Posted by Annalisa Burgos | June 19, 2009
I’m in Washington, D.C., for a conference of the National Association of Real Estate Editors and got to hear from some of the key players in the federal government’s housing recovery efforts, including Housing and Urban Development (HUD) Secretary Shaun Donovan, Federal Housing Finance Agency Director James Lockhart and some of the congressional representatives on the banking and housing committees. We heard a lot about the Obama administration’s refinance and loan modification programs as well as the massive overhaul of the financial regulatory system.
Some of the notable stats from Thursday’s speakers:
–40% of those displaced by the foreclosure crisis are renters.
–16 mortgage servicers are participating in the federal government’s loan mod program. They handle about 80% of all mortgages.
–So far, 200,000 loan mod offers have been made under the federal program.
–Potential source of real estate growth is the rental market in college towns. That’s because each coming year, we’ll see a record number of high school graduates.
–Another potential demographic shift is the growing population of non-traditional households (“traditional” meaning a married couple with children).
Check out this video of HUD Secretary Shaun Donovan talking about the mission of Obama’s proposed Consumer Financial Protection Agency, a new watchdog agency that would protect consumers from the kind of predatory lending practices that got us into the current mortgage mess and foreclosure crisis.
Posted by Annalisa Burgos | June 4, 2009
We’ve all heard about the $8,000 tax credit for first-time homebuyers — the government’s carrot to spur buying and help reduce unsold inventory.
How it used to work: A first-time buyer would complete the homebuying process, file their tax return with the IRS in January and the credit would be applied to the taxes owed. If you don’t owe anything, you get the full credit.
How it works now: A new federal program will let you use the tax credit immediately — during closing. This is an even sweeter carrot, because the down payment and closing costs are typically the biggest obstacles to overcome when buying a home.
In today’s uncertain economy, people would rather hold on to their cash. With lenders charging higher fees, this program lightens the burden of closing costs. Average fees for a $200,000 mortgage in 2008 with a 20 percent down payment were $3,118, according to Bankrate.
The catch or two…: How much your credit will be depends on your income, tax-filing status and home price. You have to get a Federal Housing Administration (FHA) mortgage and put down at least 3.5 percent of the purchase price. Of course it doesn’t hurt to use the credit to boost your down payment, which could help lower your interest rate.
Also it’s important to note that like conventional loans that require private mortgage insurance (PMI) when the down payment is less than 20 percent, FHA loans require what’s called a mortgage insurance premium (MIP). With the FHA loan, you pay an up-front premium (1.75 percent of the loan) which is financed into the mortgage and a monthly premium for at least the first five years (0.50 percent to 0.55 percent).
The bottom line: Any time you can get money upfront as opposed to waiting for it, it’s a good thing. Too bad I still own a condo in Knoxville, or else I’d be all over this.
Posted by Annalisa Burgos | April 30, 2009
Whenever I go to an open house, the listing agent often offers me the business card of a mortgage broker or loan officer, in case I’m looking for financing. Since I usually secure financing before I go house hunting, I never really think about the recommendation. Figured the guy was a friend, so the agent was doing him a favor by throwing him a bone.
But what if that agent or broker took a kickback for it. A big NO-NO.
Apparently, that’s what the nominee for the head of the Federal Housing Administration is accused of.
David Stevens, president and chief operating officer of Long & Foster, was supposed to be confirmed on Capitol Hill this week, but lawmakers put the vote on hold to review lawsuits alleging his company broke federal anti-kickback laws.
Long & Foster is facing several class action lawsuits, alleging that it shared profits with affiliated mortgage and title companies in exchange for bringing buyers their way. While these relationships are commonplace in the real estate industry, profiting from them is illegal.
If confirmed, mortgage industry vet Stevens will run the FHA, which offers those highly-coveted loans that require as little as a 3.5 percent down payment.
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