Economic Commentary If it is all about jobs, then... On the other hand, the progress we have made will cause a ripple effect throughout the economy. We are on pace to add almost 3 million jobs this year and this will increase consumer spending which will create more jobs. And some of this spending will make the real estate market stronger -- whether it is the purchase of new homes or major renovation projects for existing homes. Already we are seeing the strength in car sales and home improvement projects. But the one area we have not seen strength in this year is within the real estate sector. More recently, we have seen renewed confidence by builders as new home sales have been ramping up. The bottom line is that we cant have a recovery without the creation of jobs and it is the creation of jobs that will bring us a complete real estate recovery. Yes, we still have a long way to go, but if we keep creating jobs at this rate, the road will become a lot shorter. From there, the only question won’t be if interest rates will rise -- but when will they rise and how fast. Right now we have the best of both worlds: more hiring and very attractive interest rates. The Markets Fixed rates were stable in the past week. Freddie Mac announced that for the week ending October 2, 30-year fixed rates eased to 4.19% from 4.20% the week before. The average for 15-year loans was unchanged at 3.36%. Adjustables were also down slightly, with the average for one-year adjustables falling one tick to 2.42% and five-year adjustables decreasing to 3.06%. A year ago, 30-year fixed rates were at 4.22%, very close to todays levels. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- Rates on home loans were flat to slightly down across the board as GDP was revised up from 4.2 percent to 4.6 percent for the second quarter and the S&P/Case-Shiller National House Price Index was up a seasonally adjusted 0.2 percent for July and up 5.6 percent from the prior July. Pending home sales data were less optimistic, though, down 1 percent in August. Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Real Estate News Breaking News. Builder confidence in the new-home market rose to its highest reading in nearly 9 years, according to the latest reading from the National Association of Home Builders/Wells Fargo Housing Market Index. September marked the fourth consecutive month that builder confidence has been on the rise. Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction, says NAHB Chairman Kevin Kelly. For the new-home market, builder confidence rose to a level of 59 in September, according to the index. Any reading above 50 indicates that more builders view conditions as good than poor. The seasonally adjusted index measures builder perceptions of the single-family new-home market on home sales and sales expectations for the next six months, as well as builders perceptions of buyer traffic. All three of the index components in September posted gains, with current sales conditions and traffic of prospective buyers rising to 63 and 47, respectively. Expectations for future sales also rose two points to 67. Source: National Association of Home Builders The pace at which U.S. home prices are rising has slowed down, but a recent release shows that home prices have retraced much of the ground they lost after the 2008 crash. Prices rose 0.1% in July after adjusting for seasonal factors, according to an index maintained by the Federal Housing Finance Agency. The index is calculated using prices on residential loans backed by Fannie Mae and Freddie Mac. That was down from increases of 0.3% in June and 0.2% in May, but it represents the eighth straight monthly gain. With the latest increase, home prices are now up 4.4% over the past year. What’s more surprising is that the index shows U.S. prices now standing just 6.4% below their previous peak in April 2007. The S&P/Case-Shiller index is a separate tool used to measure home prices. It showed a bigger home price boom—and a bigger accompanying bust—in part because it included more expensive homes with loans that weren’t eligible for purchase by Fannie and Freddie. It also didn’t include loans financed by subprime lenders that weren’t selling loans to Fannie and Freddie. Also, the FHFA index is unit-weighted, meaning all sales count equally. The Case-Shiller index is value-weighted, which means price changes in more expensive properties receive greater emphasis. The Case-Shiller national index showed that home prices in June were 9.9% below their 2006 peak. Source: The Wall Street Journal The Mortgage Bankers Association, in a letter to the Consumer Financial Protection Bureau, said a proposed agency expansion of a consumer complaint database would cause more confusion than benefit and undermine its goal of improving consumer decision-making. The Sept. 23 letter to CFPB Executive Secretary Monica Jackson also cautioned that expanding the complaints database raises privacy concerns and creates a potential imbalance for resolving issues. MBA urged the CFPB to either abandon the proposal or address legal concerns and modify the proposal to better serve consumers. “MBA believes that as it is, the Proposal will not achieve its stated goal of informing consumers; in fact, it will harm them,” wrote Pete Mills, MBA senior vice president of residential policy and member services. The CFPB proposal, issued July 16, would for the first time expand its publicly available Consumer Complaint Database to include consumer narratives, regardless of substantiation. “Publishing consumer narratives would provide important context to the complaint, help the public to detect specific trends in the market, aid consumer decision-making, and drive improved consumer service,” said CFPB Director Richard Cordray. “The consumer experience shared in the narrative is the heart and soul of the complaint. By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem. There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole.” MBA noted that while it supports the CFPB’s efforts to assist consumers in making responsible choices and its establishment of the Database so that companies can respond promptly to complaints, the proposal raises important concerns over allowing the public to make public “unstructured and unsubstantiated narratives.” MBA noted that based on lenders’ experiences some narratives contain “purely false information. Source: The Mortgage Bankers Association In a recent webinar, Consumer Financial Protection Bureau officials provided more clarity on integrated disclosures that become effective next year. Lenders will be required to implement the new disclosures, which are part of the CFPBs Know Before You Owe initiative, in August 2015. One of the new disclosures, the Loan Estimate, is required within three business days of taking an application. The CFPB considers applications to have occurred when the lender has obtained the prospective borrowers name, income, social security number for a credit report, property address, estimated property value and loan amount sought. However, if an application was completed online that included all six pieces of information, but the customer only stored the application without submitting it -- an application is not deemed to have occurred and no Loan Estimate needs to be provided. If a consumer inquires about refinancing and a lender already has the six pieces of information on file from the existing loan, the lender does not need to provide a disclosure unless updated information is obtained. Creditors will be required to obtain copies of separate seller closing disclosures but not the supporting documents. Closing costs cannot exceed the amount originally disclosed on the loan estimate. Two exceptions include a category of charges that allow a 10 percent cumulative tolerance and another category that is not subject to the tolerance. Owners title insurance that is not required by the lender is not subject to tolerance limitations. The seven-day waiting period before consummation that applies to Loan Estimates does not apply to revised disclosures. A revised Loan Estimate is not necessarily required on the same business day that a consumer or loan officer requests a rate lock. If a revised disclosure is provided, it must be provided either on the same business day the rate is locked or the day it was requested. Lenders are allowed to provide the Closing Disclosure early, as long as it is received by the customer at least three business days prior to closing. In situations where the APR decreased by more than 1/4 or 1/8 percentage points due to over-disclosed finance charges, a new three-day waiting period is not required. When more than one person is applying for the loan, both consumers and their addresses need to be included on the Loan Estimate. However, the disclosure only needs to be delivered to one of the applicants. But the Closing Disclosure must be provided to each borrower who can rescind the loan. The full one-hour webinar can be viewed online at philadelphiafed.org . Source: Mortgage Daily Consumer & Realtor Corner This news is designed to help you by providing information that will be helpful to provide to your previous clients and other segments of your sphere. Feel free to forward these to your database, post on blogs, websites and more. Boomerang Buyers Ready To Move Now that the worst of the foreclosure crisis is in the rearview mirror, former home owners who lost their homes to a short sale or foreclosure are re-entering the housing market. Theyve spent the last few years rebuilding their credit — and theyre ready to buy again. Were about three years past the peak of the foreclosures, and thats about the time when most people would qualify for another loan, says Daren Blomquist, spokesman for RealtyTrac. The market really needs boomerang buyers to maintain the current recovery. Some boomerang buyers heading back to the housing market may find they have to make down payments of at least 20 percent to qualify for a loan, but others are finding opportunities to put down as little as 3.5 percent or 5 percent. The wait times for qualifying for a loan can vary depending on the former home owners circumstances. Typically, the wait times following a short sale or foreclosure are as follows: Seven-year wait for home owners with a previous foreclosure before they can qualify for a new loan through mortgage giants Fannie Mae and Freddie Mac. If the foreclosure was included in a bankruptcy, the borrower has to wait only four years. Two-year wait for home owners who underwent a short sale before theyre eligible for another Freddie Mac and Fannie Mae loan. Three-year wait for home owners seeking a Federal Housing Administration loan after a foreclosure or short sale. Some home owners who underwent a foreclosure because of at least a 20 percent cut in their pay may be able to qualify for a new loan after just a year through FHAs Back to Work program. Source: The Sun Sentinel & Raoul Badde Note: Every situation is different and lenders may follow different guidelines for different transaction types. You are always advised to see a lender for a pre-approval before you submit an offer to purchase a home. Preferably with me = )
Posted on: Tue, 14 Oct 2014 19:16:53 +0000
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