Real Estate Industry Heating Up | RISMedia

My wife and I recently attended our once-a-month cruise club cocktail hour, in which we are two of the only working stiffs in the group, as most of the members are retired. Obviously whenever I show up because of my real estate history in this area of the state, the conversation always goes straight to: “What is happening in the real estate market?”

I found myself in a very upbeat, and excited mood and I was raving about the real estate market and what I see happening over the next few years. I was particularly excited, because for the very first time in my entire career, I signed 30 closings in one day the day before the cruise and had in fact signed almost 60 closings that week.

Our business in March was up 31% over February and by April 9th, we had already passed the halfway mark of what we did in March. The real estate industry is heating up and will only continue to heat up. Needless to say I ended up surrounded by several members dying to hear the good news.

More

Lenders Flooded with Refinancing Applications as Mortgage Rates Fall | RISMedia

With mortgage rates dancing around a 65-year-low of 4.75%, homeowners are checking their credit scores and lenders are being deluged with refinancing applications.

“I’ve been through about four refinance crazes in my career, and this is the most significant I’ve seen,” said Marshall Boyd, co-president of Southwest Bank Mortgage and a founding and managing partner of Williams Trew Real Estate Services.

“The No. 1 reason is that rates are lower this time,” Boyd said. “I never dreamed we would be refinancing people with loans in the 5’s to loans in the 4’s.”

Linda and Jeff Hochster watched rates for several months before refinancing their home in Fort Worth’s Mira Vista neighborhood. “We started doing research and reaching out to brokers. We just kept watching as the rate was falling over the last 45 days,” said Linda Hochster, a retired public relations manager for Southwest Airlines.

More

Housing Most Affordable: May be Time to Move from Renting to Owning

Falling housing prices, historically low interest rates, and tax credits are creating an enticing environment for renters to convert to homeowners.

"We are still going to have a tremendous amount of foreclosures, price declines, and best opportunities to buy properties at amazing prices," says Bruce Norris of The Norris Group.

If that sounds like a mixed bag of bad and good, indeed it is. Consumers have been inundated with news about a troubled real estate market. "If you look at the closings for California, 55 percent or more closings every month are lender-owned properties; that ratio has never existed before. So, the lenders are really dictating the prices at this point and there are so many [lender-owned properties] that the appraiser almost has no choice but to give that comp a lot of credence," says Norris. But the good news, especially for those who have been wanting to take the plunge into homeownership is that markets across the country are ripe for choosing the most suitable home.

More

Time to refinance? You've got to run the numbers - MarketWatch

WASHINGTON (MarketWatch) -- Question: I have a two-year-old, 15-year cash-out refi in Texas. It's now considered a home equity loan, at 6.5%. I am thinking that it does not make sense for me to refinance again at 5% to save $170 per month because I would have to pay two additional years on the back end.

The savings is net of borrowing 100% of the $5,000 in closing costs, so there will be no up-front cash out of pocket. The original loan was for $143,500 and has a balance of $131,500. By refinancing, the $1,250 payment would be reduced to $1,080 on a new loan balance of $136,500. E.L.

Answer: To make the right choice, at least arithmetically, you gotta run the numbers. Here's how:

1. Figure out what you are going to spend by refinancing. In your case, that would be $5,000 plus, since you are going to roll that amount into the loan's principal, whatever your interest costs will be.

More

Mortgage rates rise, but 30-year fixed-rate still below 5% - MarketWatch

CHICAGO (MarketWatch) -- Mortgage rates rose this week, but the average rate on 30-year fixed-rate mortgages remained below 5%, according to Freddie Mac's weekly survey of conforming mortgage rates, released on Thursday.

The 30-year fixed-rate mortgage averaged 4.87% for the week ending April 9, up from last week's 4.78% average. The mortgage averaged 5.88% a year ago.

Rates on 15-year fixed-rate mortgages averaged 4.54%, up from 4.52% last week. The mortgage averaged 5.42% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.93%, up slightly from 4.92% last week, but still well below their 5.56% average a year ago. One-year Treasury-indexed ARMs averaged 4.83%, up from last week's 4.75%; the ARMs averaged 5.18% a year ago.

More

Clock Is Ticking For First-Time Home Buyers - MarketWatch Video

Clock Is Ticking For First-Time Home Buyers - MarketWatch Video

With Affordability Up, Home Buyers Return to the Market

Thanks to record low mortgage rates and declining home prices, 55 million families - or half of all U.S. households - can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB). “That’s an increase of 17 million households from conditions just two years ago and the best housing affordability number we have seen in years,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “We are now seeing the first signs that buyers are returning to the marketplace.”

Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.

More

Jumbo mortgage rates starting to become more affordable - MarketWatch

CHICAGO (MarketWatch) -- Jumbo mortgages became more expensive and harder to come by as the nation's credit crisis deepened. That might be starting to change.

"Jumbo" refers to mortgages that are too large to be bought by Freddie Mac or Fannie Mae. The "conforming loan limit" for those government-backed entities is $417,000 in many parts of the country, but goes as high as $729,750 in high-cost areas of the continental United States.

Bank of America recently began trumpeting its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high 5% range, said Vijay Lala, product management executive for the bank. "We decided it was time to really go after that market," he said.

More lenders may soon join in, said Guy Cecala, publisher of Inside Mortgage Finance.

More

Eligibility Requirements And Getting Started With The Making Home Affordable Program

The Making Home Affordable program is officially official. Mortgage lenders are now processing applications and paperwork for the help-the-homeowner plan often referred to as "The Obama Plan".

Because Making Home Affordable is a new program, there have been a lot of questions about how it works, who is eligible, and how to apply for a Making Home Affordable refinance.

What follows is a collection of questions and answers from my clients, the press, plus other things I think you should know.

Of primary importance -- first -- are two points:

1. Only Fannie Mae- and Freddie Mac-backed loans are eligible for The Obama Plan
2. Fannie Mae and Freddie Mac use different sets of refinancing rules

Be forewarned. In some respects, Fannie Mae and Freddie Mac are like the National League and the American League -- it's the same game, but with different rules. Or, maybe a NFL / CFL comparison is more apropos.

More

6 Reasons Why It's Still a Good Time to Buy

The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.

1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available. (Sign up for a Webinar to learn more about the home buyer tax credit)

2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.

3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.

4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.

5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.

6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.

Source: The Wall Street Journal, June Fletcher (03/27/2009)

Is California real estate coming back?

No state has been harder hit by the housing bust than California.

It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was $247,590, down 41% from 12 months earlier, according to the California Association of Realtors (CAR).

And home construction in the Golden State has nearly vanished: December housing permits shrank to about a quarter of what they were during the boom years, according to the National Association of Homebuilders.

More

5 Recommendations for Navigating Today’s Mortgage and Housing Markets

”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”

More

Mortgage Rates 'as Low as 2 percent'

Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.

Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.

A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.

Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.

The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.

More

Pending home sales rise 2.1 percent in February from January

An index that tracks signed contracts to purchase previously occupied homes rose in February from a record low a month earlier as buyers took advantage of deeply discounted prices and low interest rates.

The National Association of Realtors said today said its seasonally adjusted index of pending sales for previously occupied homes rose 2.1 percent — in line with expectations — to 82.1 in February from January's record low of 80.4.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.

Because of falling home prices and mortgage rates, homeownership is more affordable than it's been since at least 1970, the trade group said.

More

Bidding Wars Over a House? Real Estate Pros See Bottom

One hour outside of Washington DC, in the picturesque small city of Martinsburg, West Virginia, some homes for sale are attracting bidding wars—again.

“Prices are so low, we’re starting to see that," says Marc Savitt, a realtor there for a quarter of a century. “In our area, you’re at the bottom.”

Allan Ferguson California Suburbs

Savitt, who’s also president of the National Association Of Mortgage Brokers, might be accused of being overly optimistic. But he is hardly alone in sensing a long-awaited bottom in the real estate market.

• Slideshow: Highest-End Real Estate
• Slideshow: Most Affordable Metro Areas

For most at this point, it’s less a matter of bold confidence that cautious optimism, but data are emerging to make a reasonable case.

Three categories of home sales—new, existing and pending – all posted surprise gains in February, along with housing starts are posted surprise gains in February.

More

How to Buy After Bankruptcy or Foreclosure

Put your fears aside. Just because you have bad credit, filed bankruptcy or gone through a foreclosure does not mean you cannot buy a home. You most certainly can buy a home with bad credit. But you're going to pay more than a borrower who has sparkling credit.

The Waiting Period After Foreclosure / Bankruptcy

• The period between bankruptcy filings is seven years, but the ding to your credit report stays for 10 years.
• For better rates with a conforming loan, the wait is four years after filing bankruptcy.
• FHA guidelines are two years after a foreclosure, which means you could qualify for as little as 3.5% down.
• Hard-money lenders will often make loans six months after filing bankruptcy or a foreclosure, but will a require 20 to 35% down payment. The interest rate will be very high and the loan terms are not as favorable; many will contain prepayment penalties and be adjustable.
• Subprime lenders (not to be confused with hard-money lenders) are no longer making 100% financed loans.

More

30-Year Mortgage Rates Remain Low for Second Week

The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for 30-year mortgages remained relatively steady for the second consecutive week at 5.09%, up slightly from 5.06% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by real estate website Zillow.com. Meanwhile, rates for 15-year fixed mortgages increased to 4.80%, up from 4.73% and 5-1 adjustable rate mortgages dropped, down to 4.66% from 4.69% the week prior.

Mortgage Type Average Rate Average Rate % Change
Week ending 3/29/09 Week ending 3/22/09

30-year fixed 5.09% 5.06% 0.6%
15-year fixed 4.80% 4.73% 1.5%
5-1 ARM 4.66% 4.69% -0.6%

Rates for 30-year fixed purchase mortgages had decreased slightly, with the average rate on Zillow Mortgage Marketplace at 4.99%.

More

78% of First-time Home Buyers Say Now Is Good Time to Buy

Century 21 Real Estate LLC, the franchisor of one of the world’s largest residential real estate sales organizations, announced the results of its recently commissioned first-time home buyer survey. The survey found that more than three-quarters (78%) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy. Out of the 1,000 prospective U.S. first-time home buyers surveyed for the CENTURY 21 First-Time Home Buyer Survey, 68% think now is a better time to buy than six months ago. Prices are the driving motivation for potential first-time home buyers with more than eight out of ten first-time home buyers (85%) saying they consider current home prices affordable and 73% citing that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between “being willing to consider an offer now” (42%) and “waiting for prices to go down before they seriously consider making a purchase” (48%).

More

What Mortgage Rates Will Do Over The Next 30 Days

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available.

The Bankrate.com survey is for conforming mortgages. It does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or foreign national mortgages. For rate quotes, email me directly.

The group's 30-day prediction for mortgage rates:

• 50% predict mortgage rates will increase
• 25% predict mortgage rates will decrease
• 25% predict mortgage rates will remain unchanged

I am predicting that rates will increase over the next 30 days. My prediction may not be appropriate for your individual situation and it may be wrong, too.

Here's what I told Bankrate.com:

"The summer mortgage rate run-up is underway."

More

Mortgage Broker Answers

After you interview your mortgage broker or lender and ask the tough questions, what do you do with the answers? How do you know if the answers you receive are applicable to your situation? Here are the answers acceptable to most borrowers.

1. Answers to Which Type of Loan is Best

Look at the point spread between the interest rates offered on fixed-rate mortgages versus those on adjustable-rate mortgage loans. If the difference is small, say, around .5%, you would be better off with a fixed-rate mortgage.

Interest-only loans are a popular option if you decide to stay in the property for a long period of time, more than five years. Otherwise, the property may not appreciate enough to provide you with adequate equity to sell if you choose this option for a short-term residency.

More