Thomas Skiffington, CRS, GRI, CRB, ABR, ePro, CLHMS, SRES, RECS, CDPE, ECOBROKER
701 W. Market Street
Perkasie, PA 18944
Office Phone: 215-453-7653
Toll Free: 800-440-remax
May 9, 2011 1:29 pm
RISMEDIA, May 9, 2011-The Federal Housing Finance Agency recently reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 4.84% based on loans closed in March. This is an increase of 0.05% from the previous month.
The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less increased nine basis points to 5.06 percent in March. These rates are calculated from the FHFA's Monthly Interest Rate Survey of purchase-money mortgages. These results reflect loans closed during the March 25-31 period. Typically, the interest rate is determined 30-45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-February.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.84 percent in March, up four basis points from 4.80 percent in February. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.98 percent in March, up six basis points from 4.92 percent in February.
This report contains no data on adjustable-rate mortgages due to insufficient sample size.
Initial fees and charges were 0.95 percent of the loan balance in March, up 0.15 percent from 0.80 in February. Twenty-five percent of the purchase-money mortgage loans originated in March were "no-point" mortgages, down from 30 percent in February. The average term was 27.6 years in March, up 0.4 years from 27.2 years in February. The average loan-to-price ratio in March was 75.5 percent, up 0.8 percent from 74.7 percent in February. The average loan amount was $208,600 in March, down $8,300 from $216,900 in February.
For more information, visit www.fhfa.gov.
May 6, 2011 1:29 pm
RISMEDIA, May 6, 2011-Commercial and multifamily mortgage origination volumes increased 44% in 2010 over the previous year, with mortgage bankers reporting $118.8 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association's 2010 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation.
"Coming off of the 2009 lows, commercial and multifamily originations increased by a strong 44% in 2010," says Jamie Woodwell, MBA's vice president of Commercial Real Estate Research.
"Low interest rates coupled with improving economic fundamentals have the potential to draw out even more borrowers in 2011."
Fannie Mae, Freddie Mac and FHA, collectively, were the largest investor group in 2010, responsible for $42.8 billion of the total and followed closely by life insurance companies and pension funds at $30.6 billion.
In terms of property types, multifamily properties saw the highest volume, $48.9 billion, followed by office properties with $22.6 billion of originations.
First liens accounted for 92% of the total dollar volume closed.
Year-over-year changes are based on the changes in volume among "repeat reporters" that participated in both the 2009 and 2010 surveys.
For more information visit www.mortgagebankers.org.
May 6, 2011 1:29 pm
RISMEDIA, May 6, 2011--Spring is in the air, and homeowners are starting to plan their dream home remodeling projects. More Americans are staying in their homes rather than moving. According to Fannie Mae's National Housing Survey released in November 2010, 85% of the general population believed it was a bad time to sell their home. There's a lot more to be gained through remodeling besides increased functionality, new appliances, efficient systems, updated d
cor, additional space or the pure enjoyment of making your home your own. There's also the increased value your home receives when you make improvements.
To commemorate May as National Home Improvement Month, here are a few words of advice for getting the most value out of your remodeling investment.
- Curb appeal goes a long way. Exterior home improvements such as roofing, siding, windows and doors are subject to the elements and usually need to be replaced after a number of years. In terms of re-sale value, updated exteriors give sellers an edge over buyers who are attracted to your home before entering.
- According to Energy Star, half of a home's energy use is dedicated to heating and cooling. If a system is more than 10 years old, it may be time to replace it. New, energy-efficient systems are not only more cost-effective but are also better quality.
- All homes benefit from increased insulation and sealing, regardless of climate. Older homes are traditionally under-insulated compared to new homes. And recent insulation innovations like spray foam or cellulose increase the ability to trap air inside. Proper insulation evens temperature flows, reduces energy use and has long-term benefits.
- Kitchen and bath renovations are still popular-and for good reason. Homeowners continue to see the value in updating areas of the home that are used frequently and are high functioning. Universal design concepts are commonly incorporated into kitchen and bath areas to accommodate people of all sizes and abilities and conveniences for long-term residents.
Most homeowners can handle routine maintenance projects and cosmetic touch-ups, but it's recommended they consult with qualified professionals for larger remodeling jobs and major changes to the home's structure.
Homeowners that need to make several updates to their homes but cannot afford a complete overhaul may be interested in phased remodeling. In this instance, remodeling projects are broken into phases over time, for a long-term project plan. This also lessens the burden of remodeling to the homeowner as they remain in the home as work is being done.
As of April 22, 2010, the U.S. Environmental Protection Agency (EPA) passed new regulations for contractors working in homes built before 1978. The Lead Renovation, Repair and Painting rule mandates that remodelers who intend to work in pre-1978 homes to register their company and complete an 8-hour training and certification course with an accredited trainer. The course teaches remodelers how to safely contain lead in a home as it is being disturbed and reduce exposure to residents and workers. Homeowners should be aware that this new rule is enforced and should be skeptical of any contractors who choose not to follow the law.
For more information, visit www.nariremodelers.com or www.nari.org. For the latest information on green remodeling, visit www.GreenRemodeling.org.
May 6, 2011 1:29 pm
RISMEDIA, May 6, 2011-With home prices dropping, minimal interest rates and the cost of rental properties on the rise, now may be the time for renters to seriously consider buying a house, according to HouseSavvy.
When the housing bubble burst in 2006, the cost of buying a house was considerably higher than renting that same house in most areas. Today, the opposite is true in many states, particularly those hit hardest in the housing crash.
Rental cost has remained on the high side in many communities within these states, making it more monetarily advantageous for renters to buy a home that has dropped in value from the highs of five years ago, to the tune of the national average of 30%. Combine the decrease in home prices, high rental costs and historically low interest rates, and the time may be ideal for renters to consider buying.
To further underscore the advantages of buying, consider a recent study by Deutsche Bank that reported the share of income Americans are now paying to own their homes is 9.8% after mortgage, taxes and insurance payments-down from 17.2% at the housing bubble's peak. Conversely, the study further says that in 28 out of the country's 54 major markets, it's now less expensive to pay a mortgage and other major housing costs than to rent the same house.
For those on the fence when it comes to buying or renting, conducting an analysis is not difficult. Start with the total cost to rent a home or apartment-"total" means not only the rent, but any related cost such as tenant's insurance, and maintenance and/or association dues. Use that number as a starting point or base for comparison.
The next step is to determine the cost of buying comparable housing; for this a little research is necessary. Look at the houses for sale in your price range and find out the price similar homes have been selling for recently. A local REALTOR
can help in this regard. Once the price of the home has been determined, ask the REALTOR
what you can expect in the way of real estate taxes, utilities and insurance cost for a home at this price.
Lastly, talk to a local bank or mortgage broker to ascertain the availability and cost of the mortgage needed to buy the home.
Ultimately, real estate is local in nature. National, regional and municipal markets are all "macro markets" comprised of thousands of micro markets specifically made up of communities, neighborhoods and price ranges, where market conditions can vary significantly from the macro markets in which they exist.
Even in distressed market areas, healthy micro markets do exist.
For more information, visit www.housesavvy.com.
May 5, 2011 1:29 pm
RISMEDIA, May 5, 2011--It's no secret that today, home inspections have become a "must" in the real estate process. It may look like a dream home, but sometimes there are hidden characteristics that are vital to consider before signing on the dotted line. Key to protecting your budget, home inspections find what the naked eye can't, and can set your (and the seller's) expectations as to the cost and timing of when you can expect that cost can be incurred.
What to Expect During a Home Inspection
Once your professional, licensed home inspector is on the premises, he or she will review the major, visible and accessible components of the home and provide a detailed written report rating each element. The report should objectively include information in a detailed manner (sometimes even photos or charts) that allows you to make informed decisions.
After speaking with the home inspection professional and hearing your prospective home's report card, it's time to make some decisions. Were the details relatively acceptable? If you're shaking your head because the inspection resulted in a costly item, don't freak out just yet. Instead, have your REALTOR
request an extension of your contingency or objection period to take some of the pressure off while you collect more information. Follow these steps in order to help avoid panic:
- Assess. Immediately decide how much work you are willing to complete after close of escrow, considering both cost and inconvenience.
- Collect. Obtain at least three contractors' bids for the repair(s) at issue-for your own information and to increase your credibility in your renegotiations with the seller. Don't forget to collect competitive bids from a general contractor or plumber and ask the home inspector whether any of the repairs can be done over time or legally completed by an unlicensed handyman. You can reduce the costs of repair bids by sometimes 30% or 40% this way.
- Request. Through your REALTOR
, approach the sellers with a request for them to pay a closing cost credit to free up some of your cash for post-closing repairs, to complete some repairs or to reduce the price-in that order. Prioritize the strategies that would result in the repairs actually being completed, saving a price reduction as a last-ditch effort.
- Assess, again. Once your renegotiation with the seller is done, assess whether you are satisfied with the condition of the property given the final terms of the purchase, including any credits, repairs or price reduction agreed to by the seller.
With so many homes on the market today, your first instinct might be to think it's easier to just move on to the next property. However, if you take the time to properly review your overall situation, including any credits, repairs or price reduction agreed to by the seller, you'll be able to better gauge the right decision for both you and your wallet, all while keeping your cool.
May 5, 2011 1:29 pm
RISMEDIA, May 5, 2011--Fannie Mae has released two white papers detailing the company's work in the multifamily housing market and focusing on the growing need for decent, affordable housing for renters even as demand and prices soar. As the nation increasingly turns to rental housing, the white papers lay out Fannie Mae's activities and the outlook for affordable rental housing and the small multifamily loan market.
"Fannie Mae and its DUS partners have deep experience providing financing for multifamily rental housing, particularly housing that is affordable to most Americans," says Ken Bacon, executive vice president, Fannie Mae's Multifamily Mortgage Business. "As the country continues to face difficult economic times, all of us involved in housing must redouble our efforts to provide quality housing that is affordable to every segment of the population."
The first white paper, Fannie Mae and Workforce Rental Housing, describes the increasing need for rental housing, particularly, affordable rental housing. Typically, 90% of Fannie Mae's multifamily financing supports rental housing that is affordable to households earning at or below their area's median income level.
While the paper describes the current improving economic conditions impacting the multifamily housing sector, it also describes the challenges facing rental housing. For example, in recent years, the number of units in the country that are affordable to households earning 50% or less of an area's median income has declined. Furthermore, the financial crisis has forced many multifamily housing investors out of the market.
According to the white paper, Fannie Mae's successful, ongoing work in the multifamily market has been made possible, in large part, due to its Delegated Underwriting and Servicing (DUS
) program. In that program, lenders underwrite loans for multifamily projects following Fannie Mae guidelines and retain a portion of the credit risk.
Due to this risk sharing model, there is better alignment with our lenders, which results in better loans and reduced delinquency. Fannie Mae's total multifamily DUS book of business has consistently performed very well, with just a 0.56% delinquency rate (60+ days) as of December 31, 2010, compared with 13.25% for commercial mortgage backed securities (60+ days) and 3.74% for banks and thrifts (90+ days).
"Our multifamily business has long served as a reliable source of funding for apartment owners," Bacon says. "Working with our lenders, we will continue to focus on serving workforce housing by providing access to capital for multifamily loans that produce housing that is sustainable to families looking for affordable options."
Small loans - those typically less than $3 million in most markets and less than $5 million in certain high-cost areas - play a unique role in ensuring quality, affordable housing. Usually, properties consisting of 5-50 units are financed with these loans, according to the second white paper, Fannie Mae's Role in the Small Multifamily Loan Market.
As of mid-year 2010, Fannie Mae's $34 billion book of business on smaller rental properties tends to finance units that are more affordable on the whole, serve as a key source of housing for working families, and are concentrated in urban areas in close proximity to transportation and jobs.
"If you think about it, most average, working families that rent live in smaller buildings - they don't tend to live in high-rises with hundreds of units," said Bacon. "So when we talk about small loans and small properties, we're talking about working families. By supporting the small loan market we support housing that is utilized by the average working family who works hard to realize the American dream."
Due to its fragmented nature, with over 2,600 lenders originating an average of six loans each, the small loan market is a difficult one to navigate. Again, Fannie Mae's multifamily small loan model of working with lenders to ensure strong underwriting guidelines and shared risk has proved essential in providing stable, ongoing funding to the small loan market through all economic conditions, according to the white paper.
"We're proud of the results we have produced in continuing to provide liquidity and stability to all segments of the multifamily market in recent years," said Bacon. "That's our mission and we're sticking to it."
To read Fannie Mae and Workforce Rental Housing, visit: https://www.efanniemae.com/mf/refmaterials/pdf/wpworkhouse.pdf.
To read, Fannie Mae's Role in the Small Multifamily Loan Market, visit: https://www.efanniemae.com/mf/refmaterials/pdf/wpmfloanmkt.pdf.
May 5, 2011 1:29 pm
RISMEDIA, May 5, 2011-Eighteen national, regional and local lenders will participate in a new two-year pilot program that will offer qualified borrowers living in certain parts of the country low-cost loans to make energy-saving improvements to their homes. Backed by the Federal Housing Administration (FHA), these new PowerSaver loans will offer homeowners up to $25,000 to make energy-efficient improvements of their choice, including the installation of insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.
U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and U.S. Department of Energy Secretary Steven Chu announced the participating lenders during a tour of a family-run company that offers home energy audits and upgrades in Long Island, New York.
"We believe the market is right for a low-cost financing option for families who want energy-saving technologies in their home," says Secretary Donovan. "PowerSaver hits on all cylinders by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success will lead to a growing private sector interest in making these types of loans."
Secretary Chu announces, "We are breaking down barriers and making energy efficiency more accessible and more affordable. It's the right thing to do for our environment, for our economy and for the pocketbooks of American families."
The remodeling industry cites surveys that point to a growing demand among homeowners interested in making their homes energy efficient. Yet options are still limited for financing home energy improvements, especially for the many homeowners who are unable to take out a home equity loan or access an affordable consumer loan. Initially, the PowerSaver pilot program is estimated to assist approximately 30,000 homeowners to finance energy-efficient upgrades, though higher market demand may increase this impact. According to HUD projections, more than 3,000 jobs will be created through this pilot program and the impact may be larger if market demand for the loan program increases over time.
Participating lenders are largely selected based on their commitment to work in partnership with established home energy retrofit programs provided by states, cities, utilities and home performance contractors. These markets include, but are not limited to, areas of the country participating in the Energy Department's Better Building Program.
PowerSaver loans will be backed by the FHA but require these lenders to have significant "skin in the game." FHA mortgage insurance will cover up to 90% of the loan amount in the event of default. Lenders will retain the remaining risk on each loan, incentivizing responsible underwriting and lending standards.
PowerSaver has been carefully designed to meet a need in the marketplace for borrowers who have the ability and motivation to take on modest additional debt to realize the savings over time from home energy improvements. PowerSaver loans are only available to borrowers with good credit, manageable debt and at least some equity in their home (maximum 100% combined loan-to-value).
HUD developed PowerSaver as part of the Recovery Through Retrofit initiative launched in May 2009 by Vice President Biden's Middle Class Task Force to develop federal actions that would expand green job opportunities in the United States and boost energy savings by improving home energy efficiency. The announcement is part of an interagency effort including 11 departments and agencies and six White House offices.
For more information about HUD and its programs visit www.hud.gov.
May 4, 2011 1:29 pm
RISMEDIA, May 4, 2011--As the housing market continues to slowly stabilize, home buyers appear ill-prepared to take out a mortgage, answering basic questions about mortgage information wrong nearly half (46%) of the time, according to a Zillow Mortgage Marketplace survey. In fact, 44% admitted they are not confident in their knowledge of mortgages or the mortgage process. Zillow
Mortgage Marketplace, with Ipsos, surveyed prospective home buyers, asking them to gauge their own knowledge of mortgages, and asking basic questions about mortgage facts.
For example, more than half (57%) of prospective home buyers who were polled do not understand how adjustable rate mortgages (ARMs) work. When asked if interest rates on 5/1 ARMs always reset higher after five years, the majority of home buyers answered yes. In fact, the interest rate will adjust to the prevailing rate after five years, even if rates have declined. Currently, many borrowers whose ARMs have recently reset have lower interest rates than they did when they took out the loan.
Additionally, one-third (34%) of the respondents who are prospective home buyers do not understand that lender fees are negotiable and that they vary by lender. They believe lenders are required by law to charge the same fees for credit reports and appraisals, when in fact home buyers can save money by shopping for the lowest fees.
"Most people wouldn't jump out of a plane if they didn't know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages," said Zillow Mortgage Marketplace Director, Erin Lantz. "By simply spending a few hours researching how a mortgage works, and by shopping around for the most competitive rates and fees, buyers can save a lot of money."
Additional Survey Findings:
- Nearly half (45%) of polled prospective home buyers believe they should always buy mortgage discount points when obtaining a mortgage. However, because mortgage discount points are simply prepaid interest, the decision should depend on how long you intend to own the home. In some cases, you may not plan to remain in the house for long enough to break even after buying points.
- More than half (55%) of prospective home buyers in the study do not understand that mortgage rates vary throughout the day. In reality, mortgage rates can change rapidly, similar to how stock prices can change throughout the day. To get the optimum rate, it is important to monitor rates and shop around.
- More than one-third (37%) of prospective home buyers who were polled believe that pre-qualifying for a loan means they have secured financing. In fact, "pre-qualification" is used to describe the earliest step in the process when a lender approximates how much you can afford, but does not run your credit or request any sort of documentation to verify the information you provide.
Although there is not a reliable industry standard definition of pre-qualification, it is not until a lender has approved your loan application without conditions that you can rest assured that the lender has committed to financing your loan.
- More than two in five (42%) of the polled prospective home buyers do not understand that Federal Housing Administration (FHA) loans are available to all buyers. Instead, they believe only first-time buyers qualify. FHA loans can cost less for many buyers, including repeat buyers with low to average credit scores and with down payments of less than 20%.
An online version of the Zillow Mortgage Marketplace survey, the "Mortgage IQ Quiz," is available at www.zillow.com/mortgage/quiz/ and contains the correct answers and detailed explanations to each question. Following the quiz, participants are given a score and resources to learn more about mortgages and the mortgage process.
May 4, 2011 1:29 pm
RISMEDIA, May 4, 2011-- A majority of homeowners surveyed say they want Congress to leave the federal tax credit for homeowners alone, and institute other tax advantages to re-stimulate the U.S. housing market, according to a HousingPredictor.com opinion poll.
Slightly more than half (53%) of respondents said they want the tax credit for homeowners on their federal taxes to stay in place. The credit has been debated in Congress as a way of increasing federal taxes to help resolve the U.S. budget crisis and has been regarded as sacrosanct until the budget deficit, driven by Wall Street and mortgage banking excesses, ran into trillions of dollars.
The tax credit allows homeowners to write-off mortgage interest and state taxes paid as an itemized deduction on their personal federal income taxes. A large group of real estate and lending industry organizations, including the National Association of REALTORS
, has lobbied for its retention.
For more information, visit http://www.housingpredictor.com/.
May 4, 2011 1:29 pm
RISMEDIA, May 4, 2011--The U.S. Department of Housing and Urban Development (HUD) announced a competition for nearly $65 million to confront housing, infrastructure and employment challenges faced by tribal communities nationwide. The funds are intended for communities seeking to improve or create housing and economic development opportunities for low- to moderate-income families. The competitive grants are provided through HUD's Indian Community Development Block Grant (ICDBG) Program to support a wide variety of community development and affordable housing activities.
"These grants go to the very heart of the development needs in our nation's tribal communities," said HUD Secretary Shaun Donovan. "The communities that compete for these grants demonstrate enormous creativity and hard work in leveraging the funds to build better housing, create more jobs, and improve neighborhoods from the ground up. These types of projects are at the backbone of our nation's recovery."
The application deadline for this year's ICDBG grants is June 15, 2011. The ICDBG program was established in 1974 to help Indian tribes and Alaska Native villages to meet their community development needs.
Federally recognized Indian tribes, bands, groups or nations (including Alaska Indian, Aleutes and Eskimos) or Alaska Native villages compete for this funding.
Communities can use the funding to develop viable communities, including rehabilitating housing or building new housing or to buy land to support new housing construction. The funding can also be used to build infrastructure such as roads, water and sewer facilities, to create suitable living environments. To spur economic development, recipients use the grants to establish a wide variety of commercial, industrial and agricultural projects. Recipients have used the funding to build community and health centers, or to start businesses to support the community, such as shopping centers, manufacturing plants, restaurants or convenience stores/gas stations.
For more information, visit www.hud.gov.