Insider Insights

The MERS Mess . . .

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 13 Oct 2010 15:57:00 +0000

I'd be interested in your comments on a couple of videos from the guys at TkinkBigWorkSmall:

http://www.thinkbigworksmall.com/mypage/archive/1/53929

I have a message into my Title Officer to see whether MY CLIENTS who buy bank owned homes are protected by Title Insurance in the case of a broken chain of title. I'll let you know what she says. This would be for California which is not a judicial state. I don't know if that makes any difference in this or not. There is a law firm in Sacramento (I'm sure other places too), collecting clients who have been, or are in the process of being foreclosed upon to bring suit against their lending institutions. From what I hear, these cases have not been successful, it's leagal manuvering, but this HAS stalled transactions. (case in point - BofA has put a halt foreclosures in ALL 50 States). This has the potential to make a HUGE mess of the lending industry making it even harder and more expensive to get financing for our clients. NOT ONLY THAT, there is a bill before Congress (HR3808) that would indemnify Banks and mortgage processors from any liability in this "chain of title" mess. See this video from a couple of weeks ago too:

http://www.thinkbigworksmall.com/myp...chive/1/53413/

The videos explain things way better than I ever could. VERY interesting times. The story continues . . .

Loan Application Alert : Conforming, Interest Only Mortgages Guidelines Change Next Week

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 16 Jun 2010 12:58:00 +0000

If you plan to finance your Winters home with a conforming interest only mortgage, get your loan application submitted no later than this Friday, June 18.

Starting next week, Fannie Mae is clamping down on the popular loan product.

An "interest only" mortgage is exactly what its name implies -- a mortgage for which the monthly payments consist entirely of interest with no principal reduction. Because there's no amortization, payments are less costly on a month-to-month basis.

For example, assuming principal + interest payments at 5 percent, a $250,000 mortgage carries a monthly payment of $1,342. The payment on a comparable interest only mortgage, however, drops to $1,042.

That's a payment difference of $300 and the size of the cost savings, not surprisingly, is the biggest reason why Fannie Mae is making its changes.

In its official announcement, Fannie Mae says it wants the give the interest only option to "borrowers who are in a position to choose it as a financial management tool" rather than allowing homeowners use it as an affordability tool for their budgets.

Going forward, there are new minimum standards for interest only home loans.

Applicants must have a 720 credit score or better
Applicants must have at least 24 months of reserves
The property type may not be a 2-unit, 3-unit or 4-unit
The property must be a primary residence, or vacation home

Furthermore, only purchase and rate-and-term refinances are eligible. Cash out refinances are prohibited.

Interest only home loans aren't for everyone, but if you plan to finance with a Fannie Mae mortgage and interest only is your preference, get your loan application submitted as soon as possible. Starting Monday, approvals will be tougher to come by.

Shopping And Paying Bills Online? Here's Methods To Protect Your Online Financial Identity

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 15 Jun 2010 12:58:00 +0000

In May 2010, Retail Sales at non-store retailers -- a category that includes Amazon and eBay -- topped $29 billion, up 16 percent from May 2009. Clearly, Americans are doing an increasing amount of shopping online. And we're paying our bills online, too.

But how well are we protecting our identities?

In this 5-minute piece from NBC's The Today Show, you'll learn the basics of online fraud and methods to minimize the likelihood of identity theft. Furthermore, the tips go beyond the basic "choose a challenging password". For example, you'll hear about:

Why you shouldn't pay bills from a coffee shop
Who might be hiding behind an unprotected public wifi network
The dangers of storing credit card numbers with an online retailer

And, although, at one point, the interviewee goes over the top with respect to spyware and anti-phishing prevention, the point being made is a good one -- you can't be too careful with your online financials and common sense goes a long way.

Change Your Air Filters Monthly (But Don't Go Cheap)

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Mon, 14 Jun 2010 12:56:00 +0000

As the mercury rises into the summer months, don't forget to change your home's air filters regularly. It not only extends the life of your HVAC unit, but can help keep your energy costs down, too.

Not all air filters are created alike, however. Don't go cheap.

Your local hardware store carries a variety of air filters ranging in price from less than a dollar to $20 or more per filter. They're all purported to do the same job, but after watching this 1-minute video, you'll see why cheaper isn't necessarily better.

Airborne particles are smaller than most mesh filters. Pleated filters are recommended instead.

Most high-quality air filters start around $11 and can be purchased in bulk from Amazon at discounts of up to 20 percent. 3M's Filtrete line of products is a popular, well-selling brand and can last up to 3 months.

If your home has shedding pets or is dust-prone, consider changing them monthly.

FHA Mortgage Insurance Premiums Approved To Triple In Cost

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Fri, 11 Jun 2010 12:54:00 +0000

Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.

In a near-unanimous vote, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.

Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent, among other details of the bill.

Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.

In everyday terms, assuming a $200,000 mortgage, the math to a homeowner looks as follows:

Current Premium (0.55%) : $91.67 monthly mortgage insurance premium
Expected Increase (0.90%) : $150.00 monthly mortgage insurance premium
Maximum Increase (1.55%) : $258.33 monthly mortgage insurance premium

A increase in monthly mortgage insurance premiums will reduce home affordability for buyers in Winters and strain household budgets.

The news isn't all terrible, however.

Because higher monthly insurance premiums are expected to pad the FHA coffers sufficiently, the FHA has said it plans to reduce its upfront mortgage insurance premium paid at closing from 2.25 percent down to 1.000 percent.

On the same $200,000 mortgage, a move like that would reduces closing costs by $2,500.

The bill awaits companion legislation in Senate and final approval into law, but considering the House's lopsided vote Thursday, it could happen rather quickly. If you're planning to buy or refinance a home using an FHA mortgage, you may find that waiting to take the next step could be a costly one, long-term.

The FHA insured close to a quarter of all mortgages made in the first three months of 2010.

Bank Reposessions Reach Record Levels For The Second Straight Month

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Thu, 10 Jun 2010 12:56:00 +0000

According to foreclosure-tracking firm RealtyTrac.com, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.

As compared to May 2009, all 50 states now show an increase in annual REO activity.

Data like that won't surprise today's active home buyers in Vacaville. Foreclosed homes are prevalent, available and accounted for one-third of all home resales made in April.

Furthermore, total foreclosure actions -- the sum of REO, default notices, and foreclosure auctions in May -- topped 300,000 for the 15th straight month.

Foreclosures remain a huge influence on the housing market.

However, two interesting trends emerged in the data:

9 of the top 10 metro areas for foreclosure posted annual activity decreases
Each of the top 4 states for Foreclosures per Household posted annual activity decreases

We can infer, therefore, that foreclosure activity may be in permanent decline in the areas hardest hit through 2007, 2008, and 2009. In 2010, the data shows, foreclosures are waning.

This is reason for optimism -- especially as FHA delinquencies slow nationwide. As fewer homeowners go delinquent, the pace of foreclosures will slow further and that should help boost home values on every block in the country.

If you've been considered bank-owned homes for your own purchase, give a look at the RealtyTrac foreclosure report. It's provides insight on a state-by-state level, and in the nation's largest metropolitan areas.

Then, to complement your research, talk to your real estate about the foreclosure market and what opportunities may exist. Competition for bank-owned homes can be fierce at times, but there's plenty of "deals" out there.

You just have to know where to look.

Conforming Loan Costs Are Rising, Says Freddie Mac

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 09 Jun 2010 13:01:00 +0000

Mortgage rates may be dropping, but mortgage costs are not.

According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.

A "discount point" is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.

Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it. In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn't do the same for required points.

The press fails to mention discount points entirely.

An increase of 1/10 percent in discount points costs homebuyers and refinancing households in Winters an extra $100 per $100,000 borrowed.

The hike reminds us that there's more to a mortgage than just its rate -- costs matter, too. And if you've only been watching the headlines, you would have missed how costs are rising.

Fannie Mae's Loan Quality Initiative : Repulling Your Credit Just Before Closing

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 08 Jun 2010 13:13:00 +0000

A new loan quality initiative from Fannie Mae is making it harder for Fairfield home buyers and refinancing homeowners everywhere to close on a mortgage.

Beginning June 1, 2010, with all new applications, Fannie Mae wants lenders to verify that borrowers have not taken on new debt during the underwriting phase of the mortgage.

If new debts are found, the mortgage is subject to a re-underwrite and a possible turndown.

For Fannie Mae, the goal is to reduce the number of loans that go bad because of new, non-disclosed debt. Lenders have the freedom to verify in whatever manner they wish, but in most cases, the verification process will amount to a credit re-pull made just prior to closing.

The underwriters will be looking for 3 things in particular -- even after your loan is approved.

First, your updated credit report will show your current credit card bills and minimum monthly payments. Those numbers will replace your original numbers made at the time of application. If the debts exceed a certain threshold, your loan will be denied.

Second, underwriters will be looking at your updated credit score. If your FICO has dropped below minimum lending standards, your loan will be denied. Or, you may be subject to a new loan-level pricing adjustment.

Loan level pricing adjustments are mandatory loan fee based on your credit score.

And, lastly, underwriters will be looking at your credit report's Credit Inquiry section. The goal is to see if you've been applying for credit elsewhere. Underwriters can use this information at their discretion.

Fannie Mae's Loan Quality Initiative is just one more way that the government-backed group is trying to improve its loan pools. Unfortunately, it'll mean more turndowns for mortgage applicants.

Therefore, take extra care of your credit between the time of application and the time of closing. Don't buy new cars, don't buy new appliances, and -- most definitely -- don't open new credit cards. Be extra safe with your credit because a mortgage application that's supposedly cleared-to-close can be revoked at the eleventh hour.

When in doubt, talk to your loan officer about what may or may not trigger the Loan Quality Initiative. Your loan approval is at stake.

Fannie Mae's Loan Quality Initiative : Repulling Your Credit Just Before Closing

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 08 Jun 2010 13:00:00 +0000

A new loan quality initiative from Fannie Mae is making it harder for Fairfield home buyers and refinancing homeowners everywhere to close on a mortgage.

Beginning June 1, 2010, with all new applications, Fannie Mae wants lenders to verify that borrowers have not taken on new debt during the underwriting phase of the mortgage.

If new debts are found, the mortgage is subject to a re-underwrite and a possible turndown.

The underwriters will be looking for 3 things in particular -- even after your loan is approved.

Loan level pricing adjustments are mandatory loan fee based on your credit score.

Fannie Mae's Loan Quality Initiative is just one more way that the government-backed group is trying to improve its loan pools. Unfortunately, it'll mean more turndowns for mortgage applicants.

When in doubt, talk to your loan officer about what may or may not trigger the Loan Quality Initiative. Your loan approval is at stake.

May 2010 Jobs Report Gives A Temporary Boost To Home Affordability

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Fri, 04 Jun 2010 14:12:00 +0000

On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls data from the month prior.

The release is more commonly called "the jobs report" -- a major factor in mortgage rates and monthly payments.

Especially now.

With the recession officially over and growth returning to the U.S. economy, the recovery's next frontier is jobs. As job growth increases, home affordability should take a hit. Here's why:

As the number of working Americans increases, so should total consumer spending
As consumer spending increases, so should a return to risk-taking on Wall Street
As risk-taking returns to Wall Street, bond markets should start to lose

Mortgage rates, therefore, should rise.

Furthermore, as the jobs market stabilizes and recovers, renters should be more apt to buy their first home, and homeowners should be apt to up-size. More home buyers in Winters means more competition for homes and higher home prices typically follow.

Job growth can be trickle-up for housing.

Today, however, the jobs data was not so strong. According to the government, 431,000 jobs were created in May, but of those new jobs, 95.4% represented temporary staffing for the 2010 Census. The number of private-sector jobs created fell well short of expectations and Wall Street is voting with its dollars right now. Mortgage bonds are gaining so, therefore, rates are falling.

The May 2010 jobs report may not reflect well on the economy, but home affordability in California and around the country is improving because of it.

Pending Home Sales Data Shows Great Deals On Homes Are Getting Harder To Find

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Thu, 03 Jun 2010 13:06:00 +0000

The Pending Home Sales Index shot higher in April as low mortgage rates and a soon-to-expire federal tax credit spurred home buying in Vacaville and across the county.

A "pending home sale" is a home that's under contract to sell but not yet closed.

Region-by-region, April's pending home sales varied versus March's data:

Northeast Region: +29.5%
Midwest Region : +4.1%
South Region : -0.6% (after a +15.9% posting in March)
West Region : +7.5%

On an annual basis, the Pending Home Sales Index is higher by 22 percent.

April marks the third straight month that pending home sales are up and today's buyers should take note. This is because, according to the National Association of Realtors®, 80% of homes under contract close within 60 days.

In other words, May and June's existing home sales data should be similarly strong, causing the real estate market to gently shift in favor of sellers. In fact, already, we're seeing home resales touch multi-year highs while new home supplies fall to multi-year lows.

All of it tends to push home prices higher while simultaneously reducing buyer negotiation leverage. That, coupled with the high probability of higher mortgage rates ahead, means that finding "deals" will get tougher for the average home buyer.

In looking at the housing market data, it appears that the best month in which to have bought a home this year was February. The next best time may be right now.

Talk to your real estate agent if you're planning to buy a home this year. It may be sensible to move up your time frame a few months.

Consumer Confidence Hints At Higher Home Prices And Higher Mortgage Rates, Too

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 02 Jun 2010 13:09:00 +0000

The Consumer Confidence Index is rising, a potentially double-edged sword for residents of Fairfield and for Americans, in general.

According to The Conference Board, economic confidence is as high as it's been since August 2007 -- 4 months before the start of the recession. Americans are optimistic again.

Confidence matters to the economy because as confidence increases, in theory, consumer spending follows. Consumer spending accounts for 70 percent of the U.S. economy.

It's why Wall Street is responsive to confidence data.

When consumer confidence is rising, households start to make big-ticket purchases they may have otherwise put off indefinitely. Maybe it's a replacing old appliances; or, trading in an old automobiles; or, splurging on a vacation.

Rising confidence can also spur real estate sales.

When confidence is rising, a growing family that chose to "make do" in their 3-bedroom, 1.5-bathroom starter home may opt to move-up to a 4-bedroom, 3-bath instead at a slightly higher monthly carrying cost. And there are families in every city in every state making those same decisions.

As a result, the housing market gets a boost -- especially in the mid-to-upper price ranges. Values rise on higher demand for homes.

The downside is that growing confidence tends to push conforming and FHA mortgage rates up. This is because an expanding economy draws investment dollars away from bonds and into stocks -- including mortgage bonds.

The reduced demand for mortgage-backed bonds leads bond prices to fall and mortgage rates to rise. Sometimes by a little, sometimes by lot.

So, if you're buying a home or thinking of a refinance, rising confidence in the economy may be a signal to act sooner rather than later. Talk to your real estate agent and/or your loan officer about next steps and get your plan in place.

How To Replace Your New Home's Deadbolt Locks

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 01 Jun 2010 12:45:00 +0000

After moving into a new home in Winters , you should immediately replace its deadbolt locks. It's not just the home's former residents that have the key, after all, but so might a relative, a friend, a neighbor, a dog-walker, and others.

You may call a locksmith for the job, but you can save some money if you can do-it-yourself.

In this detailed, 2-minute video, you'll learn how to remove and replace a deadbolt lock using nothing but a Phillips screwdriver and a deadbolt from a hardware store. It's a simple project that requires little mechanical skill.

And one that can make your new home more safe.

The Supply Of New Homes For Sale Just Dropped Off A Cliff

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Fri, 28 May 2010 13:09:00 +0000

The supply of newly-built homes for sales plummeted in April, a positive indicator for the Fairfield housing market as we head into the summer months.

It's no wonder that homebuilders are breaking new ground at the fastest clip in 2 years.

At the current sales pace, the nation's complete supply of new homes would be sold in just 5 month's time. That's more than double the pace of a year ago.

Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.

It's a similar spike as within the Existing Home Sales data released earlier this week.

But before we declare the housing market "repaired in full", we have to consider a few of the reasons why home sales are charting so strongly.

The first reason is the federal homebuyer tax credit's April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.

The second reason is that mortgage rates have remained exceptionally low, defying expert predictions. Low rates don't sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.

And, lastly, March and April's new home sales may have been buoyed by aggressive discounting on behalf of homebuilders. As compared to February 2010, April's average new home sale price was lower by 13 percent. That's a sharp drop in a short period of time.

For now, though, homes are selling, supplies are dropping, and buyer interest is high. It's no wonder builder confidence is soaring.

Should You Refinance Your Mortgage?

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Thu, 27 May 2010 13:07:00 +0000

Because of strife in Greece, Spain and North Korea, conforming mortgage rates are back to all-time lows. They're at levels not seen in 50 years. For homeowners that missed the Refi Boom of November 2009, it's a second chance.

In this well-presented, 3-minute video from NBC's The Today Show, you'll get tips getting low rates and choosing the best time to lock in.

Some of the topics covered include:

Why were the experts wrong about rates moving higher this summer?
How much money can you save with a 1 point drop in your interest rate?
Should you buy a bigger home now that rates have fallen?

The advice in the piece is matter-of-fact and centered. There is no cheerleading and the message is honest. Mortgage rates are low and they likely won't stay that way. If you've been thinking about a refinance, talk to your loan officer as soon as possible.

Home Price Index Rises 0.3% in March 2010

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 26 May 2010 13:08:00 +0000

Home values rose in March, according to the Federal Home Finance Agency's most recent Home Price Index. Values were reported higher by 0.3 percent, on average, from February.

We use the phrase "on average" because the Home Price Index is broad-reaching, national housing statistic. It ignores the dynamics of neighborhood real estate markets as well as citywide markets like Winters , too.

Instead, the Home Price Index focuses on state and regional statistics.

For example, in March 2010 as compared to February:

Values in the East South Central region rose 2.5%
Values in the Mountain states rose 1.1%
Values in the Middle Atlantic states fell 1.0%

Of course, none of this data is especially helpful for today's home buyers and sellers.

Real estate is a local phenomenon that can't be summarized by state or region. What matters most to buyers and sellers is the economics of a neighborhood and that level of granularity can't be served up by a national housing report like the Home Price Index.

The Home Price Index data is additionally unhelpful to buyers and sellers in that it reports on a 2-month delay.

In other words, Home Price Index is not even a fair reflection of today's market -- it highlights the real estate market as it existed 60 days ago.

So why is the Home Price Index even published? Because government, business and banks rely on the reports. As a national indicator, the Home Price Index helps governments make policy, businesses make decisions, and banks make guidelines. This, in turn, trickles down to Main Street where it impacts every one of us -- and eventually influences real estate.

Since peaking in April 2007, the Home Price Index is off 13.44 percent.

Home Supplies Tick Higher, Creating An Opening For Today's Home Buyers

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 25 May 2010 13:07:00 +0000

Sales of existing homes rose in April, buoyed by an expiring home buyer tax credit and exceptionally low mortgage rates.

As compared to March, April's Existing Home Sales rose by 410,000 units nationwide -- the second straight month of large gains. An "existing home" is a home resold by a prior owner (i.e. not new construction).

It's a solid report for housing overall, with rising sales suggesting that the real estate market's recovery is ongoing. However, the data presented a mixed message.

According to the National Association of Realtors®, although the number of homes sold ticked higher in April, so did the supply of existing homes for sale, too.

Sellers are now listing homes faster than buyers can buy them.

After adding another 0.3 months of supply in April, resale home supply is nearly two full months larger than at November 2009's low-point. This put downward pressure on home prices.

Furthermore, because 49% of April's buyers were first-time buyers and the tax credit has since ended, we can expect that sellers will continue to outweigh buyers in the months ahead.

It presents an interesting opportunity for June's home buyers. Mortgage rates are still at their lowest levels of the year -- despite expert predictions to the contrary -- and homes remain affordable. Plus, in a lot of markets, home values have started to creep higher.

There's good values and good rates but neither should last long. For the next few weeks, real estate may be in its 2010 sweet spot.

If you were thinking of moving in September of this year or later, consider moving up your timeframe.

Video : The Right Way To Water A Garden

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Mon, 24 May 2010 12:46:00 +0000

From one pot to a lush garden, we all have plants for which to care in our lives. But are they getting the right amount of water? Too little water and the plant dies. Too much water and root rot sets in.

In general, plants want 1 inch of water per week but Mother Nature doesn't always provide. It's up to us to make up the difference.

In this short video from ExpertVillage, Doug Smiddy shows us how to make sure our plants get the right amount of water they need to survive. He answers questions including:

How do you know if your plants need water right now?
What is best time of day to water outdoor plants?
What is the proper way to water a plant?

The video runs a little bit over 2 minutes and is stocked with helpful tips. If you care for any plants in your life, it's a must-watch video.

Home Opportunity Index Ranks 225 Metro Areas For Affordability

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Fri, 21 May 2010 13:05:00 +0000

With home prices still relatively low and mortgage rates trolling near their all-time best levels, it's no surprise that home affordability is extraordinarily high in Fairfield and most U.S. markets.

According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between January-March 2010 were affordable to families earning the national median income.

It's the second highest reading in the survey's history.

Of course, on a city-by-city basis, home affordability varies.

In the first quarter of 2010, for example, 98.7% of homes sold in Bay City, Michigan were affordable for families earning the area's median income and in Indianapolis, the percentage was almost 95 percent.

Indianapolis has held the top quarterly ranking for close to 5 years now.

On the opposite end of the spectrum, the New York-White Plains, NY-Wayne, NJ region earned the "least affordable" metropolitan area for the 8th consecutive quarter. Just 20.9% of homes are affordable to families earning the local median income.

The rankings for all 225 metro areas are available on the NAHB website but regardless of where your town ranks, home affordability remains high as compared to historical values but it likely won't last long. Home values are recovering in many markets and mortgage rates won't stay this low forever.

All things equal, buying a home may never come this cheap again. If you were planning to buy later this year, consider moving up your timeframe.

The Fed's April Minutes Push Mortgage Rates Even Lower

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Thu, 20 May 2010 13:05:00 +0000

After starting the day in the red, mortgage rates rebounded Wednesday afternoon after the Federal Reserve released its April 27-28, 2010 meeting minutes.

It's good news for home buyers and would-be refinancers in Fairfield. Mortgage rates continue to troll along multi-year lows.

"Fed Minutes" are lengthy, detailed recaps of Federal Open Market Committee meetings, not unlike the minutes you'd see after a corporate conference, or condo association gathering. The Federal Reserve publishes Fed Minutes 3 weeks after each respective FOMC get-together.

The Fed meets 8 times annually.

Because of the minutes' content and density, it's of tremendous value to Wall Street and investors. Fed Minutes provide a glimpse into the conversations and debates that shape the country's monetary policy.

The broad scope of the published meeting minutes are in sharp contrast to the more well-known, post-meeting press release which reads more like a policy summary.

And the extra words matter.

Here's some of what the Fed discussed last month:

On Greece : A crisis in Greece could slow U.S. domestic growth
On housing : Despite government support, growth appears to have stalled
On its mortgage buyback program : There's little reason to sell mortgage bonds right now

When the markets saw the Fed Minutes, what had been a down day for bond markets turned positive. The less-than-sunny outlook for the near-term U.S. economy sparked bond sales, pushing prices higher.

Mortgage rates move opposite mortgage bond prices.

Wall Street is always in search of clues from inside the Fed about what's next for the economy and post-FOMC minutes usually give good fodder. April's meeting was no different.

For now, mortgage rates remain near all-time lows but once the Eurozone issues are settled, rates are likely to rise. If you haven't locked a mortgage rate, your window may be closing. Once the economy is turning around for certain, mortgage bonds will be among the first of the casualties.

The Right Way To Take A Cash Gift For Downpayment

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Wed, 19 May 2010 12:47:00 +0000

As lenders tighten mortgage guidelines for Winters home buyers, minimum downpayment requirements are increasing. Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent.

Anecdotally, guideline changes have led to an increase in the number of home buyers accepting cash gifts from family.

Gifts are allowed in most cases but the problem is, if you don't accept the gift in a "lender-friendly" way, the mortgage underwriter could reject it, and negate it.

You can't just deposit a cash gift into your bank account. You have to follow a series of steps and keep records.

Provide an acceptable gift letter signed by all parties
Provide documentation of the gifter's withdrawal of funds via teller receipts
Provide documentation of the giftee's deposit of funds via teller receipts

Lenders require these 3 steps for two basic reasons. First, they want to make sure that the cash gift is "clean" (i.e. not laundered). Second, they want to make sure the gift is really a gift and not a loan-in-disguise.

It's why lenders typically require that the loan application be accompanied by a signed, dated letter.

For example:

I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].

This is a gift -- not a loan -- and there is no expectation of repayment.

Signed,
[Signature of gifter]

As an additional step, home buyers receiving cash gifts should make sure that gifted funds are not commingled at the time of deposit. If the cash gift is for $10,000, therefore, the bank's deposit slip should indicate that a $10,000 deposit was made -- nothing more, nothing less. Don't add a random $100 deposit to the transaction, in other words. The $100 deposit should be a separate transaction.

It's also worth noting that gifting funds between family members can create both legal and tax liabilities. If you're unsure about how donating or receiving a gift may impact you, call or email me directly. If I can't help you with your questions, I can refer you to somebody that can.

The Right Way To Take A Cash Gift For Downpayment

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Tue, 18 May 2010 13:08:00 +0000

As lenders tighten mortgage guidelines for Vacaville home buyers, minimum downpayment requirements are increasing. Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent.

Anecdotally, guideline changes have led to an increase in the number of home buyers accepting cash gifts from family.

Gifts are allowed in most cases but the problem is, if you don't accept the gift in a "lender-friendly" way, the mortgage underwriter could reject it, and negate it.

You can't just deposit a cash gift into your bank account. You have to follow a series of steps and keep records.

Provide an acceptable gift letter signed by all parties
Provide documentation of the gifter's withdrawal of funds via teller receipts
Provide documentation of the giftee's deposit of funds via teller receipts

It's why lenders typically require that the loan application be accompanied by a signed, dated letter.

For example:

I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].

This is a gift -- not a loan -- and there is no expectation of repayment.

Signed,
[Signature of gifter]

A Dual-Edged Roller Knife To Make Your Chopped Salads Easier

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Mon, 17 May 2010 12:46:00 +0000

With the Oxo Salad Chopper, making chopped salad for the family and/or friends is both faster and safer.

Using a dual-blade roller knife similar to a pizza cutter, the ergonomic Salad Chopper cuts lettuce, vegetables, fruits, meats and nuts with just a few rolls. There's no need for a separate cutting board (and no worries of slicing a finger).

Made from stainless steel, the angle-handled roller is built to trace the curves of the accompanying Oxo bowl. The blades remain in constant contact with the plastic and the rim has a built-on grip to help you get a handle on your work.

The 5.5-quart bowl is big enough for 6 servings and is dishwasher-safe. Oxo says you can serve in it, too, but that's up to you.

Trade in store-bought salad bags and opt for something fresher. Oxo's Salad Chopper sells on Amazon.com for $25.

Your Mortgage Approval Isn't Final Until It's Funded

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Fri, 14 May 2010 13:05:00 +0000

A mortgage approval is never final until it's funded.

A host of things can "go wrong" while your home loan is underway. Some are in your control, many more are not. And just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.

MSN Money ran a summary piece on the topic titled "10 Things That Can Kill A Home Loan".

It's an excellent article because, unlike most "get approved" articles that advise against things like buying a car before closing, or opening a bunch of new credit cards, the MSN Money piece addresses more uncommon factors that can lead to a similar loan turndown.

For example, a home may be unfundable if it's unsuitable for human habitation -- a condition you may not discover until after a thorough home inspection's been made. Broken windows, lack of plumbing, and/or major foundation damage are all deal-breakers with a lender.

Either fix the home prior to closing, or don't close at all.

Homes in "declining markets" have danger spots, too. Especially for conforming mortgage applicants with less than 20% equity.

Because of how private mortgage insurers operate, some homes carry tougher, ZIP code-based PMI eligibility requirements. As a mortgage applicant, it's important to understand this because you may be PMI-eligible in one neighborhood, but not in another.

There's others ways in which a mortgage approval can go bad, too:

You're self-employed and your income was lower last year versus the year prior
Your tax return shows large amounts of unreimbursed employee expenses
You failed to return required paperwork to the lender within a reasonable time frame

Mortgage approvals are delicate and, despite an improving economy, lenders still operate with caution. Talk with your real estate agent and your loan officer and put together a game plan.

The best way to beat the mortgage system is to know the rules before you start to play.

Foreclosure Activity Slows For The First Time In Several Years

Melanie@MelanieIsOurRealtor.com (Melanie Dye & Friends) — Thu, 13 May 2010 13:05:00 +0000

The national foreclosure rate is finally falling.

According to foreclosure-tracking firm RealtyTrac.com, the number of foreclosure notices dropped 2 percent between April 2009 and April 2010.

2 percent may not seem like much, but it's the first time in the history of the RealtyTrac report that the annual foreclosure rate has dropped.

To be sure, foreclosure rates remain elevated -- more than 300,000 were reported last month, but default notices appear to be approaching a plateau.

The RealtyTrac report shows some other interesting statistics, too:

6 states accounted for more than half of April's bank repossessions nationwide
For the 40th month in a row, Nevada topped the nation's foreclosure rate
Foreclosure rates dropped in both California and Arizona, 2 foreclosure hot-spots through 2009

The good news for housing doesn't stop there. 9 of the top 10 leading metropolitan areas for foreclosure-related activity showed a drop in annual activity. Only Reno, Nevada showed an increase.

Buying distressed homes is big business, according to the National Association of Realtors®, accounting for 35 percent of all home resales with a typical discount ranging near 15 percent on value.

But with the discount comes some caution. You need to know how buying a foreclosed can be different from buying a non-foreclosed home.

For example, distressed properties are often sold as-is and may have defects that render them "un-lendable". Secondly, "quick closings" aren't usually possible with bank-owned homes -- you're often at the bank's schedule and mercy.

And, lastly, not all foreclosed homes are searchable online. You'll usually find more stock if you work with a real estate agent versus searching online.

The RealtyTrac foreclosure report is thorough and can help you gauge what's happening on a state-by-state level, and in the nation's largest metropolitan areas. Once you've done your research, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market — you just have to know where to find them.