YONKERS, N.Y. – June 30, 2009 – Consumer Reports latest poll on home remodeling reveals that over the next 12 months, 54 percent of homeowners plan a remodeling project, and nearly two-thirds (65 percent) plan to do at least some of the work themselves. The most popular types of work include painting (56 percent), designing (39 percent) and flooring (34 percent).
The recent economic downturn has forced 67 percent of homeowners to rethink their plans, with the biggest changes including doing work themselves (42 percent), fixing or sprucing up what they already have (39 percent) and remodeling in phases (36 percent). The biggest reason consumers are cutting back on remodeling is because they simply do not have the money (42 percent).
Funding for home remodeling stems from a variety of places, but two out of three homeowners (66 percent) support their projects with their savings. Others plan to cut back on travel and entertainment (29 percent), while one out of five (21 percent) is using a home equity or other loan.
Ninety-one percent of homeowners have already gotten their hands dirty with either a repair or remodeling project. But not all repairs or remodeling projects went smoothly for DIY respondents, with over one third (34 percent) having at least one regret stemming from trying to fix a broken appliance, installing tile, floors or cabinets.
“Whether homeowners are venturing into a project themselves or plan to hire a professional, you need to lay out a budget, decide what you want most at the end of the project – and decide what you can live without,” says Bob Markovich, senior home editor at Consumer Reports. “The more homeowners know what they’re getting into, the more money they’ll save.”
According to the poll, the most popular remodeling projects for homeowners are kitchens (19 percent) and bathrooms (17 percent).
Consumer Reports readers’ top 5 remodeling headaches
In another survey, Consumer Reports asked 6,000 readers to reveal what went wrong when they remodeled their kitchens and baths and how much those mistakes added to the overall cost of their projects. Here’s how to avoid their mistakes:
1. Don’t rush in. Changing plans midstream is the most common and costliest remodeling gaffe, adding $1,500 to kitchen projects and $650 to bath remodels.
2. Prepare for the unexpected. There’s a lot going on behind the walls. Unexpected water damage was an issue with 17 percent of bathroom remodels, while structural problems caused headaches for 10 percent of kitchen projects.
3. Don’t chase the low ball. Contractors are lowering profit margins due to the tight market, but they often make up their costs in labor or other areas. Homeowners who opted for the lowball bid ended up spending a median of $1,500 extra for labor on their kitchens and $1,000 extra on their bathrooms. Don’t sign a contract with a lot of open-ended amounts for products and materials – called “allowances,” in contracts.
4. Get the paperwork in order. Have the contractor attach copies of his up-to-date license, insurance and workers’ compensation policies to the written contract. He should also get permits and provide a lien waiver when the job is done to keep suppliers from contacting the homeowner for unpaid bills.
5. Focus on the boring stuff. Lighting and trashcan placement are not much fun, but they’re critical to the process. The proper exhaust fan prevents mildew in baths and vents odors in kitchens, but homeowners tend to concentrate on countertops, flooring and cabinets rather than technical installations.
The Consumer Reports National Research Center conducted a telephone poll of a nationally representative probability sample of telephone households; 1,002 interviews were completed among adults aged 18-plus. The margin of error is +/- 3.2 percent points at a 95 percent confidence level.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Tuesday, June 30, 2009
Monday, June 29, 2009
Bank gives cities, states first shot at REOs
CHICAGO – June 29, 2009 – Bank of America is making it easier for states and cities to buy foreclosures before investors purchase them.
The program is a result of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, which aims to encourage redevelopment of neighborhoods hit hardest by foreclosure and the resale of properties to homeowners.
Bank of America will notify participating cities that properties are available before they are listed on multiple listing services. The company will set the prices with no haggling allowed.
“We’re balancing our desire to work with communities that are struggling to stabilize with our fiduciary duty to the investors that hold the paper on all these properties,” says Rob Grossman, senior vice president of community affairs for Bank of America. “We will offer them the best price.”
Source: Chicago Tribune
The program is a result of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, which aims to encourage redevelopment of neighborhoods hit hardest by foreclosure and the resale of properties to homeowners.
Bank of America will notify participating cities that properties are available before they are listed on multiple listing services. The company will set the prices with no haggling allowed.
“We’re balancing our desire to work with communities that are struggling to stabilize with our fiduciary duty to the investors that hold the paper on all these properties,” says Rob Grossman, senior vice president of community affairs for Bank of America. “We will offer them the best price.”
Source: Chicago Tribune
Thursday, June 25, 2009
Fed says recession easing, inflation is tame
WASHINGTON (AP) – June. 25,2009 – The Federal Reserve sought Wednesday to defuse fears that the trillions it’s spending to revive the economy could spark inflation later on. But Wall Street didn’t seem to buy it.
Fed Chairman Ben Bernanke and his colleagues said that despite an easing of the recession, the economy remains frail enough to keep inflation at bay.
Fed policymakers held a key bank lending rate at a record low of between zero and 0.25 percent and pledged to keep it there for “an extended period”‘ to help brace the economy. The Fed made no new commitment to expand its purchases of government bonds and mortgage securities, to try to drive down rates on consumer debt. That rattled bond investors who fear the prospect of higher interest rates.
But Wall Street zeroed in on the Fed’s new observations about the risks of deflation and inflation.
Fed policymakers dropped language they had used in the statement at their last meeting in April that the weak economy could trigger deflation — a destabilizing and prolonged bout of falling prices and wages. This also spooked bond investors, who took the Fed’s decision not to mention deflation to mean inflation might arise later.
The Fed acknowledged that energy and other commodity prices have risen recently. But policymakers predicted that idle factories and the weak employment market would make it hard for companies to ratchet up prices. The Fed said it expects inflation will “remain subdued for some time.”‘
The mere mention of higher prices, though, hit the Treasury market because the value of returns on fixed-income investments can erode quickly if inflation occurs. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.63 percent Tuesday.
Stocks also lost ground after the Fed’s announcement. The Dow Jones, which had been up, closed down 23.05 points.
T.J. Marta, market strategist and founder of Marta on the Markets, a financial research firm, said the Fed’s words “disappoints (inflation) hawks and “angers bond vigilantes.”‘
Overall, though, Fed policymakers delivered a slightly more encouraging assessment of the economy.
“The Fed is sending the message that the economy is making progress toward a path of recovery, that the credit markets appear to be healing and inflation is not going to be a problem,”‘ said economist Lynn Reaser, vice president of the National Association for Business Economics. “The bogeyman of deflation also was removed from the Fed’s primary risk list.”‘
The Fed in March launched a $1.2 trillion effort to drive down interest rates to try to revive lending and get Americans to spend more freely again. It said it would spend up to $300 billion to buy long-term government bonds over six months and boost its purchases of mortgage securities. So far, the Fed has bought about $177.5 billion in Treasury bonds.
The Fed is on track to buy up to $1.25 trillion worth of securities issued by Fannie Mae and Freddie Mac by the end of this year. Nearly $456 billion worth of those securities have been purchased.
With signs economic and financial conditions are stabilizing, the Fed is wise to keep a steady-as-she goes course, said Sung Won Sohn, economist at the Martin Smith School of Business at California State University, Channel Islands. The Fed’s actions are “bearing fruit,”‘ he said.
Fed policymakers noted that the “pace of economic contraction is slowing”‘ and that conditions in financial markets have “generally improved in recent months.”‘ Those observations about the recession and financial conditions were stronger than after the Fed’s last meeting in April.
Economists predict the economy is sinking in the April-June quarter but not nearly as much as it had in the prior six months, which marked the worst performance in 50 years. The economy is contracting at a pace of between 1 and 3 percent, according to various projections.
Fed policymakers said its forceful actions, along with President Barack Obama’s stimulus of tax cuts and increased government spending will contribute to a “gradual “return to economic growth.
Bernanke has predicted the recession will end later this year. Some analysts say the economy will start growing again as soon as the July-September quarter.
Fed policymakers noted that consumer spending — the lifeblood of the economy — has shown signs of stabilizing but remains constrained by ongoing job losses, falling home values and hard-to-get credit.
Economists predict the Fed will hold its key banking rates at a record low through this year and into part of next year to spur lending and boost spending Americans. If so, that means commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25 percent, the lowest in decades.
Even after the recession ends, the recovery is likely to be tepid, which will push unemployment higher.
The nation’s unemployment rate — now at 9.4 percent — is expected to keep climbing into 2010. Acknowledging that the jobless rate is going to climb over 10 percent, President Barack Obama said Tuesday he’s not satisfied with the progress his administration has made on the economy. He defended his recovery package but said the aid must get out faster.
Some analysts say the rate could rise as high as 11 percent by the next summer before it starts to decline. The highest rate since World War II was 10.8 percent at the end of 1982.
The weak economy has put a damper on inflation.
Consumer prices inched up 0.1 percent in May, but are down 1.3 percent over the last 12 months, the weakest annual showing since the 1950s. The Fed suggested companies won’t be in any position to jack up prices given cautious consumers, big production cuts at factories and the weak employment climate.
Copyright © 2009 The Associated Press
Fed Chairman Ben Bernanke and his colleagues said that despite an easing of the recession, the economy remains frail enough to keep inflation at bay.
Fed policymakers held a key bank lending rate at a record low of between zero and 0.25 percent and pledged to keep it there for “an extended period”‘ to help brace the economy. The Fed made no new commitment to expand its purchases of government bonds and mortgage securities, to try to drive down rates on consumer debt. That rattled bond investors who fear the prospect of higher interest rates.
But Wall Street zeroed in on the Fed’s new observations about the risks of deflation and inflation.
Fed policymakers dropped language they had used in the statement at their last meeting in April that the weak economy could trigger deflation — a destabilizing and prolonged bout of falling prices and wages. This also spooked bond investors, who took the Fed’s decision not to mention deflation to mean inflation might arise later.
The Fed acknowledged that energy and other commodity prices have risen recently. But policymakers predicted that idle factories and the weak employment market would make it hard for companies to ratchet up prices. The Fed said it expects inflation will “remain subdued for some time.”‘
The mere mention of higher prices, though, hit the Treasury market because the value of returns on fixed-income investments can erode quickly if inflation occurs. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.63 percent Tuesday.
Stocks also lost ground after the Fed’s announcement. The Dow Jones, which had been up, closed down 23.05 points.
T.J. Marta, market strategist and founder of Marta on the Markets, a financial research firm, said the Fed’s words “disappoints (inflation) hawks and “angers bond vigilantes.”‘
Overall, though, Fed policymakers delivered a slightly more encouraging assessment of the economy.
“The Fed is sending the message that the economy is making progress toward a path of recovery, that the credit markets appear to be healing and inflation is not going to be a problem,”‘ said economist Lynn Reaser, vice president of the National Association for Business Economics. “The bogeyman of deflation also was removed from the Fed’s primary risk list.”‘
The Fed in March launched a $1.2 trillion effort to drive down interest rates to try to revive lending and get Americans to spend more freely again. It said it would spend up to $300 billion to buy long-term government bonds over six months and boost its purchases of mortgage securities. So far, the Fed has bought about $177.5 billion in Treasury bonds.
The Fed is on track to buy up to $1.25 trillion worth of securities issued by Fannie Mae and Freddie Mac by the end of this year. Nearly $456 billion worth of those securities have been purchased.
With signs economic and financial conditions are stabilizing, the Fed is wise to keep a steady-as-she goes course, said Sung Won Sohn, economist at the Martin Smith School of Business at California State University, Channel Islands. The Fed’s actions are “bearing fruit,”‘ he said.
Fed policymakers noted that the “pace of economic contraction is slowing”‘ and that conditions in financial markets have “generally improved in recent months.”‘ Those observations about the recession and financial conditions were stronger than after the Fed’s last meeting in April.
Economists predict the economy is sinking in the April-June quarter but not nearly as much as it had in the prior six months, which marked the worst performance in 50 years. The economy is contracting at a pace of between 1 and 3 percent, according to various projections.
Fed policymakers said its forceful actions, along with President Barack Obama’s stimulus of tax cuts and increased government spending will contribute to a “gradual “return to economic growth.
Bernanke has predicted the recession will end later this year. Some analysts say the economy will start growing again as soon as the July-September quarter.
Fed policymakers noted that consumer spending — the lifeblood of the economy — has shown signs of stabilizing but remains constrained by ongoing job losses, falling home values and hard-to-get credit.
Economists predict the Fed will hold its key banking rates at a record low through this year and into part of next year to spur lending and boost spending Americans. If so, that means commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will stay around 3.25 percent, the lowest in decades.
Even after the recession ends, the recovery is likely to be tepid, which will push unemployment higher.
The nation’s unemployment rate — now at 9.4 percent — is expected to keep climbing into 2010. Acknowledging that the jobless rate is going to climb over 10 percent, President Barack Obama said Tuesday he’s not satisfied with the progress his administration has made on the economy. He defended his recovery package but said the aid must get out faster.
Some analysts say the rate could rise as high as 11 percent by the next summer before it starts to decline. The highest rate since World War II was 10.8 percent at the end of 1982.
The weak economy has put a damper on inflation.
Consumer prices inched up 0.1 percent in May, but are down 1.3 percent over the last 12 months, the weakest annual showing since the 1950s. The Fed suggested companies won’t be in any position to jack up prices given cautious consumers, big production cuts at factories and the weak employment climate.
Copyright © 2009 The Associated Press
Wednesday, June 24, 2009
Not paying the mortgage, yet stuck with the keys
WASHINGTON – June 24, 2009 – A growing number of American homeowners are falling into financial limbo: They're badly behind on payments, but their banks have not yet foreclosed.
The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation's housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.
"It just means foreclosure rates are going to keep rising," said Patrick Newport, an economist for IHS Global Insight.
Rising mortgage delinquencies were at the root of the recession, and many economists say an economic recovery will be difficult until the housing market recovers and home prices stabilize.
And even though a delayed foreclosure can be a blessing for some troubled homeowners, for others, it simply prolongs the financial distress, leaving them on the hook for the condition of the property. Even if they move out, they cannot move on.
"I have even begged them for a foreclosure," delinquent mortgage-holder Charlotte Jensen said. When she realized she couldn't save her Glen Allen home last year, she filed for bankruptcy, packed up her family and moved out. Nearly a year later, Bank of America has yet to take back the home.
During the first quarter of this year, the share of all homeowners seriously delinquent on their mortgage but not yet facing foreclosure more than doubled to 3.04 percent, or about $227 billion in loans. There was a total of $97 billion in such loans during the same period in 2008, according to Inside Mortgage Finance. In more prosperous times, the rate is much lower – it was less than 1 percent in the first quarter of 2007, according to the industry publication.
Some of the backlog reflects the inability of lenders to keep up with the swelling rolls of delinquent properties.
"Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can't do all these things at once, and do them well, so we're seeing a lot of things falling through the cracks," said Howard Glaser, a housing industry consultant and a housing official during the Clinton administration.
But some of the backlog also reflects an intentional slowdown in the pace of foreclosures as government and industry step up efforts to help borrowers who want to save their homes. Fannie Mae and Freddie Mac, the government-run mortgage financing companies, put a temporary moratorium on foreclosures late last year and many of the country's largest lenders followed suit. That gave some lenders more time to determine which borrowers could benefit from government help.
The glut of foreclosed homes on the market has already pushed down prices across the country. Existing-home prices fell another 16.8 percent in May compared with a year ago, according to industry data released yesterday. The overhang of homes in limbo means that foreclosure rates are likely to increase dramatically during the second half of this year and into 2010 as lenders work through the backlog, said Bob Bellack, chairman of Zetabid, which auctions foreclosed properties.
"Prices will fall to the point where you have equilibrium, and it won't reach that until there is no longer this foreclosure overhang," Bellack said.
This could in turn put renewed stress on financial firms that carry mortgages or mortgage-backed securities on their books. As a general policy, many firms have been marking down the value of those assets as the loans become delinquent. But once the homes go into foreclosure and are sold, their value could decline even more, prompting another round of losses at financial companies.
For some homeowners, the foreclosure delays have provided needed breathing room to try to save their home, giving them a chance to live for free for a while or to work out a deal to save their property. "I think everyone has come to a realization that efforts to try to mediate are preferable to foreclosure right now," said David Berenbaum, executive vice president of the National Community Reinvestment Coalition, a nonprofit group.
But housing experts say that once borrowers are seriously delinquent -- defined as 90 days overdue on a mortgage -- some are too far behind to help or have already given up. According to a March report from NeighborWorks America, a large housing counseling group, 27 percent of homeowners who go to a housing counselor after missing three or four monthly payments end up in foreclosure. That figure jumps to 60 percent for those who have missed more than four payments before seeking help.
In better times, lenders tended to begin the foreclosure process after three months, said Guy Cecala, publisher of Inside Mortgage Finance. Now it is not unusual for it to take nine months for the process to begin, he said.
"No one is in a rush, lender-wise, to deal with the property," he said. "If you have to sell at a loss, why rush?"
Lenders traditionally write down the value of the home six months after an owner stops making payments, but the total loss is not recorded until the property is sold in foreclosure, said Mark Zandi, chief economist of Moody's Economy.com.
"Some may feel that the property is worth more than the market can bear at this time, and they are willing to wait until" the market improves, he said. "They don't want to sell it into a completely depressed market."
Once underway, the foreclosure process is governed by a hodgepodge of state and local laws and the time it takes to get through the process varies by place. The process can also vary based on the original lender, on the current owner of the loan and on whether the borrower has filed for bankruptcy.
During the period that precedes final foreclosure, homeowners still have the legal obligations that come with ownership. Though in practice many borrowers who have stopped making mortgage payments may do little to look after a home.
"During that period, where the property is in limbo, until there has been a sale of the property, the homeowner is still the owner, technically," said John Rao of the National Consumer Law Center. "It used to be that they wanted to foreclose as quickly as possible. . . . [Now] it's like this hot potato that nobody wants."
Even seriously delinquent borrowers can restart negotiations with lenders to stay in their homes with a modified mortgage or persuade them to accept a short sale, which involves a homeowner selling the property for less than the outstanding mortgage balance and then turning the proceeds over to the lender to satisfy the loan.
Jay Brinkmann, chief economist for the Mortgage Bankers Association, said his industry is doing its best to work through the backlog while carrying out federal foreclosure prevention programs. "If a lender has a house that they know they will have to sell eventually," he said, "they almost always want to sell it as quickly as possible because of the interest cost of holding the loan on the books, in addition to costs like taxes, keeping the grass cut and other maintenance."
More than ever, foreclosure has become an unattractive outcome for lenders.
"What we're seeing more and more right now are cases of a lender threatening foreclosure and the foreclosure sale is canceled at the last minute," said Jeanne Hovenden, a Richmond bankruptcy attorney, who handled Jensen's case. "It's more like the lenders don't want to own any more real estate and are using foreclosures as a pressure tactic."
The Jensens bought their home in 1999 and were able to make their payments comfortably until refinancing. Since moving out last July, they have not received a foreclosure sale notice even after hiring an attorney to encourage Bank of America to speed up the process.
Jensen visits her home weekly to ensure it hasn't been vandalized or taken over by squatters. She pays landscapers to keep the lawn mowed. When the home caught fire in January, the police department knocked on the door of her new home, confused about whether to notify her or the bank. When neighbors complained about the mess left from the fire, Jensen returned to clean up.
A Bank of America spokeswoman, Jumana Bauwens, said the delay was caused, in part, by the fire. She said the home has since been referred to foreclosure. "The company makes every attempt to find a home retention solution for a borrower before proceeding with a foreclosure," she said.
For the Jensens, the delay has extended a painful period. "There was a sense of responsibility that until someone says we no longer own that property, we wanted to make sure it's handed off correctly," Jensen said. "We could have walked away like everyone else and said, 'We don't care.' But we loved our neighbors and our neighborhood. We hold ourselves responsible."
Copyright © washingtonpost.com.
The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation's housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown.
"It just means foreclosure rates are going to keep rising," said Patrick Newport, an economist for IHS Global Insight.
Rising mortgage delinquencies were at the root of the recession, and many economists say an economic recovery will be difficult until the housing market recovers and home prices stabilize.
And even though a delayed foreclosure can be a blessing for some troubled homeowners, for others, it simply prolongs the financial distress, leaving them on the hook for the condition of the property. Even if they move out, they cannot move on.
"I have even begged them for a foreclosure," delinquent mortgage-holder Charlotte Jensen said. When she realized she couldn't save her Glen Allen home last year, she filed for bankruptcy, packed up her family and moved out. Nearly a year later, Bank of America has yet to take back the home.
During the first quarter of this year, the share of all homeowners seriously delinquent on their mortgage but not yet facing foreclosure more than doubled to 3.04 percent, or about $227 billion in loans. There was a total of $97 billion in such loans during the same period in 2008, according to Inside Mortgage Finance. In more prosperous times, the rate is much lower – it was less than 1 percent in the first quarter of 2007, according to the industry publication.
Some of the backlog reflects the inability of lenders to keep up with the swelling rolls of delinquent properties.
"Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can't do all these things at once, and do them well, so we're seeing a lot of things falling through the cracks," said Howard Glaser, a housing industry consultant and a housing official during the Clinton administration.
But some of the backlog also reflects an intentional slowdown in the pace of foreclosures as government and industry step up efforts to help borrowers who want to save their homes. Fannie Mae and Freddie Mac, the government-run mortgage financing companies, put a temporary moratorium on foreclosures late last year and many of the country's largest lenders followed suit. That gave some lenders more time to determine which borrowers could benefit from government help.
The glut of foreclosed homes on the market has already pushed down prices across the country. Existing-home prices fell another 16.8 percent in May compared with a year ago, according to industry data released yesterday. The overhang of homes in limbo means that foreclosure rates are likely to increase dramatically during the second half of this year and into 2010 as lenders work through the backlog, said Bob Bellack, chairman of Zetabid, which auctions foreclosed properties.
"Prices will fall to the point where you have equilibrium, and it won't reach that until there is no longer this foreclosure overhang," Bellack said.
This could in turn put renewed stress on financial firms that carry mortgages or mortgage-backed securities on their books. As a general policy, many firms have been marking down the value of those assets as the loans become delinquent. But once the homes go into foreclosure and are sold, their value could decline even more, prompting another round of losses at financial companies.
For some homeowners, the foreclosure delays have provided needed breathing room to try to save their home, giving them a chance to live for free for a while or to work out a deal to save their property. "I think everyone has come to a realization that efforts to try to mediate are preferable to foreclosure right now," said David Berenbaum, executive vice president of the National Community Reinvestment Coalition, a nonprofit group.
But housing experts say that once borrowers are seriously delinquent -- defined as 90 days overdue on a mortgage -- some are too far behind to help or have already given up. According to a March report from NeighborWorks America, a large housing counseling group, 27 percent of homeowners who go to a housing counselor after missing three or four monthly payments end up in foreclosure. That figure jumps to 60 percent for those who have missed more than four payments before seeking help.
In better times, lenders tended to begin the foreclosure process after three months, said Guy Cecala, publisher of Inside Mortgage Finance. Now it is not unusual for it to take nine months for the process to begin, he said.
"No one is in a rush, lender-wise, to deal with the property," he said. "If you have to sell at a loss, why rush?"
Lenders traditionally write down the value of the home six months after an owner stops making payments, but the total loss is not recorded until the property is sold in foreclosure, said Mark Zandi, chief economist of Moody's Economy.com.
"Some may feel that the property is worth more than the market can bear at this time, and they are willing to wait until" the market improves, he said. "They don't want to sell it into a completely depressed market."
Once underway, the foreclosure process is governed by a hodgepodge of state and local laws and the time it takes to get through the process varies by place. The process can also vary based on the original lender, on the current owner of the loan and on whether the borrower has filed for bankruptcy.
During the period that precedes final foreclosure, homeowners still have the legal obligations that come with ownership. Though in practice many borrowers who have stopped making mortgage payments may do little to look after a home.
"During that period, where the property is in limbo, until there has been a sale of the property, the homeowner is still the owner, technically," said John Rao of the National Consumer Law Center. "It used to be that they wanted to foreclose as quickly as possible. . . . [Now] it's like this hot potato that nobody wants."
Even seriously delinquent borrowers can restart negotiations with lenders to stay in their homes with a modified mortgage or persuade them to accept a short sale, which involves a homeowner selling the property for less than the outstanding mortgage balance and then turning the proceeds over to the lender to satisfy the loan.
Jay Brinkmann, chief economist for the Mortgage Bankers Association, said his industry is doing its best to work through the backlog while carrying out federal foreclosure prevention programs. "If a lender has a house that they know they will have to sell eventually," he said, "they almost always want to sell it as quickly as possible because of the interest cost of holding the loan on the books, in addition to costs like taxes, keeping the grass cut and other maintenance."
More than ever, foreclosure has become an unattractive outcome for lenders.
"What we're seeing more and more right now are cases of a lender threatening foreclosure and the foreclosure sale is canceled at the last minute," said Jeanne Hovenden, a Richmond bankruptcy attorney, who handled Jensen's case. "It's more like the lenders don't want to own any more real estate and are using foreclosures as a pressure tactic."
The Jensens bought their home in 1999 and were able to make their payments comfortably until refinancing. Since moving out last July, they have not received a foreclosure sale notice even after hiring an attorney to encourage Bank of America to speed up the process.
Jensen visits her home weekly to ensure it hasn't been vandalized or taken over by squatters. She pays landscapers to keep the lawn mowed. When the home caught fire in January, the police department knocked on the door of her new home, confused about whether to notify her or the bank. When neighbors complained about the mess left from the fire, Jensen returned to clean up.
A Bank of America spokeswoman, Jumana Bauwens, said the delay was caused, in part, by the fire. She said the home has since been referred to foreclosure. "The company makes every attempt to find a home retention solution for a borrower before proceeding with a foreclosure," she said.
For the Jensens, the delay has extended a painful period. "There was a sense of responsibility that until someone says we no longer own that property, we wanted to make sure it's handed off correctly," Jensen said. "We could have walked away like everyone else and said, 'We don't care.' But we loved our neighbors and our neighborhood. We hold ourselves responsible."
Copyright © washingtonpost.com.
Tuesday, June 23, 2009
Florida’s existing home, condo sales up in May 2009
ORLANDO, Fla. – June 23, 2009 – Florida’s existing home sales rose in May – the ninth month in a row that sales activity increased in the year-to-year comparison, according to the latest housin May existing-home sales continue rising trend, says NAR
g data released by the Florida Association of Realtors® (FAR). Statewide sales showed gains over the previous month’s sales level in both the existing home and existing condominium markets. Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.
Existing home sales rose 16 percent last month with a total of 13,921 homes sold statewide compared to 12,044 homes sold in May 2008, according to FAR. Statewide existing home sales in May increased 6.2 percent over April’s statewide activity. Florida Realtors also reported a 21 percent rise in statewide sales of existing condos in May; existing condo sales last month rose 3.8 percent over the total units sold in April.
“The improving sales of existing single family homes and condos is a trend we have been seeing for several months in Florida. What is new in this month’s data release is that we are seeing evidence of prices beginning to firm,” says Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “While one month of data does not a trend make, it is the first green shoot we have seen in some time as far as prices are concerned. Until prices stop declining, we cannot state with confidence that the housing market has stabilized. Sales have risen to levels we have not seen since 2006, though the economy still faces headwinds. As credit markets begin to thaw this will help speed along this process of recovery in the housing market.”
Thirteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in May and 13 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for 11 consecutive months.
Florida’s median sales price for existing homes last month was $144,400; a year ago, it was $203,800 for a 29 percent decrease. However, the statewide existing home median price in May was higher than the statewide median price reported in each of the previous four months. According to housing industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to lower the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in April 2009 was $169,800, down 14.9 percent from a year earlier, according to NAR. In California, the statewide median resales price was $256,700 in April; in Massachusetts, it was $275,000; in Maryland, it was $255,587; and in New York, it was $185,000.
According to NAR’s latest housing industry outlook, buyers are responding to favorable market conditions. “The $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead and that should spark more sales by repeat buyers.” Many homebuyers are taking advantage of the bargain prices offered on foreclosed listings in states like Florida, California and Nevada, Yun noted, which should “set the stage for healthy market conditions going forward.”
In Florida’s year-to-year comparison for condos, 4,839 units sold statewide compared to 3,998 units in May 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $113,400; in May 2008 it was $181,700 for a 38 percent decrease. May’s statewide existing condo median price was the same as January’s statewide median, and was higher than the median reported in February, March or April. The national median existing condo price was $173,900 in April 2009, according to NAR.
Interest rates for a 30-year fixed-rate mortgage averaged 4.86 percent last month, down significantly from the average rate of 6.04 percent in May 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 584 homes sold in May compared to 491 homes a year ago for a 19 percent increase. The existing home median sales price was $123,700; a year ago, it was $163,100 for a 24 percent decrease. In the year-to-year comparison for the existing condo market, 123 units sold in the MSA last month, up 6 percent compared to 116 condos sold the previous May. The market’s existing condo median price last month was $134,400; a year earlier, it was $144,300 for a 7 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
g data released by the Florida Association of Realtors® (FAR). Statewide sales showed gains over the previous month’s sales level in both the existing home and existing condominium markets. Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.
Existing home sales rose 16 percent last month with a total of 13,921 homes sold statewide compared to 12,044 homes sold in May 2008, according to FAR. Statewide existing home sales in May increased 6.2 percent over April’s statewide activity. Florida Realtors also reported a 21 percent rise in statewide sales of existing condos in May; existing condo sales last month rose 3.8 percent over the total units sold in April.
“The improving sales of existing single family homes and condos is a trend we have been seeing for several months in Florida. What is new in this month’s data release is that we are seeing evidence of prices beginning to firm,” says Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “While one month of data does not a trend make, it is the first green shoot we have seen in some time as far as prices are concerned. Until prices stop declining, we cannot state with confidence that the housing market has stabilized. Sales have risen to levels we have not seen since 2006, though the economy still faces headwinds. As credit markets begin to thaw this will help speed along this process of recovery in the housing market.”
Thirteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in May and 13 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for 11 consecutive months.
Florida’s median sales price for existing homes last month was $144,400; a year ago, it was $203,800 for a 29 percent decrease. However, the statewide existing home median price in May was higher than the statewide median price reported in each of the previous four months. According to housing industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to lower the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in April 2009 was $169,800, down 14.9 percent from a year earlier, according to NAR. In California, the statewide median resales price was $256,700 in April; in Massachusetts, it was $275,000; in Maryland, it was $255,587; and in New York, it was $185,000.
According to NAR’s latest housing industry outlook, buyers are responding to favorable market conditions. “The $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead and that should spark more sales by repeat buyers.” Many homebuyers are taking advantage of the bargain prices offered on foreclosed listings in states like Florida, California and Nevada, Yun noted, which should “set the stage for healthy market conditions going forward.”
In Florida’s year-to-year comparison for condos, 4,839 units sold statewide compared to 3,998 units in May 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $113,400; in May 2008 it was $181,700 for a 38 percent decrease. May’s statewide existing condo median price was the same as January’s statewide median, and was higher than the median reported in February, March or April. The national median existing condo price was $173,900 in April 2009, according to NAR.
Interest rates for a 30-year fixed-rate mortgage averaged 4.86 percent last month, down significantly from the average rate of 6.04 percent in May 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 584 homes sold in May compared to 491 homes a year ago for a 19 percent increase. The existing home median sales price was $123,700; a year ago, it was $163,100 for a 24 percent decrease. In the year-to-year comparison for the existing condo market, 123 units sold in the MSA last month, up 6 percent compared to 116 condos sold the previous May. The market’s existing condo median price last month was $134,400; a year earlier, it was $144,300 for a 7 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
Monday, June 22, 2009
'Vanilla’ home loans could benefit borrowers
WASHINGTON – June 22, 2009 – If President Barack Obama gets his way, consumers who take out mortgages would automatically get a “plain vanilla” loan -- such as a traditional 30-year fixed-rate mortgage -- unless they opted for a riskier variety.
Obama’s plan to revamp financial regulation aims to protect borrowers from the confusing and high-risk mortgages that fed a pandemic of delinquencies and foreclosures, led to the worst financial crisis in decades and thrust the nation into a deep recession.
Obama is expecting opposition to the plan, and cautioned Saturday in his radio address, “While I’m not spoiling for a fight, I’m ready for one.”
Government officials want to make the process of getting a mortgage as simple and abuse-free as signing up for a retirement savings plan: A growing number of companies now automatically enroll new employees in 401(k) plans unless they opt out.
For mortgage brokers, though, the plan threatens to shrink the fee income some have received from encouraging the use of adjustable-rate, interest-only and other sometimes-risky loans.
Obama’s plan to overhaul financial regulation, unveiled last week, would create a Consumer Financial Protection Agency to monitor consumer financial products and revamp the entire home-loan process.
It’s the administration’s latest step to tackle the aftermath of the housing bust. The administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments.
But that plan is off to a slow start. Many housing counselors say it hasn’t made much of a difference nationwide because lenders have been slow or reluctant to cooperate. As of mid-June, about 50,000 borrowers were enrolled in three-month trial modifications under the plan, according to the Treasury Department. The administration initially had said up to 4 million households could be helped.
Critics in the mortgage industry are denouncing Obama’s plan for government-approved mortgages. Some call it a paternalistic intrusion that would restrict borrowers’ options and make loans harder to get and potentially more expensive.
Guy Cecala, publisher of Inside Mortgage Finance, a trade publication, called the idea “un-American.” He said it would make the U.S. mortgage market heavily regulated, like those of Germany or France, where consumers have fewer options.
“We’re a free-enterprise country,” Cecala said. “We encourage innovation. This is certainly not going to encourage innovation. It will stifle it.”
But others in the industry are open to the idea. A good mortgage broker should always show a borrower plenty of options, including the traditional 30-year fixed-rate loan, and explain the risks clearly, said Kevin Iverson, a mortgage broker with Reed Mortgage Corp. in Denver.
During the lending boom, unscrupulous brokers “were selling bad products because it was one of the ways people made more money,” Iverson said. They focused on closing deals fast, he said, rather than building customer relationships that would endure for years.
If the Obama plan for simplifying the mortgage process is approved, here’s how it might work:
The government would give its seal of approval to a handful of mortgage types - a standard 30-year fixed-rate mortgage and perhaps a few varieties of adjustable-rate loans. For a loan to get the “vanilla” label, a lender would have to verify borrowers’ income and have them set aside money for property tax and insurance.
Borrowers would still be able to get mortgages that don’t pass the government’s vanilla test. But they would be warned about the risks.
The Obama administration faces a tough fight over its financial overhaul plan. Powerful trade groups like the American Bankers Association, for example, oppose creating a consumer financial protection agency. Even lobbying groups open to the idea of a consumer-products regulator question whether the government should suggest which mortgages are best for consumers.
“We don’t want to stifle innovation, and we don’t want to stifle competition,” said John Courson, president of the Mortgage Bankers Association.
Traditional fixed-rate loans fell out of favor during the housing boom. They dropped from a 75 percent market share in 2002 and 2003 to around 50 percent in 2004 and 2005, according to Inside Mortgage Finance. But with the housing bubble burst and mortgage rates near historic lows, fixed-rate loans -- 30-year, 15-year and other types -- now account for about 95 percent of the market.
Previous efforts in Congress to crack down on mortgage abuses have fallen short. Even regulatory proposals on seemingly simple issues, like reducing the paperwork to get a loan, have devolved into battles among industry factions.
Supporters say a new consumer regulator is sorely needed. They point to academic research suggesting that consumers, faced with a difficult choice about their personal finances, tend to choose the path of least resistance. As a result, they often make poor decisions.
That’s particularly true with mortgages, which require signing numerous complex documents. Many borrowers say they didn’t understand the loans they signed up for during the housing boom. Some say they were surprised when their rates adjusted to much higher payments.
“These loans are so complicated that the consumers can’t figure out what’s going on,” said Bill Apgar, senior adviser for mortgage finance at the Department of Housing and Urban Development.
The Obama plan includes other elements likely to produce drawn-out lobbying fights. For example, administration officials want to curb the fees that brokers and lenders receive tied to inflated mortgage rates.
Brokers argue such fees are a legitimate way for borrowers to afford a loan without having to come up with thousands of dollars in closing costs, because the fees can be spread over the life of a loan. They also intend to fight a plan to have their compensation linked to whether a borrower winds up defaulting.
“There’s no reason that we should have to assume that risk,” said Marc Savitt, president of the National Association of Mortgage Brokers. He argues that brokers merely submit loans to lenders and don’t influence whether the loans are approved.
Brokers have already seen their market share dwindle, from more than 60 percent of new loans at the peak of the market to less than 20 percent now, said David Olson, president of Access Mortgage Research in Columbia, Md.
If mortgage broker fees were eliminated, “that would be the complete kiss of death” for mortgage brokers, Olson said. “That’s really how they make their money.”
Copyright © 2009 The Associated Press,
Obama’s plan to revamp financial regulation aims to protect borrowers from the confusing and high-risk mortgages that fed a pandemic of delinquencies and foreclosures, led to the worst financial crisis in decades and thrust the nation into a deep recession.
Obama is expecting opposition to the plan, and cautioned Saturday in his radio address, “While I’m not spoiling for a fight, I’m ready for one.”
Government officials want to make the process of getting a mortgage as simple and abuse-free as signing up for a retirement savings plan: A growing number of companies now automatically enroll new employees in 401(k) plans unless they opt out.
For mortgage brokers, though, the plan threatens to shrink the fee income some have received from encouraging the use of adjustable-rate, interest-only and other sometimes-risky loans.
Obama’s plan to overhaul financial regulation, unveiled last week, would create a Consumer Financial Protection Agency to monitor consumer financial products and revamp the entire home-loan process.
It’s the administration’s latest step to tackle the aftermath of the housing bust. The administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments.
But that plan is off to a slow start. Many housing counselors say it hasn’t made much of a difference nationwide because lenders have been slow or reluctant to cooperate. As of mid-June, about 50,000 borrowers were enrolled in three-month trial modifications under the plan, according to the Treasury Department. The administration initially had said up to 4 million households could be helped.
Critics in the mortgage industry are denouncing Obama’s plan for government-approved mortgages. Some call it a paternalistic intrusion that would restrict borrowers’ options and make loans harder to get and potentially more expensive.
Guy Cecala, publisher of Inside Mortgage Finance, a trade publication, called the idea “un-American.” He said it would make the U.S. mortgage market heavily regulated, like those of Germany or France, where consumers have fewer options.
“We’re a free-enterprise country,” Cecala said. “We encourage innovation. This is certainly not going to encourage innovation. It will stifle it.”
But others in the industry are open to the idea. A good mortgage broker should always show a borrower plenty of options, including the traditional 30-year fixed-rate loan, and explain the risks clearly, said Kevin Iverson, a mortgage broker with Reed Mortgage Corp. in Denver.
During the lending boom, unscrupulous brokers “were selling bad products because it was one of the ways people made more money,” Iverson said. They focused on closing deals fast, he said, rather than building customer relationships that would endure for years.
If the Obama plan for simplifying the mortgage process is approved, here’s how it might work:
The government would give its seal of approval to a handful of mortgage types - a standard 30-year fixed-rate mortgage and perhaps a few varieties of adjustable-rate loans. For a loan to get the “vanilla” label, a lender would have to verify borrowers’ income and have them set aside money for property tax and insurance.
Borrowers would still be able to get mortgages that don’t pass the government’s vanilla test. But they would be warned about the risks.
The Obama administration faces a tough fight over its financial overhaul plan. Powerful trade groups like the American Bankers Association, for example, oppose creating a consumer financial protection agency. Even lobbying groups open to the idea of a consumer-products regulator question whether the government should suggest which mortgages are best for consumers.
“We don’t want to stifle innovation, and we don’t want to stifle competition,” said John Courson, president of the Mortgage Bankers Association.
Traditional fixed-rate loans fell out of favor during the housing boom. They dropped from a 75 percent market share in 2002 and 2003 to around 50 percent in 2004 and 2005, according to Inside Mortgage Finance. But with the housing bubble burst and mortgage rates near historic lows, fixed-rate loans -- 30-year, 15-year and other types -- now account for about 95 percent of the market.
Previous efforts in Congress to crack down on mortgage abuses have fallen short. Even regulatory proposals on seemingly simple issues, like reducing the paperwork to get a loan, have devolved into battles among industry factions.
Supporters say a new consumer regulator is sorely needed. They point to academic research suggesting that consumers, faced with a difficult choice about their personal finances, tend to choose the path of least resistance. As a result, they often make poor decisions.
That’s particularly true with mortgages, which require signing numerous complex documents. Many borrowers say they didn’t understand the loans they signed up for during the housing boom. Some say they were surprised when their rates adjusted to much higher payments.
“These loans are so complicated that the consumers can’t figure out what’s going on,” said Bill Apgar, senior adviser for mortgage finance at the Department of Housing and Urban Development.
The Obama plan includes other elements likely to produce drawn-out lobbying fights. For example, administration officials want to curb the fees that brokers and lenders receive tied to inflated mortgage rates.
Brokers argue such fees are a legitimate way for borrowers to afford a loan without having to come up with thousands of dollars in closing costs, because the fees can be spread over the life of a loan. They also intend to fight a plan to have their compensation linked to whether a borrower winds up defaulting.
“There’s no reason that we should have to assume that risk,” said Marc Savitt, president of the National Association of Mortgage Brokers. He argues that brokers merely submit loans to lenders and don’t influence whether the loans are approved.
Brokers have already seen their market share dwindle, from more than 60 percent of new loans at the peak of the market to less than 20 percent now, said David Olson, president of Access Mortgage Research in Columbia, Md.
If mortgage broker fees were eliminated, “that would be the complete kiss of death” for mortgage brokers, Olson said. “That’s really how they make their money.”
Copyright © 2009 The Associated Press,
Can buying cheap foreclosures make you rich?
ORLANDO, Fla. – June 19, 2009 – Speculators are buying up an uncounted but certainly significant percentage of homes for sale in cities where the meltdown hit hardest.
Homes.com reports a 30- to 50-percent year-over-year increase in home searches in foreclosure-heavy states, including California, Michigan and Florida. In these states, helping long-distance investors find and close on properties has become a burgeoning real estate specialty.
The investors run the gamut from international speculators seeking a house or two to venture capital firms that buy bundles of homes for 25 cents on the dollar — most in need of renovation and some with substantial tax liens.
Will these investments lead to riches? Possibly, if housing prices go back up and if investors are able to fix up and rent the properties out while they wait to sell, experts say.
Source: Smart Money, Anne Kadet
Homes.com reports a 30- to 50-percent year-over-year increase in home searches in foreclosure-heavy states, including California, Michigan and Florida. In these states, helping long-distance investors find and close on properties has become a burgeoning real estate specialty.
The investors run the gamut from international speculators seeking a house or two to venture capital firms that buy bundles of homes for 25 cents on the dollar — most in need of renovation and some with substantial tax liens.
Will these investments lead to riches? Possibly, if housing prices go back up and if investors are able to fix up and rent the properties out while they wait to sell, experts say.
Source: Smart Money, Anne Kadet
Friday, June 19, 2009
Mortgage rates fall back from 7-month high
WASHINGTON – June 19, 2009 – Rates for 30-year home loans fell back this week after soaring to the highest level in seven months a week earlier.
The average rate for a 30-year fixed mortgage was 5.38 percent this week, down from 5.59 percent a week earlier, mortgage company Freddie Mac said.
Rates had risen for three consecutive weeks after yields on long-term government debt, which are closely tied to mortgages rates, had been climbing as investors worried that the huge surplus of government debt hitting the market could trigger inflation.
But data released Wednesday suggested that inflation remains largely in check, and the yield on the 10-year Treasury note has fallen back from an 8-month high of 4.01 percent reached last week.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
The three-week run-up in rates, “is starting to slow homebuyer demand, at least temporarily,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.
Mortgage applications for home purchases fell 3.5 percent for the week ending June 12, according to the Mortgage Bankers Association, while refinancing applications were down 23 percent from a week earlier.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.89 percent, down from 5.06 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.97 percent, down from 5.17 percent last week. Rates on one-year, adjustable-rate mortgages fell to 4.95 percent from 5.04 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages. Fees averaged 0.6 point for five-year and one-year adjustable rate loans.
Copyright © 2009 The Associated Press
The average rate for a 30-year fixed mortgage was 5.38 percent this week, down from 5.59 percent a week earlier, mortgage company Freddie Mac said.
Rates had risen for three consecutive weeks after yields on long-term government debt, which are closely tied to mortgages rates, had been climbing as investors worried that the huge surplus of government debt hitting the market could trigger inflation.
But data released Wednesday suggested that inflation remains largely in check, and the yield on the 10-year Treasury note has fallen back from an 8-month high of 4.01 percent reached last week.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
The three-week run-up in rates, “is starting to slow homebuyer demand, at least temporarily,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.
Mortgage applications for home purchases fell 3.5 percent for the week ending June 12, according to the Mortgage Bankers Association, while refinancing applications were down 23 percent from a week earlier.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.89 percent, down from 5.06 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.97 percent, down from 5.17 percent last week. Rates on one-year, adjustable-rate mortgages fell to 4.95 percent from 5.04 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages. Fees averaged 0.6 point for five-year and one-year adjustable rate loans.
Copyright © 2009 The Associated Press
Thursday, June 18, 2009
Wednesday, June 17, 2009
Smart ideas for better social networking
CHICAGO – June 17, 2009 – Is it better to post snippets of your blog on Facebook, or merely use the social networking site to direct people to your blog? Should you Tweet about what your buyers had to say about your latest listing? Is it worthwhile to establish a presence on Bright Kite?
These were among the questions 150 real estate pros chewed over Monday during the daylong RE Bar Camp Chicago, the latest “user-generated conference” dedicated to innovative real estate business practices and strategies. Hosted at the National Association of Realtors® (NAR) headquarters in Chicago, the confab offered ideas about social networking tools and their use in the real estate business.
Among the tips:
• Avoid setting up two Facebook profiles. By setting separate accounts for personal and business use, you will create more confusion about your identity. The goal of social networking is to be as transparent as possible with communication.
• Consider setting up a Facebook Fan page that focuses on business matters and connects to your profile. This way you won’t overwhelm your entire friends list with real estate issues they may not care about.
• When posting comments from prospective buyers about a listing, consider your liability. Never disclose confidential information shared by clients.
• While more people are pushing their Tweets automatically onto their Facebook page, this may not make sense because the sites reach different audiences whose interests may not match. You want to engage people according to their needs. Twitter posts from a conference you attended may hold no interest for your Facebook friends.
• Go to search.twitter.com to find real-time information about any topic streaming through the service rather than just information that comes through your personal timeline.
• To obtain media coverage for your business, follow Twitter feeds for local TV and newspaper reporters. They’re always looking for reliable real estate sources, so engage them in conversation.
• Explore other sites like Brightkite.com, a location-based social network where you can see where your friends are and meet other people who are nearby.
Source: Wendy Cole, REALTOR® Magazine
These were among the questions 150 real estate pros chewed over Monday during the daylong RE Bar Camp Chicago, the latest “user-generated conference” dedicated to innovative real estate business practices and strategies. Hosted at the National Association of Realtors® (NAR) headquarters in Chicago, the confab offered ideas about social networking tools and their use in the real estate business.
Among the tips:
• Avoid setting up two Facebook profiles. By setting separate accounts for personal and business use, you will create more confusion about your identity. The goal of social networking is to be as transparent as possible with communication.
• Consider setting up a Facebook Fan page that focuses on business matters and connects to your profile. This way you won’t overwhelm your entire friends list with real estate issues they may not care about.
• When posting comments from prospective buyers about a listing, consider your liability. Never disclose confidential information shared by clients.
• While more people are pushing their Tweets automatically onto their Facebook page, this may not make sense because the sites reach different audiences whose interests may not match. You want to engage people according to their needs. Twitter posts from a conference you attended may hold no interest for your Facebook friends.
• Go to search.twitter.com to find real-time information about any topic streaming through the service rather than just information that comes through your personal timeline.
• To obtain media coverage for your business, follow Twitter feeds for local TV and newspaper reporters. They’re always looking for reliable real estate sources, so engage them in conversation.
• Explore other sites like Brightkite.com, a location-based social network where you can see where your friends are and meet other people who are nearby.
Source: Wendy Cole, REALTOR® Magazine
Tuesday, June 16, 2009
Clean the ways of messy neighbors
ORLANDO, Fla. – June 16, 2009 – A “neighbor from hell” can reduce the value of a property as much as 20 percent, estimates Sid Davis, a real estate practitioner and author of “A Survival Guide to Selling a Home.”
Here are some of Davis’ suggestions for approaching the problem.
• Reason with the neighbors. Advise your client to knock on the door and start by saying something positive like, “I’m sure we can resolve this together.”
• Suggest your client volunteer to do the work himself. Sometimes properties are in poor condition because their owners are unable to do the work and can’t afford to hire someone else to do it.
• Offer moral support. While it may work best if your client does the talking, having a real estate professional nearby can ease the situation. Occasionally, getting support from the local authorities or the neighborhood association can help, especially if you are initially rebuffed.
• Lawsuits are a last resort. Sometimes communities have mediation services that can help resolve the problem harmoniously.
Source: Universal Press Syndicate,
Here are some of Davis’ suggestions for approaching the problem.
• Reason with the neighbors. Advise your client to knock on the door and start by saying something positive like, “I’m sure we can resolve this together.”
• Suggest your client volunteer to do the work himself. Sometimes properties are in poor condition because their owners are unable to do the work and can’t afford to hire someone else to do it.
• Offer moral support. While it may work best if your client does the talking, having a real estate professional nearby can ease the situation. Occasionally, getting support from the local authorities or the neighborhood association can help, especially if you are initially rebuffed.
• Lawsuits are a last resort. Sometimes communities have mediation services that can help resolve the problem harmoniously.
Source: Universal Press Syndicate,
Monday, June 15, 2009
Website helps sellers trade houses
TAMPA – June 15, 2009 – Daniel Westbrook says his company works much like an online dating service. Suitors type in their likes and dislikes, and the computer finds the perfect match.
Only Westbrook’s company won’t find you a date. It could help sell your house, though.
The mission of Tampa-based OnlineHouseTrading.com is to connect sellers with someone willing to swap with them.
“The thinking is, ‘You buy my home, and I’ll buy yours,’” said Westbrook, co-founder and chief executive officer. Or, if the homes are worth about the same amount, trade.
It may sound unorthodox but, hey, this is real estate, after all. And what sounded strange a few years ago makes a lot more sense today.
With tens of thousands of unsold homes on the market, the site has piqued the interest of desperate sellers who’ve had no luck with the conventional route.
Unsuccessful sellers – 55,000 of them across the United States – have homes listed on the site.
Here’s how it works:
For a one-time fee of $29.95, customers list information and photos of their homes and get access to unlimited searches of other homes. Customers tell the computer what kind of home they’re looking for and list cities or areas where they wouldn’t mind living. (There’s also a slimmed-down version for free.)
The idea is that someone in Tampa, for example, might want to move to Atlanta, and someone from Atlanta might want to move to Tampa. If they both like each other’s homes, they could find a match.
The homes don’t have to be similar or in the same price range. Some people may want to sell their large home and downsize, while others may want a comparable home in another city.
“We had a couple in Atlanta who had tried for two years to sell their home,” Westbrook said. “They signed up and found their match within a couple of months.”
Before the success stories, the site was a slow go.
Westbrook and his partner, Brian Stroka, started the company in June 2007. Westbrook was a real estate agent, and Stroka worked in the mortgage business. They both saw the real estate market crashing and spotted an opportunity.
“As the real estate market changed, sellers were becoming the most motivated in a deal,” he said. “We wanted to come up something that would appeal to them.”
Colleagues, he said, “thought we were crazy and said this would never work. Now, some of those same real estate agents call us to list homes for their clients.”
The site has garnered national attention as well. It’s been mentioned in numerous articles and on television shows such as the “Today” show and “Good Morning America.” Heidi McLaughlin hopes the site will help her swap her Hyde Park condo for a home in Denver.
She and her husband moved there two years ago but couldn’t sell their condo. They ended up renting out the condo and renting a four-bedroom home in their new city. Now that they have a new baby, they want to own a home.
“Our equity is tied up in the Tampa home,” she said. “It’s tough because when people want a condo in Florida, they often want one on the water. South Tampa is a hard sell.”
Still, she’s hopeful. It’s been nearly three weeks since she posted her home on the site.
“Surely there’s someone out there with a home in Denver who wants our condo in Tampa,” she said.
As for OnlineHouse Trading.com, Westbrook thinks business will get even better.
“As the real estate market gets worse, people are looking for alternatives.”
Copyright © 2009 Tampa Tribune, Fla
Only Westbrook’s company won’t find you a date. It could help sell your house, though.
The mission of Tampa-based OnlineHouseTrading.com is to connect sellers with someone willing to swap with them.
“The thinking is, ‘You buy my home, and I’ll buy yours,’” said Westbrook, co-founder and chief executive officer. Or, if the homes are worth about the same amount, trade.
It may sound unorthodox but, hey, this is real estate, after all. And what sounded strange a few years ago makes a lot more sense today.
With tens of thousands of unsold homes on the market, the site has piqued the interest of desperate sellers who’ve had no luck with the conventional route.
Unsuccessful sellers – 55,000 of them across the United States – have homes listed on the site.
Here’s how it works:
For a one-time fee of $29.95, customers list information and photos of their homes and get access to unlimited searches of other homes. Customers tell the computer what kind of home they’re looking for and list cities or areas where they wouldn’t mind living. (There’s also a slimmed-down version for free.)
The idea is that someone in Tampa, for example, might want to move to Atlanta, and someone from Atlanta might want to move to Tampa. If they both like each other’s homes, they could find a match.
The homes don’t have to be similar or in the same price range. Some people may want to sell their large home and downsize, while others may want a comparable home in another city.
“We had a couple in Atlanta who had tried for two years to sell their home,” Westbrook said. “They signed up and found their match within a couple of months.”
Before the success stories, the site was a slow go.
Westbrook and his partner, Brian Stroka, started the company in June 2007. Westbrook was a real estate agent, and Stroka worked in the mortgage business. They both saw the real estate market crashing and spotted an opportunity.
“As the real estate market changed, sellers were becoming the most motivated in a deal,” he said. “We wanted to come up something that would appeal to them.”
Colleagues, he said, “thought we were crazy and said this would never work. Now, some of those same real estate agents call us to list homes for their clients.”
The site has garnered national attention as well. It’s been mentioned in numerous articles and on television shows such as the “Today” show and “Good Morning America.” Heidi McLaughlin hopes the site will help her swap her Hyde Park condo for a home in Denver.
She and her husband moved there two years ago but couldn’t sell their condo. They ended up renting out the condo and renting a four-bedroom home in their new city. Now that they have a new baby, they want to own a home.
“Our equity is tied up in the Tampa home,” she said. “It’s tough because when people want a condo in Florida, they often want one on the water. South Tampa is a hard sell.”
Still, she’s hopeful. It’s been nearly three weeks since she posted her home on the site.
“Surely there’s someone out there with a home in Denver who wants our condo in Tampa,” she said.
As for OnlineHouse Trading.com, Westbrook thinks business will get even better.
“As the real estate market gets worse, people are looking for alternatives.”
Copyright © 2009 Tampa Tribune, Fla
Young homeowners gain despite stagnant economy
ST. LOUIS, Mo. – June 15, 2009 – If the real estate bust has a bright side, it’s this: People like Lilly Thomas, Stephanie Driskell and Dexter Wuller can finally afford homes.
Falling home prices and an $8,000 federal tax credit are putting homes in reach of young people who couldn’t afford them a few years ago. As a result, real estate agents say starter homes are the only part of the real estate market that’s showing some life.
It’s not a lot of life. House sales this year are down by a third from the boom year of 2006, and the bust spans all price classes. But the lower end of the market – houses priced under $200,000 – is suffering less, and there’s some evidence that a comeback could be beginning.
Now, real estate agents are starting to worry that rising mortgage interest rates may dampen buyers’ enthusiasm. Rates on 30-year mortgages jumped to an average of 5.59 percent last week, up from 4.84 percent a month ago. Meanwhile, many FHA lenders have raised their credit score requirements to 620 from 580, which will seal some people out of the home market.
House prices in St. Louis dropped 4 percent in the last year, and they’re down nearly 9 percent from their high of 2007, according to the Federal Housing Finance Agency’s index, which excludes the most expensive houses.
‘We got a steal’
Those falling prices prompted newlyweds Lilly and Stephen Thomas to finally make an offer on a house in O’Fallon, Mo.
“As the market fell, we were looking at a $200,000 house that we could get for $170,000,” said Lilly Thomas, 29. “My dad thinks we got a steal.”
They also got a gift from Uncle Sam. The $8,000 “first-time homebuyer” credit is available to people who buy homes before Dec. 1. Buyers qualify if they haven’t owned a house for three years.
The credit may prompt an exodus from Mom and Dad’s house. Dexter Wuller, 23, left behind Mom’s cooking when he paid $88,000 for a century-old two-bedroom house in Belleville. “Once I started looking, I started liking houses. The idea of being out on my own and owning something was pretty good,” he said.
Stephanie Driskell, 28, saved money while living at home for free. That, plus the $8,000 credit, let her to buy a $138,000 home in Affton with her boyfriend. “We’re trying to live the American dream like they want you to do,” she said.
Scott Cottrell, of the Cottrell Realty Group in Ballwin, studies real estate statistics. He sees signs of a reviving market, led entirely by low-end home sales.
In St. Louis County, the monthly count of new sales contracts has gradually caught up to last year’s levels, which he calls a hopeful sign. That improvement comes entirely from the starter home market, he says. Completed sales in the region as a whole still lag last year’s levels.
Sellers may re-emerge
Buyers are in the catbird’s seat today, but Cottrell thinks the situation may reverse this fall. He thinks buyers will slowly reduce the inventory of moderately priced homes through the summer. Then he expects to see a rush of buyers in the fall as the December tax credit deadline nears. “We could get a supply and demand imbalance that favors the seller,” he says.
Things are sadder for sellers of upper-end homes. They suffer from two extra handicaps, says Cottrell. Fewer upscale buyers can get the federal credit because they own other houses or exceed the $170,000 income limit for married couples.
But the biggest hindrance is the $281,250 limit on FHA-backed loans. The FHA has filled some of the hole left by the collapse of subprime lending. The agency permits loans with 3.5 percent down payments to people with some blemishes on their credit.
Bankers slow market
Meanwhile, indecisiveness in the banking industry sometimes stymies sales at all price ranges. Brian Hunt learned that when he bid on two vacant houses in O’Fallon, Mo., but couldn’t get a reply at the bank.
Hunt knows construction work, so he went looking for a deal on a fixer-upper. As a result, he found himself looking at properties in foreclosure or threatened by it.
On one, he offered a “short sale.” He offered a price less than the current owner owes on his mortgage. In other words, the bank that held the mortgage would have to take a loss. Such deals are becoming more common as prices fall and foreclosures loom.
“It’s very difficult to do because you can’t get the bank to call you back,” said Hunt. He waited a month without a response, then withdrew his offer. He made a short-sale offer at another house and got the same non-response.
Real estate agents say that’s a common story. Cottrell, for instance, says he has hired a full-time short-sale negotiator, and still waits 3 1/2 weeks to 5 months for an answer from overwhelmed bank real estate officials.
Hunt finally bought a $115,000 O’Fallon home from an owner who had retired to Florida.
The most active part of the market is at the very bottom. Of 5,500 homes sold in St. Louis city and county this year, 1,079 have been worth $30,000 and less, or 19 percent of sales, according to figures from the St. Louis Association of Realtors. In 2006, these low-value properties represented only 3 percent of sales.
Some of those are “bulk sales” in which banks sell several foreclosed properties to a single investor, who then resells them or repairs and rents them.
Mark Scatizzi has watched the phenomenon firsthand as a real estate agent specializing in selling foreclosed and distressed property.
“What was selling two years ago for the $50,000s and $60,000s has been pushed down into the $30,000s,” says Scatizzi, of the RealtyNet Kratky Team.
Copyright © 2009 St. Louis Post-Dispatch
Falling home prices and an $8,000 federal tax credit are putting homes in reach of young people who couldn’t afford them a few years ago. As a result, real estate agents say starter homes are the only part of the real estate market that’s showing some life.
It’s not a lot of life. House sales this year are down by a third from the boom year of 2006, and the bust spans all price classes. But the lower end of the market – houses priced under $200,000 – is suffering less, and there’s some evidence that a comeback could be beginning.
Now, real estate agents are starting to worry that rising mortgage interest rates may dampen buyers’ enthusiasm. Rates on 30-year mortgages jumped to an average of 5.59 percent last week, up from 4.84 percent a month ago. Meanwhile, many FHA lenders have raised their credit score requirements to 620 from 580, which will seal some people out of the home market.
House prices in St. Louis dropped 4 percent in the last year, and they’re down nearly 9 percent from their high of 2007, according to the Federal Housing Finance Agency’s index, which excludes the most expensive houses.
‘We got a steal’
Those falling prices prompted newlyweds Lilly and Stephen Thomas to finally make an offer on a house in O’Fallon, Mo.
“As the market fell, we were looking at a $200,000 house that we could get for $170,000,” said Lilly Thomas, 29. “My dad thinks we got a steal.”
They also got a gift from Uncle Sam. The $8,000 “first-time homebuyer” credit is available to people who buy homes before Dec. 1. Buyers qualify if they haven’t owned a house for three years.
The credit may prompt an exodus from Mom and Dad’s house. Dexter Wuller, 23, left behind Mom’s cooking when he paid $88,000 for a century-old two-bedroom house in Belleville. “Once I started looking, I started liking houses. The idea of being out on my own and owning something was pretty good,” he said.
Stephanie Driskell, 28, saved money while living at home for free. That, plus the $8,000 credit, let her to buy a $138,000 home in Affton with her boyfriend. “We’re trying to live the American dream like they want you to do,” she said.
Scott Cottrell, of the Cottrell Realty Group in Ballwin, studies real estate statistics. He sees signs of a reviving market, led entirely by low-end home sales.
In St. Louis County, the monthly count of new sales contracts has gradually caught up to last year’s levels, which he calls a hopeful sign. That improvement comes entirely from the starter home market, he says. Completed sales in the region as a whole still lag last year’s levels.
Sellers may re-emerge
Buyers are in the catbird’s seat today, but Cottrell thinks the situation may reverse this fall. He thinks buyers will slowly reduce the inventory of moderately priced homes through the summer. Then he expects to see a rush of buyers in the fall as the December tax credit deadline nears. “We could get a supply and demand imbalance that favors the seller,” he says.
Things are sadder for sellers of upper-end homes. They suffer from two extra handicaps, says Cottrell. Fewer upscale buyers can get the federal credit because they own other houses or exceed the $170,000 income limit for married couples.
But the biggest hindrance is the $281,250 limit on FHA-backed loans. The FHA has filled some of the hole left by the collapse of subprime lending. The agency permits loans with 3.5 percent down payments to people with some blemishes on their credit.
Bankers slow market
Meanwhile, indecisiveness in the banking industry sometimes stymies sales at all price ranges. Brian Hunt learned that when he bid on two vacant houses in O’Fallon, Mo., but couldn’t get a reply at the bank.
Hunt knows construction work, so he went looking for a deal on a fixer-upper. As a result, he found himself looking at properties in foreclosure or threatened by it.
On one, he offered a “short sale.” He offered a price less than the current owner owes on his mortgage. In other words, the bank that held the mortgage would have to take a loss. Such deals are becoming more common as prices fall and foreclosures loom.
“It’s very difficult to do because you can’t get the bank to call you back,” said Hunt. He waited a month without a response, then withdrew his offer. He made a short-sale offer at another house and got the same non-response.
Real estate agents say that’s a common story. Cottrell, for instance, says he has hired a full-time short-sale negotiator, and still waits 3 1/2 weeks to 5 months for an answer from overwhelmed bank real estate officials.
Hunt finally bought a $115,000 O’Fallon home from an owner who had retired to Florida.
The most active part of the market is at the very bottom. Of 5,500 homes sold in St. Louis city and county this year, 1,079 have been worth $30,000 and less, or 19 percent of sales, according to figures from the St. Louis Association of Realtors. In 2006, these low-value properties represented only 3 percent of sales.
Some of those are “bulk sales” in which banks sell several foreclosed properties to a single investor, who then resells them or repairs and rents them.
Mark Scatizzi has watched the phenomenon firsthand as a real estate agent specializing in selling foreclosed and distressed property.
“What was selling two years ago for the $50,000s and $60,000s has been pushed down into the $30,000s,” says Scatizzi, of the RealtyNet Kratky Team.
Copyright © 2009 St. Louis Post-Dispatch
Saturday, June 13, 2009
Mortgage rates rise again
WASHINGTON – June 12, 2009 – Rates for 30-year home loans jumped to the highest level in seven months this week, leading to a slowdown in refinancing activity, Freddie Mac said Thursday.
The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, Freddie Mac said. The last time the average 30-year fixed rate mortgage was higher was the week ended Nov. 26 of last year, when it averaged 5.97 percent.
Frank Nothaft, Freddie Mac’s chief economist, said the higher rates followed an increase in bond yields, a barometer for interest rates on mortgages and other loans.
On Wednesday, the government was forced to lift the yield on 10-year Treasury notes to 3.99 percent to lure in buyers at an auction. That was the highest yield it’s offered since last August, before it started bailing out the nation’s financial industry.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
Nothaft said the higher rates “are slowing refinancing activity but not demand for home purchases.”
During the three-weeks ended June 5, interest rates for 30-year fixed-rate mortgages rose nearly one-half of a percentage point, Nothaft said. Conventional mortgage applications for refinancing fell each week during that period, while applications for home purchases consecutively increased, according to the Mortgage Bankers Association.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage rose to 5.06 percent, up from 4.79 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 5.17 percent, up from 4.85 percent last week. Rates on one-year, adjustable-rate mortgages rose to 5.04 percent from 4.81 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages, and one-year adjustable rate loans. Fees averaged 0.6 point for five-year adjustable rate loans.
Copyright 2009 The Associated Press
The average rate for a 30-year fixed mortgage was 5.59 percent this week, up from 5.29 percent last week, Freddie Mac said. The last time the average 30-year fixed rate mortgage was higher was the week ended Nov. 26 of last year, when it averaged 5.97 percent.
Frank Nothaft, Freddie Mac’s chief economist, said the higher rates followed an increase in bond yields, a barometer for interest rates on mortgages and other loans.
On Wednesday, the government was forced to lift the yield on 10-year Treasury notes to 3.99 percent to lure in buyers at an auction. That was the highest yield it’s offered since last August, before it started bailing out the nation’s financial industry.
Though there are signs that the troubled U.S. housing market is beginning to stabilize, higher rates could threaten or slow down any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
Nothaft said the higher rates “are slowing refinancing activity but not demand for home purchases.”
During the three-weeks ended June 5, interest rates for 30-year fixed-rate mortgages rose nearly one-half of a percentage point, Nothaft said. Conventional mortgage applications for refinancing fell each week during that period, while applications for home purchases consecutively increased, according to the Mortgage Bankers Association.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage rose to 5.06 percent, up from 4.79 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 5.17 percent, up from 4.85 percent last week. Rates on one-year, adjustable-rate mortgages rose to 5.04 percent from 4.81 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages, and one-year adjustable rate loans. Fees averaged 0.6 point for five-year adjustable rate loans.
Copyright 2009 The Associated Press
Friday, June 12, 2009
Home short sale flips nixed
TAMPA – June 12, 2009 – It may be a bit tougher now for investors to flip short sales for big profits.
Attorneys’ Title Insurance Fund notified its 6,000 member lawyers this week that it will not insure deals made with a popular – but controversial – method for closing flips of short sales. A short sale occurs when a mortgage holder agrees to allow a home to sell for less than the mortgage balance so that foreclosure can be avoided.
The Orlando-based fund is a major underwriter for lawyers who write title insurance in Florida. In a letter to lawyers, the fund said it has become aware of short sale programs advertised on the Internet that promise to make investors lots of money with little or no work.
The letter says they involve investors entering option deals with homeowners for “the exclusive right to purchase their property for a period of time.”
The investor negotiates a short sale with the mortgage holder by convincing it that the price it is offering is the market value of the property. The investor then finds a buyer for a much higher price. The sales happen simultaneously, and the investor pockets the difference.
The problem is that “the original lender is not told that the buyer is flipping the property on the same day for thousands more than the lender has been told is the market value of the property,” the letter states.
The fund’s decision could have a major effect on short sale flips because many investors use lawyers to close deals when traditional title companies won’t.
The option contract method has been gaining steam as a way to work off inventory in a bad real estate market.
Critics say mortgage holders are misled and don’t realize they could be selling for more. Some real estate agents and buyers complain that the option contracts lock some buyers out of the market. That’s because some types of loans forbid flips.
Some lawyers have raised concerns that sellers may have to pay the difference later.
But proponents say investors can make money and homeowners can avoid foreclosure. They say mortgage holders would lose even more money if they foreclosed on the home.
Copyright © 2009 Tampa Tribune, Fla.
Attorneys’ Title Insurance Fund notified its 6,000 member lawyers this week that it will not insure deals made with a popular – but controversial – method for closing flips of short sales. A short sale occurs when a mortgage holder agrees to allow a home to sell for less than the mortgage balance so that foreclosure can be avoided.
The Orlando-based fund is a major underwriter for lawyers who write title insurance in Florida. In a letter to lawyers, the fund said it has become aware of short sale programs advertised on the Internet that promise to make investors lots of money with little or no work.
The letter says they involve investors entering option deals with homeowners for “the exclusive right to purchase their property for a period of time.”
The investor negotiates a short sale with the mortgage holder by convincing it that the price it is offering is the market value of the property. The investor then finds a buyer for a much higher price. The sales happen simultaneously, and the investor pockets the difference.
The problem is that “the original lender is not told that the buyer is flipping the property on the same day for thousands more than the lender has been told is the market value of the property,” the letter states.
The fund’s decision could have a major effect on short sale flips because many investors use lawyers to close deals when traditional title companies won’t.
The option contract method has been gaining steam as a way to work off inventory in a bad real estate market.
Critics say mortgage holders are misled and don’t realize they could be selling for more. Some real estate agents and buyers complain that the option contracts lock some buyers out of the market. That’s because some types of loans forbid flips.
Some lawyers have raised concerns that sellers may have to pay the difference later.
But proponents say investors can make money and homeowners can avoid foreclosure. They say mortgage holders would lose even more money if they foreclosed on the home.
Copyright © 2009 Tampa Tribune, Fla.
Thursday, June 11, 2009
NAR backs move to extend tax credit
WASHINGTON – June 11, 2009 – The Housing Working Group of Business Roundtable, an association of leading U.S. corporation CEOs, yesterday announced bipartisan proposals to help return stability and growth to the U.S. housing market.
“We recognize the earlier efforts made by the Administration and Congress, but strongly recommend taking additional steps to jumpstart the lagging housing market in order to stimulate a broader economic recovery,” says Richard A. Smith, president and CEO of Realogy Corporation and chair of Business Roundtable’s Housing Working Group. “If the housing market is not corrected or stabilized, the tide of the recession is not likely to reverse in the near term, and the slide in the economy overall will continue.”
The recommendations include expanding homebuyer tax credit incentives. Among other recommendations, the CEOs also strongly encourage the Obama Administration to keep 30-year fixed mortgage interest rates at historically low levels for the next 12 months, and to undertake a comprehensive review of existing foreclosure mitigation and loan-modification programs.
“NAR (The National Association of Realtors®) and our 1.2 million members applaud the Business Roundtable for its sound policy recommendations put forth to reinvigorate our nation’s housing market,” says NAR President Charles McMillan. “The proposal is consistent with the recommendations NAR has advocated and reflects the critical need to continue efforts to bring stability to the housing market.”
The specific Business Roundtable recommendations include:
1. Keep mortgage interest rates at historically low levels for at least one year.
2. Expand the current first-time homebuyer tax credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000, to a higher limit of 10 percent or $15,000 for all homebuyers. Remove the current income restrictions and include all primary residence purchases for one full year.
3. Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates.
4. Make permanent the current temporary conforming loan limits.
5. Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
For more information about the Housing Working Group and Business Roundtable, visit its website at: http://www.businessroundtable.org
© 2009 FLORIDA ASSOCIATION OF REALTORS®
“We recognize the earlier efforts made by the Administration and Congress, but strongly recommend taking additional steps to jumpstart the lagging housing market in order to stimulate a broader economic recovery,” says Richard A. Smith, president and CEO of Realogy Corporation and chair of Business Roundtable’s Housing Working Group. “If the housing market is not corrected or stabilized, the tide of the recession is not likely to reverse in the near term, and the slide in the economy overall will continue.”
The recommendations include expanding homebuyer tax credit incentives. Among other recommendations, the CEOs also strongly encourage the Obama Administration to keep 30-year fixed mortgage interest rates at historically low levels for the next 12 months, and to undertake a comprehensive review of existing foreclosure mitigation and loan-modification programs.
“NAR (The National Association of Realtors®) and our 1.2 million members applaud the Business Roundtable for its sound policy recommendations put forth to reinvigorate our nation’s housing market,” says NAR President Charles McMillan. “The proposal is consistent with the recommendations NAR has advocated and reflects the critical need to continue efforts to bring stability to the housing market.”
The specific Business Roundtable recommendations include:
1. Keep mortgage interest rates at historically low levels for at least one year.
2. Expand the current first-time homebuyer tax credit incentive from the lesser of 10 percent of the purchase price of the home or $8,000, to a higher limit of 10 percent or $15,000 for all homebuyers. Remove the current income restrictions and include all primary residence purchases for one full year.
3. Conduct a thorough review of current foreclosure mitigation and loan-modification programs in light of rising loan-modification re-default rates.
4. Make permanent the current temporary conforming loan limits.
5. Continue to review and strengthen government efforts already underway to review and refine mortgage lending practices.
For more information about the Housing Working Group and Business Roundtable, visit its website at: http://www.businessroundtable.org
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Wednesday, June 10, 2009
Get the most out of your homebuying tax credit
WASHINGTON – June 10, 2009 – When it comes to the $8,000 tax credit for first-time homebuyers, it seems there’s a new program every week to help tap that money today.
The credit can be claimed on 2008 or 2009 tax returns. Homebuyers who get a loan backed by the Federal Housing Administration can use the money to cover closing costs and other fees, and at least 10 states offer ways to use the tax credit faster.
“There are some real neat tax planning strategies you can apply now,” said Bob Meighan, vice president of TurboTax.
To be eligible, a buyer cannot have owned a home in the past three years. So if you’re ready to buy, here are some tips:
Income considerations: The tax credit, for home purchases made through end of November, comes with income thresholds, $75,000 for individuals and $150,000 for joint filers. After those limits, the credit begins to phase out. If you bought a home this year and expect your 2008 income to be lower than next year’s, it makes sense to file for the credit this year using a 2008 amended return.
However, if you think your income will decrease, due to job loss, wage cuts or hour reductions, it makes more sense to file for the tax credit on your 2009 tax returns to get the most out of the credit, Meighan said.
Tax withholding: Another benefit to waiting until 2009: You can increase your take-home pay. By taking the credit next year, you can change your tax withholding status with your employer now and get more on a paycheck-to-paycheck basis, Meighan said.
You’ll be giving up a “fatter” tax refund next year, but each month you’ll have more change in your pocket.
Also, don’t forget to reduce your federal and state tax withholding to account for the tax deduction you can take on the mortgage interest and property taxes you pay.
Bridge loans: Ten states (and the list keeps growing) are offering so-called “bridge loans” for the federal tax credit, so homebuyers can take advantage of the $8,000 before the 2010 filing season. Qualified homebuyers can receive a loan with little to no interest and repay it with the tax credit refund next year.
“I see it as an upside,” Meighan said. “It gives homebuyers more flexibility,” with the money.
Each state program varies and some require a minimum downpayment contribution from the buyer.
Some nonprofit organizations like NeighborWorks America are also offering bridge loans for the tax credits.
California also enacted its own one-time homebuying credit for newly built homes purchased between Feb. 28 and March 1, 2010. The nonrefundable credit, which is for all buyers, not just first timers, is equal to 5 percent of the purchase price up to $10,000. It can be claimed over a three-year period. The property must be a single-family residence, the principal residence and eligible for the property tax homeowners exception.
A California resident can take both the federal and state tax, according to Kathleen Thies, a state tax analyst at CCH Inc. However, only $100 million has been put aside for the state credit and that money is expected to run out this month or next. And there are no plans to add more funding to the program.
“It’s on a first-come, first-serve basis,” Thies says.
Advance credit: Last month, the FHA said its borrowers can receive advances on the $8,000 first-time homebuyer tax credit from lenders, so they don’t have to wait to get the money next year from the Internal Revenue Service.
Borrowers will still have to come up with the FHA’s required 3.5 percent downpayment, but the advance from the tax credit can be applied toward closing costs, fees or to increase the downpayment.
John W. Roth, a senior tax analyst at CCH, believes some lenders won’t participate. The process involves more work for lenders, but lenders can only charge an additional 2.5 percent fee for that.
“How many qualified FHA lenders will offer this option to their borrowers will be interesting to see,” he said.
Roth advises homebuyers to wait and receive the money in next year’s 2009 tax return.
Said Roth: “There’s always those initial expenses when you move in that are more than you expect.”
Copyright © 2009 The Associated Press
The credit can be claimed on 2008 or 2009 tax returns. Homebuyers who get a loan backed by the Federal Housing Administration can use the money to cover closing costs and other fees, and at least 10 states offer ways to use the tax credit faster.
“There are some real neat tax planning strategies you can apply now,” said Bob Meighan, vice president of TurboTax.
To be eligible, a buyer cannot have owned a home in the past three years. So if you’re ready to buy, here are some tips:
Income considerations: The tax credit, for home purchases made through end of November, comes with income thresholds, $75,000 for individuals and $150,000 for joint filers. After those limits, the credit begins to phase out. If you bought a home this year and expect your 2008 income to be lower than next year’s, it makes sense to file for the credit this year using a 2008 amended return.
However, if you think your income will decrease, due to job loss, wage cuts or hour reductions, it makes more sense to file for the tax credit on your 2009 tax returns to get the most out of the credit, Meighan said.
Tax withholding: Another benefit to waiting until 2009: You can increase your take-home pay. By taking the credit next year, you can change your tax withholding status with your employer now and get more on a paycheck-to-paycheck basis, Meighan said.
You’ll be giving up a “fatter” tax refund next year, but each month you’ll have more change in your pocket.
Also, don’t forget to reduce your federal and state tax withholding to account for the tax deduction you can take on the mortgage interest and property taxes you pay.
Bridge loans: Ten states (and the list keeps growing) are offering so-called “bridge loans” for the federal tax credit, so homebuyers can take advantage of the $8,000 before the 2010 filing season. Qualified homebuyers can receive a loan with little to no interest and repay it with the tax credit refund next year.
“I see it as an upside,” Meighan said. “It gives homebuyers more flexibility,” with the money.
Each state program varies and some require a minimum downpayment contribution from the buyer.
Some nonprofit organizations like NeighborWorks America are also offering bridge loans for the tax credits.
California also enacted its own one-time homebuying credit for newly built homes purchased between Feb. 28 and March 1, 2010. The nonrefundable credit, which is for all buyers, not just first timers, is equal to 5 percent of the purchase price up to $10,000. It can be claimed over a three-year period. The property must be a single-family residence, the principal residence and eligible for the property tax homeowners exception.
A California resident can take both the federal and state tax, according to Kathleen Thies, a state tax analyst at CCH Inc. However, only $100 million has been put aside for the state credit and that money is expected to run out this month or next. And there are no plans to add more funding to the program.
“It’s on a first-come, first-serve basis,” Thies says.
Advance credit: Last month, the FHA said its borrowers can receive advances on the $8,000 first-time homebuyer tax credit from lenders, so they don’t have to wait to get the money next year from the Internal Revenue Service.
Borrowers will still have to come up with the FHA’s required 3.5 percent downpayment, but the advance from the tax credit can be applied toward closing costs, fees or to increase the downpayment.
John W. Roth, a senior tax analyst at CCH, believes some lenders won’t participate. The process involves more work for lenders, but lenders can only charge an additional 2.5 percent fee for that.
“How many qualified FHA lenders will offer this option to their borrowers will be interesting to see,” he said.
Roth advises homebuyers to wait and receive the money in next year’s 2009 tax return.
Said Roth: “There’s always those initial expenses when you move in that are more than you expect.”
Copyright © 2009 The Associated Press
Tuesday, June 9, 2009
A foreclosure now costs lenders even more
TALLAHASSEE, Fla. – June 9, 2009 – The cost to file for a foreclosure in Florida courts just took a sizable jump due to legislation that takes effect this month.
Banks and other lenders will have to pay for the fee increase, which is part of a package of laws predicted to generate $220 million for the state’s court system.
Prior to June, the filing fees were $295 and they are not set at a sliding scale. For properties valued at less than $50,000, the fees increased to $395. For homes and businesses between $50,000 and $250,000, new fees are $900. And for properties over $250,000, fees jumped to $1,900.
Circuit Judge Cynthia Z. Mackinnon said the increase was the largest in “many years” but is understandable considering the state’s financial woes. She supported the Legislature’s decision to tie the increase to the amount of the defaulted loan.
While some experts have said the fee increase might make lenders more reluctant to legal actions on defaulting property owners, Greg Hallam, former president of the Mortgage Bankers Association of Florida, said the new fees mean more to the state coffers than to banks.
“I honestly don’t think that would matter to a bank,” Hallam said. “The new fees are minimal to banks. If you can get out of a foreclosure with less than a $20,000 loss, it’s a party.”
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone. State court officials have said Florida has a backlog of more than 300,000 cases clogging the judicial system.
There are alternatives to losing a home in foreclosure, Mackinnon said. “The Ninth Circuit’s mediation program, stimulus money and these increased fees will hopefully all work to both parties’ advantage, and more of these cases will get worked out,” the judge said.
Copyright © 2009 The Orlando Sentinel, Fla
Banks and other lenders will have to pay for the fee increase, which is part of a package of laws predicted to generate $220 million for the state’s court system.
Prior to June, the filing fees were $295 and they are not set at a sliding scale. For properties valued at less than $50,000, the fees increased to $395. For homes and businesses between $50,000 and $250,000, new fees are $900. And for properties over $250,000, fees jumped to $1,900.
Circuit Judge Cynthia Z. Mackinnon said the increase was the largest in “many years” but is understandable considering the state’s financial woes. She supported the Legislature’s decision to tie the increase to the amount of the defaulted loan.
While some experts have said the fee increase might make lenders more reluctant to legal actions on defaulting property owners, Greg Hallam, former president of the Mortgage Bankers Association of Florida, said the new fees mean more to the state coffers than to banks.
“I honestly don’t think that would matter to a bank,” Hallam said. “The new fees are minimal to banks. If you can get out of a foreclosure with less than a $20,000 loss, it’s a party.”
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone. State court officials have said Florida has a backlog of more than 300,000 cases clogging the judicial system.
There are alternatives to losing a home in foreclosure, Mackinnon said. “The Ninth Circuit’s mediation program, stimulus money and these increased fees will hopefully all work to both parties’ advantage, and more of these cases will get worked out,” the judge said.
Copyright © 2009 The Orlando Sentinel, Fla
Monday, June 8, 2009
Bond-market rout lifts mortgage cost
NEW YORK – June 8, 2009 – The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That’s the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won’t be able to afford.
To understand how this is all connected, you have to think like a bond trader. Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
Yields on 10-year Treasury notes, a benchmark for home mortgages and other consumers loans, jumped from 2.5 percent in March around the time of the Fed announcement to as high as 3.7 percent in recent days as signs that efforts to stabilize the financial system and economy were starting to pay off. And 30-year mortgage rates jumped more than a quarter-point this week to 5.29 percent, the highest level since December, Freddie Mac reported.
“If the meltdown continues in the bond market, then mortgage yields will soon be at levels that choke off refinancing activity,” said economist Ed Yardeni, who runs his own investment firm. “Even worse, they could abort any necessary recovery in home sales and prices.”
Yardeni coined the term “bond vigilantes” in 1983 to describe how traders took matters into their own hands when they felt the Fed wasn’t doing enough to fight inflation, which was running at an annual rate of more than 3 percent at that time.
So what has set off the vigilantes this spring, at a time when the consumer price index is down at an annual rate of 0.7 percent?
One explanation is that bond investors anticipate a greater supply of government debt being sold to fund federal spending. Investors are also increasingly fearful that the trillions of dollars the government will need to borrow in the coming years to finance the various stimulus programs will lead to a new bout of inflation.
The White House estimates that the government will rack up an unprecedented $1.8 trillion budget deficit this year – more than four times last year’s all-time high.
“The bond market is calling the Federal Reserve out,” said Mike Larson, a real estate analyst at Weiss Research Inc. in Jupiter, Fla. “Investors are saying that the Fed can’t just print money out of thin air to finance a massive deficit.”
Fed Chairman Ben Bernanke acknowledged Wednesday in congressional testimony that large budget deficits could threaten financial stability by eventually eroding investor confidence and endangering the economy’s prospects for long-term health.
“Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance,” Bernanke told the House Budget Committee.
That kind of talk is meant to calm bond investors’ nerves. It also shows the quandary faced by Bernanke and other federal officials. They need to hold down interest rates through massive government spending at the same time they have to deal with worries over how that spending could damage the economy over the long term.
After Fed policymakers this spring said they would buy billions of dollars of government debt and more than $1 trillion of mortgage securities, 30-year fixed mortgage rates fell to 4.78 percent in April, the lowest since Freddie Mac started surveying rates in 1971.
Sales of new and existing homes began to trend higher. Mortgage refinancings also jumped, allowing borrowers to lock in lower rates. Fee income from this activity helped lift profits at many battered banks and gave consumers more disposable income to spend, which helped lift their confidence about the economy’s prospects. All that was good for the nation’s businesses.
But now, surging mortgage rates are threatening to undermine all that. Seventy percent of refinancing activity could be knocked out as rates close in on 5.5 percent, according to Mark Hanson, a managing director at the independent research firm Field Check Group of Menlo Park, Calif.
That’s because homeowners wouldn’t get much of a benefit if a refinancing only reduces monthly payments a tiny bit while they are stuck paying closing costs that typically run about 2 percent of the loan amount.
Also, many homeowners who wanted to refinance didn’t lock in the super-low rates in April when the refi boom took off. “Half the deals in the pipeline are dead,” Hanson said. “People were applying to refinance to improve their situation, but now they are seeing it won’t be much improved.”
All this means that even though mortgage rates are still low by historical standards, many of the trends that seem to be pointing to economic recovery in recent months could be undone fast.
Copyright 2009 The Associated Press
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That’s the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won’t be able to afford.
To understand how this is all connected, you have to think like a bond trader. Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
Yields on 10-year Treasury notes, a benchmark for home mortgages and other consumers loans, jumped from 2.5 percent in March around the time of the Fed announcement to as high as 3.7 percent in recent days as signs that efforts to stabilize the financial system and economy were starting to pay off. And 30-year mortgage rates jumped more than a quarter-point this week to 5.29 percent, the highest level since December, Freddie Mac reported.
“If the meltdown continues in the bond market, then mortgage yields will soon be at levels that choke off refinancing activity,” said economist Ed Yardeni, who runs his own investment firm. “Even worse, they could abort any necessary recovery in home sales and prices.”
Yardeni coined the term “bond vigilantes” in 1983 to describe how traders took matters into their own hands when they felt the Fed wasn’t doing enough to fight inflation, which was running at an annual rate of more than 3 percent at that time.
So what has set off the vigilantes this spring, at a time when the consumer price index is down at an annual rate of 0.7 percent?
One explanation is that bond investors anticipate a greater supply of government debt being sold to fund federal spending. Investors are also increasingly fearful that the trillions of dollars the government will need to borrow in the coming years to finance the various stimulus programs will lead to a new bout of inflation.
The White House estimates that the government will rack up an unprecedented $1.8 trillion budget deficit this year – more than four times last year’s all-time high.
“The bond market is calling the Federal Reserve out,” said Mike Larson, a real estate analyst at Weiss Research Inc. in Jupiter, Fla. “Investors are saying that the Fed can’t just print money out of thin air to finance a massive deficit.”
Fed Chairman Ben Bernanke acknowledged Wednesday in congressional testimony that large budget deficits could threaten financial stability by eventually eroding investor confidence and endangering the economy’s prospects for long-term health.
“Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance,” Bernanke told the House Budget Committee.
That kind of talk is meant to calm bond investors’ nerves. It also shows the quandary faced by Bernanke and other federal officials. They need to hold down interest rates through massive government spending at the same time they have to deal with worries over how that spending could damage the economy over the long term.
After Fed policymakers this spring said they would buy billions of dollars of government debt and more than $1 trillion of mortgage securities, 30-year fixed mortgage rates fell to 4.78 percent in April, the lowest since Freddie Mac started surveying rates in 1971.
Sales of new and existing homes began to trend higher. Mortgage refinancings also jumped, allowing borrowers to lock in lower rates. Fee income from this activity helped lift profits at many battered banks and gave consumers more disposable income to spend, which helped lift their confidence about the economy’s prospects. All that was good for the nation’s businesses.
But now, surging mortgage rates are threatening to undermine all that. Seventy percent of refinancing activity could be knocked out as rates close in on 5.5 percent, according to Mark Hanson, a managing director at the independent research firm Field Check Group of Menlo Park, Calif.
That’s because homeowners wouldn’t get much of a benefit if a refinancing only reduces monthly payments a tiny bit while they are stuck paying closing costs that typically run about 2 percent of the loan amount.
Also, many homeowners who wanted to refinance didn’t lock in the super-low rates in April when the refi boom took off. “Half the deals in the pipeline are dead,” Hanson said. “People were applying to refinance to improve their situation, but now they are seeing it won’t be much improved.”
All this means that even though mortgage rates are still low by historical standards, many of the trends that seem to be pointing to economic recovery in recent months could be undone fast.
Copyright 2009 The Associated Press
Saturday, June 6, 2009
Mortgage rates above 5% for 1st time in 3 months
WASHINGTON – June 5, 2009 – Rates on 30-year home loans surged above 5 percent for the first time in nearly three months this week as investors pushed up rates on long-term government debt, which is closely tied to mortgage rates.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 5.29 percent this week, from an average of 4.91 percent a week earlier. It was the highest weekly average in nearly six months.
Mortgage rates “caught up to the recent rise in long-term bond yields this week,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
The jump in rates came after the yield on the benchmark 10-year Treasury note, a barometer for interest rates on mortgages and other loans, jumped last week to a six-month high of 3.75 percent. But yields on long-term Treasury debt have since edged back downward following lackluster economic reports.
While signs are building that the battered U.S. housing market is beginning to stabilize, higher rates could endanger any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
Mortgage applications fell 35 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. Applications to refinance existing loans, which had made up about three quarters of mortgage applications earlier this spring, fell to about 60 percent of loan volume.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage rose to 4.79 percent this week from 4.53 percent, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages inched up to 4.85 percent from 4.82 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.81 percent from 4.69 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages, and averaged 0.6 point for five-year and one-year adjustable rate loans.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.
Copyright © 2009 The Associated Press
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 5.29 percent this week, from an average of 4.91 percent a week earlier. It was the highest weekly average in nearly six months.
Mortgage rates “caught up to the recent rise in long-term bond yields this week,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
The jump in rates came after the yield on the benchmark 10-year Treasury note, a barometer for interest rates on mortgages and other loans, jumped last week to a six-month high of 3.75 percent. But yields on long-term Treasury debt have since edged back downward following lackluster economic reports.
While signs are building that the battered U.S. housing market is beginning to stabilize, higher rates could endanger any recovery, since borrowers would be able to borrow less money and might decide to hold off on their purchases.
Mortgage applications fell 35 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. Applications to refinance existing loans, which had made up about three quarters of mortgage applications earlier this spring, fell to about 60 percent of loan volume.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage rose to 4.79 percent this week from 4.53 percent, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages inched up to 4.85 percent from 4.82 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.81 percent from 4.69 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for 30-year and 15-year mortgages, and averaged 0.6 point for five-year and one-year adjustable rate loans.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.
Copyright © 2009 The Associated Press
Thursday, June 4, 2009
Foreclosed homes could become hurricane shelters
MIAMI (AP) – June 4, 2009 – Trying to make the best of a bad situation, federal officials might use foreclosed homes as temporary housing for hurricane evacuees in Florida as soon as this summer.
The proposal would keep people close to their homes and communities instead of scattering them around the country, which happened when Hurricane Katrina devastated New Orleans nearly four years ago. Thousands never returned.
But the idea is still in its infancy and many questions remain unanswered, including whether the banks that own the foreclosed homes would agree to such a plan.
“It makes all the sense in the world,” said Jack McCabe, a South Florida real estate analyst, who has watched tens of thousands of homes go into foreclosure. “We have a lot of vacant units available.”
The Federal Emergency Management Agency told The Associated Press that it might consider using foreclosed homes if hotels, shelters and other housing options are full and only for a catastrophic situation, such as Hurricane Katrina. The idea was discussed at a hurricane drill this week in Florida.
Jeff Bryant, FEMA’s federal coordinating officer for Florida, said the agency will work with other federal agencies such as Housing and Urban Development and state emergency planners to see if it could be a solution.
If the proposal works in Florida, it could serve as a model nationally. In April, there were 278,287 homes in some stage of foreclosure in Florida, according to RealtyTrac. The idea isn’t wholly new: about 100 families were moved into foreclosed homes after Katrina, FEMA said.
“When you have a diaspora that leaves the state, it’s very hard to get those guys back. You really want to prevent them from leaving the state,” Bryant said. “We want to keep them in their same local community.”
FEMA would likely contact banks, other mortgage holders and their representatives to compile a list of available homes. The evacuees would then be assigned homes close to their own, and FEMA would use a contractor, acting as its agent, to pay rent directly to whoever owns the home, said Jon Arno, FEMA’s individual assistance branch director for Florida. His duties include finding temporary housing for disaster victims.
If there is a consenting landlord and a legitimate tenant then there should not be any legal problems, said Chris Lafakis, an economist specializing in Florida and the housing market at Moody’s Economy.com.
“I think that it should be viewed more of a moral issue,” Lafakis said, “what’s best for displaced homeowners, than as a sparkplug for the Florida housing market.”
Ruben Almaguer, the interim director of the state’s Division of Emergency Management, said he wants FEMA to fast track looking into the option for this hurricane season, which began Monday.
But there could be snags. McCabe said using foreclosed homes might be too costly and complex.
“Could FEMA react quickly enough in concert with the developers and lenders to come to agreements to utilize the vacant housing units for the temporary needs of hurricane victims?” he asked.
Another problem, said attorney Roy Oppenheim, is that neighbors might not want strange families moving in. But a displaced family would be better than squatters, and he thinks banks would look favorably on the idea.
Bank of America spokeswoman Jumana Bauwens said “we would have to see more details, but it is something we would consider.” Other banks said they would want to see plans before commenting.
Some Katrina refugees said they wish they would have had the option. Angelo Edwards, who just returned to New Orleans from Houston three months ago, said it helps everyone.
“It provides income to the bank, the person who holds the deed ... It’s taking some of that inventory out of the market,” he said. “With this program they could keep that family unit together.”
Cindy Bartholomae left New Orleans with her five children and eventually ended up in North Carolina without her husband, who stayed behind to work as a deputy. When she returned to New Orleans in 2006 they lived in trailer for a year.
“If I had a place to stay that was closer it would have been so much easier for me,” she said. “I just felt separated. My kids were lonely. They missed their dad.”
Copyright © 2009 The Associated Press
The proposal would keep people close to their homes and communities instead of scattering them around the country, which happened when Hurricane Katrina devastated New Orleans nearly four years ago. Thousands never returned.
But the idea is still in its infancy and many questions remain unanswered, including whether the banks that own the foreclosed homes would agree to such a plan.
“It makes all the sense in the world,” said Jack McCabe, a South Florida real estate analyst, who has watched tens of thousands of homes go into foreclosure. “We have a lot of vacant units available.”
The Federal Emergency Management Agency told The Associated Press that it might consider using foreclosed homes if hotels, shelters and other housing options are full and only for a catastrophic situation, such as Hurricane Katrina. The idea was discussed at a hurricane drill this week in Florida.
Jeff Bryant, FEMA’s federal coordinating officer for Florida, said the agency will work with other federal agencies such as Housing and Urban Development and state emergency planners to see if it could be a solution.
If the proposal works in Florida, it could serve as a model nationally. In April, there were 278,287 homes in some stage of foreclosure in Florida, according to RealtyTrac. The idea isn’t wholly new: about 100 families were moved into foreclosed homes after Katrina, FEMA said.
“When you have a diaspora that leaves the state, it’s very hard to get those guys back. You really want to prevent them from leaving the state,” Bryant said. “We want to keep them in their same local community.”
FEMA would likely contact banks, other mortgage holders and their representatives to compile a list of available homes. The evacuees would then be assigned homes close to their own, and FEMA would use a contractor, acting as its agent, to pay rent directly to whoever owns the home, said Jon Arno, FEMA’s individual assistance branch director for Florida. His duties include finding temporary housing for disaster victims.
If there is a consenting landlord and a legitimate tenant then there should not be any legal problems, said Chris Lafakis, an economist specializing in Florida and the housing market at Moody’s Economy.com.
“I think that it should be viewed more of a moral issue,” Lafakis said, “what’s best for displaced homeowners, than as a sparkplug for the Florida housing market.”
Ruben Almaguer, the interim director of the state’s Division of Emergency Management, said he wants FEMA to fast track looking into the option for this hurricane season, which began Monday.
But there could be snags. McCabe said using foreclosed homes might be too costly and complex.
“Could FEMA react quickly enough in concert with the developers and lenders to come to agreements to utilize the vacant housing units for the temporary needs of hurricane victims?” he asked.
Another problem, said attorney Roy Oppenheim, is that neighbors might not want strange families moving in. But a displaced family would be better than squatters, and he thinks banks would look favorably on the idea.
Bank of America spokeswoman Jumana Bauwens said “we would have to see more details, but it is something we would consider.” Other banks said they would want to see plans before commenting.
Some Katrina refugees said they wish they would have had the option. Angelo Edwards, who just returned to New Orleans from Houston three months ago, said it helps everyone.
“It provides income to the bank, the person who holds the deed ... It’s taking some of that inventory out of the market,” he said. “With this program they could keep that family unit together.”
Cindy Bartholomae left New Orleans with her five children and eventually ended up in North Carolina without her husband, who stayed behind to work as a deputy. When she returned to New Orleans in 2006 they lived in trailer for a year.
“If I had a place to stay that was closer it would have been so much easier for me,” she said. “I just felt separated. My kids were lonely. They missed their dad.”
Copyright © 2009 The Associated Press
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: Tax Credit Can Be Used on Closing Costs.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: Tax Credit Can Be Used on Closing Costs.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:
The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Renters told: Get out of foreclosed homes
DAVENPORT, Fla. – June 3, 2009 – When Joe Isserles moved his wife and four sons, one of whom is comatose, into a rental home in Davenport earlier this year, the landlord failed to mention that the house was in the final stages of foreclosure.
Shortly after they paid $1,200 rent for April, there was a knock on the door.
“It was a representative from Coldwell Banker representing Chase Bank, saying the bank took over the loan because the homeowners hadn’t paid the mortgage in a year,” Isserles said. “The next morning, the sheriff showed up to padlock us out.”
The Isserleses are among countless renters across the region and the country who have become unwitting victims of foreclosure – paying rent to landlords who pocket the rent money rather than use it to pay the mortgage. The houses go into foreclosure, and evicted tenants are left scrambling for a home.
No one has tracked the number of renters affected by the continuing wave of foreclosures, but research companies such as RealtyTrac Inc. and other groups estimate that 20 percent to 40 percent of all foreclosed homes are not occupied by the owner. Some of those may be vacant or seasonal, but many are likely rentals. And experts say the proportion is likely higher in Florida, which also has one of the nation’s highest foreclosure rates.
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone.
“Renters are losing their homes,” said Dean Preston, executive director of Tenants Together, a nonprofit group that represents California renters. Florida has no such organization. “They may not be as sympathetic of victims as homeowners, because they are not losing equity. But they are generally paying rent, losing deposits, forced out on short notice and treated unfairly by banks.”
Unpleasant surprise
Unlike defaulting homeowners, renters don’t see the eviction notices coming. Muffet Robinson, spokeswoman for the Coalition for the Homeless of Central Florida, said she returned one day last year to the Seminole County condominium unit she was renting only to find a foreclosure notice on the door. She learned that, even though she was paying her full rent on time, the landlord had not used it to pay the mortgage.
“I didn’t really understand that, because that didn’t really seem honest to me,” said Robinson, who struggled to find another apartment on short notice. “It’s hard enough to move when you’re planning on it.”
Picking up and moving quickly can be particularly difficult for a family such as the Isserleses. Tristen Isserles has been comatose since nearly drowning in a swimming-pool accident in September 2007, when he was 14 months old. Taking him to Easter Sunday church services required briefly unhooking him from ventilators, loading him in the family’s sport utility vehicle and carting him into the congregation in a Radio Flyer-style wagon.
To permanently relocate him and all the medical equipment he needs to survive is even more challenging. When his parents were not working jobs as a resort concierge and a time-share marketer, they were scouring neighborhoods from Davenport north to Clermont to find another place.
The upheaval could have been avoided if the landlord had told them the bank was about to take ownership of the house, Maria Isserles said.
“They were already in the final stages of foreclosure when they rented the house,” she said. “I couldn’t imagine somebody being so cold and heartless. ... How can you do this to a family with a sick child?”
The landlord, Alfred Sundar, said in a telephone interview that he knew he had defaulted on the loan but thought he had reached a settlement with the bank that would allow him to keep the rental house.
“I submitted all of the paperwork to the bank, and the bank said it was going to work with me, that I would pay $1,440 a month,” said Sundar, who drives a shuttle bus at Orlando International Airport. “And when I received a letter in the mail that the house was sold, I was shocked.”
He said he has a daughter with severe medical conditions and understands somewhat the plight of his tenants.
“If I knew the bank wouldn’t work with me, I would have never rented it to them,” he said of the Isserles family.
Some compensation
The Coldwell Banker agent who first knocked on the Isserleses’ front door to ask them to leave said the family’s plight was unfortunate but noted that the bank is giving them six weeks to relocate instead of the 48-hour notice many renters get. And the family is getting compensated for being forced out.
Joe Isserles said the bank offered him $1,500 to leave the house, in an arrangement known in the mortgage business as “cash for keys.” After explaining that he and his wife had invested time and money cleaning and painting the rental, he was able to get $3,400. But they must be gone by Monday.
Unlike states such as New York and California, Florida has few laws to protect renters’ rights. Relief may be on the way, however, in the form of a new federal law passed earlier this month by Congress.
Effective immediately, tenants who pay rent on time can remain in their homes until their lease ends plus an additional 90 days – unless the bank sells the property to someone who intends to reside in it. Even without a lease, a renter may stay in a house for as long as 90 days after the foreclosure is complete, though that provision in the law is set to expire at the end of 2012.
“Really, it’s the first major piece of legislation that protects renters from foreclosure,” said Taylor Materio, spokeswoman for the National Low Income Housing Coalition.
The Isserles family, meanwhile, has found another home nearby where it can relocate. This time, Joe Isserles said, he did the homework to make sure the family wouldn’t get another unwanted knock on the door.
Copyright © 2009, The Orlando Sentinel, Fla
Shortly after they paid $1,200 rent for April, there was a knock on the door.
“It was a representative from Coldwell Banker representing Chase Bank, saying the bank took over the loan because the homeowners hadn’t paid the mortgage in a year,” Isserles said. “The next morning, the sheriff showed up to padlock us out.”
The Isserleses are among countless renters across the region and the country who have become unwitting victims of foreclosure – paying rent to landlords who pocket the rent money rather than use it to pay the mortgage. The houses go into foreclosure, and evicted tenants are left scrambling for a home.
No one has tracked the number of renters affected by the continuing wave of foreclosures, but research companies such as RealtyTrac Inc. and other groups estimate that 20 percent to 40 percent of all foreclosed homes are not occupied by the owner. Some of those may be vacant or seasonal, but many are likely rentals. And experts say the proportion is likely higher in Florida, which also has one of the nation’s highest foreclosure rates.
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone.
“Renters are losing their homes,” said Dean Preston, executive director of Tenants Together, a nonprofit group that represents California renters. Florida has no such organization. “They may not be as sympathetic of victims as homeowners, because they are not losing equity. But they are generally paying rent, losing deposits, forced out on short notice and treated unfairly by banks.”
Unpleasant surprise
Unlike defaulting homeowners, renters don’t see the eviction notices coming. Muffet Robinson, spokeswoman for the Coalition for the Homeless of Central Florida, said she returned one day last year to the Seminole County condominium unit she was renting only to find a foreclosure notice on the door. She learned that, even though she was paying her full rent on time, the landlord had not used it to pay the mortgage.
“I didn’t really understand that, because that didn’t really seem honest to me,” said Robinson, who struggled to find another apartment on short notice. “It’s hard enough to move when you’re planning on it.”
Picking up and moving quickly can be particularly difficult for a family such as the Isserleses. Tristen Isserles has been comatose since nearly drowning in a swimming-pool accident in September 2007, when he was 14 months old. Taking him to Easter Sunday church services required briefly unhooking him from ventilators, loading him in the family’s sport utility vehicle and carting him into the congregation in a Radio Flyer-style wagon.
To permanently relocate him and all the medical equipment he needs to survive is even more challenging. When his parents were not working jobs as a resort concierge and a time-share marketer, they were scouring neighborhoods from Davenport north to Clermont to find another place.
The upheaval could have been avoided if the landlord had told them the bank was about to take ownership of the house, Maria Isserles said.
“They were already in the final stages of foreclosure when they rented the house,” she said. “I couldn’t imagine somebody being so cold and heartless. ... How can you do this to a family with a sick child?”
The landlord, Alfred Sundar, said in a telephone interview that he knew he had defaulted on the loan but thought he had reached a settlement with the bank that would allow him to keep the rental house.
“I submitted all of the paperwork to the bank, and the bank said it was going to work with me, that I would pay $1,440 a month,” said Sundar, who drives a shuttle bus at Orlando International Airport. “And when I received a letter in the mail that the house was sold, I was shocked.”
He said he has a daughter with severe medical conditions and understands somewhat the plight of his tenants.
“If I knew the bank wouldn’t work with me, I would have never rented it to them,” he said of the Isserles family.
Some compensation
The Coldwell Banker agent who first knocked on the Isserleses’ front door to ask them to leave said the family’s plight was unfortunate but noted that the bank is giving them six weeks to relocate instead of the 48-hour notice many renters get. And the family is getting compensated for being forced out.
Joe Isserles said the bank offered him $1,500 to leave the house, in an arrangement known in the mortgage business as “cash for keys.” After explaining that he and his wife had invested time and money cleaning and painting the rental, he was able to get $3,400. But they must be gone by Monday.
Unlike states such as New York and California, Florida has few laws to protect renters’ rights. Relief may be on the way, however, in the form of a new federal law passed earlier this month by Congress.
Effective immediately, tenants who pay rent on time can remain in their homes until their lease ends plus an additional 90 days – unless the bank sells the property to someone who intends to reside in it. Even without a lease, a renter may stay in a house for as long as 90 days after the foreclosure is complete, though that provision in the law is set to expire at the end of 2012.
“Really, it’s the first major piece of legislation that protects renters from foreclosure,” said Taylor Materio, spokeswoman for the National Low Income Housing Coalition.
The Isserles family, meanwhile, has found another home nearby where it can relocate. This time, Joe Isserles said, he did the homework to make sure the family wouldn’t get another unwanted knock on the door.
Copyright © 2009, The Orlando Sentinel, Fla
Renters told: Get out of foreclosed homes
DAVENPORT, Fla. – June 3, 2009 – When Joe Isserles moved his wife and four sons, one of whom is comatose, into a rental home in Davenport earlier this year, the landlord failed to mention that the house was in the final stages of foreclosure.
Shortly after they paid $1,200 rent for April, there was a knock on the door.
“It was a representative from Coldwell Banker representing Chase Bank, saying the bank took over the loan because the homeowners hadn’t paid the mortgage in a year,” Isserles said. “The next morning, the sheriff showed up to padlock us out.”
The Isserleses are among countless renters across the region and the country who have become unwitting victims of foreclosure – paying rent to landlords who pocket the rent money rather than use it to pay the mortgage. The houses go into foreclosure, and evicted tenants are left scrambling for a home.
No one has tracked the number of renters affected by the continuing wave of foreclosures, but research companies such as RealtyTrac Inc. and other groups estimate that 20 percent to 40 percent of all foreclosed homes are not occupied by the owner. Some of those may be vacant or seasonal, but many are likely rentals. And experts say the proportion is likely higher in Florida, which also has one of the nation’s highest foreclosure rates.
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone.
“Renters are losing their homes,” said Dean Preston, executive director of Tenants Together, a nonprofit group that represents California renters. Florida has no such organization. “They may not be as sympathetic of victims as homeowners, because they are not losing equity. But they are generally paying rent, losing deposits, forced out on short notice and treated unfairly by banks.”
Unpleasant surprise
Unlike defaulting homeowners, renters don’t see the eviction notices coming. Muffet Robinson, spokeswoman for the Coalition for the Homeless of Central Florida, said she returned one day last year to the Seminole County condominium unit she was renting only to find a foreclosure notice on the door. She learned that, even though she was paying her full rent on time, the landlord had not used it to pay the mortgage.
“I didn’t really understand that, because that didn’t really seem honest to me,” said Robinson, who struggled to find another apartment on short notice. “It’s hard enough to move when you’re planning on it.”
Picking up and moving quickly can be particularly difficult for a family such as the Isserleses. Tristen Isserles has been comatose since nearly drowning in a swimming-pool accident in September 2007, when he was 14 months old. Taking him to Easter Sunday church services required briefly unhooking him from ventilators, loading him in the family’s sport utility vehicle and carting him into the congregation in a Radio Flyer-style wagon.
To permanently relocate him and all the medical equipment he needs to survive is even more challenging. When his parents were not working jobs as a resort concierge and a time-share marketer, they were scouring neighborhoods from Davenport north to Clermont to find another place.
The upheaval could have been avoided if the landlord had told them the bank was about to take ownership of the house, Maria Isserles said.
“They were already in the final stages of foreclosure when they rented the house,” she said. “I couldn’t imagine somebody being so cold and heartless. ... How can you do this to a family with a sick child?”
The landlord, Alfred Sundar, said in a telephone interview that he knew he had defaulted on the loan but thought he had reached a settlement with the bank that would allow him to keep the rental house.
“I submitted all of the paperwork to the bank, and the bank said it was going to work with me, that I would pay $1,440 a month,” said Sundar, who drives a shuttle bus at Orlando International Airport. “And when I received a letter in the mail that the house was sold, I was shocked.”
He said he has a daughter with severe medical conditions and understands somewhat the plight of his tenants.
“If I knew the bank wouldn’t work with me, I would have never rented it to them,” he said of the Isserles family.
Some compensation
The Coldwell Banker agent who first knocked on the Isserleses’ front door to ask them to leave said the family’s plight was unfortunate but noted that the bank is giving them six weeks to relocate instead of the 48-hour notice many renters get. And the family is getting compensated for being forced out.
Joe Isserles said the bank offered him $1,500 to leave the house, in an arrangement known in the mortgage business as “cash for keys.” After explaining that he and his wife had invested time and money cleaning and painting the rental, he was able to get $3,400. But they must be gone by Monday.
Unlike states such as New York and California, Florida has few laws to protect renters’ rights. Relief may be on the way, however, in the form of a new federal law passed earlier this month by Congress.
Effective immediately, tenants who pay rent on time can remain in their homes until their lease ends plus an additional 90 days – unless the bank sells the property to someone who intends to reside in it. Even without a lease, a renter may stay in a house for as long as 90 days after the foreclosure is complete, though that provision in the law is set to expire at the end of 2012.
“Really, it’s the first major piece of legislation that protects renters from foreclosure,” said Taylor Materio, spokeswoman for the National Low Income Housing Coalition.
The Isserles family, meanwhile, has found another home nearby where it can relocate. This time, Joe Isserles said, he did the homework to make sure the family wouldn’t get another unwanted knock on the door.
Copyright © 2009, The Orlando Sentinel, Fla
Shortly after they paid $1,200 rent for April, there was a knock on the door.
“It was a representative from Coldwell Banker representing Chase Bank, saying the bank took over the loan because the homeowners hadn’t paid the mortgage in a year,” Isserles said. “The next morning, the sheriff showed up to padlock us out.”
The Isserleses are among countless renters across the region and the country who have become unwitting victims of foreclosure – paying rent to landlords who pocket the rent money rather than use it to pay the mortgage. The houses go into foreclosure, and evicted tenants are left scrambling for a home.
No one has tracked the number of renters affected by the continuing wave of foreclosures, but research companies such as RealtyTrac Inc. and other groups estimate that 20 percent to 40 percent of all foreclosed homes are not occupied by the owner. Some of those may be vacant or seasonal, but many are likely rentals. And experts say the proportion is likely higher in Florida, which also has one of the nation’s highest foreclosure rates.
The state is home to one of every six loan defaults in the country, according to California-based RealtyTrac, with 119,200 foreclosure-related court filings during the first quarter alone.
“Renters are losing their homes,” said Dean Preston, executive director of Tenants Together, a nonprofit group that represents California renters. Florida has no such organization. “They may not be as sympathetic of victims as homeowners, because they are not losing equity. But they are generally paying rent, losing deposits, forced out on short notice and treated unfairly by banks.”
Unpleasant surprise
Unlike defaulting homeowners, renters don’t see the eviction notices coming. Muffet Robinson, spokeswoman for the Coalition for the Homeless of Central Florida, said she returned one day last year to the Seminole County condominium unit she was renting only to find a foreclosure notice on the door. She learned that, even though she was paying her full rent on time, the landlord had not used it to pay the mortgage.
“I didn’t really understand that, because that didn’t really seem honest to me,” said Robinson, who struggled to find another apartment on short notice. “It’s hard enough to move when you’re planning on it.”
Picking up and moving quickly can be particularly difficult for a family such as the Isserleses. Tristen Isserles has been comatose since nearly drowning in a swimming-pool accident in September 2007, when he was 14 months old. Taking him to Easter Sunday church services required briefly unhooking him from ventilators, loading him in the family’s sport utility vehicle and carting him into the congregation in a Radio Flyer-style wagon.
To permanently relocate him and all the medical equipment he needs to survive is even more challenging. When his parents were not working jobs as a resort concierge and a time-share marketer, they were scouring neighborhoods from Davenport north to Clermont to find another place.
The upheaval could have been avoided if the landlord had told them the bank was about to take ownership of the house, Maria Isserles said.
“They were already in the final stages of foreclosure when they rented the house,” she said. “I couldn’t imagine somebody being so cold and heartless. ... How can you do this to a family with a sick child?”
The landlord, Alfred Sundar, said in a telephone interview that he knew he had defaulted on the loan but thought he had reached a settlement with the bank that would allow him to keep the rental house.
“I submitted all of the paperwork to the bank, and the bank said it was going to work with me, that I would pay $1,440 a month,” said Sundar, who drives a shuttle bus at Orlando International Airport. “And when I received a letter in the mail that the house was sold, I was shocked.”
He said he has a daughter with severe medical conditions and understands somewhat the plight of his tenants.
“If I knew the bank wouldn’t work with me, I would have never rented it to them,” he said of the Isserles family.
Some compensation
The Coldwell Banker agent who first knocked on the Isserleses’ front door to ask them to leave said the family’s plight was unfortunate but noted that the bank is giving them six weeks to relocate instead of the 48-hour notice many renters get. And the family is getting compensated for being forced out.
Joe Isserles said the bank offered him $1,500 to leave the house, in an arrangement known in the mortgage business as “cash for keys.” After explaining that he and his wife had invested time and money cleaning and painting the rental, he was able to get $3,400. But they must be gone by Monday.
Unlike states such as New York and California, Florida has few laws to protect renters’ rights. Relief may be on the way, however, in the form of a new federal law passed earlier this month by Congress.
Effective immediately, tenants who pay rent on time can remain in their homes until their lease ends plus an additional 90 days – unless the bank sells the property to someone who intends to reside in it. Even without a lease, a renter may stay in a house for as long as 90 days after the foreclosure is complete, though that provision in the law is set to expire at the end of 2012.
“Really, it’s the first major piece of legislation that protects renters from foreclosure,” said Taylor Materio, spokeswoman for the National Low Income Housing Coalition.
The Isserles family, meanwhile, has found another home nearby where it can relocate. This time, Joe Isserles said, he did the homework to make sure the family wouldn’t get another unwanted knock on the door.
Copyright © 2009, The Orlando Sentinel, Fla
Citizens proposes rate increases of 10 percent a year for one to five years
TALLAHASSEE, Fla. – June 3, 2009 – Citizens Property Insurance officials Tuesday proposed rate increases that would raise most South Florida home and condominium owners’ premiums up to 10 percent a year for as many as five years, beginning Jan. 1.
State-backed Citizens estimates it needs to boost property insurance rates for homes, condos and businesses by a statewide average of 6 percent a year starting next year until the rates are about 44 percent higher.
Some Broward homeowners could see their rates rise as much as 74 percent over the next five years, according to the Citizens proposal.
A final rate filing will be submitted to the Office of Insurance Regulation after Citizens board members approve it later this month.
The Legislature froze Citizens rates the past few years to help drive insurance prices down after the 2004 and 2005 hurricanes.
This year, legislators passed a bill to increase annual premiums by up to 10 percent. Gov. Charlie Crist signed the bill into law last week.
State officials say the rate increases are needed to pay projected claims and other expenses. All automobile and property insurance policyholders in Florida are subject to fees to offset Citizens’ deficits if a major hurricane hits. More than half of Citizens’ 1 million policyholders live in South Florida.
Some homeowners questioned the timing of the proposed increases – during a recession and after three relatively quiet hurricane seasons.
“We are losing jobs ... and our government is raising our insurance rate, which will no doubt increase the number of foreclosures,” said Jeff Kahn, a real estate agent and homeowner in Wilton Manors. “We haven’t had a storm for a while that affected us down here. ... So what justifies these abominable rates?”
Citizens’ rate estimates are broken out by region and policy type; individual policyholders’ premiums will vary based on factors such as the age, location and strength of their homes.
Over time, the projected increases will be greater on average for policyholders in single-family homes than for condo owners.
Most rates for Broward County homeowners will increase 10 percent a year for three to five years.
Most rates for Palm Beach County homeowners will increase 10 percent a year for two or three years, except for some inland neighborhoods, which will decrease slightly.
Condo unit owners in some parts of Broward and Palm Beach counties would see average rate decreases of 2 percent to 12 percent.
But some Citizens board members, including Plastridge Insurance Agency President Tom Lynch, are pushing for a 10 percent increase for all policyholders or for the projected decreases to be “zeroed out” to help the insurer become financially sound quicker.
Susanne Murphy, Citizens’ executive vice president of corporate operations, said it’s probably not fair – or legal – to charge people more than they need to pay to cover the risk of their homes and condos. But she said Citizens would consult with the insurance regulation office before the board makes a final decision.
The legislation approved this year also allows private insurers to increase premiums up to 10 percent, pending state review.
Citizens Property Insurance can be reached at 888-685-1555 and the state’s insurance consumer help line is 800-342-2762.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla.
State-backed Citizens estimates it needs to boost property insurance rates for homes, condos and businesses by a statewide average of 6 percent a year starting next year until the rates are about 44 percent higher.
Some Broward homeowners could see their rates rise as much as 74 percent over the next five years, according to the Citizens proposal.
A final rate filing will be submitted to the Office of Insurance Regulation after Citizens board members approve it later this month.
The Legislature froze Citizens rates the past few years to help drive insurance prices down after the 2004 and 2005 hurricanes.
This year, legislators passed a bill to increase annual premiums by up to 10 percent. Gov. Charlie Crist signed the bill into law last week.
State officials say the rate increases are needed to pay projected claims and other expenses. All automobile and property insurance policyholders in Florida are subject to fees to offset Citizens’ deficits if a major hurricane hits. More than half of Citizens’ 1 million policyholders live in South Florida.
Some homeowners questioned the timing of the proposed increases – during a recession and after three relatively quiet hurricane seasons.
“We are losing jobs ... and our government is raising our insurance rate, which will no doubt increase the number of foreclosures,” said Jeff Kahn, a real estate agent and homeowner in Wilton Manors. “We haven’t had a storm for a while that affected us down here. ... So what justifies these abominable rates?”
Citizens’ rate estimates are broken out by region and policy type; individual policyholders’ premiums will vary based on factors such as the age, location and strength of their homes.
Over time, the projected increases will be greater on average for policyholders in single-family homes than for condo owners.
Most rates for Broward County homeowners will increase 10 percent a year for three to five years.
Most rates for Palm Beach County homeowners will increase 10 percent a year for two or three years, except for some inland neighborhoods, which will decrease slightly.
Condo unit owners in some parts of Broward and Palm Beach counties would see average rate decreases of 2 percent to 12 percent.
But some Citizens board members, including Plastridge Insurance Agency President Tom Lynch, are pushing for a 10 percent increase for all policyholders or for the projected decreases to be “zeroed out” to help the insurer become financially sound quicker.
Susanne Murphy, Citizens’ executive vice president of corporate operations, said it’s probably not fair – or legal – to charge people more than they need to pay to cover the risk of their homes and condos. But she said Citizens would consult with the insurance regulation office before the board makes a final decision.
The legislation approved this year also allows private insurers to increase premiums up to 10 percent, pending state review.
Citizens Property Insurance can be reached at 888-685-1555 and the state’s insurance consumer help line is 800-342-2762.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla.
Wednesday, June 3, 2009
FAR study looks at Florida’s present and future
TALLAHASSEE, Fla. – June 3, 2009 – Migration – the movement of people into and out of a geographic area – impacts a state’s economy and real estate market. Because birth and death rates are usually low and stable, migration often accounts for the largest changes in population growth, decline and redistribution.
Migration patterns have a big impact on real estate professionals, and Florida has one of the greatest levels of domestic migration. Florida’s total population was 18.3 million in 2008, and, according to the Census Bureau estimates, will reach 19.3 million by July 2010, and approximately 23.4 million by 2020. The Census Bureau estimates a 79 percent increase in total population between 2000 and 2030, ranking Florida third highest in projected population growth.
Twenty-two percent of the state’s population in 2007 was under 18 years old, and 17 percent was 65 years and older. By 2015, 21 percent of the state’s population is projected to be under 18 years of age, and 19.5 percent will be 65 years and older. Furthermore, Florida is a favorite state for many second home buyers, both from other areas in the U.S. as well as from abroad. While the state still attracts retirees, it also appeals to many young college graduates.
A Florida Association of Realtors®’ study conducted by the National Association of Realtors® analyzes mobility and migration trends for Florida, and includes information on recent second home purchase activity. It includes projections for future migration patterns, including expected housing demand by different demographic segments, states with high volumes of in-migration to Florida, and expected changes in the existing home sales.
The report also compares Florida second home purchases to other states; mortgage data on second home purchases compared with primary residences; and recent changes in purchases by income and race.
The complete study is available on floridarealtors.org at:
http://www.floridarealtors.org/LegislativeCenter/Research/index.cfm
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Migration patterns have a big impact on real estate professionals, and Florida has one of the greatest levels of domestic migration. Florida’s total population was 18.3 million in 2008, and, according to the Census Bureau estimates, will reach 19.3 million by July 2010, and approximately 23.4 million by 2020. The Census Bureau estimates a 79 percent increase in total population between 2000 and 2030, ranking Florida third highest in projected population growth.
Twenty-two percent of the state’s population in 2007 was under 18 years old, and 17 percent was 65 years and older. By 2015, 21 percent of the state’s population is projected to be under 18 years of age, and 19.5 percent will be 65 years and older. Furthermore, Florida is a favorite state for many second home buyers, both from other areas in the U.S. as well as from abroad. While the state still attracts retirees, it also appeals to many young college graduates.
A Florida Association of Realtors®’ study conducted by the National Association of Realtors® analyzes mobility and migration trends for Florida, and includes information on recent second home purchase activity. It includes projections for future migration patterns, including expected housing demand by different demographic segments, states with high volumes of in-migration to Florida, and expected changes in the existing home sales.
The report also compares Florida second home purchases to other states; mortgage data on second home purchases compared with primary residences; and recent changes in purchases by income and race.
The complete study is available on floridarealtors.org at:
http://www.floridarealtors.org/LegislativeCenter/Research/index.cfm
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Tuesday, June 2, 2009
NAR: Pending home sales up for third month
WASHINGTON – June 2, 2009 – Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” says Lawrence Yun, NAR chief economist. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West, the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.
NAR President Charles McMillan says there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location.
“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans to buy down the interest rate or make a larger downpayment.”
NAR’s Housing Affordability Index (HAI) is in record territory. The index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability.
“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” Yun says. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun says.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” says Lawrence Yun, NAR chief economist. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West, the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.
NAR President Charles McMillan says there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location.
“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans to buy down the interest rate or make a larger downpayment.”
NAR’s Housing Affordability Index (HAI) is in record territory. The index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability.
“In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” Yun says. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”
The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun says.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Gov. Crist signs Fla. growth management bill
TALLAHASSEE, Fla. (AP) – June 2, 2009 – A growth management bill supported by business and development interests but opposed by environmentalists and local governments became law with Gov. Charlie Crist’s signature Monday.
Crist said he hopes the bill (SB 360) will boost Florida’s sagging construction industry and create new jobs by making it easier to build in urban areas and extending the life of existing development permits for two years. Other provisions are designed to promote affordable housing development.
“I know that it’s probably one of those bills where nobody’s going to be overly happy on either side,” Crist said. “So, hopefully it’s right down the middle and will be able to stimulate our economy and not do harm to our beautiful state.”
Environmentalists, the growth management advocacy group 1000 Friends of Florida and the Florida Association of Counties had urged a veto. They argued the legislation will encourage sprawl and make Florida’s roadways even more crowded than they are now.
“This is going to be a disappointment to the citizens of Florida who are already frustrated by traffic congestion,” said Florida Association of Counties spokeswoman Cragin Mosteller. “This is a big setback.”
Most of the argument has been over a provision designed to correct an unintended consequence of an existing growth management law that requires ample roads and other transportation facilities to be in place before development can occur. That’s a concept known as “transportation concurrency.”
It was aimed at containing sprawl but has had the opposite result. Instead of focusing growth in urban areas, concurrency has shifted it to outlying and rural areas because roads there are less congested and cheaper to build.
The new law is intended to channel that growth back into cities by lifting transportation concurrency requirements in what are termed dense urban areas. State review of large regional developments also will no longer be required in those areas.
The problem is the measure’s 1,000 people-per-square-mile definition of an urban area is too broad and will include suburban and rural sectors, said 1000 Friends president Charles Pattison.
“The areas being exempted are not the ones that are urban and dense,” Pattison said. “This is clearly meant to benefit development interests.”
Those interests certainly are happy with the new law.
“Our economy needs the shot in the arm that this legislation will provide,” said John Sebree, the Florida Association of Realtors vice president for public policy.
Associated Industries of Florida president and CEO Barney Bishop said the state’s prosperity hinges on its ability to grow and the new law will provide a spark by “easing the regulatory burdens that have been stifling economic growth.”
Florida Chamber of Commerce president and CEO Mark Wilson also praised the legislation while criticizing “special interests and others” for making “a last-minute push to politicize” the issue.
Crist also cited a provision calling for a study of mobility fees that would replace transportation concurrency and spread costs for new roads and other facilities more broadly across communities.
The fee concept has drawn support from all sides in the growth management debate, but Pattison noted the state already is conducting the study, so there was no need to put it in the law. The results are expected to be ready for next year’s legislative session.
Copyright © 2009 The Associated Press
Crist said he hopes the bill (SB 360) will boost Florida’s sagging construction industry and create new jobs by making it easier to build in urban areas and extending the life of existing development permits for two years. Other provisions are designed to promote affordable housing development.
“I know that it’s probably one of those bills where nobody’s going to be overly happy on either side,” Crist said. “So, hopefully it’s right down the middle and will be able to stimulate our economy and not do harm to our beautiful state.”
Environmentalists, the growth management advocacy group 1000 Friends of Florida and the Florida Association of Counties had urged a veto. They argued the legislation will encourage sprawl and make Florida’s roadways even more crowded than they are now.
“This is going to be a disappointment to the citizens of Florida who are already frustrated by traffic congestion,” said Florida Association of Counties spokeswoman Cragin Mosteller. “This is a big setback.”
Most of the argument has been over a provision designed to correct an unintended consequence of an existing growth management law that requires ample roads and other transportation facilities to be in place before development can occur. That’s a concept known as “transportation concurrency.”
It was aimed at containing sprawl but has had the opposite result. Instead of focusing growth in urban areas, concurrency has shifted it to outlying and rural areas because roads there are less congested and cheaper to build.
The new law is intended to channel that growth back into cities by lifting transportation concurrency requirements in what are termed dense urban areas. State review of large regional developments also will no longer be required in those areas.
The problem is the measure’s 1,000 people-per-square-mile definition of an urban area is too broad and will include suburban and rural sectors, said 1000 Friends president Charles Pattison.
“The areas being exempted are not the ones that are urban and dense,” Pattison said. “This is clearly meant to benefit development interests.”
Those interests certainly are happy with the new law.
“Our economy needs the shot in the arm that this legislation will provide,” said John Sebree, the Florida Association of Realtors vice president for public policy.
Associated Industries of Florida president and CEO Barney Bishop said the state’s prosperity hinges on its ability to grow and the new law will provide a spark by “easing the regulatory burdens that have been stifling economic growth.”
Florida Chamber of Commerce president and CEO Mark Wilson also praised the legislation while criticizing “special interests and others” for making “a last-minute push to politicize” the issue.
Crist also cited a provision calling for a study of mobility fees that would replace transportation concurrency and spread costs for new roads and other facilities more broadly across communities.
The fee concept has drawn support from all sides in the growth management debate, but Pattison noted the state already is conducting the study, so there was no need to put it in the law. The results are expected to be ready for next year’s legislative session.
Copyright © 2009 The Associated Press
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