Here are the 10 most important things to know about the revamped credit.
1. New purchase deadline extends into 2010
The home buyer credit was previously scheduled to expire on Nov. 30, 2009. The new law extends the deal to cover purchases of U.S. principal residences that close by April 30, 2010. However, if a home is under contract on that date, the deadline for closing is extended to June 30, 2010.
2. Existing homeowners can now qualify
The new law allows a reduced credit for existing homeowners who buy a replacement U.S. principal residence after Nov. 6, 2009. The credit equals the lesser of: (1) $6,500, or (2) 10% of the price of the replacement home, or (3) $3,250 for a buyer who uses married filing separate status. The new existing-homeowner credit is only available for purchases that close after Nov. 6, 2009. To qualify, the buyer must have owned and used the same home as a principal residence for at least five consecutive years during the eight-year period ending on the purchase date for the replacement principal residence. If you’re married, your spouse must pass this test too (whether or not you file jointly).
3. Larger credits still allowed for first-time buyers
Before the new law, the home buyer credit was only available to so-called first-time buyers, which means someone who had not owned a U.S. principal residence during the three-year period ending on the purchase date for a home that will serve as the buyer’s new principal residence. If you’re married, both you and your spouse must pass the three-year test (whether or not you file jointly). These first-time home buyer rules still apply for purposes of claiming a larger credit of up to $8,000. Specifically, the credit for a first-time buyer still equals the lesser of: (1) $8,000, or (2) 10% of the home purchase price, or (3) $4,000 if you use married filing separate status.
4. Higher-income folks can now qualify
The home buyer credit is phased out (reduced or completely eliminated) as income goes up. However, the new law significantly raises the phase-out ranges so that many more higher-income buyers will now qualify.
* For purchases after Nov. 6, 2009, the phase-out range for unmarried individuals and married folks who file separately is between modified adjusted gross income (MAGI) of $125,000 and $145,000 (way up from the old-law range of $75,000-$95,000).
* The phase-out range for married joint filers is now between MAGI of $225,000 and $245,000 (way up from the previous range of $150,000-$170,000).
5. New $800,000 purchase price limit
For purchases after Nov. 6, 2009, the credit can only be claimed for a principal residence that costs $800,000 or less. So if your new home costs $800,001, the credit is completely off limits (but I doubt too many people will feel sorry for you).
6. No more credits for kids or dependents
For purchases after Nov. 6, 2009, the home buyer must be at least 18 years old on the purchase date to qualify for the credit. Also, no credit is allowed for a buyer who can be claimed as a dependent on someone else’s Form 1040 for the year of the purchase. These new rules are intended to shut down the practice of claiming the credit for youngish buyers who really don’t even have incomes of their own (like college students who use money from their parents to buy a pad near campus).
7. New anti-fraud rules
A recent government report said the IRS has already identified over 100,000 returns with potentially fraudulent home buyer credits. This is hardly surprising when the government is willing to give away up to $8,000 in free money to anyone who files a return, even when that person reports no income. Believe it or not, absolutely no documentation was required to claim the credit, until now. For credits claimed on 2009 and 2010 returns, buyers must attach a properly executed real estate settlement sheet to the return. Also, the IRS can now simply disallow credits in fishy circumstances (like when it appears the $8,000 credit is being claimed by someone who already owns a home).
8. Credits can still be claimed on prior-year returns
Under the revamped rules, you can still claim the credit for a 2009 purchase on your 2008 return (although you would now generally have to file an amended return to do so). You can also claim the credit for a 2010 purchase on your 2009 Form 1040. This allows you to cash in on the credit sooner rather than later, and it may also allow you to claim a larger credit if your income in the year of purchase is higher than in the preceding year.
9. Credits must still be repaid in some cases
Under old-law rules for homes purchased between April 9, 2008 and Dec. 31, 2008, buyers are generally required to repay the credit over 15 years. However, this repayment rule is generally eliminated for purchases after 2008. That said, you might still have to repay the credit if you sell your home within three years of the purchase date or stop using it as your principal residence during that period.
10. Special rules for military service members
For military service members on extended duty outside the U.S., the new law lengthens the deadline for closing on home purchases for an extra year, to April 30, 2011 (or June 30, 2011 for homes under contract on April 30, 2011). The new law also waives the credit repayment rules for service members who are forced to move due to receiving new orders. The same special rules apply to members of the foreign service and intelligence communities.
Good News! December Sales Show Increase
1/29/2009
Existing home sales rise
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®. Existing-home sales jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December from a downwardly revised pace of 4.45 million units in November, but are 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008 there were 4,912,000 existing-home sales, which was 13.1 percent below the 5,652,000 transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November. The national median existing-home price for all housing types was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000.
Good News on the Mortgage Front
12/5/2008
Mortgage applications surge by record amount
Reuters, Julie Haviv, December 3, 2008
NEW YORK (Reuters) - Mortgage applications surged by the largest amount on record last week as a new Federal Reserve program pushed interest rates down to their lowest level in more than 3 years, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended November 28 soared a record 112.1 percent to 857.7, the highest reading since the week ended March 21 when it reached 965.9.
Potential borrowers were lured by enticing mortgage rates, which dropped dramatically after the Federal Reserve unveiled a plan last week to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae (FNM.P: Quote, Profile, Research, Stock Buzz), Freddie Mac (FRE.P: Quote, Profile, Research, Stock Buzz), and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
"Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship," Orawin Velz, Associate Vice President of Economic Forecasting, said in a statement.
"When rates plummeted following the Fed's announcement that it would buy GSE debt and MBS, many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound," she said.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.47 percent, down a whopping 0.52 percentage point from the previous week, the largest drop since 1990 when the MBA started conducting the weekly survey.
Interest rates are at their lowest level since the week ended June 24, 2005, when they reached the same level. Interest rates are sharply below the peak of 6.59 percent reached during the summer, but only slightly below the 2008 low of 5.49 percent in January, according to the trade group.
Interest rates were below year-ago levels of 5.82 percent.
The MBA's seasonally adjusted purchase index rose 38.0 percent to 361.1, the largest rise since the week ended February 24, 1995. The index, however, came in well below its year-ago level of 464.3, a drop of 22.2 percent.
Overall mortgage applications last week were 8.3 percent above their year-ago level. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 29.7 percent.
WEEKLY REFINANCING ACTIVITY SURGES
Cameron Findlay, chief economist at LendingTree.com based in Charlotte, North Carolina, said they are seeing a positive uptick in refinancing volume due to the drop in interest rates.
"Consumers who were previously on the fence to refinance or purchase a home are in a position to take advantage of the decline in rates," said on Tuesday.
"Now it'll be a matter of qualification as lenders evaluate each borrower individually," he said.
The low interest rates can help many drop their monthly payments, and is especially good news for those who have adjustable- rate mortgages and are looking to lock in a secure fixed-rate mortgage, he said.
The group's seasonally adjusted index of refinancing applications jumped 203.3 percent to 3,802.8, the largest rise on record. The index was up 37.7 percent from its year-ago level of 2,761.3.
The refinance share of applications increased to 69.1 percent from 49.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.4 percent, down from 3.0 percent the previous week.
Fixed 15-year mortgage rates averaged 5.13 percent, down from 5.78 percent the previous week. Rates on one-year ARMs decreased to 6.61 percent from 6.87 percent.
The U.S. housing market is currently suffering the worst downturn since the Great Depression. A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, deflating a bubble from the early part of this decade.
While U.S. housing market indexes tend to be volatile, data from the MBA may help gauge how the hard-hit sector is faring.
FDIC's Bliar Pushes Agressive Mortgage Plan
11/18/2008
FDIC's Bair pushes aggressive mortgage plan
In a surprise move, FDIC Chairwoman Sheila Bair unveiled on Nov. 14th details of her plan to have the government help delinquent homeowners. There are two key elements to the proposal.
First, housing payments for delinquent borrowers two months or more late would be reduced to 31 percent of gross monthly income. To get there, mortgage rates could be set as low as 3% for five years, before increasing at an annual rate of 1 percentage point until they hit the prevailing market rate. Loan terms could be extended as long as 40 years.
Second, to encourage servicers and investors to participate, the government would share up to 50 percent of the losses if a borrower who had been helped ended up in default anyway. The risk of re-default had been one obstacle to getting lenders on board with systematic modification plans. In addition, the FDIC would pay servicers who process mortgages $1,000 for each re-worked loan.
The plan is expected to initially help 2.2 million borrowers get new loans; after some borrowers re-default, 1.5 million would ultimately keep their homes, the FDIC estimated. The plan would cost an estimated $24.4 billion, which Bair has said could come from the $700 billion bailout Congress approved last month.
Unless Bair's proposal gets the Treasury Department's blessing, it would have to be approved by Congress or wait for review by the Obama administration.
Source: CNNMoney.com
VA and FHA Updates
10/14/2008
Law expands homeownership for veterans
Veterans who have fallen victim to risky subprime loans will be able to refinance those loans into safer, more affordable loans thanks to the Veterans' Benefits Improvement Act of 2008 recently signed by President Bush. The bill includes housing provisions for veterans who are already homeowners and those who aspire to homeownership, according to the National Association of Realtors® (NAR).
In addition to the provision above, two other provisions in the legislation help veterans during the current housing turmoil:
· The legislation extends VA loan limit increases through 2011, which will help veterans living in high-cost areas. · The VA can now offer adjustable-rate mortgages to veterans, making homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.
FHA Only Accepting Applications from State Certified Appraisers
Effective October 1, 2008, the Federal Housing Administration is only accepting new applications from state-certified appraisers. No new applications are being accepted from state-licensed appraisers. This is a result of the Housing and Economic Recovery Act of 2008, signed into law on July 30, 2008. The act states that FHA can only accept appraisers that are certified by a state or a nationally recognized organization. Appraisers must also demonstrate verifiable education in appraisal requirements as established by FHA. A mortgagee letter providing additional details is expected in the coming weeks.
Lending Tree Internet Report
9/16/2008
As reported by Inman News, a new California Association of Realtors survey called "Survey of California Home Buyers" shows ever growing relationship between real estate sales and use of the Internet compared to the 2007 survey
Excerpts from the article from Inman are included here and show the importance of having a strong Internet plan. A couple of particularly interesting points include the fact that Internet buyers spent less time looking at homes before purchasing and viewed about half as many homes with their agent before settling on a purchase than traditional home buyers reported.
Another key area to note is that of responsiveness of the agent where the expectation of the consumer has increased dramatically.
On a positive note, far more of the Internet buyers indicated that they were likely to use the same agent again in comparison to the traditional buyer, making Internet generated buyers a much more valuable repeat and referral pool.
Survey reveals growing use of Internet in home purchases
The share of home buyers who said the Web was integral to their purchase process continues to grow, according to an annual survey of home buyers by the California Association of Realtors trade group. Meanwhile, the home-search process lengthened compared to the 2007 survey.
The association's "Survey of California Home Buyers" reveals that 78 percent of buyers used the Internet "as an important part of (their) home buying and selection process," compared to 72 percent in 2007.
Buyers who stated that the Internet was an important part of the buying process spent an average 8.3 weeks searching for a home with their agent, up from 5.2 weeks in 2007 and 2.2 weeks in 2006 -- reflecting the slowing sales environment of the past two years.
"Traditional" buyers who said the Internet was not an important part of the buying and selection process took even longer -- 10.3 weeks searching for a home with their agent compared to eight weeks in 2007.
Also, the survey found that traditional buyers saw almost twice as many homes with their agent (23.3 homes) as Internet buyers (12.7 homes).
“Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,” said William E. Brown, CAR president, in a statement.
The sample of buyers in the survey included 1,249 home buyers who used the Internet and 351 who had not to purchase homes during the last half of 2007.
The survey found that affordability for first-time buyers has improved with home-price declines and relatively low mortgage interest rates.
"However, problems in the area of real estate finance continue to limit access to capital on the part of all buyers, including first-timers," and has shrunk the pool of first-time buyers. Also, because of the credit crunch, "there is no guarantee that the loan will actually be funded," according to the report.
Participants expressed a need "to better understand the direction of the market" and for escrow to close on time, citing concerns about "market conditions" and "agent responsiveness," the report states.
Specifically, participants asked for better negotiating and faster response times from their agents. "Both assessments reflect the uncertainty of the market in recent months and frustration with that uncertainty," the report concludes from those survey findings.
The share of first-time buyers in the "Internet" group participating in the survey dropped from 31 percent in the 2007 survey to 22 percent in the 2008 survey and is down from 41 percent in 2006.
"With lenders tightening their underwriting standards and requiring a larger down payment from borrowers, many first-time buyers who had already been facing affordability constraint due to high home prices in California found it insurmountable to qualify for a home loan."
About 77 percent of first-time buyers reported that they were motivated to buy by falling home prices, compared to 64 percent of repeat buyers.
Other motivators included: low mortgage interest rates enabled the buyer to move to a better location, the likelihood that sales will increase, mortgage rates enabled the buyer to move to a bigger home, and the desire to move to a more affordable area, in that order.
Satisfaction with the home-buyer process dropped in ever category in 2008 compared to the prior year -- the average rating among the nine categories was 3.4 in the latest survey (five is "most satisfied" and one is "most dissatisfied). In last year's survey, the average rating was 4.1.
Overall satisfaction with agent averaged 3.3 in the 2008 survey compared to 4.1 in the 2007 survey.
About 80 percent of those who were not satisfied said the agent "did not negotiate aggressively on their behalf," according to the survey report.
And the report suggests, "Although home buyers did not mention it, failure to close escrow on time probably contributed to the level of dissatisfaction buyers had with their agent," as 57 percent of Internet buyers participating in the 2008 survey reported that they did not close escrows on time.
About 31 percent of the Internet group in the survey expected an instant response from their agent, up from 22 percent in 2007. And 96 percent of Internet buyers expected a response within four hours or less, according to the latest survey. That compares to 94 percent in the 2007 survey.
Also, about 84 percent of participants said they considered the agent's response time to be either a "very important" or "extremely important" factor in their decision-making process, the survey report states.
About 71 percent of the Internet buyers in the survey said they would use the same agent again, down from 92 percent in 2007.
Among the "traditional" buyers, 27 percent reported they would use the same agent again, down from 47 percent in 2007 and 79 percent in 2005.
Multiple pictures and a slide show were named by survey participants as "extremely important" Web site features by buyers (61 percent), followed by maps and directions, agent contact options, virtual tours and neighborhood profiles.
About 88 percent of survey participants hired an agent to assist them in the home-sale transaction. About 90 percent of buyers in the Internet group found their real estate agent using the Internet, while 9 percent found their agent through a for-sale sign and 1 percent through an agent's marketing materials.
Meanwhile, about 32 percent in the traditional buyers' group reported that they had a previous transaction with the real estate agent, 28 percent found the agent through marketing materials, 27 percent through a for-sale sign and 14 percent through a referral, according to the survey.
.S. Treasury Department Announces Takeover of Fannie Mae; Freddie Mac
It's been the talk of Wall Street for months, but it's now official. Much to the relief of those in the real estate industry, on September 7, 2008, the U.S. Treasury Department announced its takeover of mortgage-finance companies Fannie Mae and Freddie Mac. From it should come a much-needed boost to the nation's housing market.
Fannie Mae and Freddie Mac, which together back around $5 trillion in home loans, have been battered in the past year by declining home prices and rising foreclosures. The four-part rescue plan will be set up as a conservatorship to be overseen by the Federal Housing Finance Agency.
Lawmakers from both parties indicated strong support for the steps according to The Wall Street Journal and New York Times. The plan commits the government to provide upwards of $100 billion in additional capital although none is needed right away. The government will be issued special 10% yield preferred shares and receives warrants equating to 79.9% of the common shares of the two companies. According to Treasury Secretary Paulson the longer term plan is to first cap the amount of each company's mortgage portfolios at $850 billion and then shrink them to the neighborhood of $250 billion a move that some lawmakers said would not happen.
"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe," says Treasury Secretary Henry Paulson, Jr. "This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation."
Paulson refused to say how much capital the government might eventually have to provide, or what the ultimate cost to taxpayers might be. However, CNNMoney.com said the move would extend as much as $200 billion in Treasury support to the two companies.
Stock markets around the world reacted favorably to the news. It is expected that mortgage rates may ease somewhat with this move as markets are reassured of the long term viability of the secondary market supported by Fannie Mae and Freddie Mac.
Fannie and Freddie CEOs Daniel Mudd and Richard Syron respectively will be replaced. Herb Allison, former chairman and CEO of pension provider TIAA-CREF will take the top position at Fannie Mae while Carlyle Group (a private equity firm) senior advisor David Moffett will take over Freddie Mac.
REAL Trends Comment: The uncertainty surrounding the future of Fannie Mae and Freddie Mac would seem to be less now than it was Friday. However, now that the Federal government has control of these monetary giants what we don't know is how much this control will affect their operations in the secondary market. Will a more robust private market develop, a long sought objective of Wall Street (and the current Treasury Secretary)?
Steve Murray, Publisher
Tracey Velt, Editor
REAL Trends, Inc.
Housing Market Summary
8/11/2008
The following is from Real Trends in Colorado:
Top economists say housing doom is overblown (WASHINGTON) – The Washington Post reports that a team of housing economists believe "predictions of further large housing price declines are greatly overblown." The Post gathered some of the nation's top economists to study the housing crisis. They concluded that in reality only four states – Arizona, California, Florida and Nevada – have had home price declines of more than 4 percent in the past year. The economists said the home price index compiled by the Office of Federal Housing Enterprise Oversight was the most comprehensive of the various indexes. The Post said, "Our analysis reveals, unsurprisingly, that foreclosures and home prices have negative effects on each other over time, but this does not imply a vicious cycle of collapsing prices. Our models predict that as foreclosures continue to climb in many states, house prices will remain flat or decline in those states — but will not collapse."
Pending home sales rise (WASHINGTON) - NAR's Pending Home Sales Index, based on contracts signed in June, rose 4.5 points to 89.0, compared to a reading of 84.5 in May. A year ago the index was 101.4. An index of 100.0 suggests the market is equal to what it was in 2002. Trade association chief economist Lawrence Yun said the numbers suggest the market is moving in a narrow range. He noted, however, pending sales were up in all four regions last month. Insiders speculated much of the activity involved distress sales.
Despite numbers, most believe house values are solid (SEATTLE) - A survey by the real estate data site Zillow shows homeowners have a high degree of confidence in the value of their homes and believe those values will improve over the next six months. The survey, taken in the second quarter of this year, showed 62 percent of homeowners believe their property value has increased or remained the same as last year; and 75 percent believe their values will increase through the end of the year. Zillow said, however, its analysis of markets around the country suggested 77 percent of homes had actually lost value last year. "Whether it's apathy, confusion or just plain denial, homeowners seem to believe the housing crisis affects every other home but 'not my house,'" the company said
Housing and Economic Recovery HR 3221
7/28/2008
HR 3221, the Housing and Economic Recovery Act of 2008
National Association of REALTORS® Summary
(as of 7/24/08)
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23rd by a vote of 272-152.The Senate must now approve the language adopted by the House.The Senate is expected to approve the bill on Friday, July 25th or Saturday, July 26th. The President has said he will sign the bill.It includes:
·GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500.The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
·FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
·Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009.The credit is repayable over 15 years (making it, in effect, an interest free loan).
·FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans.Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value.Borrowers would have to share 50% of all future appreciation with FHA.The loan limit for this program is $550,440 nationwide.Program is effective on October 1, 2008.
·Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members.This prohibition does not go into effect until October 1, 2008.
·VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
·Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year.This provision does will be effective from October 1, 2008 through September 30, 2009.
·GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
·Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
·National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs.In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program.In out years, the Trust Fund would be used for the development of affordable housing.
·CDBG Funding – Provides $4billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
·LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
·Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate).Federal bank regulators will establish a parallel registration system for FDIC-insured banks.The purpose is to prevent fraud and require minimum licensing and education requirements.The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
The National Association of Realtors® congratulated House Committee on Financial Services Chairman Barney Frank, D-Mass. on his leadership and the U.S. House of Representatives for voting to pass H.R. 3221, The Foreclosure Prevention Act. Their actions will help bring stability to the housing market and stem the rising rate of foreclosures.
NAR has expressed ongoing support for all the major features in the House housing package. “Our Realtor® members appreciate the House’s hard work and bipartisan effort in bringing forth legislation that will go a long way toward helping people become and remain homeowners,” said NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. “We are pleased with the comprehensive nature of this bill.”
Realtors® have long advocated modernizing Federal Housing Administration programs that will simplify and make FHA-backed mortgages more available, and expanding FHA to allow more homeowners to refinance their mortgages. Additional bill components that NAR has long supported include reform to the government-sponsored enterprises (Fannie Mae and Freddie Mac) and permanent increases to both GSE and FHA loan limits. The proposed tax credit of $7,500 for first-time home buyers would help stimulate a weak housing market, and FHA stabilization should help thousands of families to refinance existing mortgages and keep their homes.
“This is meaningful legislation that can have a major impact. We look forward to working with the House and Senate to finalize an aggressive bill that will ensure that every American who can afford to own a home and aspires to do so will have that opportunity, and that every American who responsibly owns a home is able to keep it,” said Gaylord.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
ERA Morrison Named to the RISMedia.com Top Broker List
4/24/2008
RISMedia Ranks Top 700 Brokers in 20th Annual Power Broker Report & Survey
ERA Morrison Real Estate is proud to announce that it has been named to RISMedia’s 20th Annual Power Broker Report & Survey. ERA Morrison was ranked on the top listin closed transaction sides in the Power Broker Report, which identifies and ranks America’s largest residential real estate brokerage companies by transaction sides and sales volume.
The results of this year’s Power Broker Survey reflect the market downturn felt from coast to coast. Longer listing times, more cautious buyers and the mortgage meltdown resulted in fewer total transactions—2,322,210 in 2007 compared to 2,754,618 in 2006. Meanwhile, price appreciation continued its decline, resulting in lower total sales volume—$749,201,552,294 in 2007 compared to $855,755,959,352 in 2006.
To view the complete Power Broker Survey results, visit www.rismedia.com.
“Appearing in RISMedia’s 2008Power Broker Report is more important than ever,” explains RISMedia President & CEO John Featherston. “By ranking the industry’s leading brokerages by sales dollar volume and transaction, we have been able to identify the leaders in real estate year after year. It’s a great promotion and recruitment tool and a great way to show consumers that the real estate industry is still open for business.
“Being among the top 700 brokers in the country is a sure way to gain the trust of speculative clients, differentiate your firm from the competition, and catch the eye of ambitious new recruits.”
For years, the nation’s top real estate brokers have sought to be included in the report—an indispensable reference tool used by the real estate industry. RISMedia’s Power Broker Report is read by more than 300,000 real estate professionals, thousands of leading corporate relocation decision makers and is accessible online to millions of interested consumers.
The Power Broker Report & Survey is compiled annually by RISMedia and is based on data collected by an annual survey of leading residential real estate brokerage firms. All sales and transaction volume comes directly from brokerages and is verified and substantiated by external sources, in most cases accounting firms, prior to publication.
Based in Norwalk, Conn., RISMedia was founded in 1980 as the premier source of news and business-development information for the residential real estate and home services industries. RISMedia is the leading media organization for best practices information, breaking news and analysis, educational and networking events, and marketing and branding solutions for the leading real estate and home services companies throughout the United States. RISMedia’s flagship publication, Real Estate magazine’s printed edition is distributed to more than 40,000 brokers and leading agents nationwide, and RISMedia’s Daily e-News is circulated to upwards of 300,000 real estate professionals each day. For more information, visit www.rismedia.com.
Fannie Mae Tightens Rules for Mortgages
4/4/2008
Fannie Mae tightens rules for mortgages
Fannie Mae announced a new round of tightening in its standards for home mortgages it buys or guarantees.
The government-sponsored provider of funding for home loans told lenders this week that it will require a minimum credit score of 580 for most loans it buys on an individual basis. Credit scores, which range from 300 to 850, are designed to measure borrowers' likelihood of repaying loans. In the past, Fannie had no minimum score. The company said it will still acquire loans with lower credit scores in certain circumstances.
Among other changes announced to lenders, Fannie also said it will increase the period needed for borrowers to "re-establish" their credit history after a foreclosure to five years from four years. Fannie said it would allow shorter recovery periods for borrowers with "documented extenuating circumstances" that caused the foreclosure.
Separately, Fannie last week told loan servicers - companies that collect loan payments - that they can increase their forbearance period on delinquent borrowers to as much as six months from four months to allow more time to seek alternatives to foreclosure. Fannie hopes that move will reduce the number of loans on which it needs to recognize losses, though it may be only delaying the pain in some cases. (The Wall Street Journal Online)
Fed Expands Lending Program While Lender's Require Larger Downpayments
3/12/2008
Fed expands emergency lending program
The Federal Reserve joined with other central banks this week to extend its temporary lending program to provide more liquidity to global financial markets. The Fed will lend up to $200 billion of Treasury securities to primary dealers in the bond market secured for a term of 28 days, rather than overnight, as in the existing program.
The term securities lending facility will accept as collateral mortgage-backed securities, including federal agency debt, Fannie Mae and Freddie Mac residential-mortgage-backed securities and AAA-rated private-label residential mortgage-backed securities. The auctions will be held weekly.
Lenders requiring larger downpayments
Falling prices in many parts of the country have improved affordability for those interested in becoming homeowners for the first time, but financing the purchase has become a bigger challenge. Lenders, in general, are requiring larger downpayments and higher credit scores, criteria that can trip up first-time buyers. It's typically first-time buyers who have the toughest time scraping together a downpayment.
According to the National Association of REALTORS, 45 percent of first-time homebuyers opted for 100 percent financing between July 2006 and June 2007. The median percentage that first-time buyers financed was 98 percent.
No-downpayment loans "are still happening, but with a lot more restrictions than before," says Barton Pitts, president of Downers Grove (IL).-based Professional Mortgage Partners.
Borrowers today are going to have to verify their income and verify their financial assets to lenders, says Frank Nothaft, chief economist for Freddie Mac, the government-sponsored mortgage agency. A FICO credit score of 660 to 680 is now the minimum most lenders will consider to prove your creditworthiness, he says.
Some in the industry figure that many borrowers will need about a five percent downpayment on a typical loan these days. Others are predicting heftier restrictions to entry. According to Guy Cecala, publisher of the industry newsletter Inside Mortgage Finance, a first-time buyer in many markets will soon need even more money down - perhaps 10 percent. "And I think before too long we're going to see it up to 15 percent to 20 percent," he adds.
Realogy, ERA Parent Company Announces New Alliances
2/22/2008
Realogy announces marketing agreements with Homescape and Zillow
Homescape, a leading real estate search and information Web site, has announced a marketing agreement with Realogy Corporation. The partnership enables approximately 700,000 property listings from Realogy's residential real estate brands to be available on Homescape.com and its network of 130 newspaper real estate sites nationwide. Realogy's residential real estate franchise systems include CENTURY 21, Coldwell Banker, ERA and Sotheby's International Realty.
Homescape.com offers consumers one simple search with multiple options to view and manage results. The site also provides advertising opportunities with unlimited photos and priority placement for real estate professionals, while driving engaged consumer traffic directly to their listings. Content on Homescape includes local market information, a consumer-focused blog, search tips and its new Moving channel, which features articles on planning and paying for a move, choosing movers, packing and more.
Leading real estate Web site Zillow.com has announced an expansion to its marketing agreement with Realogy that will result in its approximately 700,000 property listings to be posted to the Zillow.com Web site on a daily basis.
Property listings under the Realogy brand networks, which also include listings from Realogy-owned brokerages operated by its subsidiary, NRT LLC, will be dynamically uploaded to Zillow on a daily basis, providing its brokerages with additional marketing exposure for their properties while enhancing the search experience for Zillow's users. Upon viewing the listings on Zillow.com, consumers will have the option to click a link to the listing brokerage's Web site where they can locate a Realogy-affiliated agent to guide them through the home buying and selling experience.
ERA Parent Realogy Issues Major USA Campaign
2/15/2008
Realogy Corporation, a leading global provider of real estate and relocation services, and parent company of leading residential real estate franchise networks such as Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, ERA and Sotheby's International Realty, applauds the economic stimulus package approved by Congress and signed into law this week by President George W. Bush.
"We are greatly encouraged by the positive impact that the government's economic stimulus package should bring to home buyers and sellers across America, especially in markets with higher home prices where the increase in conforming loan limits will be most helpful," said Richard A. Smith, president & CEO of Realogy Corporation. "The housing sector represents approximately 20 percent of this nation's GDP, and proactive measures such as this that help increase housing affordability will ultimately reflect favorably on the U.S. economy as a whole, and that's good news for Americans."
Collectively, Realogy's franchise systems have approximately 15,000 offices and 315,000 sales associates doing business in 87 countries around the world. Realogy's real estate brand leaders are united in their support of this new legislation
Lowell Condo Tours
6/20/2007
ERA Morrison is excited to announce yet another real estate innovation in buying and selling condos----LowellCondoTours.com.
This new approach provides buyers as well as sellers a “1 stop shop” for their real estate needs.For the seller, their condo has an open house every Saturday and Sunday for the maximum exposure.The advantage to the buyer is they can immediately view condos in their price range, be pre-approved on the spot, and work with Lowell’s most experienced real estate agents.LowellCondoTours.com is located at the intersection of Market & Central Street (98 Central St.).Tour Hours are:Saturday & Sunday from 1:00-4:00.Tours can also be scheduled during the week by calling 978-454-8558 or stopping in ERA Morrison Real Estate, 61 Market Street, Lowell, MA.
ERA Morrison serves Northeast Massachusetts from 10 locations; Acton, Ayer, Billerica, Chelmsford, Dracut, Lowell, Pepperell, Tyngsboro and Westford.
About ERA Franchise Systems, Inc. ERA Franchise Systems, Inc. is a global leader in the residential real estate industry with more than 30 years experience in developing consumer-oriented products and services. ERA Real Estate was recently named the recipient of the prestigious 2006 J.D. Power and Associates Award for "Highest Overall Satisfaction For Repeat Home Sellers Among National Full Service Real Estate Firms." The ERA® network includes more than 38,700 brokers and sales associates and nearly 3,000 offices throughout the United States and 29 other countries and territories. Each office is independently owned and operated except offices owned and operated by NRT Incorporated. ERA Franchise Systems, Inc. is a subsidiary of Realogy Corporation (NYSE: H), the world's largest real estate franchisor. ERA® information is available to consumers at ERA.com.
