PALM CITYS HORSE TALK: USDA Mortgage Program

USDA mortgage program runs out of money



Florida Realtors® letter to Congress

Download the full text Florida Realtors President Wendell Davis’s letter to all of Florida’s U.S. Senators and Representatives. (PDF format)
WASHINGTON – March 31, 2010 – A no-down/low downpayment program for rural areas is running out of operational money, jeopardizing sales in some Fla. areas.

Last week, the United States Department of Agriculture (USDA) announced that funding authority for its popular Rural Housing 502 Single-Family Loan Guarantee program would, according to its notice, “likely be exhausted by the end of April 2010.” Once the funding runs out, the USDA will not issue its conditional commitments to homebuyers “subject to receipt of appropriated funds.”

Officially, new appropriated funds don’t become available until October 2010, but the National Association of Realtors® sent letters to Congressional appropriators urging immediate extension of commitment authority for the program. Other real estate interests, such as the National Association of Builders, have also stepped up pressure on Congress.

In a letter sent to every Florida Congressional lawmaker, Florida Realtors® President Wendell Davis told Senators and Representatives that “worthy homebuyers will be left without access to mortgages” from federal inaction. In the letter, Davis protested the lack of funding for Section 502 rural housing and Congress’ failure to extend the National Flood Insurance Program.

“Homeowners and homebuyers in our state/region are already feeling the impact,” Davis said in his letter. “Given the many challenges financial and real estate markets are facing, now is not the time to create another obstacle to real estate transactions.”

However, Congress is now in recess and does not return until April 12, so additional funding cannot appear until at least then. In addition, an increase in funding is not assured for the rural housing program, and homebuyers counting on the loan could be out of luck – especially those homebuyers hoping to use a USDA loan in time to qualify by the April 30 deadline for the federal tax credit of up to $8,000 for first-time buyers and $6,500 for move-up buyers.

Loans are first-come, first-served. With 1,900 lenders offering the loans, time is of the essence for homebuyers who plan to use the funding. When the money runs out, the program stops operations.

Our Weekly Report..How did we do?

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OVERVIEW ~ March 15 through 19 was a rather quiet week, a welcome respite from the ceaseless turmoil of markets moving first higher, then lower, then reversing again. The Dow Jones Industrial Average began the week at 10,624.69, then made minor improvements on the figure, adding from 0.2% to 0.4% each day until Friday. At the week’s end, unsurprisingly, investors found a few small bits of data to worry about. They also saw prices on various shares of stock that made the equities, for some investors, possibly worthy of selling. And the DJIA fell a mild 0.35%, ending the week at 10747.98.
Interest rates, meanwhile, remained quiet. The 10-year Treasury note yielded 3.702% at the beginning of the week and treaded water, end-
ing the week at 3.693%. That amounted to a 0.2% decline. The Freddie Mac average rate for their 30-year mortgage, measured Thursday through Thursday, rose from 4.95% the prior week to 4.96% on Thursday March 18.
Why the calm? There was little for investors to be unusually nervous about. Federal Reserve Board Chairman Bernanke also helped matters by promising, once again, that it would be several months before the Fed allowed short-term rates to rise very far above 0%.
FOCUS ~ Further, there were bits of data that tended to calm the nerves and suggest that the economy probably is heading toward a sustainable recovery. A simple example: A company that freights, flies and delivers a vast amount of the goods produced by this nation and purchased by consumers, reported that its fiscal third-quarter profit more than doubled year-prior earnings. As a major participant in the world economy, this company can likely be seen as something of a barometer. Its health and growth suggest that the world economy is improving.
The current yield curve is another matter of special interest. (The yield curve is generally defined by the distance between the yield on the 2-year Treasury note and the 30-year Treasury bond.) In February of this year, the gap stood at a record 2.926. On Monday, March 15, the gap had narrowed to 2.742, closer to where it stands when the economy has regained strength and borrowers and lenders both expect a reasonable but not excessive premium for long-term lending. (If the gap becomes either too high or too low, we can expect market forces to bring the gap back into balance as the economy improves.) The gap is indeed moving toward a more normal range, and it may decrease even more rapidly when the Fed ceases its downward pressure on short-term rates. Though the markets fear the moment when the Fed makes this change, a change in Fed policy may become unavoidable if the yield curve continues to narrow.

New Mortgage Aid Plan

Answers to questions about new mortgage aid plan



WASHINGTON – March 30, 2010 – The Obama administration on Friday announced a major reworking of its troubled $75 billion plan to prevent foreclosures. The revamped program is now designed to aid jobless homeowners and people who owe more on their mortgages than their homes are worth.


Here’s a look at the details:

Q. How many homeowners will this help?


A. The effort is designed to enable the government to reach its original goal of helping 3 million to 4 million homeowners avoid foreclosure by the end of 2012. That benchmark has so far proved impossible to approach. Only 170,000 homeowners have completed loan modifications, out of 1.1 million who began the government’s Home Affordable Modification Program (HAMP) since it started last year.


Q. How many borrowers are in trouble?

A. About 6 million homeowners have missed at least two months of payments. And experts warn that 10 million to 12 million borrowers are in danger of foreclosure over the next three years. A growing risk is among homeowners who are “under water”: They owe more on their loans than their homes are worth.


Q. How does the new plan work?


A. Borrowers will get help in three ways: Jobless homeowners can get a three-to-six-month break on their mortgage payments. Banks will get financial incentives to reduce mortgage balances for under-water borrowers. And lenders can offer refinanced loans backed by the Federal Housing Administration to these borrowers.


Q. When will all these programs be available?

A. Government officials didn’t specify but said they should become available in the coming months.

Q. I’m unemployed. How do I get help?

A. That piece of the program is designed to give homeowners more time to find a job. Borrowers will have three to six months in which they’ll have to spend no more than 31 percent of their monthly income on their mortgages. If you do find a job during that time, you will be evaluated for a loan modification that could permanently reduce your payments. To qualify, you need to live in your home, have a mortgage below $729,750 and receive unemployment benefits.

Q. What happens if I don’t get a job after the time is up?


A. Lenders will encourage you to consider a short sale, in which you sell your home for less than the mortgage amount. Another option is a deed-in-lieu of foreclosure, in which you agree to hand back the property to your lender.

Q. I owe more on my mortgage than my house is worth. Will this help me?

A. Maybe. The program depends on the willingness of mortgage companies to participate. Their track record has been shaky at best.


Q. How does it work?

A. Mortgage companies that already participate in the government’s foreclosure prevention program will have to consider reducing the mortgage amount for borrowers who owe at least 15 percent more than their home’s current value. Those reductions will happen gradually over three years and apply only if you miss no payments. Those companies will receive expanded incentives to do so.


Q. What kind of incentives?

A. For every dollar of principal the lender reduces, they will receive a subsidy of 10 to 21 cents. The larger subsidies will help reduce principal of borrowers who are less under water.


Q. How do I qualify?

A: You must have a mortgage of less than $729,750. You also must show that you are in financial trouble. And you have to be spending at least 31 percent of your pretax income on your mortgage payment.

Q. So how do I apply?

A. Call the company that sends your mortgage bill, also known as your mortgage servicer, to see if you qualify. If you can’t get hold of someone, try a nonprofit housing counselor. NeighborWorks America runs a national network of foreclosure counseling agencies. Try: http://www.findaforeclosurecounselor.org/

Q. How does the refinancing program work?

A. Some borrowers will be able to refinance into loans backed by the Federal Housing Administration, which insures loans against default. The FHA will get $14 billion in incentive money from the federal bailout fund to make this happen. Lenders will have to reduce the homeowners’ primary mortgages by at least 10 percent.

Q. How do I qualify?


A. Homeowners must not have missed any payments on their home loans, must live in their home as a primary residence and must provide proof of income.

Q. How do I apply for the FHA plan?

A. You don’t. It’s voluntary for mortgage companies. They’ll evaluate whether they want to offer this option to homeowners.

PALM CITYS HORSE TALK: WEEKLY ECONOMIC UPDATE

OVERVIEW ~ Though credit market indices appeared poised on the edge of losing their strength, with rates likely falling in the face of investor concerns about the week’s Treasury security actions, the auctions very quickly showed their strength over the week of March 8 through March 12. There were causes that almost seemed to conflict with one another. Doubts about the ability of European Union nations to resolve debt problems seemed to fade, keeping rates from rising on fears that near-term debt problems would push them higher. But, at the same time, there was an apparent flight to safety evidenced in the higher percentage of foreign investor bids in the auctions (35% as against 32% in the prior recent auctions).

The Treasury auctions were preceded by a small run-up of yields as investors anticipated the possible need for higher rates to attract bidders to the auctions. At Monday’s close, therefore, the 10-year Treasury note yield had climbed to 3.710%. This most likely made the auction all the more successful as investors sought both safety and higher yields. The auction was very successful, with 3.45 bids for every 10-year note auctioned.

Notice, though, that the 10-year note ended the week at 3.703% and may remain at this higher level for some time if a continuing stream of favorable economic data continues to increase investor confidence in the U.S. recovery. Indeed, interest rates may have already been making a turnaround in the week ending March 12, heading north, but slowly and unevenly.

The Freddie Mac average 30-year fixed rate, measured from Thursday through Thursday, edged down two basis points meantime, as mortgage rates remained rather flat over the week.

FOCUS ~ The net worth of U.S. households fell by $14 trillion during the recession. Keeping in mind that consumer retail purchases make up roughly 70% of our nation’s Gross Domestic Product (GDP), we can understand that the astonishing plunge in funds available for spending has reduced retail sales significantly and caused our GDP to fall.

What were the main causes of the loss of household net worth? The decline in home values was significant, as was the reduction in stock values. Losses of jobs have also created much slower retail sales. A formula for a large part of our nation’s economic recovery, therefore, should include an improvement to real estate values (or, at the least, a firming, eliminating concerns about further price declines), higher stock prices, and above all, an improving jobs market. The latest figures already suggest improvement, with a $5 trillion gain in household net worth from the first quarter through the end of the third quarter 2009. There are no guarantees, of course, but the formula may well continue to move the economy in the direction of recovery.

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Mortgage Rates Still Below 5 Percent

Mortgage rates still below 5 percent

Mortgage Rate Trend Index

Almost two out of three (59%) mortgage experts polled by Bankrate.com this week expect little rate fluctuation in the near future. On the other hand, only 8% foresee further drops, with the remaining 33% expecting an increase.
WASHINGTON – March 19, 2010 – Mortgage rates held below the 5 percent threshold for the third straight week as the Federal Reserve prepares to end a program that has kept rates at or near record lows.

The average rate on a 30-year fixed rate mortgage edged up to 4.96 percent this week from 4.95 percent a week earlier, the mortgage finance company Freddie Mac said Thursday.

Rates dropped to a record low of 4.71 percent in December and have hovered around 5 percent since, kept down by the Fed’s $1.25 trillion program to buy up mortgage securities issued by Freddie Mac and sibling company Fannie Mae.

The Fed said this week that this program would end on March 31, as expected. But some analysts fear that once the program ends, mortgage rates could rise. That could weaken the fragile recovery in housing and the overall economy. Still, the Fed has left the door open to extending the program if the economy weakens.

The central bank has been the dominant buyer of mortgage securities over the past year. Without the Fed’s participation, “it may take a few weeks for the market to sort out whether there’s enough demand to soak up the supply,” said Greg McBride, senior financial analyst with Bankrate.com.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.33 percent, up from 4.32 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.09 percent, up from 4.05 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.12 percent from 4.22 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year loans and 0.6 of a point for the other loans in Freddie Mac’s survey.

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PALM CITYS HORSE TALK: LOAN MODIFICATION TERMS CAN BE TOUGH.........

Loan modification terms can be tough for those few who get them

FORT LAUDERDALE, Fla. – March 10, 2010 – For William and Lida Negron, their lender’s decision to modify their mortgage seemed to be the key to holding on to their home.

William Negron, in his mid-70s, lost his job in car sales two years ago. The possibility of losing their home put “so much stress on him,” said son Carlos Negron. “My mother has been to the hospital twice because of this.”

Relief turned to shock when the Negrons saw the new loan terms: the monthly payment fell to $1,280 from $2,000, but the loan would be extended to 40 years from 30, with a $25,000 balloon payment in 15 years. William Negron would turn 90 about the same time.

“That was a major slap in the face,” said Carlos Negron. The couple gave up their Orlando home.

The Negrons’ story is a sign that trouble in mortgage loan modifications is reaching a new stage.

For months, troubled borrowers have struggled to get mortgage modifications. Only 14.3 percent of South Floridians who get a temporary mortgage modification secure a permanent new loan. Now, a growing number of homeowners who are offered permanent mortgage modifications are finding the terms unacceptable.

Among the problems: surprising balloon payments – one-time lump-sum payments that cover any principal that may have been deferred – and interest rates that can rise again.

Many borrowers spend months in limbo, from the time a temporary loan modification is offered by their lender to when a permanent modification is made. Terms of the permanent loan may not be the same as the temporary modification.

“It’s been a long, tedious, painful time of uncertainty,” said Steven Carroll, a Lighthouse Point resident who has spent more than a year trying to modify his mortgage.

A brief period of unemployment for Carroll and his wife threw their finances into turmoil. Now they are both working and they have a temporary modification, but he doesn’t know what the terms of the permanent loan will be. “I’m hopeful that they’ll finally fulfill their end of the bargain,” he said. A Bank of America spokeswoman said the lender is working with Carroll.

A year ago, the Obama administration launched the Making Home Affordable program, putting $75 billion toward modifying mortgages and helping millions of borrowers through the worst housing crisis in decades.

So far, the results are slim. About 100,000 Florida loans have been modified on a trial basis. A spokeswoman for the Treasury Department says it is difficult to estimate how many borrowers are eligible.

Fewer than 15,000 trial loan modifications in Florida have become permanent. Nationwide, 116,297 modifications have become permanent out of almost 1.3 million trial modifications begun under the Obama program.

Despite the odds, thousands of South Floridians are trying to modify their loans in a desperate effort to save their homes. Recently, they jammed an event in West Palm Beach that promised face-to-face meetings with bank representatives and loan counselors. “Good news!” shouted homeowner Cleore Gauvin, of Wellington, when she learned, on the spot, that Bank of America would cut her interest rate in half to 3 percent for a trial modification.

Bankers point out that a mortgage modification is only a temporary break that gives borrowers an affordable payment while they stay in the home. Borrowers, they say, should make plans for the day when that period of lowered payments will end and decide whether they can really afford the house.

A cut in the interest rate, for example, could end in a few years, which would mean the monthly payments would increase and the loan potentially becomes unaffordable again.

Under the Making Home Affordable program, interest rates can be lowered for up to five years. Then they start rising again, 1 percentage point per year until the rate reaches the market rate at the time of the modification. Loans modified outside the federal program can have different provisions.

Another emerging issue is balloon payments, such as the one the Negrons faced.

Not all loan modifications have them. But some permanent loan modifications defer payment on a portion of the loan until years later.

When the mortgage’s term ends – in 30 or 40 years – or when the house is sold or the loan is refinanced, some borrowers will owe a one-time, lump-sum payment that could amount to tens of thousands of dollars. The balloon payment covers the portion of the principal that was deferred.

“There’s no question the principal-deferred balloon payment is, in fact, very, very common,” said David Berenbaum, of the National Community Reinvestment Coalition, a group of hundreds of lenders, loan servicers and community groups that offer foreclosure counseling. The organization wants banks to reduce or forgive some of the loan rather than to defer a portion of it.

The concept of deferring principal and having a balloon payment is widely misunderstood.

Says Alexander Fernandez, director of Homeownership Preservation for Neighborhood Housing Services of South Florida. “A lot of people have that confused. They think (the principal that they’re not paying) is going to be forgiven and it’s not.”

Homeowners may be unaware of the terms of their new deals – for a good reason. Terms such as balloon payments are not spelled out in their loan papers, said Terry Schmitz, senior underwriter at AmeriFirst in Fort Lauderdale.

“It doesn’t say you have to make a balloon payment [in the future]. Unless you know how to work a real estate calculator, you don’t know what you’re signing,” she said.

For borrowers trying to hold on to their homes the difficulties continue even after the new loan begins.

About 20 percent of modified loans, through last June, ended up in default only three months later, according to federal statistics.

Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla., Harriet Johnson Brackey. Distributed by McClatchy-Tribune Information Services. Mary Shanklin of the Orlando Sentinel contributed to this report.

PALM CITY'S HORSE TALK: OUR ECONOMIC NEWS FOR THE WEEK

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OVERVIEW ~ As now seems the usual course for the markets, sentiment among investors turned from optimistic, over the week of Feb. 16 (Feb. 15 was a holiday) to Feb. 19, to pessimistic in the week that followed. At the start of the day on Monday, Feb. 22, the Dow Jones Industrial Average (DJIA) had risen to 10402.35. By the end of the week, the DJIA had declined to 10325.26. This is not a precipitous fall, but stock market indices remained somewhat sluggish over the entire week, brought down by disappointing economic indicators and worries about developments in Greece. Further, the week saw very large Treasury security auctions in which bidders pushed rates slightly higher than the Treasury had anticipated. Again, not a great deal higher, but enough to create worry, particularly over Monday’s and Wednesday’s auctions. The Freddie Mac average 30-year fixed-rate, meanwhile, rose from 4.93% the week prior to 5.05% on Thursday, Feb. 25. This signaled the possibility of an on-going uptrend among mortgage rates (though, as always, concerns that present events foretell future trends usually fall away as the mood among investors moves from negative to positive and back again).

FOLLOW-UP ~ Greece remained in the news, postponing its sales of 10-year notes for one to two weeks, much to the concern of international investors. Greece needs to borrow at least 54 billion this year to pay off existing notes and bonds; it has thus far raised 13 billion. About 22 billion of bonds mature in March and April, and so Greece is under the gun to find enough money to pay off the 22 billion. The country also currently faces the possibility that Standard & Poor’s, and possibly other rating agencies, will lower its rating for Greece, which could make it still harder for Greece to sell its notes.

Coming this spring as well, the Fed will stop helping keep mortgage rates low as its program of buying very large quantities of mortgage-backed securities (MBSs) comes to an end. Investors have had plenty of advance warning that this will happen, and it is therefore difficult to predict the reaction in the markets. More important, though, we can’t know to what extent this will leave the MBS markets vulnerable to an imbalance of growing supply and lower demand, elevating the rates required by investors.

FOCUS ~ The Federal Reserve Board Chairman, in testimony before Congress on Wednesday, Feb. 24, once again reassured the markets that the Fed would continue to help keep rates low for an “extended period.” His comments appeared to briefly help lift the stock index nearly a full percent, but investors remain skeptical, worried that interest rates may turn higher before the Fed Chairman currently predicts they will. The rate the Fed charges at its “discount window,” after all, was nudged higher last week. And purchases of MBSs will cease in March. What we can see here is an anxiety among investors which cannot be salved by the Fed chief (surely assuring continued market volatility) as rates and indices climb and fall unpredictably

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PALM CITYS HORSE TALK

Palm City Horse Talk News: 5 Bedroom Home/5 acres

PALM CITY, FLORIDA. This five acre home has wonderful location. It is located near all schools and shopping centers. This lovely Fixer has so much to offer. Plenty of space to do almost anything like, have a horse farm, work in your shop on your own property, or just have a beautiful natural Florida homesite. Offered at $459,000. Watch this movie and give me a call for more information.

PALM CITYS HORSE TALK: STAGE YOUR HOME TO SELL TO SELL

5 ‘Hip’ Ideas for Do-it-Yourself Staging
March 2, 2010 by Erica Christoffer · Leave a Comment
Filed under: Staging Tips
By Erica Christoffer, Contributing Editor, REALTOR® Magazine

Looking for some quick home staging ideas that don’t cost a lot? Here are five inexpensive “Hip Tipz” from stager Charlene Storozuk that will help you show off a home with painting techniques and found objects.

1. Paint bedroom furniture antique white and the walls a darker tint. Add crystal hardware such as a chandelier or light fixtures for added elegance to create a French-inspired bedroom.

2. Frame a favorite tea towel for display in the kitchen.

3. Make the rooms off the hallway appear larger by painting them a lighter shade than the hallway.

4. Vintage door panels make an interesting headboard when painted.

5. Make a sloped ceiling appear taller by installing a shelf underneath at height of lowest point of slope.

PALM CITYS HORSE TALK NEWS: DON'T WAIT TO LONG

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Buyers Who Wait May Lose a Lot
Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

Source: Money Magazine, Beth Braverman (03/02/2010)

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Fixer-upper financing from FHA

WALNUT CREEK, Calif. – March 4, 2010 – The word “as-is” can indeed be one scary phrase. Especially when buying a home in today’s market where foreclosures and short sales that need fix-up work are plentiful.

But a little-known Federal Housing Administration loan program that’s been around since 1978 can help take the sting out of “as-is.” Only a small number of homebuyers took advantage of the FHA’s 203(k) program in 2009. Not that many lending and real estate professionals are aware of the program, say observers.

Last year, Tom Meyer found a classic Oakland, Calif., home built in 1925 near Mills College he liked a lot. As a short sale it was priced right and about half the original asking price. Trouble was, the place needed some fix-up work – foundation improvements, dry rot work, a new roof over the garage and other improvements.

With the help of the FHA’s 203(k) renovation financing loan program, Meyer folded about $100,000 worth of repairs and improvements into his $422,000 mortgage. He had bought the home for $320,000.

“I would not be able to pay a contractor $100,000 and buy a house at the same time,” said Meyer, 58, who works in corporate media at Shaklee’s Pleasanton headquarters. “It had been essentially allowed to start falling apart over the last 20 years.”

He had rented in San Francisco for 25 years before moving into his new digs last September with his girlfriend, Cathy Keating. “We like old houses, and a great benefit of this program is that it helped us keep a beautiful but deteriorating house from deteriorating further. With the work we did, we expect it to still be standing and beautiful 80 years from now,” he said.

Renovation financing through the 203(k) program allows the costs of needed repairs and improvements to be included in the FHA federally insured loan amount instead of having the buyer come up with cash or a separate loan to do the work.

“This is a perfect loan for an as-is situation,” said Kristine Marr, a loan officer with Prospect Mortgage in Lafayette, Calif. “It’s not a new loan program, although I think it’s going to have a lot more use today because we have so many foreclosures and bank-owned properties. You go into lots of homes and see people have yanked out stoves and ovens and fixtures and sinks.”

The work has to be done within six months after escrow closes. Borrowers have the option of putting up to six months of mortgage payments on the end of the loan if they don’t want to live in the house while the work is being done.

“Renovation financing is a program that allows you to not only finance the purchase of a home but finance any repairs and/or improvements. It provides (buyers) with a responsible way to purchase a fixer-upper property,” said Luis C. Munoz, who helped Meyer with the loan and is a renovation loan specialist with the Oakland branch of Mason-McDuffie Mortgage Corp.

Munoz also gives presentations about the program at monthly home ownership workshops sponsored by the Unity Council, an Oakland-based nonprofit.

At a time when equity loans are hard to get, the program can also be used as a refinancing vehicle for borrowers who want to do repairs and improvements, provided the value of the home is greater than the value of the loan. “At the same time as you refinance, you pop in the extra dollars you need for whatever you want to do,” Marr said.

FHA home loans require certain health and safety standards be met and that needed repairs identified during the inspection process be completed before escrow closes. However, minor repairs and improvements costing between $5,000 and $15,000 can be done after escrow closes for borrowers who opt for a streamlined repair program.

A 203(k) loan can help buyers finance both minor and major repairs and improvements. It can also help buyers compete with investors when bidding for short sales and foreclosures, said Sheri Powers, director of the Homeownership Center at Unity Council.

The loans can also be used to pay for improvements such as new appliances, second-story additions, remodeled kitchens and bathrooms, and skylights, just to name a few examples. “Property repairs cost money and they want to make sure people using their loan program are going to be in the home in long run and not just the short run,” Powers said.

The loans have become more popular since home prices started falling and FHA lending limits were raised a couple years ago but are still a tiny sliver of overall FHA loan volume. Last year, 203(k) loans accounted for 219 mortgages in the Bay Area, compared to 35 in 2008, one in 2007 and none in 2005 and 2006, according to Department of Housing and Urban Development statistics. “It’s making a comeback,” said Powers.

Marr said that 203(k) financing is not for everyone. A buyer will have to work with contractors and may have to wait several months before moving in, she said. And there is no guarantee they won’t be outbid by an investor for the property. “A lot of listing agents are preferring the investors, because the investors tend to be all cash or 50 percent cash. That’s always hard to compete with,” she said.

Palm City Horse Talk: Getting The Best Interest Rate

You should shop around for the best interest rate.
In fact, the new good faith estimate issued by the Department of Housing and Urban Development (HUD) that took effect January 1 of this year has a new section that you, the consumer, can use to help compare one lender’s rate offering to another.
While you’ve always been able to compare lenders, this is the first time the government has given you your very own rate comparison chart. The “shopping cart” as HUD calls it allows you to record a lender’s rate as well as the total estimated settlement charges. But while it’s important to shop for an interest rate it’s also critical to know not just how but also when you should query potential lenders.
First and foremost, you need to decide on which loan program you’re going to compare. While that might seem a little obvious at first glance it’s really not. You need to decide not only between a fixed, an adjustable rate mortgage ( ARM) and a hybrid. A fixed rate is fixed throughout the life of the loan, an ARM has an interest rate that can vary throughout the life of the loan and a hybrid is an ARM that is fixed for a predetermined period, say five years then morphs into an ARM. In the current rate environment, where interest rates are still near historical lows, most people select a fixed rate.
But you’re not finished. You also need to select a loan term, or its amortization period. The most common fixed rate term is the 30-year fixed-rate mortgage. But most lenders offer fixed rate loans in five year increments beginning with ten-year loans. You can also select a 15, 20, and 25 to go along with a 30 year fixed rate.
When should you choose a shorter term for your loan? When you aren’t stretching to meet payments. Conventional loan to debt ratios prevent you from having more than 41% of your gross income used toward debt payments and mortgage payments. The ceiling for mortgages is about 28% of your income, with the rest of your debt payments going toward a car payment, student loan, or revolving credit card charges. If you have low debt, or are buying a modest home compared to your means (below a debt ratio of 28%), it’s a good idea to get a shorter term.
The difference in interest rates for the full term even for only five years is well worth it, and you build equity, or ownership, that much faster. Plus a higher mortgage payment is a disincentive to go out and run up your credit cards.
Once you select the proper loan as well as the term you can start shopping. But you’re not done just yet. Now you need to compare loan rates to decide where you want to apply for a loan.
You’ll need to give the lenders you call the same facts – what kind of loan you want, how long the loan term will be, how much you want to put down or toward the purchase price, and your credit score.

Keep in mind that quotes you receive aren’t binding on the lender’s part until you actually sign an application and share your financial information like tax returns and pay stubs. You won’t receive a good faith estimate, or binding costs, from the lender unless you have put a contract on a home.

Mortgage rates can change throughout the day. Rate swings of a quarter of a percent, while not a common occurrence does in fact happen, especially in these volatile times. What does that mean?
It means that you need to do your rate shopping not only on the very same day but at the same time of day. You might get a rate quote from a lender on a Friday morning of 5.00 percent then call another lender the following Monday afternoon and get a quote of 4.75 percent for the very same loan.
That doesn’t mean the second lender is always lower than the first lender, it means the markets may have changed and rates in general have gone down. You need to call back the first lender and get their updated rate quote.
Give your lenders the opportunity to earn your business, just make sure they’re all competing under the same conditions: the same loan program at the same time.

Palm City, Florida News..WANT TO SELL YOUR HOME?

Nine tips to sell your home in 2010

WASHINGTON – March 3, 2010 – Signs of a recovery in the real estate market indicate this may not be the “Winter of your Discount Tent.” Home sales, value and mortgage applications have risen slightly as mortgage rates stand at a historic low.

This slight glimmer of positive news is offset by estimates that about 48 percent of all U.S. mortgages will be underwater by 2011. Foreclosures and short sales continue to plague the market, keeping a lid on home prices. As a result, 2010 will continue to be a buyer’s market.

That doesn’t mean, however, that all hope is lost of selling your home this year. Here are nine tips to sell your home in 2010.

1. Don’t wait for a recovery

Home values aren’t likely to rebound to previous highs for several years, perhaps even a decade. While you may face a loss by selling now, that negative figure may only be a paper loss, particularly if you’ve owned your home for some time.

2. Make improvements

If you have access to credit, invest in improving and repairing your home before placing it on the market, rather than trying to go for a quick as-is sale. Rehabs are more affordable now, thanks to the availability of low financing, reduced construction materials costs and lower contractor charges. Focus on upgrades to kitchens and bathrooms, especially counters and cabinets, as these yield the highest returns. Get three different estimates from contractors and add another 10 percent for unexpected costs.

4. Hire professionals

You need professionals, not friends or relatives, to repair, upgrade and sell the biggest investment you’ll likely own. Ask for credentials, references and a history of recent performance. Your appraiser should have at least five years experience with an appropriate license or certification. The same applies to hiring a home inspector. Talk to at least two or three appraisers and inspectors before selecting one.

5. Get downpayment assistance

Federal and local governments offer several downpayment assistance programs for first-time home buyers. Look for other city, county and state programs that will piggyback on federal programs for assistance. Search for “downpayment assistance programs” with the name of your region.

6. Take Uncle Sam’s help

The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers qualify if they sign a binding contract to buy a home by April 30 and close by June 30. The program’s maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.

A separate $6,500 tax credit has been added for those who have owned their homes for at least five years and want to upgrade. Homeowners drowning in their present real estate loans are eligible for a loan-modification program with their current mortgage company or loan service through the Making Home Affordable Program (http://makinghomeaffordable.gov/).

7. Price accordingly

Listings move when a property is appropriately priced. Others gather dust because the owners haven’t adjusted their expectations to the present market. This doesn’t mean, however, you should severely drop your price on a well-maintained home to avoid extended problems. Research your market and price accordingly.

8. Energy tax credits

Through Dec. 31, homeowners who buy and install specific energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can apply for a 30-percent tax credit of up to $1,500 of their costs on each product.

Go one step further and earn a 30-percent tax credit through 2016 (without a spending limit) when you purchase such energy-saving products as solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems. Visit EnergyStar’s Federal Tax Credits for Energy Efficiency (http://www.energystar.gov/index.cfm?ctax-credits.tx-index) for a complete summary.

9. It’s not personal

Buyers want to imagine themselves in your house for years to come. Excess decor and knick-knacks distract from this vision. Ask your Realtor’s advice or hire a home stager to bring your house back to zero before beginning to show it. A general rule of thumb is to eliminate or store at least half the items in every room.

Don’t get defensive about colors, design patterns or flooring you installed. Just grit your teeth and think of the closing check while your agent serves as a buffer. Remember the customer is always right, unless, of course, they’re low-balling you.

If you need help to stage your home and you are thinking about selling in the near future, take these suggestions seriously. It is a tough market. If you really want to try to get your price, it really has to be an effort from your professional and the owner. If you smoke, go outside to keep your nice and fresh. If you have animals in the home, try to prepare for showings. I have always found that it is much better to have the pets out of the home. We love them but some folks may not love them as much as you do.

Another good suggestion is to open the draperies to let as much light into the home as possible. Light and bright always sells before dark and dull. I have also found that a pleasant smell of apple pie or baked ham in the oven gives a home a warm feeling.

Curb appeal is also very important. Make sure pots are filled with flowers and not weeds. Try to create a warm, happy feeling for people that approach your front door. If you do not have the funds to paint, try cleaning the outside front door so it will be nice and inviting.

One more real good tip is let your professional do all the work that they have been contracted to do. It is always best for the owner to not be there when a buyer comes. For some reason, this is a negative. Buyers sometimes feel pressure and cannot wait to leave. Think about this when you list your property because this really works for you.

Should you need an evaluation, give me a call and I will be happy to help you. Should you think that you may qualify for a short sale, I can help you. Don't wait until time runs out. Short sales take time to prepare. Not everyone qualifies for a short sale. I am qualified to help you, so please contact me. I can help you get the ball rolling on this long process. GOOD LUCK IN SELLING YOUR HOME THIS YEAR!!

50 Acres, Beautiful Farm, Just Move In

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Foreclosure Newsletter

Nationwide Agent Network
Carol Cross
Yanick Realty
7004 SW Busch Street, Palm City, FL 34990
“I am available to assist you in purchasing a foreclosure property or another property bestsuited to your needs. I am here to act as your local real estate specialist.”

Phone: 772-283-6582 Email: lilourmare@gmail.com
February 2010 Vol 4 Issue 5
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6 month National Foreclosure Trends

NOD NTS NFS LIS REO


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U.S. FORECLOSURE ACTIVITY DECREASES 10 PERCENT IN JANUARY
Foreclosure filings were reported on 315,716 U.S. properties during January, a decrease of nearly 10 percent from the previous month but still 15 percent above the level reported in January 2009, according to the RealtyTrac January 2010 U.S. Foreclosure Market Report. REO activity nationwide was down 5 percent from the previous month but still up 31 percent from January 2009; default notices were down 12 percent from the previous month but still up 4 percent from January 2009; and scheduled foreclosure auctions were down 11 percent from the previous month but still up 15 percent from January 2009.
Complete Story
Best to buy before new FHA guidelines take effect
By Octavio Nuiry, RealtyTrac Staff Writer
Starting in early summer, the Federal Housing Administration is tightening lending standards in an effort to bolster its dwindling reserves. The new lending standards will make it tougher for some prospective buyers to purchase a home by requiring a higher down payment than the typical 3.5 percent for some borrowers, higher insurance premiums and reduced seller concessions. Securing FHA-insured mortgages are attractive to borrowers because down payments are only 3.5 percent. Most conventional loans now require 20 percent down, keeping many creditworthy borrowers on the sidelines. Complete Story
Here are some of the most recent Investment opportunities in the area.
300 yds300 yds© 2010 Microsoft Corporation © 2009 NAVTEQ © AND © 2010 Microsoft Corporation © 2009 NAVTEQ © AND 2D3DRoadAerialBird's eyeLabelsSee this location in bird's eye view
Bing Maps 3D has finished updating Pre-Foreclosure
SW Parkgate Blvd
Palm City,
FL 34990

Market ValueDefault Amount$231,349N/ABeds/BathSq. FT3/22,741
Property Type Address Market Value Default Sq. Ft.
Bank-Owned SW Villa Pl,
Palm City, FL 34990 $1,000 N/A 1,346 GET DETAILS
AuctionAuction Date: 2/23/10 SW Murphy Rd,
Palm City, FL 34990 $191,669 N/A 1,414 GET DETAILS

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Why Borrowers Are Welcoming Foreclosure
Which would you rather lose, your home or your credit cards? It's a choice most of us would prefer not to face, but for some the answer is that they would rather hang onto their plastic. In a new study of 27 million credit records, TransUnion says that since 2008 credit card delinquencies have been lower than mortgage payment delinquencies. “This 'flip' is representative of the change in the conventional wisdom around the payment hierarchy, or which debt obligations consumers would choose to pay first,” according to the company. Foreclosure, it seems, is no longer the stain it once was.
Complete Story

Foreclosure Trends : December, 2009
National Florida Martin CTY
NODs 96,765 0 0
NTSs 219,090 2 0
NFSs 79,810 33,504 159
LISs 151,344 66,984 523
REOs 196,460 17,681 84


Notice of Default (NOD)
A non-judicial document filed by a trustee that starts the foreclosure process. More about NOD
Lis Penden (LIS)
Notification of pending lawsuit. A judicial document filed by an attorney or trustee that starts the foreclosure process. More about LIS
Auction / Notice of Trustee's Sale (NTS)
A filing by notice announcing a public auction. More about NTS
Notice (Judgment) of Foreclosure Sale (NFS)
An order signed by a judge directing to sell the property at public auction. More about NFS
Real Estate Owned (REO)
The final step in foreclosure process in which property ownership returns to lender. More about REOs

30 yr fixed mtg 5.05% 15 yr fixed mtg 4.40% 5/1 ARM 4.16%

Our Economic View

Weekly Economic Summary - February 26, 2010




OVERVIEW ~ During the holiday-shortened week of February 16th through 19th, the Dow Jones Industrial Average (DJIA) moved to higher ground every day, beginning at 10099.14 on Friday (Feb. 12th) and rising ultimately to 10402.35 on Friday, February 19th. Setting aside for a moment their concerns about the debt crisis in Greece, investors dove back into the stock markets because of recent declines and because most of the economic data over the course of the week suggested the economy was strengthening. Good news about the economy, of course, tends to send today’s interest rates a bit higher. The 10-year Treasury note began the week at 3.691% and ended it at 3.782%. But the Freddie Mac average mortgage interest rate barely moved, ending its Thursday-through-Thursday cycle with its average 30-year fixed-rate at 4.93%, down from the prior week’s 4.97%.

FOLLOW-UP ~ The recent preoccupation with Greece did not entirely fade, however, and will be with us for some time. The good news was that officials of the European Union (EU) pledged to assist Greece in avoiding a debt default. But the assistance has thus far taken the form of demands that Greece tighten its budget. Still, more good news came in the form of very successful bond offerings in Portugal and Spain. Both nations found strong support from investors at home and abroad in their securities.

Note that Greece plans to offer a 10-year note very soon, and the success of that offering will tell us a great deal about the short-term future of the Greek debt problem. If investors are attracted, Greece’s credibility in its challenging efforts to reduce its debts will be affirmed. If not, the country and its EU neighbors may have to scramble to find effective ways of financing Greece’s current budget deficit.

FOCUS ~ The Federal Reserve made a noteworthy decision to raise the rate it charges member banks at its discount window (for short-term emergency loans) from 0.5% to 0.75%. The Fed called it a mere technical adjustment and was quick to add that it in no way was the harbinger of other rate hikes that would affect consumers and the economy more directly. But analysts suspected that the Fed was trying out this relatively benign rate hike to see if stock and bond markets could absorb the change without becoming too rattled. After all, investors are worried that the Fed may very soon stop other programs that have kept rates so low. It has, after all, already committed to stopping its purchases of mortgage-backed securities in March. Will more such actions follow sooner than has been expected? Clearly, the markets are worried about this possibility, even going so far as to worry that the economy may be recovering more quickly than we thought, and stronger signs of recovery may cause federal support to withdraw more quickly. This doesn’t make a great deal of sense in the long run; it’s reflective of very short-term thinking. But it suggests that the worries in the markets may likely keep producing volatility.

A Word from Warren Buffett

Buffett predicts downturn will end in 2011

NEW YORK – March 2, 2010 – Billionaire investor Warren Buffett predicted that the real estate market downturn would end by 2011 as the housing inventory declines.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote in his annual letter to the shareholders of Berkshire Hathaway, where he is chairman and CEO. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means.”

He also pinpointed what he sees as the cause of the downturn. “People thought it was good news a few years back when housing starts – the supply side of the picture – were running about 2 million annually,” wrote Buffett, “But household formations – the demand side – only amounted to about 1.2 million.”

Source: Bloomberg News, Andrew Frye (03/01/2010)