Archive for the ‘Radio News’ Category

What Does It Take to Get a Loan Today? A Lot!

Saturday, May 26th, 2012

As Alex reported 5/26/2012 on Property Source Radio. – Daily Real Estate News | Tues May 22, 2012
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One of the biggest obstacles home buyers are facing is qualifying for financing, and a new report by the Federal Reserve shows exactly how big of struggle potential borrowers face.

According to a new Federal Reserve report surveying banks, the report found that most banks say they are a lot less likely to issue a mortgage to borrowers with a FICO credit of 620 and a 10 percent down payment than they were in 2006 during the housing boom.

“A moderate net fraction of banks were less likely to originate loans to borrowers with a FICO score of 680, regardless of down payment size,” the report also said. “A modest net fraction of banks were less likely to originate loans to borrowers with a FICO score of 720 and a 10 percent down payment, although survey respondents indicated that they were about as likely to originate loans now as they were in 2006 if such borrowers had a down payment of 20 percent.”

So while mortgage rates continue to sink to new record lows, many home buyers are finding they can’t always qualify for the low rates.

As a recent New York Times article about the Federal Reserve’s report illustrates: “A borrower with a credit score of 720 can expect a rate of 3.70 percent on a 30-year, $300,000 fixed-rate mortgage … while someone with a score of 620 to 639 can expect a 5.07 percent rate — or an extra $242 per monthly payment.”

Source: “How to Pump Up Your Credit Score,” The New York Times (May 17, 2012)

Gaps Persist in Americans’ Credit Knowledge

Saturday, May 19th, 2012

As Alex reported 5/19/2012 on Property Source Radio. – Daily Real Estate News | Tues May 15, 2012
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The majority of Americans don’t fully understand how credit scores are formulated, according to a survey released by the Consumer Federation of America. That gap in knowledge can cost them when applying for a mortgage too.

While the survey showed a big improvement in the last year in the number of Americans knowledgeable about credit and how companies collect credit information on them, Americans overall still don’t fully understand how credit scores are calculated or used.

For example, the survey found that respondents were not fully aware of just how a low credit score could hamper them. “Only 29 percent are aware that, on a $20,000, 60-month auto loan, a borrower with a low credit score is likely to pay at least $5,000 more than a borrower with a high credit score,” according to the Consumer Federation of America survey.

The survey found that 56 percent of respondents mistakenly believe a person’s age and 54 percent say a person’s marital status are used to calculate a credit score. Twenty-one percent surveyed also mistakenly said that a person’s ethnic origin was a factor in calculating credit scores too.

The survey also found that less than half of respondents — 44 percent — understood that a credit score is for measuring the risk of repaying loans. Twenty-two percent mistakenly thought credit scores measured a person’s amount of debt and 21 percent said credit scores were “financial resources.”

Still, the survey found that more people are becoming aware of what can hurt or help your credit score in comparing this year’s results to last year’s. The survey found that more people in the most recent survey knew that a missed payment, bankruptcy, or carrying high credit card balances could lower their credit score. Most respondents also knew that making payments on time can raise their credit score, while missing a payment can lower it.

Source: Consumer Federation of America and “Consumer Knowledge of Credit Leaves a lot to be Desired,” HousingWire (May 14, 2012)

More Foreclosures Turned into Indoor Pot Farms

Saturday, May 12th, 2012

As Alex reported 5/12/2012 on Property Source Radio. – Daily Real Estate News | Tues May 8, 2012
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Foreclosed homes are increasingly being purchased or rented by those who are turning the homes into sites of illegal activity: Indoor marijuana farms.

According to law enforcement officials, many of these illegal marijuana farm foreclosures are blending right into suburbia. New owners or renters move into foreclosed properties in middle to upper-class neighborhoods, mowing the lawn, taking out the trash, and appearing like any other good neighbor, The New York Times reports.

“Houses that sold for $1 million before the crisis have been turned into grow houses, equipped with the high-intensity lights, water, and air-filtering systems necessary to produce potent, high-quality marijuana,” The New York Times reports. “Many grow houses go unnoticed, even by next-door neighbors, until there is a fire, typically caused by unsafe electrical wiring.”

Rusty Payne, a spokesman for the Drug Enforcement Administration, says areas in Northern California are seeing some of the highest incidences of foreclosures turned into indoor marijuana farms.

Indeed, according to DEA statistics from 2010 — the latest year available — California accounted for more than 70 percent of all marijuana plants confiscated nationwide.

Source: “Foreclosed Houses Become Homes for Indoor Marijuana Farms,” The New York Times (May 6, 2012)

Attacks Against Real Estate Professionals Surge

Saturday, May 5th, 2012

As Alex reported 5/5/2012 on Property Source Radio. – Daily Real Estate News | Tues May 1, 2012
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The number of assaults against real estate professionals is on the rise, with the nature of attacks becoming more violent and sometimes deadly.

Fatal injuries among real estate professionals while working on the job reached in 2010 their highest level since 2003, according to the Bureau of Labor Statistics. Figures from 2010 are the latest year available.

Sixty-three workplace fatalities occurred in the real estate industry category in 2010, which is a 19 percent rise over the previous year. Of the 63 fatalities, 23 were homicides, according to BLS. That overall total also includes 14 deaths from falls, nine from transportation incidents, and eight from being exposed to harmful substances or environments, Inman News reports on the BLS findings.

That marks the highest level of fatalities since at least 2003 when BLS began collecting such data. The real estate industry category, as defined by BLS, includes landlords, real estate agents and brokers, and those who perform work related to real estate, such as appraisers and property managers.

Landlords appear to be the most vulnerable to attacks. Of the 23 homicides in 2010, 52 percent of the victims were landlords.

In 2010, 940 real estate and rental leasing professionals were victims of nonfatal assaults. That number has steadily risen over the last few years, up from 620 in 2009 and 170 in 2008.

Inman News, in its analysis of the findings, discovered that workplace fatalities among real estate professionals were at their lowest point during 2005, the height of the housing boom. In 2005, 39 fatalities were recorded. The number has been on the rise ever since, particularly in the categories of “assaults and violent acts” caused by others, self-inflicted injury, and animal attacks.

Source: “Assaults, Murders of Real Estate Professionals on the Rise,” Inman News (April 30, 2012) [Log-in required.]

More Single Family Homes Turned Into Rentals

Saturday, April 28th, 2012

As Alex reported 4/28/2012 on Property Source Radio. – Daily Real Estate News | Tues April 24, 2012
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As the number of for-sale homes listed on the multiple listing service (MLS) drops, the number of single-family homes up for rent has been gradually increasing, RISMedia reports.

Single-family home rentals are a growing business, as more investors buy up foreclosures at bargain prices and then transform them into rentals.

About 16 percent of all listings on the MLS are rentals, which is more than double the number of rentals listed in 2006, RISMedia reports. Single-family rentals are often listed on the MLS by real estate brokers, whereas multifamily units typically aren’t.

The single-family rental market now accounts for “21 million rental units or 52 percent of the entire residential rental market,” according to a new study by CoreLogic.

Single-family rentals are usually very differently from multi-family homes. For example, rents for single-family rentals typically are 1.5 to 1.6 times higher than multifamily homes. Also, families and prior home owners tend to be attracted to single-family rentals whereas multifamily tenants tend to be younger, more mobile people who have never owned a home before.

Many of the single-family rental tenants nowadays are former home owners who had faced foreclosure and can no longer afford to own. According to CoreLogic, more than 3 million home owners have been turned into renters over the past five years due to foreclosure.

Source: “Single Family Rentals Now Exceed Multifamily,” RISMedia (April 23, 2012)

Foreclosure Scams Rise Nearly 60%

Saturday, April 21st, 2012

As Alex reported 4/21/2012 on Property Source Radio. – Daily Real Estate News | Tues April 17, 2012
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Mortgage foreclosure scams — which seek to dupe struggling home owners with offers to save them from financial troubles — have soared nearly 60 percent this year. Scammers are increasingly using federal programs, like refinance programs such as HARP and HAMP, to try to trick home owners, reports the Homeownership Preservation Foundation (HPF), a nonprofit group that helps home owners avoid foreclosure.

“Every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” says Colleen Hernandez, CEO of HPF.  “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided.”

About half of the reported scams to HPF tend to involve claims of specialized “legal services” from attorneys or individuals to help home owners avoid foreclosure.

The HPF warns that scammers also are using the HPF logo and brand to try to dupe home owners in foreclosure rescue scams.

“The only way distressed home owners can be certain they are dealing with a trained HPF counselor is by calling 888-995-HOPE,” Hernandez says.

Source: Homeownership Preservation Foundation

Mortgage Statements to Get Consumer-Friendly Makeover

Saturday, April 14th, 2012

As Alex reported 4/14/2012 on Property Source Radio. – Daily Real Estate News | Tues April 10, 2012
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The Consumer Financial Protection Bureau announced it will be offering up new rules for mortgage servicers aimed at making monthly mortgage statements more transparent in disclosing fees or changes in a loan.

“For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to home owners in distress,” says Richard Cordray, director of the consumer bureau. “It’s time to put the ’service’ back in mortgage servicing.”

Servicers will be required to provide more details in monthly mortgage statements. For example, the agency is considering a requirement that servicers offer a breakdown of mortgage payments by principal, interest, and fees in the statements. Also, servicers may soon be required to itemize fees and charges part of a loan and include warnings to consumers about possible late fees. The agency is also seeking a rule that statements must contain warnings about any future interest rate changes and penalty fees if a mortgage is paid off early.

The new rules are expected to take effect January 2013.

Source: “Consumer Bureau to Crack Down on Mortgage Servicers,” CNNMoney (April 10, 2012)

Next Foreclosure Wave Coming: Reason for Alarm?

Saturday, April 7th, 2012

As Alex reported 4/7/2012 on Property Source Radio. – Daily Real Estate News | Mon April 2, 2012
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Economists have been warning that a flood of foreclosures will soon be hitting the real estate market, likely this summer. Increases in foreclosures traditionally pull down nearby home prices. So should home owners be worried?

As of now, housing reports continue to show month-over-month drops in foreclosures. CoreLogic released a report late last week that showed completed foreclosures fell from 71,000 in January to 65,000 in February.

But as more banks look to clear a backlog of defaulting home loans from their books, economists say the public should expect a turn with foreclosures and the numbers are expected to soar in the coming months. Mark Fleming, CoreLogic’s chief economist, expects the wave to hit this summer.

However, Fleming doesn’t view the increase as a bad thing for the overall housing market. “I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” Fleming told AOL Real Estate. He says that recent improvements in the real estate market and economy may mitigate any traditional downward pressure seen on overall home prices by foreclosures.

In fact, despite an increase, Fleming still expects home prices to rise in some markets.

RealtyTrac has predicted that completed foreclosures will jump 25 percent this year, reaching 1 million.

“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, vice president of RealtyTrac, said in a public statement in February.

Source: “Home Prices May Withstand Foreclosure Wave,” AOL Real Estate (March 30, 2012)

New FHA Rule to ‘Kick Some Buyers Out’?

Saturday, March 31st, 2012

As Alex reported 3/31/2012 on Property Source Radio. – Daily Real Estate News | Tues, Mar 27, 2012
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The Federal Housing Administration announced that starting April 1 it will not insure mortgages to borrowers who have an ongoing credit dispute of $1,000 or more on their file.

To be considered for an FHA-backed loan, borrowers will either have to pay the remaining balance on the credit dispute or enter into a payment plan, making at least three payments on it. Any payment plans will need to be documented and submitted to FHA, which will then figure it into the debt-to-income ratio for the new mortgage.

FHA’s new rule does not include disputed credit accounts from more than two years ago or any related to reported identity theft.

Still, the new rule has some in the housing industry worried that it’s going to keep more potential home buyers from securing a mortgage.

“We expect this revision will certainly kick some buyers out of the marketplace, and we’re in ongoing efforts to quantify how extreme the impact will be,” Lisa Jackson, senior vice president of research at John Burns Real Estate Consulting, told HousingWire.

Jeremy Radack, a real estate attorney in Houston who assists with financing, estimated FHA originations may be reduced by 33 percent to 50 percent this year due to the new rule.

FHA says the rule is aimed at protecting the FHA’s emergency fund, which has fallen below the mandated amount Congress requires.

“We found that many borrowers with mortgage payment delinquencies had prior credit deficiencies including unpaid collections and unresolved disputed accounts prior to the approval of their loan,” the spokesman said. “This change was made to eliminate this layer of risk to FHA-insured loans and help protect our insurance fund.”

Also in reimbursing the emergency fund*, FHA announced it would raise its insurance premiums starting April 1 too.

Source: “FHA to Deny Mortgage Backing for Credit Disputes Above $1,000,” HousingWire (March 26, 2012) and “Tougher Requirements Start Monday for FHA Mortgages,” Tampa Bay Times (March 27, 2012)

Housing Market Reaches Turning Point, Economists Say

Saturday, March 24th, 2012

As Alex reported 3/24/2012 on Property Source Radio. – Daily Real Estate News | Tues, Mar 20, 2012
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Economists say the housing market is starting to heal, but too many people aren’t aware of it because they’re judging a housing recovery on the wrong sign: What’s happening with home prices.

Paul Dales at Capital Economics says higher prices won’t be the sign that the housing market is on the mend — that can be a lagging indicator — but rather an increase in overall home sales. And that’s showing signs of improvement: Existing home sales in 2011 rose to 4.26 million compared to 4.19 million in 2010. In the last six months alone, home sales have increased 13 percent.

As a recent article at Fortune points out, “The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won’t happen for another few years.”

Source: “The One Number to Watch for a Housing Recovery,” Fortune (March 20, 2012)