New FHA Mortgage Rules

 FHA Mortgage  6 Responses »
Jan 302010
 

FHA Mortgages now allow flipping

The FHA mortgage has now become much more useful because they will allow a new mortgage on a rehabilitated home. The term is called flipping. Buying a home and then flipping it before 90 days have elapsed. Prior to this ruling a buyer had to hold a property at least 90 days before an FHA mortgage could be obtained for a new buyer. FHA has signed a waiver that takes effect on February 1, 2010 and is limited to sales meeting the following conditions:

1)     Of course all transactions must be arms length for all parties. This will be determined using some of the following practices. The seller should hold title, the seller / property should not show a pattern multiple transfers within the last 12 months and the property was marketed openly.

2)     In situations where the properties sale price is equal to or greater then 20% above the acquisition cost the waiver and a new FHA mortgage could be issued only if the lender justifies the increase in value with a second appraisal and documents the costs (labor and materials) incurred to improve the property and the appraiser includes the documentation with the appraisal. The lender must also provide an inspection report to the purchaser but it doesn’t necessarily need to be a 203(k) consultant doing the inspection.  The inspector must also be an arms length participant in the transaction. The inspection must be a full top to bottom structural inspection. The inspection must include at a minimum the foundation, floors, ceilings, walls, roofs, all exteriors, appurtenant structures such a decks, balconies, walks and driveways and include the  insulation and ventilating systems.

3)     The waiver is for forward mortgages and doesn’t apply to reverse mortgages or an HECM (Home Equity Conversion Mortgage) used for a purchase.

FHA / HUD has found that many buyers of REO and foreclosed properties have the means to buy repair and resell quickly. Because of the dramatic increase in foreclosures the 90 days rule was inhibiting the sale of some of these homes. By allowing new FHA mortgages on these homes FHA hopes to help improve the resale market.

Jim Johnson and comments are always welcome.

Everett Mortgage on Line

Twitt
 Posted by JAJohnson at 6:19 am

Prices Homes for Sale in Everett Remain Soft

 Homes for Sale Everett  1 Response »
Jan 302010
 

Expect No Recovery for Homes for sale in Everett

If you are expecting a recovery of the market for homes for sale in Everett don’t hold your breath. The MSM (main stream media) keeps on drinking the Kool aid but I’m not. A panel of economists at the International Builders’ Show in Las Vegas agreed broadly on the outlook for the housing market and economy. Both, they said, had turned a corner, but there are slim prospects for a swift rebound. As I have stated many times before there will be no recovery without jobs.

After the news that home sales UNEXPECTEDLY dropped like a stone in December I don’t know how an economist like Davis Crowe of the National Association of Home Builders (NAHB) can say, “It won’t be a strong recovery, but it will be a recovery,” Granted he has to remain positive because of his position but let’s get real. There is that word unexpectedly. I would love a job like his. It’s like the weatherman you never have to be right.

Anyway Mr. Crowe had that to say after the December home sales were reported. Sales of new homes fell unexpectedly in December, capping the industry’s worst year on record and fueling concern that the housing market turnaround could falter.

Last month’s results were the weakest since March and were only 4 percent above the bottom last January. The data showed the housing recovery remains limp despite newly expanded tax incentives to spur sales. Many in the industry, however, expect sales to pick up as the April 30 deadline for the tax credit nears.

Mr. Crowe has this forecast for homes for sale in Everett. He claims sales of new and previously occupied homes to weaken after tax credits for homebuyers expire in April. But 2010 sales of new homes will be up by more than one-third, he said, and almost 7 percent higher for resale’s. As for prices on homes for sale in Everett he says  home prices should remain stable going forward, though some cities may still see some slight declines in the coming months. Personally I don’t see any recovery without JOBS.

Last month cash out refinancing was almost nonexistent. Even with mortgage rates at historic lows no one is taking advantage of them. I see 2 reasons for that. One reason is tight credit rules making refinancing so difficult as to turn off many borrowers. I had a borrower with a 718 credit score but we were unable to refinance his home. This is a loan that makes great economic sense but will not happen because of unreasonably tight rules. Another reason is plain fear, the uncertainty of the future and no JOBS.

NAHB has a consumer confidence index and it fell to 15. The index reflects a survey of 504 residential developers nationwide. Index readings below 50 indicate negative sentiment about the market.

I expect the market for homes for sale in Everett to remain flat for the foreseeable future.

Jim Johnson and comments are always welcome.

Everett Mortgage on Line.

Twitt
 Posted by JAJohnson at 6:14 am

Seattle Lagging Economy and Everett Real Estate

 Everett real estate, Homes for Sale Everett, Real Estate Everett, Seattle Mortgage Companies  No Responses »
Jan 182010
 

Will Everett Real Estate Experience the Same Lagging Economic Effect?

In Snohomish county and real estate in Everett only one home in 53 has received a notice of default. Seattle is doing much better at 1 in 80. The national average is 1 in 45. The usual rate for real estate in Everett is 1 to 1.5 in every 100 homes.

Everyone who pays any attention knows that the Seattle Metropolitan Area has a lagging economy. Our economy lags by 4-8 months versus the rest of the nation. What does that portend for the next year or so?

God I hate to have nothing but bad news to talk about

Foreclosures or “Notice of Defaults” have increased, as Seattle mortgage companies well know, by about 60% in 2009 over 2008. But the Seattle and Everett real estate markets still haven’t seen the worst of it yet. So while we haven’t completely caught up we seem to be working at it. My guess is that the value of homes for sale in Everett will face downward pressure for the next 12 to 18 months.

Because foreclosed homes are almost always sold at a discount, sometimes a huge discount, they will continue to exert a downward pressure on prices. I have addressed how we could mitigate that pressure by changing the way appraisals are done, see my blog post, that isn’t going to help until enacted.

The foreclosure pressure is not letting up soon. We can expect from 3,000,000 to 3,500,000 homes enter foreclosure in 2010. Do you want to ask my why? I can say in with 3 words, JOBS, JOBS, and more JOBS”. And it not just the loss of jobs but the loss of high paying jobs. When you go from $75,000 per year to $55,000 it hurts your ability to pay mortgage loans. What tells us that is the fastest growing sector of foreclosures is the 30 year fixed rate mortgage. The very one that used to be the bed rock of real estate in Everett and the rest of the nation.

I may be getting strident here. But I want you to know if you don’t do something about this our nation may be damaged for an entire generation.

Now so you realize that I am not calling the sky is falling. Here is a bit of good news 3 States have foreclosure rates of more than 10% and they are Nevada, Arizona and Florida. In Washington, Clark and Pierce were the only counties in which more than 2 percent of homes were sent a notice of default last year.

We desperately need quality leadership at the state and federal level. I believe that we need leaders who have experience in business. I want to see Everett real estate recover its value.

Jim Johnson and comments are always welcome.

Twitt
 Posted by JAJohnson at 8:38 am

Boondoggle Involves Everett Real Estate

 Everett real estate  No Responses »
Jan 182010
 

By the Time HAMP is Up to Speed the Crisis Will be Over

Enacted on March 9, 2009 this $75,000,000,000 boondoggle is screwing up the value of Everett real estate. Mortgage lenders are cashing in on monster money for doing virtually nothing.

At least this guy is honest enough about t. But maybe the reality is we (you the taxpayer) can’t do a thing about it anyway.  Richard Neiman was quoted directly, “HAMP has made only limited progress for nine months now, and the residential foreclosure crisis continues to mount,” the superintendent of banks in New York state and a member of the Congressional Oversight Panel. This is the guy appointed by the Obama administration to oversee the HAMP program.

HAMP by the way is Home Affordable Modification Program. With a budget of $75,000,000,000 of your tax dollars it is designed to modify mortgages to avoid foreclosure. I will not go into just how unfair this whole concept is in this post. Or why the Federal Government is paying my neighbors mortgage with my tax dollars but I have posted about it before.

A Republican congressman from Texas, Jeb Hensarling, has call HAMP a massive failure.

Right now after 9 months they have finished only 31,382 loan mods. That is out of 759,058. But that 759,058 number is not really correct. Because I get different numbers every time I look at a different report. According to another report we have 10,000,000 loan mods to do. Well if it took 9 months to do 31,382 then it will take: Lets see take 31,382 divided by 9 months = 3486 per month.

Give them credit and say 4,000 per month. 10,000,000 divided by 4,000 = 2500 months or 208.33 years.

By the end of December they did manage to get it moving along a bit better. An additional 35,083 loan mods were finished and that means they might get done in 23.75 years. Still they will not make a dent in the 10,000,000 until long after the crisis is over.

Oh by the way our Federal government allows the very same people who lied to get these loans can now lie to modify them.

Why am I not surprised.

And you would let these clowns run health care.

How will the value of real estate in Everett ever recover with these idiots running the government?

Jim Johnson and comments are always welcome.

Twitt
 Posted by JAJohnson at 8:30 am

Value of Real Estate in Everett Affected by Govt Program

 Real Estate Everett, VA mortgages  5 Responses »
Jan 162010
 

1 In 4 Out of work affects value of Everett Houses

How do Everett houses keep there value when 1 in 4 out of work? The value of real estate in Everett is hurt when 22% are unemployed. I have been shouting this for months.. Mr. Obama we need JOBS.

Today the White House breathlessly announced that a $2,300,000,000 “Green Jobs” program that will create approximately 17,000 subsidized TEMPORARY JOBS.

Well let’s see $2,300,000,000 divided by 17,000 equals $135,295.19 per TEMPOARY JOB.

Heck of a deal Mr. Obama.

These TEMPORARY JOBS he has created will be in wind and solar industries. These industries have to have a 30% subsidy to get even close to being economically viable. NONE of the technology is invented yet. Without a staggering improvement in technology they can’t compete in the market place. This is unsustainable.

The stupidity of the Obama administration is appalling. If he really wanted to create jobs he could start with simply drilling for the oil we will need for any recovery that might take hold, even in this political environment. In just a year or two when (if) a recovery starts, unless we drill now we will see $6 and $7 a gallon gasoline. Then when that happens any recovery is dead before it even starts.

How are we going to pay our mortgages in Everett? How will we keep the value of real estate in Everett from falling thru the floor? If 22% or about 1 in 4 is out of work how does that affect the value of houses in Everett?

Now you have idiots like the Governor of Wisconsin, a state I used to live in. Wisconsin Gov. Doyle says a clean energy bill will mean thousands of green jobs and result in energy savings for consumers and business. This guy takes you for a complete fool. He says that this Clean Energy Bill will create 15,000 green jobs by 2025. What we do until then is a mystery to me.

The value of real estate in Everett will remain stagnate for the foreseeable future. Everett homes will not appreciate in value without more jobs, it’s that simple.

Jim Johnson and comments are always welcome.

Everett Mortgage on Line.

Twitt
 Posted by JAJohnson at 5:59 pm
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