http://www.realty.com/ en kate@realty.com Copyright 2009 2009-06-30T22:18:00-05:00 http://feedproxy.google.com/~r/Realty-Blog/~3/lepnkVnnjME/ http://www.realty.com/blog/when-sending-your-docs-to-the-mortgage-servicer/#When:22:18:00Z Problems that often reduce your chances of acquiring a mortgage So you’re ready to get that mortgage. You’ve talked to your lender. You can’t get enough of moving in your new home. But what could possibly spoil your plans? Believe it or not, your mortgage can be delayed by a couple of things.  Credit Report Have you checked your credit report? Make sure that it has not changed since your last call. To be sure that you’re not in a precarious situation, it’s best to maintain a FICO score of at least 620. In case there are errors and the lender discovers about it, your application will be delayed since credit report companies would have to verify the real score first. Forms, Forms, Forms Now that there is a conscious effort from the government to cut down the amount of paperwork when acquiring a mortgage, many are thinking that filling out those forms won’t be a hassle anymore. But if you need to check your lender once again, you might be surprised that one page may be composed of more than thirty lines that you have to answer. Always check the accuracy of your entries. If possible, you may ask your husband or wife to accompany you so that he or she can review your answers. In case there are too many mistakes, don’t expect the loan officer to get back to you immediately. There are many applicants who are also requesting for a speedier process. Submitting by Fax Since most mortgage firms require borrowers to submit documents by fax, make sure that you follow the correct procedure. Your documents won’t be misplaced if you attach a cover page with the name of the recipient and sender, the corresponding contact numbers, the date, the mortgage account number (MAN) the number of pages. Then for every page, write your name and MAN as well, just to make sure that no page gets mixed up with other forms. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-30T22:18:00-05:00 http://www.realty.com/blog/when-sending-your-docs-to-the-mortgage-servicer/#When:22:18:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/8KI1gcY0VZ8/ http://www.realty.com/blog/when-your-appraisal-gets-reviewed-all-the-way-from-the-philippines/#When:18:43:00Z Industry professionals are fuming mad at this latest revision of the Code of Conduct New York Attorney General Andrew Cuomo stroke a deal with government sponsored enterprises Fannie Mae and Freddie Mac almost two months ago. What resulted was the Home Valuation Code of Conduct (HVCC) – with the main goal of deterring appraisers from giving out figures closer to predetermined values that in reality, are way below the actual appraised rate. In the Freddie Mac Fact Sheet , here’s an edit version of the lender requirements from the code: Prohibits lenders and third parties from influencing the result or review of an appraisal report Requires lenders to ensure that borrowers are provided a copy of the appraisal report no less than three business days prior to closing, unless the borrower waives the requirement.  Requires any third party specifically authorized to perform certain actions on behalf of the Seller to be in compliance with the Code.  Requires lenders or third parties authorized by lenders to be responsible for selecting, retaining, and providing for payment of all compensation to appraisers A lender may accept an appraisal report prepared by an appraiser for a different lender provided that the lender obtains written assurances from the other lender that it has adopted the Code and determines that such appraisal conforms to appraisal requirements and is otherwise acceptable.  But the revision was not well received and a number of groups (obviously, appraisers) are protesting against it. One problem is it that only appraisal management companies are allowed to perform the appraisal. They charge the customer higher fees upfront instead of asking for the payment during the closing.  And there’s more problem. The National Association of Mortgage Brokers mentions in its open letter stating, “AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal. i. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.” The Seattle-Post Intelligencer has a more direct accusation when it interviewed Mercer Island appraiser Richard Hagar. It reports, “(He) cited cases of appraisers inappropriately using foreclosures as comparable sales and using comparable sales for unsuitable neighborhoods; appraisal management company employees claiming, wrongly, that they’re not required to follow federal guidelines; and companies illegally using review appraisers that are based not only out of the area, but out of the country, in the Philippines.” The thousands of business process outsourcing workers in the Philippines have brought an estimated $4 billion in earnings in the country last year. It trails behind India in the number of BPO jobs. America has relied too much in bringing back office jobs across the shores for effective cost cutting. But the dissatisfaction among Americans is only felt when clients discover that they’re redirected more than 7,000 miles and would have to put up with fake American accents (but could respond to their queries immediately and correctly, in fairness).  The issue however is focused on appraisal reliability. This is not a computer hardware malfunction that a call center agent can assist a client in a matter of five minutes. The difference with other outsourced product queries is that properties cannot be treated generically. Remember how real estate ads on TV were lambasted for not taking a local approach? This is the same issue that the HVCC has. By allowing unregulated companies to conduct insufficient appraisals and passing on the review to someone who has very limited, if not absolutely no exposure to the area, borrowers are not receiving due service. Not that we have anything against outsourcing especially in a country with skilled, talented workers. However in this issue, we understand where the NAMB stands. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-29T18:43:00-05:00 http://www.realty.com/blog/when-your-appraisal-gets-reviewed-all-the-way-from-the-philippines/#When:18:43:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/v74Ki2TN5Fg/ http://www.realty.com/blog/home-shopping-in-detroit/#When:18:35:00Z The plunge in home values is causing a buying rush. If you thought everyone’s packing their bags out of the Motor City for lack of opportunities, think again. A report by CNNMoney.com reveals that home buyers are snapping up the bargain prices in Detroit, with some buying more than 10 units all at once. That’s how low the prices are these days. In fact, you could easily own a home for $12,000. There’s no typo with that – it’s $12,000 or even lower. The report states, “Recently a Californian purchased 178 properties, mostly one at a time, and most for under $10,000. Another has purchased six Detroit properties since September and hopes to begin buying five a month…The city’s average home price has sunk by a third to less than $80,000. But these cheap houses have got sales jumping, with volume up 23% in April compared with April 2008.” So before you begin checking these foreclosed properties, we suggest you follow these three tips: 1. Ask a contractor to inspect the house first. If you don’t, you might end up spending more on renovation expenses than what you initially thought. 2. Maintain your communication with your lender. You have to realize that you’re not the only one storming the city for house shopping so you need to constantly remind your lender that you need the money as soon as possible before the price inches up. 3. Check the neighbors. You might get the house at a bargain, but you sure wouldn’t want to live where the area’s crime rate is high or it’s too far from your office that you’d have to be late for work everyday. It’s an ideal time to buy but bear in mind the factors attached to these low-priced homes. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-26T18:35:00-05:00 http://www.realty.com/blog/home-shopping-in-detroit/#When:18:35:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/x0-gcbCZeV0/ http://www.realty.com/blog/even-the-ex-washington-governors-mansion-is-on-foreclosure/#When:17:34:00Z So long to this historic site If you once headed one of the world’s largest fast food chains, once became a state governor, and has tons of assets to boast of, chances are, you’d be less concerned about disposing a house with a sentimental value for the state. The Lexington Herald reports that Cave Hill, the city’s 17-acre estate that once served as a temporary mansion of Gov. John Y. Brown Jr. is going to foreclosure and is slated to be in the market on July 27. The mansion was the governor’s present to his wife, Phyllis, until it was bought by Bruce Fein, a Washington D.C. constitutional lawyer. The report states, “The house is listed on the National Register of Historic Places. In the past three years, the fortunes of the stately house and once immaculately groomed grounds have fallen on hard times. It is abandoned, neglected and a judge has ordered it be sold to pay the mortgage that the owners have defaulted on. The historic mansion has been empty since it was purchased by the Feins, according to Mattie Fein. The couple put it back on the market in December 2006 for $2.45 million.  “According to court records, Cave Hill went into foreclosure after the Feins defaulted on a $1.3 million mortgage from Logan Asset Back Fund, a private lender in Boca Raton, Fla. The mortgage was held by Cave Hill LLC in the spring of 2007, but personally guaranteed by the Feins.  “Six months later, the Feins and Cave Hill LLC stopped making the $16,800 monthly payment on an interest-only loan, states a lawsuit brought by Logan Asset Back Fund. Last month, Fayette Circuit Judge Ernesto Scorsone ordered Cave Hill be sold by the master commissioner to raise $1.3 million, plus additional costs including interest and taxes. If the sale does not raise the needed amount, he ruled the Feins would be held individually liable.” So here’s what’s funny about this story. Divorce issues and perhaps their personal finances prevented the Feins from maintaining the property. In the end, it cost the entire city a site that would have stood for ages. The problem however lies in the fact that the state is regretting about the loss without putting its finger in the pie. Sure, the property market is in shambles but it must realize that only a private buyer will be willing to put up with the headaches of restoration and property taxes. So if nothing significant occurs on the 27th, they could just transform the place into shelter for the homeless instead. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-25T17:34:00-05:00 http://www.realty.com/blog/even-the-ex-washington-governors-mansion-is-on-foreclosure/#When:17:34:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/AGkGCWZNxSM/ http://www.realty.com/blog/a-comparison-of-harvard-us-housing-reports/#When:19:11:00Z Is there any significant change in findings? Last Monday, Harvard University’s Joint Center for Housing Studies released its 2009 The State of the Nation’s Housing . Unless you’re living in a cave, you probably have a good idea of where the housing market is in right now. The 44-page report paints a grim picture of what is plaguing the nation’s property market: “At the end of 2008, first-lien loans in foreclosure stood at 3.3 percent of all loans—an increase of 62 percent in one year. The share of loans at least 60 days past due rose by almost two percentage points, to 4.8 percent, in just the last half of 2008. Unless new federal initiatives result in many more loan workouts, foreclosure filings will likely continue to rise through the first half of 2009. “The homebuying market will continue to struggle until the foreclosure crisis comes to an end. Although new federal efforts may prevent millions of families from losing their homes, mounting job losses will likely keep foreclosures at elevated levels. At the same time, falling prices are keeping potential buyers on hold while locking millions of potential sellers in their current homes.” We decided to check out the 2000 version and realized the upbeat market sentiment that was published: “Powered by strong income and employment growth, the national homeownership rate reached a new annual high of 66.8 percent in 1999 and continues to climb across all geographic regions, age groups, and racial/ethnic groups. Although persistent disparities between whites and minorities narrowed only slightly, minorities still accounted for nearly 40 percent of the net growth in owners in the final half of the 1990s. Rapid household growth, combined with climbing ownership rates, has boosted the minority presence in homebuying markets. “Homeownership has gotten an extra lift from mortgage industry innovation and outreach to low-income borrowers. With the introduction of low-downpayment products, flexible underwriting standards, and improved risk assessment tools, lenders have helped millions of low income families buy first homes. In fact, loans to low-income buyers in metro areas increased by 55 percent between 1993 and 1998, compared with a 40 percent increase in loans to high-income borrowers.” Times have changed, America. Oh how it feels to be back in time when the country has just went through the ordeal of fearing for Y2K, Al Gore was in a tight race for the White House’s main man, and there was still no modern case of influenza with a tongue-twisting letter-number combination.  In no more than a decade, this country has gone from a booming housing market to a real estate industry pummeled by the effects of subprime lending. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-24T19:11:00-05:00 http://www.realty.com/blog/a-comparison-of-harvard-us-housing-reports/#When:19:11:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/CAcL_MN8AvY/ http://www.realty.com/blog/why-small-banks-are-at-the-helm-of-the-recession/#When:02:45:00Z More banks fall into losses. Three banks have shut their doors after the Federal Reserve reported that Cooperative Bank of Wilmington, NC, Southern Community Bank of Fayetteville, GA and First National Bank of Anthony, KA cannot keep up with their operations. The recent bankruptcies bring the total number of failed banks to 40 this year. According to the New York Times , the three banks will be acquired by First Bank of Troy, N.C., United Community Bank of Blairsville, GA and Bank of Kansas in South Hutchinson respectively. So are small banks already this vulnerable to economic downturns? In December 2008, economists Philipp Longman and T.A. Frank wrote in Washington Monthly , “One reason community banks are doing so well right now is simply that they never became too clever for their own good. When other lenders, including underregulated giants like Ameriquest and Countrywide, started peddling ugly subprime mortgages, community banks stayed away. Banking regulations prevented them from taking on the kind of debt ratios assumed by their competitors, and ties to their customers and community ensured that predatory loans were out of the question.” But that was a more than five months ago. The recent string of bankruptcies doesn’t seem to be holding down. Federal Reserve Bank of St. Louis economists Andrew Meyer and Timothy Yeager mention in their research paper entitled, “Are Small Rural Banks Vulnerable to Local Downturns?”, “If local economic activity affects bank performance, this association is more likely to be evident in the data for small banks with offices in rural areas than for other banks. Smaller banks (as measured by assets) typically have more geographically concentrated operations and, due to their lower levels of capital, lend to smaller, less diversified businesses. Therefore, the performance of small banks may depend more heavily on local conditions.” It’s clear therefore that we have a rising number of small banks giving in to the pangs of recession. These small banks do not deserve to be eaten up by large financial institutions. After all, there is still a good number that have resisted the credit crisis by focusing on community loans instead of following what JPMorgan and Wachovia have committed. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-24T02:45:00-05:00 http://www.realty.com/blog/why-small-banks-are-at-the-helm-of-the-recession/#When:02:45:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/gfOgUZkwjSY/ http://www.realty.com/blog/what-californias-credit-downgrading-means/#When:22:39:00Z It’s another hit in Schwarzenegger’s turf. When it rains, it pours but in California’s case, economic woes are flooding the state with setbacks here and there. In a report by CNNMoney.com , the Sunshine State is currently beset by a shortage in budget. In effect, Moody’s Investor Service plans on a “multi-notch” downgrade if no improvement takes place. The report states, “The state’s current A2 credit rating is Moody’s sixth-highest investment grade and makes California the lowest rated of the 50 states. The A2 rating is just five notches above speculative status and Moody’s raised the potential for the rating to tumble toward “junk” status if lawmakers fail to quickly produce a budget for Governor Arnold Schwarzenegger to sign.” What does this have against the state? First, this could affect its already battered financial condition. With the proposed downgrade, California will be facing increased borrowing costs since its ability to meet the terms of debt obligations on time will be much harder to achieve. Therefore, when it issues bonds to investors, it will expect few groups of interested takers. Second, with less revenue because of the budget shortfall, the state will have fewer public projects to finance and public services to complete. This will discourage home buyers to settle in California. Also, the lack of public support in terms of infrastructure and services will have a negative effect on property appraisals. House values will further dip in the months to come after streamlining government policies. Finally, the state’s funding profile will be marred by its limitations to gain capital with the cost of debt now rising to higher levels. The recovery will be longer than most predictions considering that the state is struggling with its housing woes, unemployment crisis and tougher lending standards. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-22T22:39:00-05:00 http://www.realty.com/blog/what-californias-credit-downgrading-means/#When:22:39:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/yhhNtzDQOvA/ http://www.realty.com/blog/check-out-the-wells-fargo-chiefs-statements-on-subprime-loans/#When:21:55:00Z So should we heed his advice? The Charlotte Observer recently interviewed Wells Fargo CEO John Stumpf on his views regarding the sacking of 548 employees of his company’s office in the city. At the middle of the conversation, Stumpf was asked if there is a place of subprime loans in his company. He commented, “We think there is a place for that. The subprime loans that we made – there’s about $25 billion on our balance sheet – were made in a subsidiary company called Wells Fargo Financial. This is a very different kind of subprime loan. It’s a debt consolidation product: The customer already owns her home, but she might have a lot of credit card debt, a debt on an auto, a debt with a hospital. We would consolidate all that debt and put it on her house. That’s the kind of subprime loans we put on the books. In fact, those loans are performing very, very well – well above the industry average because they are fully underwritten, there’s no broker involved, full appraisals, full income verification. In some cases, we originated some subprime that we did not keep on our balance sheet. If you look at the league tables, we are now the No. 1 mortgage originator company, but we have historically been No. 1 or 2. Our origination of subprime would be 8 or 9 or 10. We’re well down the line and that relates more to the $25 billion we hold in this debt consolidation product. We are not big in that business and have never been big in that business.” We’re surprised at how one man who has become influential in the mortgage industry can still say something so positive about subprime loans after all the hullaballoo. It’s not an excuse that he’s shaping up his bank’s image after acquiring Wachovia that’s why he can release such statements. Stumpf must realize that the property market isn’t on a smart rebound yet.  Among the points that we have to raise include the following: First, Stumpf puts too much credit in his consolidated-debt subprime loan. We hope no sensible American would take advantage of the package that Wells Fargo is offering, at least until general market conditions stabilize. The more credit card debt and medical loans that you lump to your house, the higher risk that you’re going to take. It’s not going to make your situation easier, it’ll just raise your chances of ending up in foreclosure. Settle you obligations for each loan before giving in to the bank’s much promoted package. Second, according to the Center for Responsible Lending (CLR), an estimated 2 million subprime mortgage holders are delinquent. In their August 2008 research , CLR concludes, “We now project that almost 2.2 million subprime foreclosures will occur primarily in late 2008 through the end of 2009, up from our original 1.1 million estimate made in 2006. Additionally we estimate that 40.6 million homes in neighborhoods surrounding those foreclosures will suffer price declines averaging over $8,667 per home and resulting in a $352 billion total decline in property values.” Now, isn’t this more convincing than Stumpf’s promotion? There’s a better time for acquiring a subprime loan. This year (and the year after) won’t be all that good for this type of loan. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-19T21:55:00-05:00 http://www.realty.com/blog/check-out-the-wells-fargo-chiefs-statements-on-subprime-loans/#When:21:55:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/mmWaLpfBPqc/ http://www.realty.com/blog/women-sure-know-how-to-help/#When:22:10:00Z An organization extends its hand. The Association of Women in Real Estate (AREW) has created a wise step in helping disadvantaged women get through the times. Last June 10, they hosted a penthouse and rooftop tour in Twenty9th Park Madison condominium in New York for a $20 fee per visitor. On top of that, they collaborated with designer Jes Wade who showcased his latest line. Proceeds were used for helping homeless families. Interestingly, the organization also supports “women entering the field of real estate by underwriting scholarships to real estate students at New York University, Columbia University School and Baruch College.” Here’s one good way of supporting the industry. Admittedly, women can always use their creativity to come up with things that they can use to raise more funds in helping the industry. Here are some ideas where the proceeds can be used to help the homeless: 1. Hold make over classes that will give tips to women on dressing appropriately and choosing their over all style. They can ask for a certain fee upon joining. 2. Ask visual artists to exhibit their work in high-end condominiums and invite people to participate in auctioning these artworks. They can also showcase the condominium’s features during the exhibit. 3. Invite celebrities to show up for a charity event where they can sit down and have dinner with people who are willing to pay for the event. The total earnings can be used to fix dilapidated apartments of hurricane victims. 4. Host cooking classes during the weekends where families can participate. This can be held in condominium units where appliance, furniture and kitchen supply manufacturers can sponsor the event. All takings can be allotted for building small homes. 5. Join forces with other real estate organizations in holding larger projects where they can generate more funds for the homeless. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-18T22:10:00-05:00 http://www.realty.com/blog/women-sure-know-how-to-help/#When:22:10:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/fhmz1i2SKhM/ http://www.realty.com/blog/the-aba-is-more-sanguine-than-anybody-else/#When:02:19:00Z They’re looking forward to a healthier 2010. The recent report by the American Bankers Association speaks of a less chaotic housing market scenario in the months to come. It states, “However, even with more potential credit available, it is likely that a normal growth environment cannot resume until the housing markets have stabilized and prices end their decline so that financial assets do not continue to deteriorate, keeping lenders and investors risk adverse, and would-be home buyers end their wait on the sidelines trying to avoid a falling knife. If capital markets are able to continue to improve, this combined with declining home prices has caused home ownership affordability to improve greatly. Once a bottoming is generally perceived, it is likely that there will be some significant pent-up demand to fuel a housing recovery.” This is a more credible projection that we’ve come across in the past months. The ABA’s economists have come up with a more detailed explanation of their judgments. Here are the following points from the report that we some comments about: 1. The large class of Alt-A mortgages that are scheduled to reset this year 2. The high amount of foreclosures that continue to depress the market 3. The lack of sufficient equity of homeowners currently underwater that will not allow them to refinance into fixed-rate mortgages. However, some things have changed since the group culled their data. First, mortgage rates have inched above 5 percent. Definitely, the higher the rate goes, the more it will be difficult for currently distressed homeowners to get out of their situation. Second, it doesn’t mean that every time Alt-A mortgages reset, the banks are all that worried. In reality, these institutions benefit from this scenario. (Read our related post here). Finally, bankers have lost the trust of Americans after they mostly take the blame of this crisis. Now, who would believe in their sunny projection? Only when we reach next year will we know if they can redeem their reputation. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-06-18T02:19:00-05:00 http://www.realty.com/blog/the-aba-is-more-sanguine-than-anybody-else/#When:02:19:00Z