Market Analysis For Our Area

Setting the Right Price

I know most sellers hate having this converstation with thier agents. But the thing is, it must be done. The knowledge of knowing that the list price is a set price in time and it must change as the market changes. Sometimes its all about setting the right price and letting the buyers determine the value that they are willing to pay.

Fannie and Freddie Detail New HARP Guidelines

11/15/2011 By: Carrie Bay
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Fannie Mae and Freddie Mac have released highly anticipated guidelines for the revised Home Affordable Refinance Program (HARP).

Both GSEs have posted details of the program modifications and procedural changes on their respective business sites for mortgage servicers to follow (Fannie’s, Freddie’s).
Among the key program revisions, the GSEs have eliminated or raised the loan-to-value (LTV) cap, and relaxed representation and warranty stipulations – changes that officials expect to at least double the number of homeowners with a HARP-refinanced mortgage. Since the program was launched in 2009, just under 900,000 borrowers have participated.
Negative equity typically excludes a homeowner from refinancing through traditional channels. Removing previous LTV ceilings will allow homeowners who are severely underwater due to plummeting property values to take out new loans at today’s lower interest rates. There are, however, some LTV conditions depending on loan type.
There are no LTV restrictions for fixed-rate mortgages with terms up to 30 years, including those with terms of 15 years.
For fixed-rate loans with terms between 30 and 40 years, LTV is limited to 105 percent. Likewise, a 105 percent LTV cap has been placed on adjustable-rate mortgages (ARMs) with initial fixed periods of five years or more and terms up to 40 years.
Any borrower with an LTV ratio below 80 percent is not eligible for HARP.
As previously announced, across the board, the original mortgage must have been sold to Fannie or Freddie prior to April 1, 2009.
In the October notice announcing their intent to modify HARP to increase participation, the GSEs said they would “waive certain representations and warranties” on loans refinanced through the program. Analysts said at the time
that depending on what exceptions would be made, such a move could spark increased competition among lenders to refinance borrowers through HARP.
In Tuesday’s guidance, the GSEs provided specifics on which liabilities would be lifted and noted that the rep and warranty adjustment is one of the most important components of the new program.
The lender will not be responsible for any of the representations and warranties associated with the original loan.
The lender is also relieved of the standard underwriting representations and warranties with respect to the new mortgage loan as long as the data in the case file is complete and program instructions are followed for collecting information on income, employment, assets, and fieldwork.
The lender is not required to make any representation or warranty as to value, marketability, or condition of the subject property unless they obtain a new appraisal.
Lenders will, however, be held accountable for any fraudulent activities.
Administration officials are hoping that eliminating the risk associated with reps and warranties – whether transferred from the original loan or on the new loan – will spark healthy competition among lenders to help homeowners get into the program. And Fannie and Freddie are making it easier for the competition to flourish.
The GSEs are modifying their policies to allow lenders to solicit borrowers with Fannie- and Freddie-owned mortgages for a refinance. The only condition is that the lender “simultaneously applies the same advertising and solicitation activities” to borrowers of both GSEs, and for loans both owned or securitized by the GSEs.
In the new guidelines, the GSEs detail specific language that must be included in any borrower solicitation material.
Regarding program eligibility as it relates to delinquencies, the borrower must not have been behind on their payments at all within the most recent six-month period, and had no more than one 30-day delinquency within the last year.
The GSEs are also removing the requirement that the borrower (on the new loan) meet the standard waiting period following a bankruptcy or foreclosure. The requirement that the original loan must have met the bankruptcy and foreclosure policies in effect at the time the loan was originated is also being removed.
The new HARP program has been extended through December 31, 2013

One Thing That Still Concerns Us

There is no doubt that the housing market is stumbling to a recovery. This past week Lawrence Yun, NAR’s chief economist, predicted a 4% increase in sales next year. Last month, Celia Chen of Moody’s Analytics projected sales to increase over 20% in 2012. Any increase in transactions will be welcomed.
However, we believe there is one headwind that could jeopardize a recovery: fragile consumer confidence. Consumer sentiment, as measured by the University of Michigan, has seen modest improvement in the last few months after nose diving over the previous several months. Moving forward, any hit to consumer confidence will impact a real estate rebound.
Prices are predicted to soften through the first two quarters of 2012 before reaching modest levels of appreciation by year’s end. Falling prices will force more homeowners into a position of negative equity. Being underwater is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there will be an increase in the number of foreclosures. This, in turn, could cause a relapse in consumer sentiment.
Bottom Line
We believe that there will be a dramatic increase in residential real estate transactions (both existing sales and new construction sales). The only thing that may stand in the way is a loss of confidence in a housing recovery. The next six months will tell us a lot regarding this possibility.

Best day to list real estate for sale: Friday

Sellers should list their home on a Friday for the best chance of selling it, according to Seattle-based brokerage Redfin.

Redfin analyzed data for 1.2 million listings in 16 markets nationwide over the past 21 months. The brokerage found that of all listed homes in those 16 markets, those listed on a Friday were 12 percent more likely to sell within 90 days, and homes listed on a Thursday or Friday sold, on average, for slightly closer to list price: 94.4 percent compared with 93.9 percent when homes are listed on a Sunday or Monday. Put another way, that's a $1,000 difference on a $200,000 home.

Homes listed on a Friday were also 18.8 percent more likely to be toured by Redfin customers. Homes listed on a Sunday or Monday were the least likely to be toured.

"Our theory is that since homebuyers tend to tour homes on the weekends (Saturday and Sunday have 2.5 times more tours per day than weekdays), homes listed on Fridays are the freshest in buyers' minds when they're making their weekend plans. It also seems likely that many homebuyers sort their weekend 'must see' lists by date listed, going to see the freshest homes first so they have the best chance of getting in on a potential good deal before other buyers," the brokerage said in a blog post about the findings.

Hud Home for $100 dollars down!!?

The U.S. Department of Housing and Urban Development (HUD) is offering its foreclosed homes for a mere $100 down from now until October 2012.
HUD like other federal agencies, are anxious to unload properties they hold, because they can be a financial drain.
Of course you'll have to qualify for a mortgage, you may have to pays some closing costs, the deal isn't available everywhere and the condition of the homes is strictly "as-is."
If you can handle those qualifiers, here's the deal:
• You can only buy HUD homes. Go to the HUD Homes For Sale web page.
• You must use a HUD-registered real estate broker or agent.
• You must qualify for and use Federal Housing Administration (FHA) financing.
• You must plan to be an "owner-occupant," buying the property to live in and not as an investment.
• The home's purchase price must be no more than the appraised value of the property. If you bid a higher price you can pay the difference in cash, minus $100.
• The $100 down incentive must be on the executed contract. That means you have to specifically request the incentive. Your real estate agent should be aware of this provision.
• In some cases, HUD will also cover up to 3 percent of the closing costs.
• The $100 down payment program is eligible for the FHA 203(k) loans. The loans allow borrowers to use a portion of their purchase loan to repair and renovate run-down homes.
That's a good thing because HUD homes are sold in an "as-is" condition -- what you see is pretty much what you get. You could find a diamond in the rough or fool's gold. HUD homes often include a property condition report, but that is not a warranty.
The property report can resemble a home inspection report, but HUD home buyers are always encouraged to get a home inspection to determine just what "as is" is.
The deal is offered in states in two HUD regions:
Denver Homeownership Center
Arkansas Colorado Iowa Kansas Louisiana Missouri Minnesota Montana Nebraska New Mexico North Dakota Oklahoma South Dakota Texas Wisconsin Wyoming Utah
Atlanta Homeownership Center
Alabama Florida Georgia Kentucky Illinois Indiana Mississippi North Carolina South Carolina Tennessee
Published: November 10, 2011

Rate on 30-year mortgage below 4 pct. for 2nd time

WASHINGTON (AP) -- The average rate on the 30-year fixed mortgage fell below 4 percent for just the second time in history.
Freddie Mac said Thursday the rate on the 30-year fixed loan fell to 3.99 percent, down from 4 percent last week. Five weeks ago, it dropped to a record low of 3.94 percent, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage fell last week to 3.30 percent from 3.31 percent. Five weeks ago, it too hit a record low of 3.26 percent.
Mortgage rates track the yield on 10-year Treasury note, which fell this week as investors shifted money into safer Treasurys amid fears Europe's debt crisis could worsen.
[Click here to check home loan rates in your area.]
Low mortgage rates have down little to boost home sales. Rates have been below 5 percent for all but two weeks this year. Yet home sales are on pace to be the lowest in 14 years.
Refinancing activity jumped more than 12 percent last week from the previous week, to the highest level in a month, according to the Mortgage Bankers Association. But refinancing is down 13.5 percent from a year ago and the four-week moving average for purchase and refinancing mortgage applications is down slightly, suggesting the low rates are failing to entice many Americans.
High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.
The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year fixed mortgage was unchanged at 0.7. The average fee on the 15-year fixed loan rose from 0.7 to 0.8.
The average rate on the five-year adjustable loan rose to 2.98 percent from 2.96 percent, which had been a record low. The average rate on the one-year adjustable loan increased to 2.95 percent from 2.88 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average fees on the five-year and one-year adjustable loans were both unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.