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  1. Canadians: Possible Saviors For Distressed Housing Markets

    By on March 31, 2011

    canadian real estate investors, canadian home buyers

    Distressed housing markets can try looking north for help. With home prices low in the American Sun Belt and the Canadian dollar strong, Canadians might be doing more than sunbathing during spring vacations stateside.

    One in five Canadians would now consider purchasing real estate in the United States, reveals a survey from BMO Bank of Montreal. Lower prices for American homes and a strong Canadian dollar are boosting their interest in U.S. properties.

    Housing prices in the U.S. overall have dropped 30 percent from their peak four years ago, but prices where Canadian snowbirds traditionally visit have dropped even more. For instance, prices have dropped 44 percent in Tampa, Fla., 54 percent in Phoenix, 57 percent in Las Vegas, and 49 percent in Miami.

    “Now, with the American economy and employment gaining strength, home sales should pick up and put a floor under soft prices,” says Sal Guatieri, a senior economist at BMO Bank of Montreal. “We expect prices to rise over time as the overhang of unsold homes eases.” Continue Reading…

    Category: Housing Market

  2. Mortgage Fraud Up In Hard-Hit Housing Markets

    By on March 30, 2011

    mortgage fraud, foreclosure rescue schemes

    Mortgage fraud is increasing where foreclosures are the highest and home values have fallen the most.

    Criminals are gravitating to those distressed housing markets to employ foreclosure rescue schemes and other fraudulent plots such as “flopping” or selling homes at deflated short sale values then quickly selling it for a higher price, according to Interthinx, a California company specializing in detecting and preventing mortgage fraud.

    Mortgage fraud is way up in Nevada, as well as the Chicago area. Nevada had the same fraud risk level as California in late 2009, but since then Nevada has become much riskier. Mortgage fraud in California, meanwhile, has actually decreased, although it remains high, especially in its Central Valley region.

    “This may be due to a migration of fraudsters seeking to take advantage of the more fertile grounds for fraud in Nevada, where the proportion of foreclosure and distressed sales is by far the highest in the nation,” Interthinx states in its 2010 annual mortgage fraud risk report.

    The riskiest states are Nevada, Arizona, California, Michigan, Florida, Colorado, Minnesota, Georgia, Rhode Island and Massachusetts. The District of Columbia, Maryland, New Jersey, Tennessee, Ohio, Illinois, Oregon and Hawaii also have higher than average fraud risks.

    Employment/income and identity fraud risk both increased substantially over the past year. In those types of fraud, borrowers lie to qualify for a loan.

    Lenders and law enforcement officials have largely ignored those loans, believing they are uncommon and rarely default. Instead, they focused on sophisticated criminals trying to defraud lenders in “fraud for profit” schemes.

    However, they were the predominant form of mortgage fraud during the real estate boom, mostly through stated income and low- and no-document programs. Sometimes encouraged by mortgage professionals to lie, millions of borrowers obtained loans they could not afford to repay.

    “When these borrowers began to default en masse,” the report states, “it sparked the mortgage meltdown, which led to the failure of hundreds of financial institutions, the liquidity crisis, and, ultimately, the Great Recession.”

    Going forward, Interthinx warns, they must be identified and addressed with the same urgency as frauds for profit.

    Category: foreclosures

  3. Tough Mortgage Lending Criteria Hurting Home Sales

    By on March 25, 2011

    mortgage guidelines, home loan requirementsGetting a mortgage is becoming more difficult for many potential home buyers. That’s one of the reasons why investors are starting to dominate purchases of short sales and bank-owned properties, concludes a survey of real estate agents.

    Investors, typically using cash to buy homes, accounted for 23.5 percent of home purchases in February, an increase from 19.9% percent in just two months, reports the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. Cash purchases of homes set a record, reaching 33.7 percent of purchases in February.

    “We are seeing investors come back into the market. One investor told me that one house he wanted came on Wednesday p.m. and had 9 offers by Thursday a.m.,” stated New Jersey real agent participating in survey.

    Mortgage application requirements may get even tougher later this year and next year as the government withdraws its support for the housing market and tougher regulations implements new regulations. For instance, the conforming loan limit for jumbo mortgages in high-cost is scheduled to retreat from $729,750 to $625,000 on Sept. 30 and new regulations will require lenders to keep a stake in riskier, or non-qualified, mortgages. Those changes will probably mean higher mortgage rates and tough qualification requirements for many borrowers. Continue Reading…

    Category: Purchase

  4. Retiring Baby Boomers Will Prompt A Home Remodeling Explosion

    1 By on March 24, 2011

    Baby boomers have changed everything they’ve touched by their sheer numbers. Now they will create a home remodeling explosion as they sell their older homes and retire, predicts a study from the Joint Center for Housing Studies at Harvard University.

    The oldest baby boomers will be turning 65 this year, the first of the group that will reach retirement age in the next 20 years, and the younger home buyers moving into their homes will want to renovate, upgrade and repair the dwellings, baby boomer homes, fha 203k home renovation loans, home salespredicts the report, “Housing Turnover by Older Owners: Implications for Home Improvement Spending as Baby Boomers Age into Retirement.”

    Home buyers can use the FHA 203(k) home renovation loan to finance home purchases and renovations with one loan. The home appraisal is based on the home values after renovation is completed, allowing larger valuations which helps home buyers qualify for home loans.

    Home owners over 55 accounted for about a third of all home sellers between 1997 and 2007 and that figure has been trending up and will continue to increase, predict the report’s authors, George Masnick, Abbe Will and Kermit Baker. Continue Reading…

    Category: Housing Market

  5. Home Prices Have Over-Corrected In Many States, Experts Say

    By on March 21, 2011

    Home prices have over-corrected in over half of all states based on per capita income, say economists at PMI Mortgage Insurance.

    Using 1995 as a benchmark, PMI calculates that 35 states have home prices below what they should be (based on disposable incomes), and are very affordable.

    Home prices in some states, such home prices, home values, housing marketsas Michigan, outpaced incomes in the real estate bubble, but have since significantly over-corrected, PMI says in its latest Housing Mortgage Market Review. Those states also include Alabama, Georgia, Idaho, Illinois, Missouri, Montana, Nevada, New Mexico, and West Virginia.

    That doesn’t mean home values will rebound immediately. They could fall even more before recovering.

    Home prices in other states, namely Indiana, Arkansas, Kentucky, Kansas, Iowa, Mississippi, Nebraska, Ohio, Oklahoma, South Dakota, Texas and Wyoming, are far too low even though they had no bubble. Home prices in those areas should recover as jobs return.

    New York and California home prices remain too high relative to incomes. Desirable living conditions and limited space could support higher home values, or home prices could fall even more. Others states in this group include Alaska, California, Hawaii, Massachusetts, New Jersey, New Hampshire, Oregon, South Carolina, as well as Washington DC. Continue Reading…

    Category: Housing Market

  6. More Americans Are Optimistic About A Housing Market Recovery

    1 By on March 10, 2011

    home price trends, housing market recovery, first-time home buyersMore Americans are confident that home values will recover in the next year or two, indicates a survey by Prudential Real Estate and Relocation Services Inc.

    The survey reports that 68 percent of potential home buyers think home prices will recover in a year or two. Last year, 47 percent predicted home values would increase. Also, 86 percent believe real estate is a good investment despite recent housing market troubles. Potential home buyers, the survey points out, realize that this a good time to buy a home, but if they are current homeowner they are worried about selling their existing home for a decent price.

    Given home price trends and current mortgage rates, first-time home buyers are in a better position, provided they can qualify for a mortgage and have enough for a down payment.

    A recent Fannie Mae survey fewer people believe a home is a safe investment, 64 percent compared to 70 percent last year. The difference could be due to potential home buyers feeling more optimistic and sellers feeling disillusioned. Continue Reading…

    Category: Housing Market, Purchase

  7. Buying A Home Is A Great Investment, Buffett Says

    By on March 9, 2011

    buffett's best investment, manufactured housing financing, clayton homes

    Warren Buffett, renown as the smartest investor around, says buying his home was one of the best investments he ever made.

    Specifically, it was the third best investment after wedding rings. “For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come,” writes Buffet, chairman of Berkshire Hathaway, in his 2010 letter to shareholders.

    Buffett concedes that he could have made more money if he had rented instead and used the extra money to purchase stocks, but most of us are not Buffett and don’t do a job picking stocks.

    “Homeownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates,” he writes in the shareholder letter. “But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.”

    Buffett remarked about homeownership while commenting on financial performance of Clayton Homes, a producer and financier of manufactured homes, that Berkshire Hathaway owns. Continue Reading…

    Category: First Time Home Buyer, Purchase

  8. Jumbo Mortgage Rates, Stock Values Boost Sales Of Luxury Homes

    By on March 7, 2011

    At least one housing market saw a huge jump in home sales last year: high-end homes.

    For instances, sales of California homes over $1 million increased from 18,621 in 2009 to 22,529 in 2010, a 21 percent, reported DataQuick Information Systems, a San Diego-based data provider. In fact, sales of homes and condominiums for over $1 million increased in all 20 major metro areas lastjumbo mortgage rates, luxury house year, reported DataQuick. Those metro areas saw an 18.6 percent increase in high-end home sales on average.

    Low mortgage rates helped boost the increase in luxury home sales, but a rebounding stock market and lower home prices were major factors. Buying a million dollar home calls for a jumbo mortgage, which entails a higher mortgage rate and stricter lending guidelines like a higher down payment. Although many luxury home buyers use cash, lower mortgage rates helped motivate them to purchase homes. The difference, or spread, between jumbo mortgage rates and rates for smaller conforming mortgages has narrowed considerable since the height of the financial crises.

    But the wealthy worry less about mortgage rates than other home buyers, said DataQuick President John Walsh. Continue Reading…

    Category: Jumbo Mortgage

  9. Mortgage Lending Standards Still Tight And Housing Remains Weak, Says Fed Report

    By on March 3, 2011

    home loan requirements, mortgage guidelines, housing marketsWhile hints of inflation are emerging and the job market improved in January and February, mortgage lending standards remain tight and the housing industry is still anemic, according to the Federal Reserve Beige Book report released yesterday.

    “Recent activity in residential real estate varied, but overall sales and construction remained at low levels across all districts,” the survey stated.

    Lending requirements remained tight in all districts. Atlanta actually reported tighter home loan standards. Although an improving job market is definitely good for the economy, stringent mortgage lending requirements are not good news for homeowners or home buyers hoping to take advantage of current mortgage rates.

    New York saw a stable housing market with some improving markets. Other Fed districts reported mixed or sluggish real estate activity. For instance, home prices continued to fall in the Philadelphia area, but mainly at the high end of house prices. The New England district said home sales continued to decline significantly in Rhode Island, Connecticut, and Maine, but increased modestly in Massachusetts and New Hampshire. Continue Reading…

    Category: Housing Market

  10. Disputes Over NAR’s Data Raise Questions Over Realtors’ Role In The Housing Market Bubble

    By on February 23, 2011

    Recent allegations that the National Association of Realtors has been inflating home sales data raise questions over the group’s role in the real estate bubble and the still struggling housing market.

    Economists use its home sales figures to gauge the health of both housing markets and the overall economy. But those numbers are being called into question. Saying NAR’s home sales are inflated by 15 to 20 percent, a housing analytics firm, CoreLogic, found that the trade group’s figures contradict its data as well as information from other researchers. Perhaps a non-biased government agency like the U.S. Census Bureau shome sales, housing markets, NARhould take over reporting the all-important home sales data.

    Mortgage lenders are often blamed for causing the home price bubble, while NAR’s role in the crisis has been largely ignored. Lenders can choose to approve mortgage applications or not, but they do not set home prices. Lenders consider the appraised home value, but that value is based on other nearby home values. If the entire market if overpriced, then individual overpriced homes are perceived as valued appropriately. How much subprime mortgages contributed to the home price bubble is unclear. Perhaps making mortgages available to more people helped increase demand for homes, but subprime mortgages were meant to make homeownership possible for more people, such as minorities and low- and moderate-income first-time homebuyers.

    Buyers and sellers working with their real estate agents establish home values. Real estate agents were indeed a factor in driving up home values. Just remember the television programs showing how to get rich quickly by flipping homes. Continue Reading…

    Category: Housing Market, Mortgage Rates

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