Fannie Mae, one of the nation’s mortgage giants, announced new lending restrictions that might make it even more difficult for some home buyers to qualify for a loan.

New applicants and home owners looking to refinance may find they have to meet more stringent standards, such as in meeting new loan-to-value ratios in qualifying for a mortgage. For example, Fannie announced that the maximum loan-to-value ratios permitted will now be 90 percent, down from 97 percent. Also, the GSE says that some loans will now require higher credit scores. For example, borrowers who are applying for an adjustable-rate loan will need a credit rating of 640—which is up from 620.

Also, self-employed applicants may be required to supply more tax information, such as two years of tax returns to verify their income.

“This can knock a decent portion of borrowers out of the picture who had a rough year in business two years ago,” says Matt Hackett, underwriting manager at New York lender Equity Now Inc. “You’d be surprised how much of an effect this has.”

Fannie Mae, along with fellow GSE Freddie Mac, back about two-thirds of all new mortgages.

Source: “How Fannie Mae Is Making it Harder to Get a Home Loan,” Credit.com (Aug. 27, 2012)

Young people are connecting across social networks to start “Sharpie parties” that target foreclosed homes and use Sharpie permanent markers to leave a trail of markings behind on the vacant homes.

Merced County, Calif., officials recently reported six Sharpie parties at foreclosed homes that were spawned from invitations posted online. Partygoers—sometimes up to 100 people—are given Sharpie pens and encouraged to write on and graffiti the walls of the abandoned homes. Some of the partygoers, besides marking up the walls, also smash holes in the walls and rip up the floors, Reuters reports.

These parties have also been reported recently in Texas, Florida, and Utah.

Investigators say vandals are leaving a trail on social networking sites, like Facebook, by posting invitations and photos of the parties that are making it easier to find perpetrators. Banks, on the other hand, have been somewhat reluctant to pursue vandals because they don’t want the unwanted publicity to incite more parties, Reuters reports.

As such, “usually they leave the damage and just drop the price,” Andy Krotic, a California real estate professional, told Reuters.

Source: “Sharpie Parties Fuel Rampage on Foreclosed Homes,” Reuters (Aug. 16, 2012)

Some analysts suggest that the financial crisis has reshaped attitudes of younger generations similar to how the Great Depression did for generations during its aftermath.

The younger generation is most at risk for reshaped attitudes, they say. “This is a generation that is scared of commitment, wants to be light on their feet and needs to adjust to whatever happens,” Cliff Zukin, a professor of public policy and political science at Rutgers, told Bloomberg. “What once was seen as a solid investment, like a house or a car, is now seen as a ball and chain with a lot of risk to it.”

The younger generations’ current financial situation is what’s most holding them back. College graduates emerging post-recession are earning less and owing more in student loan debt nowadays. Forty percent of college graduates surveyed say that their student loan debt is the main thing that is delaying them from making major purchases, like buying a home.

The housing market has shown some positive signs lately, but the slow pace of recovery is making many younger adults hesitant, Jeff Lubell with the Center for Housing Policy told Bloomberg. Case in point, the number of first-time home buyers is shrinking while the number of renters is increasing.

But Lubell says he is concerned that the younger generations’ reluctance when it comes to purchases of assets like homes may be hurting their chances at building long-term wealth.

“What you are seeing is a delay in all the kinds of decisions that require a long-term financially stable future,” Lubell told Bloomberg. “That’s home purchases, that’s marriage and that’s having kids.”

Source: “Recession Generation Opts to Rent Not Buy Houses to Cars,” Bloomberg (Aug. 8, 2012)

Foreclosures can offer some home buyers big bargains, with the typical discount on a foreclosure about 19 percent, according to National Association of REALTORS® data from May. But buyers should be careful not to be guided by price alone, housing experts warn.

“Distressed properties can have great appeal,” says Wendy Forsythe, executive vice president at Atlantic Pacific Real Estate. “Discounted prices and historically low interest rates make these homes affordable to many families who might otherwise not be able to buy a property. But buyers also need to be selective because not every distressed property is a bargain.”

Home buyers need to be aware of some of the following issues with foreclosures before they buy, according to Atlantic Pacific Real Estate, a real estate brokerage with offices in 22 states:

1. Know the claims on the property. How many lenders have claims against the property? “If a distressed home has been financed with two or more loans then the sales process can be far more complex,” according to an article for RISMedia written by Atlantic Pacific Real Estate.

2. Get financing in order. How does the buyer plan to finance the purchase of the property? “Buyers who use financing must prepare in advance so they can act quickly when a distressed property becomes available as there are often multiple bids on an individual home,” according to Atlantic Pacific Real Estate.

3. Judge the condition. Buyers need to carefully weigh the condition of the property. Some foreclosures require extensive and expensive work, and some buyers may find themselves getting in over their head, if they aren’t careful and don’t have a thorough home inspection done of the property prior.

4. Check for potential delays. For example, is the property already occupied? If so, an eviction may be needed and this could delay the purchase process. Buyers need to be prepared for any potential delays.

Source: “Buying a Distressed Home: What You Need to Know,” RISMedia (July 15, 2012)

Six Americans stand to collect up to $46.5 million for their part in helping to expose foreclosure abuses by the nation’s largest banks.

The whistleblowers helped the government expose how some banks used fraudulent documents to collect money from federal housing programs.

For their help in the lawsuits against the banks, these whistleblowers will be able to collect big paychecks due to the False Claims Act, “which allows private citizens to file lawsuits on behalf of the U.S. when they have knowledge that the government is being defrauded,” CNNMoney reports. Those who file the lawsuits stand to collect between 15 percent to 30 percent of the penalties assessed in the case.

For home owner Lynn Szymoniak, it was like winning the lottery. Szymoniak was served foreclosure papers in 2008. She helped prove banks had been using fraudulent documents to prove ownership of defaulted mortgages, for which the banks were then submitting insurance claims to the Federal Housing Administration. From the government’s $95 million award in a lawsuit, Szymoniak will get $18 million.

“I recognize that mine’s a very, very happy ending,” Szymoniak told CNNMoney. “I know there are plenty of people who have tried as hard as I have and won’t see these kinds of results.”

The other five whistleblowers came from within the industry, such as an appraiser who helped the government show that Countrywide Financial had been inflating home appraisals to collect higher claims from FHA. Other whistleblowers exposed banks overcharging veterans who had mortgages guaranteed by the Department of Veterans Affairs.

The whistleblower lawsuits helped lead to a foreclosure settlement, approved in May, between the nation’s five largest banks and state and federal officials. The settlement stems over banks’ errors uncovered in the processing of foreclosures. In the settlement, banks agreed to pay $5 billion in fines and about $20 billion in refinancing and mortgage modifications for home owners.

Source: “Whistleblowers Win $46.5 Million in Foreclosure Settlement,” CNNMoney (July 2, 2012)

The housing slump is one of the culprits behind rising student loan debt, suggests an analysis of government data by the National Association of Home Builders.

The study reveals a shift in borrowing for higher education costs due to the housing crisis and the drop in home prices. As home prices dropped across the nation, home owners found there was less availability of home equity loans, which traditionally were often used by parents to finance higher education costs of their children. As such, more students had to take out student loans on their own, the study notes.

“The rising student loan debt problem is another consequence of the housing downturn,” says Barry Rutenberg, NAHB chairman. “As more and more parents face tighter budget restraints as a result of lower home values, this is forcing an increasing number of students to take out loans for tuition, essentially shifting some of the burden of paying for college from parents to students.”

Outstanding student loan debt has risen 47.9 percent or by $293 million since the third quarter of 2008.

“The sharp rise in student loans is due to the end of accessible home equity loans, as a result of home price declines preceding, during and after the Great Recession,” the report notes.

The report continues that “this issue is once again a reminder of the importance of housing wealth for the middle class. When that wealth declines, or otherwise becomes inaccessible (as is the case with home equity loans), it causes significant changes for the economy as a whole.”

View the report at the NAHB web site.

Source: “The Connection Between Student Loans and Housing,” The National Association of Home Builders (June 2012)

Real estate practitioners in vacation spots across the country say the market for second homes is picking up steam as buyers grow more confident given signs of growth in small businesses.

The National Association of REALTORS® reports a 7 percent jump in vacation sales to 502,000 last year, accounting for 11 percent of all volume.  The median vacation home price was $121,000 last year, down from a peak of $204,100 in 2005, but agents in some locales say prices are beginning to creep up as the distressed inventory is moved out.

Vacation-home buyers are snapping up higher-priced properties, although Jennifer Calenda of Michael Saunders & Co. in Southwest Florida says prices are not necessarily on the rise.  With inventory hitting a seven-year low of 4.7 months in Sarasota, Manatee, and Charlotte counties, she says buyers “are saying ‘we better hurry up.’”

Inventory is so scarce in some markets that some real estate professionals report multiple offers; and with prices probably at the bottom, Trulia economist Jed Kolko says people ready to make a cash purchase or who can qualify for low mortgage rates should strongly consider buying now.

Source: “Vacation Home Buyers Return, Pick Pricier Properties,” Investor’s Business Daily (06/15/12)

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Taking advantage of an increase in home owners-turned-tenants, apartment landlords are raising their rents and expect to continue to do so.

During the first quarter, monthly apartment asking rents increased 2.2 percent year-over-year, reaching an average of $1,070, according to Reis, a property research firm.

Vacancies are at lows and developers are trying to rush projects of multifamily housing to meet the increased demand from renters, but continued constraints on lending has put the brakes on many projects, particularly in smaller markets.

“I’m optimistic about the multifamily sector, certainly for the next two years,” Kevin Thorpe, chief economist at Cassidy Turley, a commercial property brokerage, told Investor’s Business Daily. “We’ve entered a period of sustained rent growth.

The reason behind analysts’ optimism: Young professionals are increasingly turning to renting and more than 3 million former home owners, who have been displaced by foreclosures or short sales, are turning into renters.

Demand for single-family home rentals is increasing too, according to CoreLogic. A four-month supply of single-family homes is now available for rent, which is down from five months a year ago, according to CoreLogic data.

Source: “Rents Rise as Apartments See Demand,” Investor’s Business Daily (June 7, 2012)

It’s been mostly a “buyer’s market” in the majority of housing markets for the past few years, but more Americans are seeing home buyers’ power in home sales and negotiations soon slipping away.

More Americans are reporting increased optimism when it comes to selling a home as prices take a gradual turn upward, according to a recent survey.

About 28 percent of Americans say it’s a good time to sell now, inching up from 13 percent last quarter, according to a survey by Redfin of more than 1,200 potential buyers in 18 metro areas.

Nearly 60 percent of the survey’s respondents say they think prices will rise this year, up from 34 percent last year.

Seventy-one percent of the respondents surveyed also said they are seeing more bidding wars and multiple bids on homes today, too.

Home buyers are increasingly being lured back to the housing market, according to several recent surveys. Many buyers say record-low interest rates and increased housing affordability has made buying more attractive. However, according to the Redfin survey, buyers also say the drop in inventory of homes for-sale is one reason to hold off on buying nowadays.

Source: “Redfin: Homebuyers Think the Market is Beginning to Favor Sellers,” HousingWire (June 4, 2012)

Americans are more positive about the direction of the economy, as consumer confidence reached its highest level since October 2007, according to a Thomson Reuters/University of Michigan index on consumer sentiment.

Americans are more positive about the job market and salary increases, and may be more willing to spend, the index showed. Half of the consumers in the index said the economy had improved in the last year. And more consumers reported plans to buy cars and household durables.

Higher-income Americans are more optimistic about salary increases than lower-income Americans, according to the index. Americans with incomes greater than $75,000 predicted more salary increases with an average 2 percent boost in income by next year. However, Americans who make less than $75,000 only anticipate a 0.3 percent increase in salaries.

“You’ve got a variety of forces working on consumer sentiment at this point. You’ve got obviously concerns about Europe, the economy in general, lower stock prices — all those are a negative,” Scott J. Brown, chief economist at Raymond James in St. Petersburg, Fla., told Reuters News. “But lower gasoline prices are a plus, so I think that’s probably part of the factor that you’ll see an increase in purchasing power if gasoline prices continue to move down.”

Source: “May Consumer Sentiment Highest in More Than 4 Years,” Reuters (May 25, 2012)