The Massachusetts Real Estate Guy

HUD wipes out the CAP on FHA origination fees.

The Department of Housing and Urban Development (HUD) has removed the 1 percent ceiling on loan origination fees for standard mortgages insured by the Federal Housing Administration (FHA).

The Mortgagee Letter outlining the change was issued last week just days before the new Real Estate Settlement Procedure Act (RESPA) disclosure rules took effect on January 1, requiring lenders to clearing disclose borrowing costs.

According to HUD, the sum of all fees and charges from origination-related services required as part of the good faith estimate “will most often exceed the specific origination fee caps set for government programs.”

Without the cap, some consumer advocacy groups argue the fees charged to borrowers for government-backed loans could rise too much, but HUD says it expects competition among lenders to temper excessive increases.

The new RESPA rule standardizes the good faith estimate provided to applicants detailing mortgage terms and closing costs, making it possible for the first time for consumers to compare fees charged by different lenders and shop around for the best possible deal.

HUD says FHA will also be monitoring lenders to ensure the fees charged for origination services are “fair and reasonable.”

The agency also stressed that the FHA commissioner still has the authority to set future limits on the amount lenders can charge borrowers for obtaining a government-insured loan and indicated that additional guidance on origination fees would be forthcoming

Okay, you can "flip" your properties fast ... for 90 days...

Click on the link

From Reuters:  Effective Feb 1, the Housing and Urban Development Department will waive for one year an FHA rule that prohibits insuring a mortgage on a home owned by the seller for less than 90 days, giving FHA borrowers access to a broader array of recently foreclosed properties.

New Smoke Detector Regulations for 2010

Did you know?  The new smoke detector regulations will be effective beginning April 5, 2010. In order to sell a property in Massachusetts (ask your attorney if the sale is a "cash" sale), the property MUST have both smoke detector and carbon monoxide detector compliance,

Clink on this line for for information on the new smoke detector law.

Here is the link for Nicole's Law - Carbon Monoxide Regulations

Keller Williams is "Most Recognizable" Brand in Real Estate!

FHA Updated on December 7...

I am sharing the following excerpt from my team leader's email today.. Thanks Kathleen!

After much anticipation the Federal Housing Administration (FHA) has, effective December 7, 2009 made adjustments to its underwriting guidelines. The new rules will expand the number of properties eligible for FHA loans.

The great advantage to FHA loans has been that for qualified applicants and properties the minimum down payment has been 3.5% as opposed to 10% or 20% for conventional non-FHA loans. The tricky part has been that many properties, under the old guidelines, simply did not meet the criteria

Here are some of the more important changes:

• Under the old guidelines the association had to have 4 or more units. Now an association with 2 or 3 units qualifies.
• Under the old guidelines the required owner occupancy in the association was 51%. Now it is 50%.
• Under the old guidelines the maximum amount of commercial space was 20%. It has now been increased to 25%.
• Whereas new projects were ineligible under the old guidelines, now FHA, with extensive documentation up front, will give loans on new construction projects.

The House Financial Services Committee is, however, considering a couple of adjustments that would make it more difficult to obtain a FHA loan.    There are some who feel it is too easy for buyers to qualify for the FHA loans and feel that the applicants should have more “skin in the game.”           One proposal is to increase the minimum credit score from the current 620 to 640. The other proposal is to raise the down payment from the current 3.5% to 5%. These proposals have not been enacted. So stay tuned!

5 Trends to watch for in 2010, according to Keller Willliams ...

Just got an email and notice from Keller Williams with their 5 Trends to watch for.. I felt this is something I should share with everyone, and also give you my own take on things.. Here we are...

1. Incentives - Opportunities ... With the tax credit of 2009, first time buyers comprised 47 % of the sales. The National Association of Realtors (NAR) predicted around 53.5%.  Everyone's pretty much hoping the extended credit will help the economy and provide added incentives to continue and heighten these trends in 2010, Early indicators however, are not in fact, showing this.. However, this could be temporary..

According to the Keller Williams Report

"Economists are now hoping the extension of the $8,000 first-time homebuyer tax credit coupled with the expansion for current homeowners will continue to stimulate sales and the housing market as a whole. The tax credit, which was slated to expire Nov. 30, 2009, will be extended for contracts signed before May 1, 2010 that close before July 1, 2010. First-time buyers, who are in the process of closing now, no longer have to worry about qualifying for the $8,000 tax credit if they do end up closing after the Nov. 30 deadline. The new legislation also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the current level. Read the full story on the new tax credit and its provisions, including a chart comparing the old versus the new here.
Buyers who already own a home are also now eligible for a tax credit on the purchase of a home. The $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation does set forth several provision including, limiting eligibility for existing homeowners to homes worth $800,000 or less, as well as making both credits available only for primary residences, not second homes or investment properties. Economists, legislators and industry experts expect that the credit will encourage current homeowners to accelerate their purchase plans."

2.  Distressed properties and short sales - still represent around 40% of the total inventory; and that number is expected to actually increase!  

3.  Education - Only the best agents are the ones who are educated and knowledgable about what's going on.. Agents that keep themselves abreast of what's going on and who actually work in the "trenches" day in and day out are the ones you as a consumer need to work with, for YOUR sake more than anyone..

4.  Social Media- More and more people are getting their information and communication from social media. I am on Facebook, Twitter, and I blog.. regularly, to give the public a perspective of who I am before they even call upon me for services. This way you can get to know me before you even know me...

5.  Accountability- The "best of breed" agents out there treat and track everything like a business.. Does your agent know their numbers?  Why is that important to you... Well, most likely, if an agent treats their own business seriously, they'll probably treat you more seriously, too.. Would you go to an unorganized dentist? 

Who says it's gonna be easier to buy a house in 2010? NOT the FHA, that's who!

Among the real estate blogging community there's the "buzz" now that the Obama Administration's gonna make things yet "a little tougher" for Joe and/or Joan Homebuyer to actually buy a home this forthcoming year of 2010...

Maybe THAT'S why poor Barack's popularity ratings plunged all the way down to 48% this week, who knows..

READ THIS ARTICLE: FHA will tighten up in 2010...
 
So, what are YOUR thoughts?

The "gist" of this includes ... increasing the amount of upfront cash homebuyers must have ,the minimum FICO scores for new borrowers have to be higher... and seller concessions dropping from 6 percent to 3 percent.

Okay.. so on ONE hand, we have an extension of the "Highly Exalted" Tax Credit, into April...

BUT WAIT!  Now we have a little "sobering" up with actually making it harder for would be homeowners to be able to qualify by slamming them where it counts, and hurts..

Folks who are paying a high rent will need to "sweat it out" just a little longer, to save even more money before they can buy a house.. Never mind that the total amount of the monthly payment AND taxes, insurance, and related is probably close to or even less than what they're at present paying for rent...

So now, to sum up.. here's what MAY happen...

• The minimum down payment will go from 3.5% to 5%
• The minimum FICO credit score will be raised to 620
• The Upfront and ongoing mortgage insurance premiums will be raised
• Maximum Seller contribution allowable wil be reduced from 6% to 3%

That's too bad, in all honesty... I see numerous folks who can't take advantage of the extra super low rates and incentives NOW; if the above become reality, it'll just add more people into the mix. By the time these folks may be in a position to buy, it may be already too late; they may wind up "missing the boat"...

My understanding is Congress and the Obama Administration are still mulling these proposed changes. I wish they made it harder for folks to qualify a couple of years ago, when Countrywide was handing out "frightening" mortgages like they were at a "clearance sale".. Although yes, I am at least glad SOMEONE'S finally trying to be more careful THIS time around, if you're going to try to get the economy moving by promoting home sales, let's really do it and stop the self sabotage.. 

because sometimes when I read this crazy contradictory stuff, I just feel I'd be better off if I "talk to the hand:" instead...

Top 10 Must-Know Real Estate Trends for 2010 by Frontdoor

I found this and I felt everyone should read it..

Frontdoor's 10 Must Know Real Estate Trends...

Home Sales Rise in October largely due to the 1st time buyer tax incentive...

Prospect Mortgage's, Deven Ewing's Monday Morning Email:

"Existing home sales rose 10.1% in October to a seasonally adjusted annual rate of 6.1 million units from 5.54 million units in September. The increase was largely due to the tax incentive for first-time homebuyers. The inventory of unsold homes on the market fell 3.7% to 3.57 million, a 7-month supply at the current sales pace, and the lowest level since February 2007."

Okay...Will it sustain?

The news is saying now there are signs we are heading towards a recovery, but even if THAT'S so, the effects will take a long time to trickle down...

A little "Gatos - Trickle - down" economics theory here....LOL...

Good news though... The inventory's got to move... The only snags?

1.  The "pent up" bank owned inventory YET to be released to the public for sale.. I suspect that will be "coming soon", probably in spurts, but coming soon... and ...

2.  Unrealistic sellers and their ridiculous agents with their overpriced listings living in "LaLa" land, and further damaging the statistics by showing abnormally high days on market that wouldn't necessarily be so high if they'd only go away, or reduce their prices.

Stay tuned...

Nearly 27% of Homeowners owe more than they can sell ...

So we're not out of the "woods" yet...

I hear "stuff" everywhere I turn... "Oh, sales are up!" and so on, and so forth... A good amount of this "optimism" probably comes from real estate agents themselves... I honestly don't think anyone's out to mislead anyone.  I think it's more a case of "jumping" the gun...The low prices and the tax credit helped the situation.... although I think after the tax credit got extended, buyers are now looking like they're taking it a little "too easy".. and I suppose come next April we'll see another "frenzy"...

My own "informal" observations lead me to think that yes, compared to last year, the market locally HAS in fact, improved, but not in pricing.. As a matter of fact, after months of decline and stagnation, the market IS in fact, showing signs of "flatlining" .... but I'd hardly say it's starting to go up...yet...

Eventually, it will.. Let me say I hope it's slow and steady.. Too many folks got hurt the last time around....

On the 24th, I saw a newscast on ABC News. I found it and I'd like to share it here.  Also, let me say, I will try to find out what the rate of homeowners are in the area that are upside down. My "informal" observations would say around 30% of homeowners are now "upside down", on their mortgages, locally speaking...

ABC News Clip Click Here