet – the same number of who said they’d like their home to be between 800 and 1,400 square feet. Fifty-five percent of Americans would prefer a home between 1,401 and 2,600 square feet.
Harris Interactive conducted this July 2010 survey online within the United States via its QuickQuery online omnibus service on behalf of Trulia between July 22-26, 2010, among 2,055 U.S. adults aged 18 years and older. The sample included 1,345 homeowners and 663 renters. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.
Source: Florida Realtors®
Are housing tax breaks in jeopardy?
Federal housing policy offers the wealthiest Americans billions in tax breaks without delivering much bang for the buck in increased homeownership, critics told government policymakers Tuesday.
“We aren’t getting our money’s worth,” Mark Zandi, chief economist of Moody’s Analytics, said at a government conference on reforming housing policy.
The government spent $230 billion last year to promote homeownership through tax breaks and spending programs. The biggest chunk – $80 billion – went toward the mortgage interest deduction, according to the Congressional Budget Office.
Michael Stegman, housing policy specialist at the MacArthur Foundation, said the mortgage tax break goes primarily to the wealthiest households. A study this year by the Tax Policy Center of the Brookings Institution and the Urban Institute noted that the mortgage deduction was worth just $91 a year to families earning less than $40,000 – and $5,459 a year to those making more than $250,000.
The government, seeking to overhaul the housing market after the collapse of mortgage giants Fannie Mae and Freddie Mac, is unlikely to touch the politically sacrosanct deduction anytime soon.
But analysts suggested that the government’s debt – $8.8 trillion and growing – meant that housing subsidies might one day face the knife. “We can’t afford it,” Zandi said.
The U.S. homeownership rate (66.9 percent) is about the same as Canada’s and is lower than Australia, Ireland, Spain and Britain’s even though “these countries provide far less government support for homeownership,” Michael Lea of San Diego State University wrote this year.
For now, the government is neck-deep in housing. Private money has fled the market in the wake of a housing-market meltdown. Fannie, Freddie and other government agencies have filled the gap, guaranteeing more than 90 percent of new mortgages.
“Without government guarantees, mortgage rates would be hundreds of basis points higher, resulting in a moribund housing market,” said William Gross, managing director of bond fund Pimco. “We don’t want government in the housing market, but it’s a necessity.”
Treasury Secretary Timothy Geithner told the conference “there’s no clear consensus yet” on reforming the way mortgages are financed. He promised “fundamental change” in the way Fannie and Freddie do business: They used an implicit government guarantee to borrow cheap money and make big bets in the housing market. When their gamble went bad, taxpayers picked up the tab.
Source: USA TODAY, a division of Gannett Co. Inc., Paul Wiseman.
“We aren’t getting our money’s worth,” Mark Zandi, chief economist of Moody’s Analytics, said at a government conference on reforming housing policy.
The government spent $230 billion last year to promote homeownership through tax breaks and spending programs. The biggest chunk – $80 billion – went toward the mortgage interest deduction, according to the Congressional Budget Office.
Michael Stegman, housing policy specialist at the MacArthur Foundation, said the mortgage tax break goes primarily to the wealthiest households. A study this year by the Tax Policy Center of the Brookings Institution and the Urban Institute noted that the mortgage deduction was worth just $91 a year to families earning less than $40,000 – and $5,459 a year to those making more than $250,000.
The government, seeking to overhaul the housing market after the collapse of mortgage giants Fannie Mae and Freddie Mac, is unlikely to touch the politically sacrosanct deduction anytime soon.
But analysts suggested that the government’s debt – $8.8 trillion and growing – meant that housing subsidies might one day face the knife. “We can’t afford it,” Zandi said.
The U.S. homeownership rate (66.9 percent) is about the same as Canada’s and is lower than Australia, Ireland, Spain and Britain’s even though “these countries provide far less government support for homeownership,” Michael Lea of San Diego State University wrote this year.
For now, the government is neck-deep in housing. Private money has fled the market in the wake of a housing-market meltdown. Fannie, Freddie and other government agencies have filled the gap, guaranteeing more than 90 percent of new mortgages.
“Without government guarantees, mortgage rates would be hundreds of basis points higher, resulting in a moribund housing market,” said William Gross, managing director of bond fund Pimco. “We don’t want government in the housing market, but it’s a necessity.”
Treasury Secretary Timothy Geithner told the conference “there’s no clear consensus yet” on reforming the way mortgages are financed. He promised “fundamental change” in the way Fannie and Freddie do business: They used an implicit government guarantee to borrow cheap money and make big bets in the housing market. When their gamble went bad, taxpayers picked up the tab.
Source: USA TODAY, a division of Gannett Co. Inc., Paul Wiseman.
Wednesday, August 18, 2010
Geithner Calls for Cooperation to Modify GSEs
Treasury Secretary Timothy Geithner told attendees at a housing summit on Tuesday that the U.S. government will continue to guarantee mortgages, but its role will be revised to avoid making it a primary backer if Fannie Mae and Freddie Mac face another meltdown.
Geithner urged Democrats and Republicans to work together to rebuild Fannie and Freddie to avoid another crisis. He called remaking the mortgage market one of the most important and complicated economic policy problems the U.S. faces today.
"There is nothing we can do to decrease the significant losses Fannie and Freddie incurred ahead of this crisis. All we can do is to minimize the risk that they get worse,” Geithner said.
Source: The Wall Street Journal, Nick Timiraos (08/17/2010)
Geithner urged Democrats and Republicans to work together to rebuild Fannie and Freddie to avoid another crisis. He called remaking the mortgage market one of the most important and complicated economic policy problems the U.S. faces today.
"There is nothing we can do to decrease the significant losses Fannie and Freddie incurred ahead of this crisis. All we can do is to minimize the risk that they get worse,” Geithner said.
Source: The Wall Street Journal, Nick Timiraos (08/17/2010)
Banking execs say gov’t needs to back mortgages
The call from business for less government has a notable exception: the mortgage market.
The Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in backing the mortgage market. While they disagreed on the exact level of support needed, the group overwhelmingly advocated for the government to maintain a large role in the $11 trillion market.
If the government pulled out, millions of Americans wouldn’t be able to convince banks to take the risk of giving them home loans, the executives said. Ending government support could lead to a spike in mortgage rates. That could deter many from buying homes, and banks, mortgage lenders and Realtors would lose money over time.
“It will take on a different form, but there is a role for government,” Kevin Chavers, a managing director at Morgan Stanley, said in an interview.
Most attendees agreed the time had come to do away with Fannie Mae and Freddie Mac. Rescuing the two mortgage giants has cost the government nearly $150 billion so far.
Bill Gross, the managing director for bond giant Pimco, suggested Fannie and Freddie should be formally merged into the government. He also called on the administration to allow millions of homeowners to automatically refinance their loans to help stimulate the economy.
A more widely held view at the conference is for the government to do away with Fannie and Freddie, and instead provide a guarantee that mortgage investors get paid even if borrowers default in droves.
Figuring out a plan for Fannie and Freddie is also a political challenge for President Barack Obama and his party. Republicans have seized on the administration’s management of Fannie and Freddie to illustrate Democrats’ push for growing the reach of the federal government.
While the banking industry has joined Republicans in criticizing the administration for instituting stronger regulations of Wall Street, they support the government playing a large role in the mortgage market.
“There would be a lot of homeowners who wouldn’t be able to afford homes because we’d be dealing with higher interest rates,” said S.A. Ibrahim, chief executive of mortgage insurer Radian Group Inc.
Treasury Secretary Timothy Geithner pledged on Tuesday “fundamental change” to the structure of Fannie and Freddie. The mortgage giants profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren’t the only cause of the financial crisis, but made it worse.
Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans – even after the housing market collapsed.
The two companies, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.
Geithner did not offer a specific exit strategy for Fannie and Freddie. But he said, “It is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again.” The administration is expected to offer a plan next year.
One option that dominated the discussion Tuesday is for the government to collect money from the mortgage industry and set up an insurance fund that could be used to cover losses during a severe downturn.
This would prevent taxpayers from having to foot the bill for the industry.
Some want the administration to take more dramatic actions.
Gross said Fannie and Freddie’s function should be consolidated into one government agency that would issue mortgage-backed securities. Without such a solid guarantee, mortgage rates would soar, he warned.
He also told the administration that the economic recovery required more government stimulus, particularly in the housing market. He suggested the administration push for the automatic refinancing of millions of home loans backed by Fannie and Freddie.
Refinancing those loans at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, he said.
Without such stimulus in the next six months, Gross said, the economy will move at a “snail’s pace.”
Obama officials say they do not plan to enact such a program, which has been the subject of intense rumors on Wall Street in recent weeks.
Source: The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The Obama administration invited banking executives Tuesday to offer advice on changing the government’s role in backing the mortgage market. While they disagreed on the exact level of support needed, the group overwhelmingly advocated for the government to maintain a large role in the $11 trillion market.
If the government pulled out, millions of Americans wouldn’t be able to convince banks to take the risk of giving them home loans, the executives said. Ending government support could lead to a spike in mortgage rates. That could deter many from buying homes, and banks, mortgage lenders and Realtors would lose money over time.
“It will take on a different form, but there is a role for government,” Kevin Chavers, a managing director at Morgan Stanley, said in an interview.
Most attendees agreed the time had come to do away with Fannie Mae and Freddie Mac. Rescuing the two mortgage giants has cost the government nearly $150 billion so far.
Bill Gross, the managing director for bond giant Pimco, suggested Fannie and Freddie should be formally merged into the government. He also called on the administration to allow millions of homeowners to automatically refinance their loans to help stimulate the economy.
A more widely held view at the conference is for the government to do away with Fannie and Freddie, and instead provide a guarantee that mortgage investors get paid even if borrowers default in droves.
Figuring out a plan for Fannie and Freddie is also a political challenge for President Barack Obama and his party. Republicans have seized on the administration’s management of Fannie and Freddie to illustrate Democrats’ push for growing the reach of the federal government.
While the banking industry has joined Republicans in criticizing the administration for instituting stronger regulations of Wall Street, they support the government playing a large role in the mortgage market.
“There would be a lot of homeowners who wouldn’t be able to afford homes because we’d be dealing with higher interest rates,” said S.A. Ibrahim, chief executive of mortgage insurer Radian Group Inc.
Treasury Secretary Timothy Geithner pledged on Tuesday “fundamental change” to the structure of Fannie and Freddie. The mortgage giants profited tremendously during good times but burdened taxpayers with losses when the housing market went bust. He said the two companies weren’t the only cause of the financial crisis, but made it worse.
Fannie and Freddie buy mortgages and package them into securities with a guarantee against default. They have ensured that millions of Americans can get home loans – even after the housing market collapsed.
The two companies, the Federal Housing Administration and the Veterans Administration together backed about 90 percent of loans made in the first half of the year, according to trade publication Inside Mortgage Finance.
Geithner did not offer a specific exit strategy for Fannie and Freddie. But he said, “It is our responsibility to make sure that we create a system that is not vulnerable to these same failures happening again.” The administration is expected to offer a plan next year.
One option that dominated the discussion Tuesday is for the government to collect money from the mortgage industry and set up an insurance fund that could be used to cover losses during a severe downturn.
This would prevent taxpayers from having to foot the bill for the industry.
Some want the administration to take more dramatic actions.
Gross said Fannie and Freddie’s function should be consolidated into one government agency that would issue mortgage-backed securities. Without such a solid guarantee, mortgage rates would soar, he warned.
He also told the administration that the economic recovery required more government stimulus, particularly in the housing market. He suggested the administration push for the automatic refinancing of millions of home loans backed by Fannie and Freddie.
Refinancing those loans at the lowest mortgage rates in decades would give Americans more money each month. That would boost consumer spending by $50 billion to $60 billion and lift housing prices by as much as 10 percent, he said.
Without such stimulus in the next six months, Gross said, the economy will move at a “snail’s pace.”
Obama officials say they do not plan to enact such a program, which has been the subject of intense rumors on Wall Street in recent weeks.
Source: The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Meanest stretch of hurricane season begins
Hurricane season might seem been pretty tame so far, particularly in light of the predictions for a highly active year. Through the first seven weeks, a hurricane and two tropical storms have emerged, about average activity.
But the meanest stretch – the seven weeks from mid-August through early October – is here and “now the game starts,” said Stanley Goldenberg, a research meteorologist with the National Oceanic and Atmospheric Administration.
Waters in the tropical Atlantic are heating up. The atmosphere in the deep tropics is becoming more moist. The upper-level winds are easing. And more robust tropical waves are rolling off the coast of Africa.
Possibly adding fuel, La Nina, the large-scale atmospheric force that promotes storm formation, is kicking in, experts say. As a result, forecasters predict 18 to 20 named storms, including 10 to 12 hurricanes, will develop this season. They project five to six will be intense, with winds greater than 110 mph.
An average season sees 11 named storms, including six hurricanes, two intense.
Goldenberg said several seasons have started slow or average and ended up being extremely active.
For instance, in 1998, the first hurricane didn’t form until late August. The season ended with 10 hurricanes, three major.
“People say in August, it sure seems quiet,” said Goldenberg, who works for NOAA’s Hurricane Research Division in Miami. “I say just wait, the season hasn’t really gotten started.”
He also noted that in highly active seasons, there is a 90 percent chance at least one hurricane will strike the U.S. East Coast.
On average, five hurricanes, including two major ones, form between mid August and the first week of October. However, since 1995, when the Atlantic basin entered an era of heightened intensity, many seasons have seen considerably more systems than that.
In 1995, for instance, seven hurricanes, four intense, developed in that time frame. In 1998, eight hurricanes, two intense, formed. And in 2005, eight hurricanes, three intense, emerged.
Just the same, forecasters expected more activity in June and July, and note unexpected levels of wind shear, dry air and Saharan dust acted to subdue systems.
Phil Klotzbach, the Colorado State University climatologist who works with William Gray, said an expansive system of low-pressure is largely responsible for creating the wind shear.
But that system starts to weaken at this time of year, he added.
“So we should expect conditions to become more conducive for storm formations over the next couple of weeks,” he said.
Jeff Masters, chief meteorologist of Weather Underground, an online weather site, said another reason for the slow start might be the record heat on land areas creating dry air and stability over the adjacent oceans.
“It is also possible that climate change is causing the reduction in tropical cyclone activity, for a variety of complex reasons,” he said.
But, he added: “I still think we will have a busy season. It just will be delayed, like the 1998 season was.”
Other experts say a large ridge of high pressure over the Atlantic has pushed tropical systems so far to the south that they don’t have enough “leverage” from the Earth’s gravitational forces to spin up. But that ridge is expected to move farther north in coming weeks.
Although the busiest stretch of the season goes into early October, the rest of that month also could be active. Systems tend to develop in the western Caribbean, where water temperatures remain warm and wind shear low.
Goldenberg, of NOAA, said October can be just as busy as August in active years. He further noted that on average one major hurricane has formed every year in October since 1995.
“During a busy year, you do not let your guard down in October. All you have to say is Wilma,” he said, referring to the hurricane that hit South Florida in late October 2005.
Goldenberg said there have been highly active years where the United States escaped seeing severe seasons, such as 1995. Meanwhile, there have been slow years where the U.S. coast got clobbered, such as 1992, when Hurricane Andrew destroyed much of South Miami-Dade County.
“The reminder to people is that we’re predicting an extremely active year,” he said. “Whether it is or not, it only takes one hurricane to cause a disaster.”
Source: Sun Sentinel, Ken Kaye. Distributed by McClatchy-Tribune News Service.
But the meanest stretch – the seven weeks from mid-August through early October – is here and “now the game starts,” said Stanley Goldenberg, a research meteorologist with the National Oceanic and Atmospheric Administration.
Waters in the tropical Atlantic are heating up. The atmosphere in the deep tropics is becoming more moist. The upper-level winds are easing. And more robust tropical waves are rolling off the coast of Africa.
Possibly adding fuel, La Nina, the large-scale atmospheric force that promotes storm formation, is kicking in, experts say. As a result, forecasters predict 18 to 20 named storms, including 10 to 12 hurricanes, will develop this season. They project five to six will be intense, with winds greater than 110 mph.
An average season sees 11 named storms, including six hurricanes, two intense.
Goldenberg said several seasons have started slow or average and ended up being extremely active.
For instance, in 1998, the first hurricane didn’t form until late August. The season ended with 10 hurricanes, three major.
“People say in August, it sure seems quiet,” said Goldenberg, who works for NOAA’s Hurricane Research Division in Miami. “I say just wait, the season hasn’t really gotten started.”
He also noted that in highly active seasons, there is a 90 percent chance at least one hurricane will strike the U.S. East Coast.
On average, five hurricanes, including two major ones, form between mid August and the first week of October. However, since 1995, when the Atlantic basin entered an era of heightened intensity, many seasons have seen considerably more systems than that.
In 1995, for instance, seven hurricanes, four intense, developed in that time frame. In 1998, eight hurricanes, two intense, formed. And in 2005, eight hurricanes, three intense, emerged.
Just the same, forecasters expected more activity in June and July, and note unexpected levels of wind shear, dry air and Saharan dust acted to subdue systems.
Phil Klotzbach, the Colorado State University climatologist who works with William Gray, said an expansive system of low-pressure is largely responsible for creating the wind shear.
But that system starts to weaken at this time of year, he added.
“So we should expect conditions to become more conducive for storm formations over the next couple of weeks,” he said.
Jeff Masters, chief meteorologist of Weather Underground, an online weather site, said another reason for the slow start might be the record heat on land areas creating dry air and stability over the adjacent oceans.
“It is also possible that climate change is causing the reduction in tropical cyclone activity, for a variety of complex reasons,” he said.
But, he added: “I still think we will have a busy season. It just will be delayed, like the 1998 season was.”
Other experts say a large ridge of high pressure over the Atlantic has pushed tropical systems so far to the south that they don’t have enough “leverage” from the Earth’s gravitational forces to spin up. But that ridge is expected to move farther north in coming weeks.
Although the busiest stretch of the season goes into early October, the rest of that month also could be active. Systems tend to develop in the western Caribbean, where water temperatures remain warm and wind shear low.
Goldenberg, of NOAA, said October can be just as busy as August in active years. He further noted that on average one major hurricane has formed every year in October since 1995.
“During a busy year, you do not let your guard down in October. All you have to say is Wilma,” he said, referring to the hurricane that hit South Florida in late October 2005.
Goldenberg said there have been highly active years where the United States escaped seeing severe seasons, such as 1995. Meanwhile, there have been slow years where the U.S. coast got clobbered, such as 1992, when Hurricane Andrew destroyed much of South Miami-Dade County.
“The reminder to people is that we’re predicting an extremely active year,” he said. “Whether it is or not, it only takes one hurricane to cause a disaster.”
Source: Sun Sentinel, Ken Kaye. Distributed by McClatchy-Tribune News Service.
Subscribe to:
Posts (Atom)