National Real Estate Data Lumps 128,203,000 Homes In America Into 1 Data Set

By Todd Abelson NMLS #180858 on .

us-map

National real estate data helps economists identify trends in the housing market. It shapes policy and influences markets.

For active home buyers and home sellers, though, national real estate data is irrevelant.  This is because national data says nothing for the factors determining home prices in any given zip code.

See, national real estate news is mash-up of data.  It’s 128,203,000 homes from all 50 states.  Each of these states has its own economy and there are different factors that drive home values in each

Most Americans understand this.

But, if we dig deeper, we see that within those states, there are more than 19,000 incorporated cities — plus thousands of unincorporated ones.  And like the 50 states, city-to-city home values vary by economy, too. 

Furthermore, each city is comprised of areas, and those areas can be broken down into neighborhoods and then sub-divided again into streets, with blocks.

It’s apparent that a random home in Alabama can’t be compared to a random home in California.  Yet, that comparison is exactly what you’re getting with national real estate data and why we can’t rely on it to say “values are up” or “values are down”.

Values depend on what’s happening locally.

For buyers and sellers, the underlying goal is to meet at “the right price”. To reach that sort of price discovery, you have to look local.

It’s not as easy as it sounds.

Local real estate trends is a topic that’s too narrow to be covered by the national press.  It’s even too narrow for local papers.  Therefore, buyers and sellers have two places to turn:

  1. A general real estate website
  2. A practicing real estate agent

Using both sources for local data is common among today’s buyers and sellers. 

National real estate news offers little value with respect to home price negotiation.  Because all real estate is local, your real estate data should be, too.

How To Know If You’re Eligible For A Making Home Affordable Refinance

By Todd Abelson NMLS #180858 on .

April 4, 2009, marked the official start of the Making Home Affordable refinance program.April 4, 2009, marked the official start of the Making Home Affordable refinance program and Tucson home owners are eligible.

Expected to help 5 million homeowners, the Making Home Affordable program “looks the other way” with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.

Not every homeowner is eligible for a Making Home Affordable refinance, however.  There are 3 basic criteria that must be met.

First, your existing home loan must be backed by either Fannie Mae or Freddie Mac.  Thankfully, both companies provide online lookup services.  Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac’s site requires your social security number.

Next, you must have a perfect mortgage payment history over the last 12 months.  Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program.  It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home’s value by more than 5%.  The math formula is (Mortgage Balance) / (Home Value).  If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

  1. If you didn’t pay mortgage insurance prior to refinancing, you won’t have to pay it after refinancing — even if your loan-to-value exceeds 80%.
  2. All refinances require income verification — even if the original mortgage was a stated income loan.
  3. Second mortgages cannot be paid off using loan proceeds — they must be subordinated

There are other guidelines, too, and both Fannie Mae and Freddie Mac have dedicated portions of their website to the Making Home Affordable program. To the layperson, unfortunately, the information may be a bit technical. 

Even the government’s fact sheet can be a little dense at times.

Therefore, if you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan.  If they are, pick up the phone and call your loan officer to plan next steps.

The program ends June 10, 2010 so give Tyler Ford or Todd Abelson of Sunstreet Mortgage a call to see if you are eligable.

The Mortgage Calvary has arrived!!!

By Todd Abelson NMLS #180858 on .

 April 4, 2009, marked the official start of the Making Home Affordable refinance program.

Unlike the FHA “HOPE for homeowners” program released in 2008 that was touted as being able to help “millions” and actually only helped hundreds there’s a new sheriff in town!

The “Making Home Affordable” program announced by President Obama in February and released by Fannie Mae on 03.04.09 hit the streets in full force this week.

This new program provides refinance opportunities to borrowers with mortgages held or guaranteed by Fannie Mae who have demonstrated an acceptable payment history on their mortgage but due to a decline in home prices have been unable to refinance to obtain a lower payment or move to a more stable product.

For example, lets say you purchased a home for $250,000 at the peak of the market in 2005 and made a full 20% down payment and financed the balance with a juicy 4.25% 5-year Interest-Only ARM. Obviously rates on 30-year fixed mortgages are at an all-time low and you really want, and may NEED to convert over.  However, the home value has dropped to $209,000. By today’s mortgage standards you would either need to move to an FHA loan (over 95% loan-to-value) or pay down the loan a bit and add PMI – either option will be expensive in cash and/or new payment. What to you do???

MAKE HOMES AFFORDABLE!!!

Three key components to see if you fit:

1. Your present loan must be owned by Fannie Mae (click to see)

1- New loan can be up to 105% of the CURRENT HOME VALUE.

2- No monthly MI is required on the new loan if is none on the current loan.

Obviously there’s alot more under the covers on this program; to read more check out the Making Home Affordable website.

While some investors are simply not partaking in the new program, some are and BOY ARE THEY GOING TO BE BUSY!!! SunStreet Mortgage is committed to helping customers stay in their homes and continues to offer other refinance products. Stay tuned for updates as Todd Abelson & Tyler Ford in Tucson, Arizona are working diligently to offer the full breadth of the Fannie Mae Refi Plus offering as quickly as possible.

April 15 Is 1 Week Away And 27 Million Taxpayers Have Yet To File. If You’re One Of Them, Here’s Some Tax Tips.

By Todd Abelson NMLS #180858 on .

There are 138 million taxpayers in the United States and, according to the IRS, 20 percent of them file their taxes within 7 days of April 15.  In a holiday-shortened week, that means that 27 million people had better get a move on.

And while a portion of this year’s last-minute filers will file with storefront operations like Liberty Tax Service or H&R Block, many others will self-prepare with the help of tax software from TurboTax or TaxCut.

If you’re a member of the do-it-yourself crowd, consider taking a review of this year’s tax law changes before starting your returns.  The stimulus package signed into law this past February made a profound impact on tax liability and the list of changes may be helpful for you.

A few of the new, allowable income tax deductions for 2008 include:

  • Tucson Mortgage debt forgiveness in the event of a short sale
  • An additional standard deduction on real estate taxes paid
  • $8,000 tax credit for homes bought since January 1, 2009

TurboTax offers 4 tax filing choices online, ranging in price from $100 to free.  If you’re among the 27 million yet to file, choose whichever program fits best — just choose it before April 15.

Filing could take several hours.  Plan accordingly.

By The Time You Read About Low Mortgage Rates, It Was Already Too Late To Get Them

By Todd Abelson NMLS #180858 on .

The newspaper headlines were too late for mortgage rate shoppersThursday morning, homeowners in different parts of the country awoke to find similar-sounding newspaper headlines:

  • Rates on 30-year mortgages sink to 4.78%, a new low (LA Times)
  • Mortgage rates at record low for 2nd week (Miami Herald)
  • Mortgages hit another record low (San Francisco)

The underlying story was that Freddie Mac’s weekly Primary Mortgage Market Survey showed the lowest, average 30-year fixed rate mortgage in its 38-year, rate-tracking history.

Once again, however, the headlines came too late for homeowners.

Prior to Thursday’s market open, mortgage markets had already worsened from their record-setting levels.  Slowly at first, and then with momentum.  The shift pressured rates higher so that when lenders issued their Thursday morning rate sheets, most showed an 1/8 increase from Wednesday’s close.

The negative momentum carried into the afternoon, too, forcing a second increase of an 1/8 percent.

The Freddie Mac survey may have been accurate when the sun came up Thursday, but by the time the sun went down, it wasn’t even close.  It’s why you can’t do your rate shopping by watching newspaper headlines.  Mortgage markets are volatile and rates often change without notice. 

Thursday, they did it twice.

8 Things You Absolutely Shouldn’t Do Now That Your Mortgage Application Is In-Process

By Todd Abelson NMLS #180858 on .

8 things you should absolutely not do while your home loan is in processWith mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities. 

The downside of today’s unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business. 

As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete. 

This is double the time needed as recently as six months ago.

Because there may be 60 days between the application date and the closing date, it’s important for applicants to remember that mortgage approvals can be revoked at any time prior to funding. 

As mortgage applicants, there are many events that are out of our control — job security and health matters, for example.  But there are also events that are within our control. 

Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process.  It may be the difference between being approved by the bank, and being turned down.

  1. Don’t buy a new car or trade-up to a bigger lease.
  2. Don’t quit your job to change industries
  3. Don’t switch from a salaried job to a heavily-commissioned job
  4. Don’t transfer large sums of money between bank accounts
  5. Don’t forget to pay your bills — even the ones in dispute
  6. Don’t open new credit cards — even if you’re getting 20% off
  7. Don’t accept a cash gift without filing the proper “gift” paperwork
  8. Don’t make random, undocumented deposits into your bank account

Now, avoiding these items may not be practical for everyone.  For example, if your car lease is expiring and you need a larger vehicle, it doesn’t mean you can’t buy the car — just check with your loan officer first to be sure the new payments won’t “break” your approval. 

The same goes for accepting cash gifts from parents.  There’s a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of downpayment.

Mortgage lending is full of “gotchas” and with underwriting times stretching to 60 days, it’s a lot more likely that a mortgage applicant will trip into one.  Following these 8 rules, though, is a good start.

If you have any questions give us a call at 520-331-LEND

www.tucsonmortgages.com

Explaining What The Federal Reserve Did In Plain English (March 18, 2009 Edition)

By Todd Abelson NMLS #180858 on .

FOMC press release March 18 2009

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn’t mean the Fed stood pat, however.

On plan to resurrect the economy using “all available tools”, today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets.

The stimulus will likely be Thursday morning’s headline story.

In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load:

  • Job losses and wealth loss are dragging down consumer spending
  • Some U.S. trading partners are falling into recession
  • Businesses are cutting back on investment and inventory

Of interest is that the FOMC said today’s inflation levels may be too low to support economic growth at all.  This condition is more commonly called deflation.  The Fed’s latest actions, therefore, may be a deliberate attempt to induce inflation through unprecedented borrowing.

For home buyers and potential refinancers, this is terrific news — at least in the short-term.  By introducing new demand for mortgage bonds, the Fed will help pressure mortgage rates lower.  Already this afternoon, mortgage rates fell and they will continue to fall until the market reaches a new equlibrium.

After the Fed’s last intervention, markets reached their balance point in about a day-and-a-half.

Source
Parsing the Fed Statement
The Wall Street Journal Online
March 18, 2009
https://online.wsj.com/public/resources/documents/info-fedparse0903.html