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Optimistic Outlook for Housing, But Challenges Remain

RISMEDIA, May 24, 2010—Economists participating in a recent NAHB Construction Forecast Conference Webinar agreed that the housing market is on the road to recovery, but cautioned that several factors could contribute to a bumpy ride in the coming months.

“Home buyer tax credits clearly did their job and got people back into the marketplace,” said NAHB Chief Economist David Crowe, who also served as moderator of the webinar.

With the expiration of the tax credits in April, Crowe said the housing momentum is being carried forward by low interest rates, pent up household formations, stabilizing prices and budding employment growth.

However, many factors continue to drag on housing at this time–including the critical shortage of credit for new and existing projects, competition from short sales and foreclosures and regional economic disparities.

The availability of acquisition, development and construction (AD&C) financing remains a major concern as the industry moves forward, Crowe said. “Builders still tell us that credit is extremely tight. Banks are saying not so much. That gap is an indication that something is broken, at least when it comes to residential construction.”

NAHB is forecasting 552,000 single-family starts in 2010, up 25% from last year’s 445,000 level, which was the lowest annual output since 1959 when the government began collecting this data.

Suffering from an acute shortage of available financing and a significant shadow inventory of homes lost to foreclosure that are competing against normal inventory, Crowe said that multifamily housing starts are expected to lose further ground this year, falling 18% to 93,000 units, before rebounding to 150,000 units in 2011.

Crowe anticipates that nationwide home prices will remain flat this year and post a modest increase in 2011 and that mortgage interest rates will continue to stay low, barely breaking 6% by the end of this year, and not rising much above that level through 2011.

The road back to normal levels of residential construction will be longer for some states than others. By the end of 2011, the top 20% of the states will see their production levels back to normal. Those states include Texas, Oklahoma, Montana, Wyoming, Tennessee, Louisiana, Mississippi, Alabama, Arkansas and Kansas. The previous boom markets in California, Arizona, Florida and Nevada, along with the Great Lake states of Michigan, Indiana, Ohio, Illinois and Wisconsin that were hit by deep cuts in auto production and manufacturing, will be the last ones to recover.

Housing Demand Reflects Job Growth
Like his co-panelists, Mark Zandi, chief economist of Moody’s Analytics, said that housing will improve as the job market does. He forecast that the economy will average monthly job gains of 125,000 this year, 250,000 in 2011 and 300,000 in 2012.

Mirroring anticipated employment growth, Zandi expects GDP to rise 3% this year, approximately 4% in 2011 and closer to 5% in 2012.

The key factor driving housing demand is jobs, said Zandi. “We’re not going to get home sales unless we have jobs. Here the prospect is good. Business balance sheets are in good shape and improving rapidly. These are pre-conditions for better job growth and we should see the job market steadily gain traction.”

Zandi forecast that overall housing starts will total 700,000 units this year, close to 1 million in 2011 and about 1.7 million by 2012, which he describes as close to trend and consistent with demographics in a normal functioning economy.

Driven largely by the high foreclosure rate, Zandi expects that home prices will continue to fall modestly in 2010, down about 5% on a national average. He calculates that the difference between supply and demand is approximately 750,000 units annually, and it will require until the end of 2011 to work off this extra inventory.

“The good news,” he said, is “as the job market improves, so will household formations and demand. So I anticipate we will work off the excess inventory more quickly than the two-year period.”

He added that most of the housing surplus is regionally concentrated in Florida, around Atlanta, along the South Carolina coast, in Las Vegas, Phoenix, and Tucson and in the central valley of California.

Consumers Fuel Recovery
Taking the most bullish approach to the ongoing recovery, Chris Varvares, president of Macroeconomic Advisers, LLC, forecast that GDP will rise 3.7% this year and that housing starts will total 750,000, well above the Blue Chip Economic Indicators consensus of 690,000.

“Personal consumption expenditures are making a very solid recovery,” said Varvares. “Residential investment is going from a drag to a contributor. The difference between our forecast and the consensus is the strength in personal consumption and housing.”

Although the huge number of foreclosures on the market are accounting for about 300,000 to 400,000 fewer starts than there otherwise would be, Varvares said the fundamentals still point to a solid trajectory for housing.

“With prices stabilizing, demand is picking up and we expect builders to respond. By the end of 2011, we expect about 1.2 million housing starts. This suggests we can have recovery in starts this strong while simultaneously working down excess housing inventory.”

The panelists were in unanimous agreement on a number of areas–the Federal Reserve will likely continue to keep interest rates near rock bottom levels at least through the end of the year; the chance of a double dip recession is extremely slim; and policymakers will need to take action within the next two years to increase revenues and cut spending to rein in the burgeoning structural deficit.

For more information, visit www.nahb.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMedia » Home Buying 101

Posted on May 24, 2010 by admin | Posted in Home Buying | Leave a comment

How to Avoid Getting Hooked by Debt-Reduction Schemes

RISMEDIA, February 18, 2009-(MCT)-Get rid of debt fast and easy, for pennies on the dollar. If the deal sounds too good to be true … well … you know the drill.

As the jobless rate climbs, many people find themselves falling behind on credit-card bills, struggling with living expenses and bogged down with a mortgage or car payment.

Consolidating debt through a credit negotiator may sound appealing, but experts urge caution in this economic environment ripe for scammers.
Sometimes unscrupulous companies will ask for an upfront or monthly fee, saying they can renegotiate your debt, but what they actually do isn’t clear, said Kim States, interim president and CEO of the Better Business Bureau of Southern Arizona.

In the meantime, if you’re not paying minimum fees on credit cards, your credit score plummets.

“You end up in further in debt because you’ve paid this scam artist the money and nothing happened,” States said.

It’s a lesson that one Sierra Vista woman learned the hard way.
Christina Rawl, a 36-year-old disabled Army veteran, said she lost her job about a year ago and bills started piling up. She and her husband had about ,000 in debt on five credit cards, a mortgage and two car payments.

She went online and found a company called Clear Your Debt LLC. The company started taking 0 out of her account every month.

“The way I understood it, I was saving money, and while I was saving the money, they were negotiating with credit companies,” she said.

But Rawl said those negotiations never took place, and she is now being sued by two creditors.

Her husband, who works for the federal government, is now having his wages garnisheed.

David Jones, president of the Association of Independent Consumer Credit Counseling Agencies, said what typically happens is the negotiating company claims it can settle the debt for 20 or 30 cents on the dollar.
In the meantime, the debt consolidator takes hundreds of dollars from your account every month and purportedly puts it into another account to pay off the renegotiated debt.

Consumers don’t realize that sometimes the company will first collect its fee, so no money is used to pay any bills for several months. The creditors will then go to a collection agency or take legal action because of the unpaid bills.

Depending on the terms of the contract, such action may be legal, but “it’s certainly unethical,” Jones said.

Calls to Clear Your Debt, based in Austin, Texas, were not returned.

Consumers have filed 136 complaints with the BBB against Clear Your Debt in the past three years, said Erin Jones, a spokeswoman for the BBB that serves Central, Coastal and Southwest Texas.

The company has a rating of F, the lowest on the BBB’s grading scale, because consumers complain they get enrolled in the program when they think they are only applying for eligibility, Erin Jones said. Consumers also complain about the lack of communication between the company and its customers’ creditors, she said.

The BBB has concerns with the debt consolidation industry in general, Erin Jones said.

“A lot of these folks are very vulnerable because of the desperate situation they may be in, and it’s very important that customers take their time and understand what they’re signing,” she said.

In Southern Arizona, there has been a marked increase in complaints about debt consolidators.

Last year, the BBB of Southern Arizona received 1,733 inquiries about debt consolidation companies, a 90% increase from the previous year.

In Arizona, the Attorney General hasn’t taken legal action against any debt consolidation companies, said spokeswoman Anne Hilby. But she said consumers should still be diligent about researching a debt negotiator, so they don’t end up in a worse situation.

The Pima Council on Aging has also seen a spike in the number of people calling its office with financial concerns, officials said. They refer people to one of three nonprofits with local offices.

Nonprofits get money from fees paid by customers and from contributions from the creditors themselves, said David Jones, of the AICCCA. Reputable for-profits do exist, he said.

States, of the local BBB, said whether the company is nonprofit or not, consumers should check them out and make sure they have a local office with a physical address.

And Jim Murphy, the CEO of the Pima Council on Aging, said if consumers are going to enter into a debt consolidation program they need to make sure they’ll have enough money to pay back that debt. And they need to be careful to read the fine print because there may not be any recourse.

“There are some groups who are doing things legally,” Murphy said. “But they’re not moral.”

Steps to Become Debt-Free

Step 1: Set up a household budget. Examine monthly income and expenses. If expenses exceed your income, you need to boost your income or cut expenses to bring the totals in line. Cutting discretionary spending — restaurants, entertainment and travel — is the first place to start.

Step 2: Don’t go deeper in debt. Put credit cards away and pay cash or use a debit card. If you must charge something in an emergency, use the card with the lowest interest rate.

Step 3: Find small ways to save money. Forgo the daily coffee; take public transportation; use coupons; eat home-cooked meals; seek out lower-priced auto insurance; cancel your cable TV; or switch your cell phone provider.

Step 4: Correctly prioritize debt repayments because not all carry equal weight:
- Pay off high-interest rate balances first. Review the interest rates and terms of payment for each credit card. Pay double or triple the minimum monthly payment each month on the credit card with the highest annual percentage rate until its balance is paid off then apply payments toward the next highest-rate balance. In the meantime, make the minimum due payments on remaining cards.
- Consider transferring balances to the lowest-rate card.
- If you must miss a payment, carefully consider which debt is most important. Ignoring your mortgage or rent payment could cost your home. Your car loan may be critical if you’re dependent on transportation for your job.

Step 5: Ask creditors to reduce interest rates or for a new payment schedule. Be honest about your challenges and assure them that you’d like to remain a loyal customer.

Step 6: Make extra payments whenever possible.

Step 7: Contact a credit counseling agency if your efforts are not successful.

Source: Better Business Bureau

Warning signs that you may be dealing with a questionable debt negotiator:

- Demands that you provide account numbers or other financial details before it will discuss its services or fees. Reputable credit counseling will provide free information about their services.

- Boasts it can “lower your monthly payments by 30% to 50%,” which is rarely true.

- Promises that it can “get you out of debt easily.” Avoid counselors who promise a quick fix.

- Avoid any agency that claims it can evaluate your situation in just minutes, or that offers to do so quickly over the phone. Experienced counselors may want to spend an hour reviewing your financial situation.

- Claims it can remove negative information, such as bankruptcy, from your credit report. Accurate information cannot be removed from a person’s credit report.

- Issues a blanket recommendation for a debt-management plan. The plans-which pay down debt through monthly deposits to the credit counseling agency-are not for everyone. Do not agree to establish one unless and until you have reviewed your personal situation with a certified credit counselor who recommends such a plan and then customizes the plan to best manage your debt.

- Reluctance to provide the organization’s business name and address.
- Insists upon an immediate decision.

Source: Better Business Bureau

How to Choose Debt Adviser

The Association of Independent Consumer Credit Counseling Agencies urges consumers to consider the following when considering a credit counselor:

Third party accreditation, which demonstrates that the counselor meets industry standards.

Certified counselors: Counselors have undergone training and met financial education guidelines.

Non-profit agency. They generally work toward the best interest of their customer, but it’s not the sole criteria to judge an agency.

Good customer-service record. Check with the local Better Business Bureau or Attorney General’s Office to find agencies with few or no complaints.

Full disclosure of policies and operations. All services, procedures and fees should be outlined in writing before entering into any agreement.

Reasonable fees. A reputable agency won’t charge a large upfront fee or request a voluntary contribution such as the first month’s payment of a debt management plan. Fees should not exceed to set up a debt management plan or per month to maintain the plan. If the consumer is unable to pay fees, the agency should be willing to work at no cost to the consumer.

Copyright © 2009, The Arizona Daily Star, Tucson
Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMedia » Financing a Home

Posted on May 24, 2010 by admin | Posted in Mortgage | Leave a comment

As Housing Market Nears Bottom, Pent-Up Supply Waits

RISMEDIA, May 24, 2010—While Zillow’s Q1 Real Estate Market Reports did contain a few bright spots regarding the housing market, we continue to have plenty of cause for concern. Peaking foreclosures and mortgage delinquencies are among them, but another threat is pent-up supply, or homeowners who want but don’t need to move, and are waiting on the sidelines for hints that the market is improving.

As part of our Q1 Homeowner Confidence Survey, we asked homeowners how likely they would be to put their home on the market in the next 12 months if they saw signs of a turnaround. The results were troubling: 7% said they would be “very likely” to put their home on the market, while 8% said “likely” and 14% said “somewhat likely.”

The 7% of homeowners “likely” to put their home on the market may not seem like a significant number, but that translates to 5.32 million homes (based on a total of 76 million owner-occupied homes in the U.S., from the Census Bureau). In 2009, the National Association of Realtors reported that 5.2 million existing-homes sold in the United States.

The danger of this pent-up supply lies in its contribution to a “saw-toothed bottom,” in which both home values and home sales will oscillate up and down from month to month. We forecast that the nation will hit a bottom in home values in the third quarter of this year, but that there will be negligible appreciation in home values for three to five years after we’ve reached bottom (near zero or even negative appreciation after accounting for inflation). Big factors in this forecast are the high inventory of for-sale homes that already exists, continuing elevated foreclosure rates fueled by high negative equity rates and high unemployment rates, and mortgage rates that are expected to be much higher in 2011 than they are now.

An equally important factor in this prediction though is the likelihood that a substantial number of sidelined sellers will put their homes on the market with any signs of improvement. This will have the effect of flooding a recovering market with more inventory, which will keep a lid on home value appreciation. Since the majority of these sidelined sellers are unlikely to buy a new home until they have sold their current home, the added inventory will not be driven down by these sellers until after they have put their home on the market. These sidelined sellers will essentially put a floor on how low for-sale inventory can fall: when inventory levels fall below this floor, sellers will jump into the market and supply will move back up; while inventory levels are above the floor, they’ll stay on the sidelines.

While we focus on the 7% of homeowners who said they were “very likely” to put their home on the market with signs of a turnaround, a total more than one-fourth (29%) said they are at least “somewhat likely” to put their home on the market. There are clearly millions of homeowners who want to move into a different house or neighborhood, but who, because of negative equity or hesitation to sell and take a loss, have been effectively trapped in their homes for the past several years. When they do take the step to list their homes, it will have a very real effect on the housing market.

For more information, visit www.zillow.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMedia » Homeowner’s Toolkit

Posted on May 23, 2010 by admin | Posted in Home Improvement | Leave a comment

Home Staging Tips That Focus on Largest Customer Segments

RISMEDIA, April 14, 2010—The busy spring home buying and selling season is underway and the experts at Pulte Homes are offering staging tips to get your home ready for sale. A quicker home sale can be reached by keeping in mind the needs of the home’s most likely buyer and creating a fresh inspiring look just for them, according to Pulte Homes expert Janice Jones, national vice president of merchandising.

“Everyone understands the value of de-cluttering, cleaning and refreshing a home in today’s competitive market,” Jones said. “The difference between a ‘For Sale’ and a ‘Sold’ sign often boils down to effectively staging a home to appeal to young singles, families or empty nesters—the three largest customer segments that are likely to buy your home. Home sellers should have a good idea of the type of buyer who will make an offer and, since everyone likes an updated home, some simple refreshes can achieve an updated look and feel.”

Jones recommends conducting a technology overhaul prior to staging your home. “Old technology will date your home and you seldom have a second chance to make a positive first impression,” she said. “Flat screen TVs, lap top computers, iPods with docking stations and wireless technology have eliminated the need for large bulky entertainment centers or massive desks designed to hide wiring. Once you’ve rid your home of bulky, dated stereos and TVs, it’s time to hone in on attracting prospects.”

For singles, Jones recommends emphasizing sleeping spaces and the living room, which are critical to this group. “Singles will spend a lot of time in the living room and the bedroom, which are their sanctuaries from the outside world. As a result, there is no need to set the dining room table with place settings,” Jones said. “Instead, focus on a simple TV stand with clean lines, a flat screen TV and candles in the bedroom and bathroom.”

Young families tend to revolve around children. Items that help this demographic envision themselves living in the space include age-appropriate bedding, linens and towels, a bright rug near play areas, and strategically placed toy chests with open tops. Since kids often play or watch TV on the floor, eliminate the coffee table to create a living room that appears larger and more inviting. Jones notes to remember about the garage when staging for families. “Organize children’s toys and sports equipment to showcase the garage’s storage capacity without compromising functionality,” she said.

Empty nesters tend to seek an upgrade in quality features. Upgrading bath accessories like towel bars and toilet paper holders or decorative hanging lights to a better quality and newer style will make an impact. If the budget allows, upgrading the refrigerator, stove and dishwasher can draw in a buyer. Lighting is also a key feature for this group. Jones advises ensuring living spaces maximize natural light. If lighting is less than ideal, add lamps or a ceiling fan with light fixtures. It’s important to open heavy blinds or window coverings when showing the home.

An absolute “must” for home stagers regardless of which demographic being targeted is color. Most sellers are instructed to use neutral colors when repainting. However, adding the right punch of color to accent walls can create depth, enhance kitchen cabinets, or bring a boring bathroom to life.

Homeowners can find color in simple accessories, like throw pillows, coffee table books, and decorative canisters. Neutral colors in flooring materials, upholstery pieces and window dressing work well because they enhance brighter accents.

When choosing colors, Jones cautions homeowners to be aware of their sensory impact:

- Red is stimulating and encourages self confidence

- Orange promotes happiness and celebration

- Yellow is uplifting and light-hearted

- Blue is calming in softer tones and promotes clarity in deeper tones

- Green is the color of nature—it feels fresh and rejuvenating

- Aqua is restful while pink is gentle and sweet—making a great pair

- Purple tones bring out a sense of compassion

“The key is to experiment and put yourself in the shoes of the prospective home buyer,” Jones said. “It may be helpful to ask a friend or relative for a brutally honest opinion before and after you start staging. You may be surprised how little changes—with a little budget—can make a huge difference to a prospective buyer.”

For more information, visit www.pulte.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more top headlines on RISMedia.com, be sure to see:

RISMedia » How to Sell Your Home

Posted on May 23, 2010 by admin | Posted in Home Selling | Leave a comment

Simplifying the Process: Lowe’s and RE-buildUSA Streamline the 203k Loan Process for Agents and Their Clients

RISMEDIA, May 7, 2010—In today’s stringent credit climate, the process of securing a loan approval involves many details that can be easily overlooked by prospective home buyers. The 203k loan—an FHA loan that enables home buyers to purchase and renovate properties—adds a new dimension to the loan approval process. From finding licensed and trusted contractors to detailing the scope of work involved in the renovation plans, obtaining a 203k loan requires a special degree of knowledge.

So why not simplify the process? Well, that’s just what industry veterans Dennis and Teresa Walsh did last year by launching RE-buildUSA, a designation/membership program that turns agents into 203k Specialists.

Together with Lowe’s, the Walshes educate real estate professionals and prospective home buyers about 203k, most recently on the West Coast where Lowe’s recently launched its 203k initiative in a region that encompasses major metros such as San Francisco, Salt Lake City, Sacramento, Lake Havasu and Las Vegas.

“Lowe’s is partnering with RE-buildUSA to help facilitate the home-improvement needs of home buyers acquiring distressed properties,” explains Nick Mraz, Lowe’s regional sales director who works extensively on the 203k initiative. “The Walshes brought a real asset to the table…the 203k certification. It’s an asset to both an agent’s clients and to the community as a whole.”

Why It Works
The reason the 203k certification works is because it’s comprehensive training that offers an agent entrance into RE-buildUSA’s 203k program and online member center. The full program includes a Project Portal and access to marketing ideas and materials, blogs and forums and information on the program’s additional partners, such as Lowe’s, Oakley Sign, Pillar To Post, Merrill, Obeo and PODS.

“We’ve been working for a long time to build the technology platform to support the program,” explains Dennis Walsh, CEO of RE-buildUSA. “The way the program is structured, the real estate professional only becomes a member after completing the five-hour certification course. It’s only at that point that he or she gets full access to the RE-buildUSA Membership Center and Project Portal.

“One of the frustrations when working on a 203k loan is finding licensed contractors and handling the paperwork and financing,” adds Walsh.

From Lowe’s perspective, the program is a win for all involved.

“We fit in this scenario perfectly,” says Mraz. “Lowe’s is a perfect fit because we can help the lender by outlining what they need and help the customer by taking away the stress of trying to find a contractor or installer*, or both.”

Simple as Filling Out a Form
A key component to the 203k certification is access to what RE-buildUSA calls the “Project Portal.” It’s there that the truest value comes into play.

The idea is that once the agent has a 203k deal ready to go, the process takes just minutes to complete. From the Project Portal, the agent fills out an online form, which includes detailed information on the buyer and project. From there, once the offer is accepted, it becomes contingent on inspection, the submission of the scope of work and the 203k financing itself.

“It can be a challenging process for the average buyer or untrained agent,” says Walsh. “This was the reason we created the Project Portal. We said, ‘We really have to simplify this process.’ Using the Project Portal, our 203k Specialists can easily submit key project information in less than five minutes. That information then gets disseminated to our partners in the program to help expedite the process in a much faster and streamlined way.”

For example, once the Project Portal data is received by Pillar To Post, RE-buildUSA’s home inspection partner, the company immediately contacts the agent to conduct the home inspection, which, in this case, is designed specifically to meet the FHA standard requirements of the 203k loan.

“Their entire inspection revolves around making sure the home meets proper FHA standards and guidelines,” says Walsh. “While there, they’ll also make additional recommendations about repairs that may make sense to include in the 203k renovation. Rather than being confronted with costly repairs a few years down the line, the homeowners can roll these expenses into their mortgage at a lower cost and interest expense.”

While all of this transpires, Lowe’s is working for the client at the same time.

“Lowe’s contacts the customer immediately,” Walsh says. “The idea is to help them immediately begin the process of choosing flooring, cabinets, appliances, etc., so they can move quickly to the closing table. The product specialists at Lowe’s help customers finalize their choices, review their scope of work and ensure that each customer has all the proper documentation and paperwork needed for the lender to finalize the deal.”

Lowe’s also is able to track the customer’s 203k progress through the Project Portal to schedule appointments, access project data and coordinate communications.

All Points East to West…and Soon, in Between
Already a success in Florida, in late March, Lowe’s rolled out its 203k initiative on the West Coast, starting in San Francisco at Prudential California/Nevada Realty.

According to Prudential California/Nevada Realty President and CEO Ed Krafchow, Lowe’s and Re-BuildUSA rolled out the program to more than 120 agents at an event this past April. Of those 120 in the room, 94 of them signed up on the spot for the Walshes’ 203k training. For Krafchow, education in the 203k area is an essential next step for agents who want to succeed in the current marketplace.

“This company went through a process of certifying more than 1,000 agents as short sale specialists,” Krafchow explains. “We wanted to go into where the market is selling, and short sales are selling up a storm. We have to give agents tools and the ability to speak to people with good knowledge. We believe the 203k program is right behind short sales in terms of what the market will become. The Walshes’ 203k training will allow people to go into their communities and support people who really want to buy a house to get the house they want and have it fixed up and repaired at the same time.

“This rebuilding process is critical to changing the valuation process. Everyone knows that a house with recent repairs is more valuable than a house in disrepair.”

The event at Prudential CA/NV is just one of many to come as Lowe’s and RE-buildUSA continue to educate real estate professionals and consumers on the power of the FHA 203k.

“Our relationships with real estate professionals all across the country have really blossomed over the past year,” says Mraz. “We’ve received a lot of interest from people who have heard about what’s been happening with our program in Florida, so we’ll be moving pretty quickly this year to expand the program.”

Lowe’s is clearly ready for a larger rollout, having an already well-developed installation services department that boasts more than 10,000 installers nationwide who specialize in over 40 product categories across the store.

Down the Road
For the Walshes and Lowe’s, the ultimate goal is to make 203k education viral and have it spread through the people actually doing the deals—the agents.

“One example is that our 203k Specialist can use a customizable, consumer-directed PowerPoint presentation we provide in the Membership Center to put on their own seminars,” says Walsh. “Many have done this successfully with first-time buyers’ seminars. 203k seminars appeal to a broad segment of prospective buyers and are a great opportunity to drive more business.”

In fact, at press time, Krafchow’s company was getting ready to put on the first in a series of consumer seminars geared toward learning about the 203k loan.

“The nature of our relationship with Lowe’s is very positive,” Krafchow explains. “We’re planning on doing consumer-facing workshops based on the 203k program where Lowe’s will come in with samples, and consumers in the room will literally be able to pick out colors, fabric and tile…and then buy the house.”

“His company is going to have 203k-certified agents put on the seminar and have their local lending partners sponsor it,” says Walsh. “It’s a great way to inform the public, and also help loan officers and certified agents connect with consumers.”

*Lowe’s installers are licensed, bonded and insured. The company also stands behind the quality of its work with a 100% satisfaction guarantee.

For more information, visit www.lowes.com or www.re-buildusa.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more top headlines on RISMedia.com, be sure to see:
Convincing Clients to Stay – Cultivating First-Time Home Buyer Business
First-Time and Move-Up Tax Credits Require Paper Trail When Filing Taxes


RISMedia » Homeowner’s Toolkit

Posted on May 23, 2010 by admin | Posted in Home Improvement | Leave a comment

Will the Stimulus Benefit Homeowners and Buyers?

RISMEDIA, February 18, 2009-”There are four primary sections of the economic stimulus plan that will benefit home owners and buyers,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. According to Nicholas, these include:

1. Expansion of Home Improvement Tax Credit.”The tax credit for making energy efficient home improvements is now 30% of the cost of the improvements up to a maximum of 00,” Nicholas said. “This means that if the improvements cost you ,500, you would receive a tax refund of ,500 when you file your tax returns.”

Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters.

“Generally, most modern improvements like windows, furnaces, and air conditioners meet the necessary standards for energy efficiency,” Nicholas said. “If you’ve been holding off on making some of these improvements, now is a great time to get a move on it – especially with all the great deals being offered.”

2. Expansion of First-time Home Buyer Tax Credit.

The tax credit available to first-time home buyers was increased from ,500 to ,000 for homes purchased between January 1, 2009, and December 1, 2009. Also, the credit no longer needs to be paid back as long as the buyers live in the home without selling it for at least 3 years.

“The previous version of the credit expired on July 1, 2009, and required home buyers to pay the funds back over a 15 year time frame,” Nicholas said.

The income limitations remain the same (,000 for single tax payers claiming the full credit and 0,000 for married tax payers), as do most other qualification requirements. Also, the credit remains refundable. “This means that first-time home buyers who owe less than ,000 in taxes for the year are still eligible for the full ,000 credit when they file their tax returns, and the IRS will write them a check for the difference between ,000 and their actual tax bill,” Nicholas said. “In fact, the credit can be claimed on your 2008 tax returns that you file by April 15 of this year, even if you buy the home in 2009.”

There is one catch, however: if you bought the home in 2008, the credit remains ,500, and it still needs to be paid back over a 15 year timeframe beginning in 2011 when you file your 2010 returns.

3. Higher Reverse Mortgage Loan Limits.

The loan limits for FHA-insured reverse mortgages have been increased to 5,500 across the entire country-not just the higher cost areas. The previous limit was 7,000 across the country.

“This is especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated,” Nicholas said.

This coincides with another little-known change in the reverse mortgage
arena: the availability of reverse mortgages on home purchase transactions.

“This is a fantastic opportunity for senior citizens to buy a new home and live mortgage payment-free without having to wait for their old home to sell,” Nicholas said. “Seniors could also use this strategy to buy a new home and turn the old home into a rental or otherwise wait for market conditions to improve before trying to sell the old home.”

4. 9,750 FHA and Conforming Loan Limits Restored in High Cost Areas.

“The 9,750 maximum loan limit had been in force throughout 2008, but was reduced to 5,500 in 2009,” Nicholas said. “The economic stimulus plan restores the 9,750 maximum. This makes higher cost homes more affordable – especially in the coastal housing markets that tend to have higher than average home values.”

For more information, visit http://gibrannicholas.com and www.CMPSInstitute.org or call 888.608.9800.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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Are Lower Mortgage Rates Working? For Some, Yes; for Others, No
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RISMedia » Financing a Home

Posted on May 23, 2010 by admin | Posted in Mortgage | Leave a comment

Ending Tax Credit Triggers New-Home Sales Surge in March 2010

RISMEDIA, April 29, 2010—With many buyers rushing to take advantage of the federal home-buyer tax credit set to expire on April 30, sales of newly built single-family homes surged 26.9% in March to a seasonally adjusted annual rate of 411,000 units, the Commerce Department recently reported. Sales increases were posted in all four regions of the country.

“Undoubtedly, the tax credit is working,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Builders are seeing a growing optimism among consumers.”

“The near record-breaking 27% increase over February was the result of home buyers taking advantage of the tax credit as well as a carryover of demand that was held back by unusually bad weather in February,” said NAHB Chief Economist David Crowe.

“The increased sales are very welcome news and sales will continue to improve, although we expect them to plateau in late spring and early summer when the credit expires. Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth,” Crowe added.

Regionally, sales increased 35.7% in the Northeast, 4.3% in the Midwest, 43.5% in the South and 5.7% in the West.

The nationwide inventory of new homes on the market dropped a negligible 0.8% in March, to 227,000 units as builders continued to maintain small inventories. With the increased sales pace and low inventory level, the month’s supply of new homes for sale dropped from 8.6 in February to 6.7 in March.

For more information, visit www.nahb.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

RISMedia » Home Buying 101

Posted on May 23, 2010 by admin | Posted in Home Buying | Leave a comment

Fannie Mae Announces New Initiative to Help Struggling Homeowners in Orlando

RISMEDIA, May 10, 2010—Fannie Mae recently announced a new partnership that will accelerate response time and provide financial counseling to distressed Florida homeowners whose mortgages are owned by Fannie Mae and serviced by SunTrust.

Under the agreement, the Orlando agency of Consumer Credit Counseling Service of Central Florida and The Florida Gulf Coast (CCCS) will initiate a grassroots mail and telephone campaign focusing on eligible homeowners who are delinquent on their mortgage payments. The goal of the campaign is to help eligible homeowners understand the steps they can take to prevent foreclosure.

Homeowners will be encouraged to schedule an appointment to meet with experienced English and Spanish-speaking housing advisors. The counselors will explain the qualification requirements for loan modification programs or other assistance available to them, and help to facilitate an expedited resolution.

“This partnership with CCCS is the latest step in our effort to expand national foreclosure prevention assistance programs in hard-hit markets around the country,” said Terry Edwards, Fannie Mae’s Executive Vice President, Credit Portfolio Management. “It is important for homeowners who are struggling with their mortgage to access free assistance. We are finding many borrowers are paying third-parties for services that are free if they connect with their servicer.”

CCCS will assist each qualifying mortgage holder with organizing the documentation necessary to complete a loan modification under the Obama Administration’s Making Home Affordable Program, or other programs, and submit the information directly to the servicer. Additional monitoring services will be provided to homeowners who enter into a trial modification to ensure that they submit any outstanding information required by the servicer in a timely manner, with the goal of successfully transitioning the homeowner into a permanent modification. If the borrower is unable to qualify for a modification, counselors will work with the servicer and the borrower to arrange a graceful exit from the property, which may include assistance with relocation costs.

For more information, visit www.fanniemae.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.


RISMedia » Homeowner’s Toolkit

Posted on May 22, 2010 by admin | Posted in Home Improvement | Leave a comment

Regional Spotlight: April Home Sales Increased in Mid-Atlantic Region, Report Indicates

RISMEDIA, May 11, 2010—Metropolitan Regional Information Systems, Inc. (MRIS), a leading provider of real estate information technology and the largest multiple listing service in the nation, announced that the number of homes sold in the Mid-Atlantic region increased 25 percent* more during the month of April than during the same time period last year. MRIS today released its April 2010 Residential Real Estate Market Statistics, a monthly report showing purchase activity and trends by jurisdiction, county, and zip code within the Mid-Atlantic region.

Data from the report suggests that a moderate recovery in the residential real estate sector could potentially be fueled the government tax credit incentives on new home purchases. Days on market decreased by more than 26 percent* while average sales prices increased by nearly 4 percent*, with major metro areas showing higher increases. The majority of homes sold were priced between 0,000 and 0,000* offering three or more bedrooms.

“We are pleased to see signs of recovery within the Mid-Atlantic region,” said David Charron, President and CEO of MRIS. “Our monthly statistics reports will continue to measure the changes and developments during the summer selling season; we are then able to provide this critical information to real estate professionals.”

The following snapshot compares activities within MRIS’ service region to April 2009†:

Prince Georges County, MD
Continues to have the highest year-over-year (Y-O-Y) change in number of Units Sold (85.61%) from 424 units sold in 2009 to 787 units sold in 2010. The Median Sold Price dropped by a little over 17% (from 0,000 in 2009 to 0,000 this year) and the Average DOM dropped over 36% (from 151 last year to 96 this year).

Shenandoah County, VA
Had the second highest Y-O-Y change in number of Units Sold. This year, 43 units were sold compared to 24 last year for a % increase of over 79%. The Median Sold Price dropped by 6% (from 154,250 in 2009 to 5,000 this year). Average Days On Market (DOM) dropped nearly 16% from 169 last year to 142 this year.

Harford County, MD
Had the third highest year-over-year (Y-O-Y) change in number of Units Sold at nearly 79% (245 units in 2010 compared to 137 units in 2009). The Median Sold Price stayed nearly the same (7,557 this year compared to 0,000 in 2009 for a drop of a little over 1%). Average Days on Market increased by 6.61% (129 this year compared to 121 in 2009).

Dorchester County, MD
Had the largest increase Y-O-Y in Average DOM at nearly 124% (from 113 in 2009 to 253 this year). However, the Y-O-Y change in Total Units Sold was increased by 75% from 16 last year to 28 this year. The Median Sold Price rose by just a bit over 4% from 0,250 in 2009 to 5,575 in 2010.

Manassas Park City, VA
Had the highest Y-O-Y increase in Median Sold Price, it nearly doubled over last year (from 5,950 in 2009 to 5,000 this year for a 93.49% increase). The number of Units Sold dropped by nearly 6% (from 34 last year to 32 this year) and the Average DOM dropped by nearly half (from 95 in 2009 to 51 this year for a -46.32% decrease).

Winchester City, VA
Had the second highest Y-O-Y increase in Median Sold Price with a nearly 55% increase (from 2,600 in 2009 to 5,000 this year). While the Total Units Sold dropped by 20% (from 25 units last year to 20 this year), the Average DOM also dropped by nearly 43% (from 124 in 2009 to 71 in 2010).

In the major cities of the MRIS region, as well as in some frequently asked about suburban areas, the picture remains consistent.

Baltimore City
• Total dollar amount of home sales increased by more than 37 percent
• Total units sold increased by 24 percent
• Average sales price increased by 10 percent

District of Columbia
• Total dollar volume sold increased by 50 percent, though average sales price declined by nearly 4 percent
• Total units sold increased by more than 58 percent
• Average days on market decreased by 30 percent, from 92 days to 64 days

Falls Church, VA
• Average days on market dropped more than 73 percent, from 71 days to 19 days
• Average list price decreased by about 4 percent
• Average sales price remained nearly the same

Howard County, MD
• Total units sold increased by 23 percent
• Average days on market decreased by 35 percent, from 113 days to 73 days
• Average sales price remained nearly the same, though average list price decreased by 5 percent

Full reports on MRIS market statistics are available through a self-service tool on the MRIS website; navigate through the News link to Market Statistics, www.mris.com.

*Source: Real Estate Trend Indicator – Higher Price Segment Format, Entire MRIS Region 4/1/2010 – 4/30/2010. RealEstate Business Intelligence, LLC. An MRIS Company.

†Source: Real Estate Trend Indicator – Higher Price Segment Format, individual reports by jurisdiction 4/1/2010 – 4/30/2010. RealEstate Business Intelligence, LLC. An MRIS Company.

For more information, visit www.mris.com.

RISMedia welcomes your comments and questions. Email realestatemagazinefeedback@rismedia.com.

RISMedia » How to Sell Your Home

Posted on May 22, 2010 by admin | Posted in Home Selling | Leave a comment

It’s Harder, but Still Possible, to Get a Loan

RISMEDIA, February 19, 2009-(MCT)-The freewheeling days of doling out cars and homes to just anyone are over. With the nation facing a deepening financial crisis, banks have tightened their credit standards. Yet, lenders say it’s still possible for the average person to qualify.

Here’s how to get that loan.

Car loans

A consumer’s down payment, credit history and the value of the car all play a role.

At Fresno-based Murphy Bank, Vice President Richard Laxton says the bank is looking for people with a credit score of 700 or more.

“You pick up the newspaper and you read about thousands and thousands of job layoffs,” he said. “If somebody has got a weak FICO score at the moment, that’s not somebody we want to gamble on right now.”

FICO, or credit, scores range from 300 to 850, and most people score in the 600s and 700s (the higher the better), according to the Consumer Federation of America.

Brett Hedrick, general manager of Hedrick’s Chevrolet in Clovis, was reluctant to place a minimum credit score on buying a new car because of varying factors.

The down payment plays a big role, he said.

“The worse your credit is, the more money you need down,” he said.

Laxton said a typical down payment is about 15%. He said that borrowers may have better luck with small banks and credit unions because those lenders, in general, are not feeling the same pressures as big banks.

Hedrick said some dealers may be willing to search for credit for customers, but some small banks may require the customer come directly to them.

The same rules apply to used cars.

On the plus side, Laxton said, prices are low right now and so many perks are available that it’s a great time to buy.

Hedrick agreed. He encouraged shoppers wondering whether they’ll qualify to go for it.

“When you find what you want, it doesn’t hurt to give it a try and shop around,” he said.

Home loans

The days of no down payment and not-so-great credit are over.

First-time home buyers looking to buy through the government’s Federal Housing Administration loan program need a credit score of at least 600, said Mike Baker, manager of Fresno-based Resource Lenders.

The loans require a 3.5% down payment, he said.

For a conventional loan, lenders want a credit score of at least 680, Baker said. The greater the percentage of the house that must be paid for with the loan, the higher the credit score needs to be, he said.

A 20% down payment is preferred, though 10% down payments are common, he said.

Granville Homes’ preferred lender likes to see credit scores of 720 and above for a conventional loan, said sales manager Michelle Brunn.

Customers can get financing below that, but their options might be limited.

If a credit score isn’t good enough, lenders will look for “compensating factors,” Baker said. That includes getting the buyer to come up with a large down payment and show a long and steady work history.

The good news is there are easy and relatively quick credit fixes that can put buyers in a better position.

For instance, lenders don’t like to see customers who regularly go over 50% of their available credit on items like credit cards. Paying down to below 50%–and especially 30% — could cause their credit score to “skyrocket,” Baker said.

However, paying off accounts and closing them is not a good idea because it can cause scores to drop dramatically.

Granville offers buyers a monthly seminar to help improve their credit.

Brunn recommended that potential buyers meet with a reputable lender long before they make the decision to buy to come up with a game plan.

Copyright © 2009, The Fresno Bee, Calif.
Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMedia » Financing a Home

Posted on May 22, 2010 by admin | Posted in Mortgage | Leave a comment
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