TEAM EMPOWERMENT MORTGAGE CHATTER: Dec 28; 5 Quick Tips for Jan 2012; 90-Day Seasoning Waiver Expanded; FHA Loan Limits are Back Up!; Best Post for 2011: For Buyers; Home Owners try Delay Tactics to Stall Foreclosures; What’s In Store for Housing in 2

“What if you could be anything, or anybody, you chose to be? Think about it. What would you choose to be?”

—Nido Qubein: is a businessman and motivational speaker

 Please note our office will be closed on Monday 1/2/2012 returning Tuesday 1/3/2012 in observance of the New Year Holiday, Thank You.

 

 5 QUICK TIPS FOR JANUARY 2012

1. Attack the Expired Listings

There will probably be more listings expiring this December 31st than any other single day in real estate history. We should not let this tremendous opportunity pass us by. These sellers may not have had an agent that was strong enough to price their home correctly. Prospect these sellers and explain what it will take to sell their home in this market and let them decide what is best for their families.

2. Prepare a Powerful Pricing Conversation

Whether working expired listings, FSBOs, new listings or your current listing inventory, it is crucial to have a well prepared conversation concerning pricing. Building a large inventory of salable listings in January will guarantee your success throughout the year – BUT THEY MUST BE SALABLE. Pricing will be the most crucial component of salability throughout the first quarter of 2012. For more on this subject you can read: House Prices: Where They Will Be in the Spring.

3. Be Seen As a Trusted Advisor

In the current economic climate, many consumers are losing confidence in both corporations and the individuals who represent those corporations. We must make sure that we know how to build trust with both our buyers and sellers. Once people realize that we are knowledgeable and truly care, they will more readily trust us and the information we share with them. To help with this you can listen to a recorded version of a webinar we recently did on this subject: How to Build Trust in Times of Doubt.

4. When Speaking With Buyers, Talk Affordability

The combination of falling prices and record low interest rates has made owning a home more affordable than almost any other time in history. Know what the affordability indices (ex. Price-to-Income, Mortgage Payment-to-Income) mean and be able to explain them simply and effectively. Dr. Ken Johnson of FIU has done great research on this issue. To download a copy of a PowerPoint presentation Dr. Johnson recently did on the subject, click here.

5. Become a Go-To-Agent

We must realize that it is not just the number of people we talk to but the depth of conversations we are capable of having with them. We need to position ourselves as the source of great information regarding the real estate market. We must develop and be able to communicate compelling messages for both buyers and sellers. For additional information, you can listen to a recorded version of a webinar we recently offered: How to Position Yourself as the Go-To-Agent.

 

90-DAY SEASONING WAIVER EXPANDED

This update from FHA was released late last week as an industry email without a corresponding Mortgagee Letter and contains information about FHA’s policies regarding the waiver of the 90-day seasoning required for sellers.

Here are the 6 things you need to know:

1. The extension is effective through December 31, 2012, unless otherwise extended or withdrawn by FHA.

2. Investors continue to be exempt from the 90-day seasoning rule.

3. All transactions must be arms-length.

4. No identity of interest can exist between buyer and seller.

5. If sale price is 20% or more of the seller’s acquisition cost, the lender must: a) provide supporting documentation and/or a second appraisal and b) order an inspection of the property and provide it to the buyer.

6. The waiver is limited to forward mortgages only.

READ FHA’S ANTI-FLIPPING WAIVER

 

FHA LOAN LIMITS ARE BACK UP!

The FHA Loan Limits have been restored to a SFR High Balance Maximum of $729,750. Loan limits vary by county (see flyer below for details) and will be effective through December 31, 2012.

 

 

BEST POST FOR 2011: FOR BUYERS

Even the Naysayers Say Now Is the Time to Buy

Business School professors Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? In their paper, the professors do not dispute the social benefits of homeownership:

“Home ownership is touted as the “American Dream”. It is credited with enhancing wealth, increasing civic pride, improving self-esteem, crime prevention, child development, and better educational outcomes, among other benefits. This paper does not dispute any of these claims.”

What the professors were proposing is that homeownership is not a better investment strategy than renting. The first of the two major findings was:

“After setting the holding period to the average American’s tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period… Individuals, on average, were better off in economic terms to have rented for most of the years in the study period. This first result is strongly dependent upon fiscally disciplined individuals that, without fail, reinvest any residual savings from renting.”

Historically, people do not actually reinvest savings “without fail”. Check here for the findings of a recent study from The Joint Center for Housing Studies at Harvard.

The second major finding says it all. According to both professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…

The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Bottom Line

Two researchers set out to prove that homeownership is not a good financial decision. After completing that research, they have determined that now is the time to buy. What more needs to be said?

 

HOME OWNERS TRY DELAY TACTICS TO STALL FORECLOSURES

The average time it takes for banks to process a foreclosure — from missed mortgage payment to the final part of the process — has increased to 674 days, more than double the time frame foreclosures took just four years ago, according to LPS Applied Analytics. Four years ago, the average time nationally was 253 days.

Delinquent home owners are learning how to stay longer in their homes with some home owners taking advantage of delay tactics, according to a recent article at CNNMoney. Some stall tactics housing experts report more home owners are using to delay evictions are home owners’ challenging the bank’s foreclosure against them, requesting that lenders dig up original paperwork such as by asking for banks to produce paperwork that shows it is the legal holder of the mortgage note, or even, in some cases, home owners will declare bankruptcy, CNNMoney reports.

Housing experts say the delays are continuing to throw a thorn in the real estate market’s recovery. “People who stay in homes undergoing foreclosure for years often don’t maintain the properties, causing blight and lowering property values in the surrounding neighborhoods,” David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks in foreclosure cases, told CNNMoney.

The following are the states with the longest delays in foreclosures:

• Washington, D.C.: Foreclosures take on average 1,053 days

• Florida: The average process time for foreclosures takes 1,027 days (or three years).

• New York: 906 days

 

WHAT’S IN STORE FOR HOUSING IN 2012?

The worst for the housing market may finally be over, according to housing experts in a recent article in Kiplinger. After median home price have dropped nearly 40 percent nationwide, a rebound is taking shape — although, housing experts say, the market may stay flat for awhile before gradually ticking up.

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody’s Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability — the ratio of median home prices to median family income — will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 — at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication.

Sales increases: The National Association of REALTORS® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes.

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace.

 

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