Advice For Sellers


Hello everyone, Do you get Rock Star Service from your lender? This is a recent testimonial from one of our realtor partners:

“WOW…..I want to thank each and everyone involved in “making it happen” for the Smith family. To fund their loan on time and on schedule despite the many hurdles and obstacles sent our way in three (3) weeks with two (2) long holiday weekends in between is a true testamen…t to our abilities to perform and exceed our clients expectations.” This is how we earn life-long customers.

The Meredith Team @ CMG
Erin & Kathleen
The Bay Area’s Premier

Mortgage Banker and Broker
(925)983-3048 office
(925)226-3215 efax

(925)918-0585 mobile
meredithteam@comcast.net
emeredith@cmgmortgage.com
https://meredithmortgageteam.wordpress.com/

The population is getting older, and those who are 65 and up now make up the biggest part of the nation’s population in size and percentage, according to newly released data from the U.S. Census Bureau. Older residents comprise 13 percent of the population, or 40.3 million people.

The older adult population increased by 15.1 percent from 2000 to 2010, while the combined remaining age groups saw 9.7 percent growth.

The states with the highest number of senior residents are:

  • Florida
  • West Virginia
  • Maine
  • Pennsylvania
  • Iowa

The state with the lowest number of seniors is Alaska (7.7 percent compared to Florida’s 17.6 percent). However, Alaska also has the largest growth rate for older populations, according to Census data.

Source: “New Census Data Show Increase in Older Adults,” St. Louis Post-Dispatch (Dec. 1, 2011)

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Baby Boomers Seek Smaller, Affordable Homes

Selling a home in the cold, dreary winter months may not be ideal but there’s still plenty you can do to get a home to standout.

“Buyers out looking at homes in December or January are, as a group, quite serious about buying,” Laura Ortoleva, a spokesperson for the RE/MAX Northern Illinois, told RISMedia. “Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property.”

RE/MAX agents offer some of the following tips when selling a home in winter in a recent article at RISMedia.

Turn on the lights: Counter winter’s cloudy and short days by turning on all of the lights in a home for each showing. “Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled,” says Marlene Granacki of RE/MAX Exclusive Properties in Chicago. “People are always driving past the house, and keeping it lighted makes it look happy and welcoming.”

Have a place for shoes: Prospective buyers may arrive at the front door with shoes coated in snow or salt. “Make it easy for buyers to deal with their shoes when they arrive,” says Barbara Hibnick of RE/MAX Showcase, Long Grove, Ill. “Put a festive area rug at the front door for a great first impression and so visitors can wipe their feet. Have slippers or disposable booties available, along with a bench or chair, if there is room for one, where a visitor can sit and easily remove or put on their boots.”

Watch for odors: Homes can get stuffy in the winter. “Pet odors can be especially worrisome in winter,” says Mike Mondello of RE/MAX Synergy in Orland Park, Ill. “Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often.”

Don’t make it too toasty: “Don’t blast buyers with hot air,” the RISMedia article notes. Keep the temperature at a comfortable 65 degrees during your showings (although keep in mind that a comfortable temperature for your thermostat can vary form house to house.) Potential buyers will most likely be wearing their winter coats when they tour the house so no reason to make them sweat.

Read more winter-selling tips.

Source: “10 Ways to Get the Best of Winter When Selling Your Home,” RISMedia (Dec. 1, 2011)

Read More:
Add Some Holiday Charm to Your Listings

7 Tips for Showing Property in the Dead of Winter

Living near an occupied property in foreclosure can bring down home prices nearly twice as much than just living next door to a vacant home, according to a new study by the Federal Reserve Bank of Cleveland, which analyzed sales data of nearly 10,000 homes in the Cleveland area.

“The impacts of homes with multiple indicators of distress are larger than the impacts of homes that are only vacant, delinquent, or recently foreclosed,” the researchers found.

Some findings from the study:

  • Homes within 500 feet of at least one vacancy sold 0.8 percent lower.
  • Occupied home that had recently entered the foreclosure process lowered the sales price of nearby homes by 1.8 percent.
  • Sales within 500 feet of a home where a delinquent borrower abandoned the home saw, on average, a 3.1 percent drop to home values.
  • The largest drop was from homes that were tax delinquent, vacant, and foreclosed: Home sales prices within 500 feet were found to be 9.6 percent lower.

Source: “Study Finds Foreclosures Harm Home Prices More Than Vacancies,” HousingWire (Oct. 20, 2011)

Daily Real Estate News | Wednesday, September 28, 2011
In the past, both the luxury housing market and the low-end market moved in tandem, but these days, they're moving in opposite directions.

The luxury market is outperforming the rest of the market, with Zillow reporting a 0.7 percent gain since February in the prices of properties worth $1 million or more but more than a 1.5 percent decline in lower-priced homes.

At the lower end, houses sit on the market for months without receiving an offer, and most buyers are unable to qualify for financing despite record-low mortgage rates. In Miami, $1 million-plus condos are flying off the shelves, but two-bedroom condos in gated communities can be had for as little as $25,000.

Condo Vultures founder Peter Zalewski says, “In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not.” Experts attribute the strength of the luxury market to international buyers, who view U.S. properties as undervalued assets and who can pay in cash. Home purchases by foreign buyers rose to $82 billion in 2010 from $66 billion in 2009; and they accounted for 33 percent of purchases in Florida, up from 10 percent four years ago.

Source: “Housing Market Is Terrific, If You Are Rich,” USA Today (09/25/11)

Daily Real Estate News | Friday, September 30, 2011

 

Starting Saturday, many borrowers in pricey housing markets may find they’ll need a higher down payment or pay higher rates. The size of mortgages that the government will back in several high-priced regions is set to drop on Oct. 1, which some analysts expect will serve as another thorn to the housing market.

In 2008, Fannie Mae and Freddie Mac raised its cap on conforming loans up to $729,750 in some of the most expensive housing markets so that larger mortgages would be available to home buyers. But those caps are set to reset on Oct. 1, scaling back to a maximum of $625,500 in some areas of the country.

Housing analysts say the drop will make it more expensive and harder for some buyers to qualify for home purchases in expensive markets, particularly along the coasts.

“The down-payment issue is the most significant aspect form borrowers standpoint,” says Greg McBride, a senior financial analyst at Bankrate.com. “These changes will price some prospective borrowers out of the market.”

Source: “Big Borrowers Face Larger Down-Payments, Rates,” MarketWatch (Sept. 30, 2011) and “Big Mortgages: Harder to Get and More Expensive With Loan Caps,” CNNMoney (Sept. 30, 2011)

Read More:
On Loan Limit Drop, Middle Faces Hard Hit

House Fails to Vote on Extending Loan Limits

 

10 YR Treasury 2.027 (time of CMG Rate Sheet Release)
Open is about 4 tix worse from yesterday. Approximately 0.174 worse in rebate on rate sheet.

Growing concern that Greece’s leaders are divided as to how to handle their current financial crisis has lead most US stocks to go down. The Netherlands and Germany are leading a drive to include more private-sector involvement in the next austerity package for Greece. “Europe is the issue that is first and foremost in everyone’s mind, so any news that comes out on that does have a strong impact on the market,” Peter Jankovskis, of Oakbrook Investments in Lisle, Illinois. “Any weakness there is going to be a drag worldwide.”

As a further sign that consumer spending has taken a turn for the worst, the world’s largest consumer electronics chain, Best Buy, is planning on slashing its holiday hiring by about half of what it was last year. This is a poor indicator both for the economy and is real bad news for the unemployed. Best Buy hired 29,000 seasonal employees last year, and anticipates hiring only 15,000 this year. “Our plan isn’t built or predicated upon a meaningful move in the economic environment,” said Brian Dunn, CEO of Best Buy, “The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays.”

US home mortgage applications rose last week, showing that refinance demand is going up as rates are going down. Refi applications, according to the Mortgage Bankers Association’s seasonally adjusted index, went up 11.2 percent and purchase applications rose 2.6 percent. “Mortgage rates declined last week, at least partially in response to the Fed’s announcement that they would shift their portfolio towards longer-term Treasury securities, and that they would resume buying mortgage-backed securities,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.

Market Summary

At 12:32 PM ET: Although the major indexes are mixed in trading today, most stocks are lower on the NYSE where declining issues lead advancing issues by 2.0 to 1. Among individual stocks, the top percentage gainers in the S.&P. 500 are Jabil Circuit, Inc. and Amazon.com Inc. http://markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp

S&P Lowers Fannie, Freddie Credit Rating-Daily Real Estate News | Tuesday, August 09, 2011

Standard & Poor’s downgraded the credit rating of lenders backed by the federal

government on the heels of the first-ever lowering of the U.S.’s credit rating.

Fannie Mae, Freddie Mac, and other government-backed lenders were lowered one step from AAA to AA+, S&P reported in a statement issued Monday. Some analysts say the downgrade may force home buyers to pay higher mortgage rates.

“The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government,” S&P said in a statement. “Fannie Mae and Freddie Mac were placed into conservatorship in September 2008 and their ability to fund operations relies heavily on the U.S. government.”

The GSEs own or guarantee more than half of U.S. mortgage debt.

Freddie Mac said that the lower debt rating will cause “major disruptions” in its home-lending by possibly reducing the supply of mortgages it can purchase. It said in a Securities and Exchange Commission filing that the lower rating could hamper home prices and even lead to more home-loan defaults on mortgages it guarantees.

Meanwhile, the Federal Housing Finance Agency on Monday assured investors that securities issued by GSEs are sound. “The government commitment to ensure Fannie Mae and Freddie Mac have sufficient capital to meet their obligations, as provided for in the Treasury’s senior preferred stock purchase agreement with each enterprise, remains unaffected by the Standard & Poor’s action,” said Edward DeMarco, FHFA acting director.

Some analysts and lenders have said they don’t see the fallout from the S&P downgrade on the U.S. and other banks as having such a widespread affect. “It’s likely that once the storm passes, you’ll get an increase in mortgage rates because of this, but it won’t be significant,” says Anika Khan, a housing economist at Wells Fargo.

S&P also announced on Monday that it had lowered its credit ratings for 10 of 12 federal home loan banks and federal farm credit banks from AAA to AA+.

Source: “S&P Lowers Fannie, Freddie Citing Reliance on Government,” Bloomberg (Aug. 8, 2011); “S&P Downgrades Fannie and Freddie, Farm Lenders and Bank Debt Backed by U.S. Government,” Associated Press (Aug. 8, 2011); Freddie Mac Reports $4.7B Loss, Says S&P Downgrade Will Disrupt Mortgage Market,” Associated Press (Aug. 8, 2011); and “FHFA Assures Investors After Fannie, Freddie Downgrade,” HousingWire (Aug. 8. 2011)

Read More:
Will the S&P Downgrade Affect Interest Rates?

Mortgage lending at lowest level since 1997

Despite near-record-low mortgage rates, a combination of factors is depressing the industry. Many people have simply decided homeownership isn’t for them.

 

  • Despite the confluence of lower home prices and rates, new mortgages are down by a third compared with 2010. Lenders will write about $1 trillion in home loans this year, the smallest total since 1997, according to the Mortgage Bankers Assn., which projects home lending will fall even lower in 2012.
Despite the confluence of lower home prices and rates, new mortgages are… (Seth Perlman, Associated Press)

 

August 06, 2011|By E. Scott Reckard, Los Angeles Times
Despite near-record-low mortgage rates and the cheapest housing prices in eight years, home lending has slipped this year to the lowest level since 1997.The laggard loan market can be explained in part by the slow economy, numerous foreclosures and the proliferation of “underwater” loans, those that exceed the value of the properties they secure.

 

But other factors are compounding the problem, including so-called refi burnout — how many times, after all, can one refinance a home? — and a wave of people who have simply decided that homeownership isn’t what it was cracked up to be.

Weary of a noisy tenant on the other side of a common wall, Bruce and Deborah Dennis sold their Arcadia duplex in April, banked a $600,000 profit and went looking for a quieter place to spend their 60s.

Bruce’s boss, a property manager, urged them to buy another home, saying they’d never again see prices and mortgage rates so low at the same time. The couple searched seriously for two months, even bidding on a home. In the end, they opted to rent a house, leery of tying up capital and taking on the headaches of ownership with the housing market so shaky.

“We thought, ‘Is buying really what we want to do?’ I have no confidence that home prices are going back up any time soon,” Bruce Dennis said.

Opt-outs like the Dennises are one reason the mortgage business, which led the way into the Great Recession, is taking so long to come out of it.

Another factor is the slowing of the refinance market. Mortgage costs are near historical lows, with lenders offering 30-year fixed-rate loans at about 4.2% to Californians seeking $400,000 mortgages, online home-loan specialist Lending Tree said Thursday.

But most of the lucky homeowners who still have equity and solid finances have already refinanced once or more and have long since locked in annual rates of less than 5%.

In 2003, as the housing boom took hold and 30-year fixed mortgage rates fell below 6%, refinancings propelled home lending to four times the current volume. And as the rate tumbled toward 5% and then smashed that barrier in 2009 for the first time since 1956, there was twice as much mortgage lending as now.

“There is a burnout phenomenon,” said Mortgage Bankers Assn. economist Michael Fratantoni. In addition, many would-be refinancers have been stopped by the declines in home prices, now back at 2003 levels, which has left them owing far more than their homes are worth.

“Borrowers who couldn’t qualify for 4.5% mortgages last year for the most part still can’t qualify this year,” Fratantoni said.

And getting the purchase market up and running again would require “significant job growth,” he said, something that has failed to materialize in the sluggish recovery that is threatening to fall back into recession.

 

 

The result of all this: Despite the confluence of lower home prices and rates, new mortgages are down by a third compared with 2010. Lenders will write about $1 trillion in home loans this year, the smallest total since 1997, according to the Mortgage Bankers Assn., which projects that home lending will fall even lower in 2012.Some say the combination of falling home prices, tight credit in the aftermath of the financial crisis and the flood of foreclosure sales has undermined the traditional view of homeownership as the engine of financial success.

“The previous assumptions that housing is a good investment, or that home prices can only go up, or that all Americans should be able to buy a home, are being seriously challenged,” Morgan Stanley housing analysts wrote last month in a study titled “A Rentership Society.”

In the middle of the last decade, when the term “ownership society” was coined, the homeownership rate was nearly 70%, the report noted. If delinquent borrowers were excluded, it said, the current rate of 66.4% today would instead be 59.7%.

For those willing to take out mortgages despite all the grim news, the prospects are improving slightly. Lenders have eased certain terms for the first time since the mortgage meltdown took hold, and some on the front lines say banks are abandoning the scrutiny bordering on suspicion with which they had come to regard potential borrowers.

“All those granular issues we were beating people up about over the last three years seem to be going away,” Laguna Niguel mortgage broker Jeff Lazerson said. “The hassles over old credit inquiries. Having to explain every entry on a bank statement.”

Spokesmen for Wells Fargo & Co. and Bank of America Corp., the largest mortgage companies, said they recently eased standards slightly for loans backed by the Federal Housing Administration, which are attractive to first-time buyers because they require relatively small down payments.

However, among younger buyers, “there’s not much feeling that they need to buy right away,” Fratantoni said. “I expect that may change over the next couple of years, but certainly for the first-time buyer there’s less near-term demand.”

Older people can be ownership-averse as well, like the Dennises, who intend to work five more years before they retire.

“To buy another house, we were going to have to come up with a chunk of change for a down payment,” Bruce Dennis said. “Then there were property taxes, and of course maintenance — that gets expensive in a hurry.

“The glories of homeownership we no longer have to face.”

scott.reckard@latimes.com

Will the S&P Downgrade Affect Interest Rates?

Daily Real Estate News | Monday, August 08, 2011

 

Standard & Poor downgraded the U.S.’s credit rating on Friday, despite Congress reaching a deal in the final hours on the debt ceiling crisis last week. And now many of your customers may be asking: What does this mean for interest rates?“The impact on your wallet of the Standard & Poor’s downgrade of the nation’s credit rating is similar to what would happen if your own credit score declined: The cost of borrowing money is likely to go up,” the Washington Post explained in the aftermath of S&P’s decision.

S&P downgraded the U.S.’s top-notch AAA credit rating for the first time in history, moving it down one notch to AA+; the rating reflects a downgrade in S&P’s confidence in the U.S. government’s ability to repay its debts over time. It’s not clear, however, whether S&P’s downgrade will instantly effect rates, analysts say.

The 10-year Treasury note is considered the basis for all other interest rates. And “the downgrade could increase the yields on those bonds, forcing the government to spend more to borrow the same amount of money,” the Washington Post article notes. “Many consumer loans, such as mortgages, are linked to the yield on Treasurys and therefore would also rise.”

Watch this video with NAR Chief Economist Lawrence Yun for more information.

While consumers who have fixed interest rate mortgages will be immune to any changes in borrowing costs, home buyers shopping for a loan or those with mortgages that fluctuate may see a rise in rates later on, some analysts say.

Mark Vitner, senior economist at Wells Fargo Securities, told the Associated Press that he doesn’t expect the downgrade to drive up interest rates instantly since the economy is still weak and borrowers aren’t competing for money and driving rates higher. However, he expects in three to five years, loan demand will be much higher and then the downgraded credit rating might cause rates to rise.

Analysts are still waiting to see if the other rating agencies, Moody’s and Fitch, follows S&P’s lead in its downgrade of the U.S. credit rating. If so, the aftermath could be much worse, analysts say.

The debt deal reached by Congress last week was expected to save the U.S. from any credit rating downgrade. However, S&P said lawmakers fell short in its deal. Congress’ deal called for $2 trillion in U.S. deficit reduction over the next 10 years; S&P had called for $4 trillion.

Source: “5 Ways the Downgrade in the U.S. Credit Rating Affects You,” The Washington Post (Aug. 8, 2011); Questions and Answers on Standard & Poor’s Downgrading of U.S. Federal Debt,” Associated Press (Aug. 6, 2011); and S&P Downgrade Will Shake Consumer and Business Confidence at a Fragile Time, Economists Say,” Associated Press (Aug. 6, 2011)

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Real Estate OK in Debt Deal But Risks Remain

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