November 16, 2011
ERA Mortgage Craig Snyder and Rick Knight about FHA loans.
Rick ask Craig, “Can you give us an update on FHA loans with ERA Mortgage. Like what kind of down payments, credit scores etc that are needed?”
Craig reply’s,”Standard would be 3.5% for the down payment. The only exception would be a HUD REO property only requires $100 down payment. Also, minimum eligible credit score is 600. ”
Rick,” And how about the loan limits?”
Craig,” Current loan limits vary by county, but most in our area around Charlotte are at $271,000.”
Rick,” What are the qualifying rations?”
Craig, “Standard are 31% on the front ration and 42% on the back ration. So, the front ration is the mortgage payment, taxes and all insurances divded by gross monthly eligible income. The back is the same payment plus all monthly debt divided by gross monthly income.” Adds Craig, “ Debt ratios can be expanded based on customers qualifications. So they can go higher somtimes. Sometimes as high as 50%. ERA Mortgage can loan to borrowers with no established credit or limited credit if they qualify.”
Rick,” Thanks Craig.
If you would like more information about qualifying for an FHA home loan or conventional financing please contact Craig Snyder ERA Mortgage at 704 280 6868 or call ERA Knight Realty 1-888-892-7373 to get started.
September Stats for ERA Knight Realty was an average month.
“We have seen our units sales increase in 2011 but our sales volume stay about the same.” says Rick Knight, President of Knight Realty. “Our average sales price is lower this year than 2010. We anticipated that because of the price pressures from the inventory. 2012 ? Well, we are seeing the usual season slow down with activity in sales but the rental market is still hot. We expect more foreclosures to hit the market in 2012 which will have an impact on any hope for appreciation. But real estate is usually a long term investment and with interest rates at this level, if you can buy, you should. There are so many great properties out there at great values.”
“Gina Compton and Zach Stamey were our top Sales leaders for September. Those guys do a great job for our clients. Their expereince is what home sellers and home buyers are looking for. Their ability to help them through this tricky real estate cycle.”
Existing-Home Sales Off in September but Higher Than a Year Ago
Washington, DC, October 20, 2011
Existing-home sales were down in September on the heels of a strong gain in August, but remain well above a year ago, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 3.0 percent to a seasonally adjusted annual rate of 4.91 million in September from an upwardly revised 5.06 million in August, but are 11.3 percent above the 4.41 million unit pace in September 2010.
Lawrence Yun, NAR chief economist, said the market has been stable although at low levels, and there is plenty of room for improvement. “Existing-home sales have bounced around this year, staying relatively close to the current level in most months,” he said. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable – this speaks to an unfulfilled demand.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.11 percent in September, down from 4.27 percent in August; the rate was 4.35 percent in September 2010.
Contract failures2 were reported by 18 percent of NAR members in September, unchanged from August; they were 9 percent in September 2010. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said access to credit is unbalanced. “All year we’ve been discussing the fact that many creditworthy home buyers are being denied mortgages,” he said. “On top of that, loan limits have been lowered, which means buyers of higher priced homes, including many in more expensive housing markets, now have to pay a higher interest rate for a jumbo mortgage than buyers who can qualify for a conventional loan. We need to remove the roadblocks to a housing recovery – not place more obstacles in the way of financially qualified buyers.”
All-cash sales accounted for 30 percent of purchase activity in September, up from 29 percent in August and 29 percent also in September 2010; investors make up the bulk of cash purchases.
Investors purchased 19 percent of homes in September, down from 22 percent in August; they were 18 percent in September 2010. First-time buyers accounted for 32 percent of transactions in September, unchanged from August; they were also 32 percent in September 2010.
The national median existing-home price3 for all housing types was $165,400 in September, down 3.5 percent from September 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 30 percent of sales in September (18 percent were foreclosures and 12 percent were short sales), down from 31 percent in August and 35 percent in September 2010.
Total housing inventory at the end of September declined 2.0 percent to 3.48 million existing homes available for sale, which represents an 8.5-month supply4 at the current sales pace, compared with an 8.4-month supply in August.
Single-family home sales fell 3.6 percent to a seasonally adjusted annual rate of 4.33 million in September from 4.49 million in August, but are 12.2 percent above the 3.86 million-unit level in September 2010. The median existing single-family home price was $165,600 in September, down 3.9 percent from a year ago.
Existing condominium and co-op sales rose 1.8 percent a seasonally adjusted annual rate of 580,000 in September from 570,000 in August, and are 5.6 percent above the 549,000-unit pace one year ago. The median existing condo price5 was $163,800 in September, which is 1.0 percent below September 2010.
Regionally, existing-home sales in the Northeast rose 2.6 percent to an annual level of 790,000 in September and are 6.8 percent above a year ago. The median price in the Northeast was $229,400, down 3.3 percent from September 2010.
Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.09 million but are 17.2 percent higher than September 2010. The median price in the Midwest was $137,400, which is 1.4 percent below a year ago.
In the South, existing-home sales declined 2.6 percent to an annual level of 1.89 million in September but are 10.5 percent above a year ago. The median price in the South was $144,400, down 3.0 percent from September 2010.
Existing-home sales in the West fell 8.8 percent to an annual pace of 1.14 million in September but are 10.7 percent higher than September 2010. The median price in the West was $207,400, which is 4.5 percent below a year ago.
“The falloff in Western sales from a surge in August was expected because many lenders had lowered mortgage loan limits over concerns that sales wouldn’t close before the higher loan limits expired at the end of the September,” Yun said. “Given the concentration of higher cost housing in the West, particularly in California, many buyers were motivated to close in the months leading up to the changeover while they could still get low interest rates on conventional mortgages. Unless Congress reinstates the higher limits, the overall housing market recovery will be slower than it otherwise could be, and will hold back the broader economic recovery.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
Emac’s Bottom Line
Foreclosure Settlement Imminent, Bank Sources Say
By Elizabeth MacDonald
Published October 10, 2011
| FOXBusiness
Sources at Citigroup and Bank of America tell FOX Business that bank officials worked through the weekend and were in close talks with state attorneys general and the Department of Justice to try to wrap up a potential $20 billion settlement that could come as early as this week or next over improper mortgage practices and robosigning.
The would-be settlement involves foreclosure papers that were rubberstamped, allegedly pushing many out of their homes. JPMorgan Chase, Ally Financial and Wells Fargo are also involved in the talks, sources say.
A number of sticking points could still hang up the deal, these sources add.
These bank sources say the Administration at the same time is pressing ahead on sweeping new guidelines for mortgage lenders nationwide which could be part of the deal, possibly one of the biggest overhauls of an industry since the tobacco settlement in 1998.
The Department of Justice did not return calls for comment. Bank of America and Citigroup also did not return calls for comment.
The $20 billion deal is stuck on the legal exposures banks would still face in exchange for agreeing to revamp their mortgage servicing practices and paying the billions of dollars in the settlement. Also hamstringing the talks are states who are balking, such as New York and California, due to misgivings over whether the banks’ conduct has been adequately probed.
The plan is to put the final sum, which could vary from the $20 billion under discussion, into a “monetary relief fund” for mortgage borrowers, a fund that’s somewhat akin to the $20 billion BP oil spill victims’ fund for the disastrous oil spill in the Gulf of Mexico. The banks would give loan modifications according to government guidelines, using this money, say Citi and BofA sources.
“But who will get the loan modifications? What are the standards? No one knows yet, and whether this will be done fairly,” says a Citi source. Another question: Not all banks committed improper mortgage practices and/or robosigning to the same degree as others. Will their payments into the fund be prorated according to guilt?
“Good question, it doesn’t look like it — this is a political deal,” says a bank official.
Meanwhile, California’s attorney general recently pulled out of the deal, saying it is inadequate because it gives bank officials too much legal immunity for conduct “that has not been properly investigated.” California now says it may go it alone to get its own bank deal.
Arizona and Nevada have also taken separate action in suing BofA, according to bank disclosures. And New York’s attorney general also has expressed reservations. Meanwhile, foreclosure fraud class actions against the banks continue to flood in. And fighting has already begun at the state level over the formula for how much each state would get from the relief fund. Federal agencies may want their cut too.
A deal could help restart a clogged foreclosure system that is keeping the housing market down and the economy at stall speed. But how the new relief fund will be run is a sticking point, too.
The government recently shut down a federal program created last year to help homeowners struggling to make mortgage payments. The Emergency Homeowners’ Loan Program (EHLP) spent about half of its $1 billion budget. It had aimed to give jobless homeowners up to $50,000 in zero-interest rate loans for underwater mortgages.
But the government’s poor administration and stiff qualifying rules plagued the EHLP from the start. This program was enacted as part of the Dodd-Frank financial reform law enacted in July 2010. But it didn’t launch until June, due to strict eligibility requirements, and less than half of the intended 30,000 borrowers got assistance.
What happened? Tough income requirements, for one, as the EHLP disqualified people who had landed new jobs after falling behind on their loan payments while being unemployed.
Read more: http://www.foxbusiness.com/markets/2011/10/10/foreclosure-settlement-imminent-bank-sources-say/#ixzz1bRqVPOAC
The Federal Reserve’s decision to reinvest payments from mortgages in its portfolio into government-backed mortgage securities signals a renewed effort to help consumers take advantage of interest rates that have fallen to their lowest levels in decades.
Wednesday’s announcement follows recent talks between the White House and federal regulators to ease hurdles to refinancing for borrowers whose loans are backed by Fannie Mae and Freddie Mac. The Fed said its action “would help support conditions in mortgage markets and contribute to a stronger economic recovery.” The central bank hopes that by restraining the supply of mortgage-backed securities in the hands of private investors, it will support their price and thus push down the yields, which could trickle through to borrowers in the form of lower mortgage rates.
WSJ’s Nick Timiraos reports the Fed’s decision to reinvest payments from mortgages into government-backed mortgage securities signals a renewed effort to help consumers take advantage of interest rates. Photo by David Paul Morris/Getty Images
A $1.25 trillion program of mortgage-backed securities purchases by the Fed, which ended in March 2010, is widely believed to have had that effect. Its holdings of those securities have since fallen to about $885 billion.
The Fed won’t increase its overall portfolio of mortgage bonds. Instead, it is simply taking the cash it gets when bonds in the existing portfolio mature and reinvesting it into other mortgage-backed securities.
“This is a way of saying, ‘We are going to also foster low mortgage rates, and if the market isn’t interested in buying them, well, we will buy them,’ ” said Keith Gumbinger, vice president at financial publisher HSH Associates.
In recent weeks, the prospect of a refinancing wave has sparked concerns that mortgage markets would face a glut of newly issued bonds, particularly as those held by the Federal Reserve are paid off. “Who’s going to buy all those mortgages if the Fed isn’t buying them?” said Jim Vogel, an analyst at FTN Financial. “There was that possibility of an oversupply.”
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