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08/27/2010 - Long-Term Mortgage Rates Fall for the Ninth Week Out of Ten! - Fixed-rate mortgages reached record lows again this week. 30-year fixed-rate mortgage (FRM) averaged 4.36% with an average 0.7 point for the week ending August 26, 2010, down from last week when it averaged 4.42%. Last year at this time, the 30-year FRM averaged 5.14%.

Real Estate Outlook: Fannie Forecast! - Check out the latest forecast from Fannie Mae chief economist Doug Duncan, if you want a good sense of where we are in housing and where we're headed. Never known as a Pollyanna or wild optimist, Duncan acknowledges that this summer has been a challenging time for just about anyone in real estate. The slump was widely predicted earlier this year by economists -- including Duncan -- who saw sales and building starts essentially sucked out of the summer months into the spring months by the tax credit. However, Duncan sees some positives taking shape: "Consumers are lowering their leverage" he says-cutting their debt burdens - and "positioning themselves to resume consumption" - including home purchases.

New Fees Weighed for Mortgage Industry - The Obama administration may propose that any federal backing of mortgages be paid for through fees on the lending industry, according to people familiar with the internal discussions. Some conservatives don't believe the government should offer any type of guarantee, while others advocate limited, but explicit, backing. About nine in 10 new loans are currently backed by Fannie, Freddie or government agencies. Treasury Secretary Timothy Geithner recently cited a "strong case" for a continued federal guarantee but said "the challenge is to make sure that any government guarantee is priced to cover the risk of losses, and structured to minimize taxpayer exposure."

How long after a Distress Sale can you expect to wait before you can apply for another home loan? - The answer will always vary depending on the type of loan and the person applying. However, as general 'rule of thumb', the following is a good guide.

Conventional:

Chapter 7 Bankruptcy - 4 years from discharge or dismissal date.

Chapter 13 Bankruptcy - 2 years from discharge date or 4 years from dismissal date.

Foreclosure - 5 years from completion date (conditions apply from 5 up to 7 years).

Deed-In-Lieu of Foreclosure, Pre-Foreclosure or Short Sale - 2 years with max 80% max LTV ratio; 4 years with max 90% max LTV ratio; 7 years - LTV ratios per eligibility matrix.

FHA:

Chapter 7 Bankruptcy - 2 years from discharge date.

Chapter 13 Bankruptcy - 1 year of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage.

Foreclosure - 3 years from completion date.

Short Sale - 3 years from completion date.

(Per FHA's Mortgagee Letter 09-52, FHA financing can be obtained in less than 3 years under certain conditions)

VA:

Chapter 7 Bankruptcy - 2 years from discharge date.

Chapter 13 Bankruptcy - 1 year of the payout must elapse & payment performance must be satisfactory; buyer must receive permission from the court to enter into a mortgage.

Foreclosure - 2 years from completion date.

Short Sale - No specific information on this yet, assume foreclosure rule of 2 years.

Please note that while waiting-out these time-periods you need to understand the importance of re-establishing your credit after a distress sale, bankruptcy or foreclosure. Maximizing your waiting timeframe by rebuilding your credibility is an extremely advisable suggestion.

08/20/2010 - Valley Mortgage Delinquencies Drop! - Valley homeowners are doing a better job keeping up with their mortgage payments. For the second straight quarter, Phoenix-area mortgage delinquencies dipped in the April to June period, reported TransUnion. As of midyear, 12.3% of Valley homeowners were 60 days or more late on payments, down from 12.71% in the first quarter and a cyclical peak late last year of 13.16%.

City set to condemn land where pioneer museum is located! - Phoenix will begin condemnation proceedings against a private landowner that outbid the city at auction for property that is home to the Pioneer Arizona Living History Museum. The Phoenix City Council voted 7-0 at a special meeting on Wednesday to negotiate with or exercise eminent domain against Great Western Historical LLC to obtain the property. On Aug. 13, the city offered the real-estate entity owned by Eric and Steve Roles $3.21 million for the 92 acres in north Phoenix that the Roleses won at a state-land auction in July. The Roleses outbid the city for the museum property by $10,000, and the city's offer is the same price that the Roleses paid for the land this summer. Deputy City Manager Rick Naimark said since the city hasn't heard from the Roleses about the proposal, the condemnation will begin. Eminent domain allows government entities to take private property with or without the landowner's permission for public purposes as long as the property owner is fairly compensated. The museum has been operating since the 1960s and is designed to preserve the history and heritage of Arizona's early settlers. Thousands of schoolchildren visit the museum annually on field trips and users of the Pioneer Arizona Living History Museum say they were caught off-guard when the land fell into private hands. The same day the city made the offer of $3.21 million for the land, Great Western Historical ordered the Pioneer Arizona Foundation (the non-profit group that runs the facility) to shut down the museum because the water would be shut off.

Mortgage apps rise 13% on low rates! - Mortgage applications rose 13 percent last week as consumers refinanced at the lowest rates in decades. The increase was driven by a 17 percent surge in applications to refinance home loans, the Mortgage Bankers Association said Wednesday. Those taken out to purchase homes fell by more than 3 percent. The numbers are adjusted for seasonal factors. Home refinancing hit the highest level since May 2009, but was still lower than the last big boom during the first three months of that year. Applications to refinance loans made up more than 81 percent of all home loan activity, the highest share since January 2009. Low mortgage rates have failed to spark home sales, which remain hobbled by the weak economy and tight credit standards. Rates have fallen since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields. The average rate for a 30-year fixed loan rose slightly to 4.6 percent from 4.57 percent a week earlier. The Mortgage Bankers Association's survey covers more than 50 percent of all applications nationwide.

Fed rolls out new rules on loan disclosure! - Yesterday, the Federal Reserve announced a slew of changes and proposed changes to mortgage loan disclosures provided to consumers under the Truth in Lending Act, even as plans to create a new, simplified mortgage loan disclosure form move forward. The Fed's interim rule revising disclosure requirements under Regulation Z of the Truth in Lending Act applies to loan applications received on or after Jan. 30. Beginning Jan. 1, borrowers must also be notified when their loan is sold or transferred.

Real Estate Outlook: Modest Recovery - The Federal Reserve's board of governors gave their current economic forecast a label last week: The label is "modest" - and it's an important word to keep it in mind. Yes, we're still in recovery mode, the Fed governors said, but it's a slow slog, and on any given day the news can sound discouraging. Yes, the gross domestic product, or GDP, is still growing, and many corporations are sitting on big wads of cash, which is good. But those same companies are not yet confident enough in the pace of the economic recovery to start hiring again, and that's not good. It all adds up, according to the Fed, to a mixed picture of where we are on the long pathway out of the Great Recession. Given this tepid assessment by the government's top economists, it's useful to note that the real estate market racked up positive numbers in three quarterly sales and price reports issued last week.

08/13/2010 - 30-Year Mortgage Rates Hit Another Low: 4.44% - Mortgage rates sank to the lowest level in decades this week, pushed down by the Federal Reserve's move to buy up government debt to help lift the economic recovery. The average rate for 30-year fixed loans this week was 4.44%, down from 4.49% last week, according to Freddie Mac. That's the lowest since Freddie Mac began tracking rates in 1971.

New Arizona law helps shield buyers from mortgage abuses - New state licenses required for anyone handling a mortgage application could help prevent a repeat of the bad loans that contributed to Phoenix's housing crash. Backed by mortgage brokers and real-estate regulators, the law quietly went into affect on July 1. The law, passed in 2008, creates state oversight for people who take loan applications, gives consumers an avenue for reporting misconduct and establishes a fund to help repay borrowers who lose money because of unethical or illegal acts by their loan officers. The law faces hurdles, as cash-strapped Arizona struggles to process thousands of new applications. Still, advocates call it a success. Many of the risky - and sometimes illegal - home loans that helped lead to record foreclosures in Arizona might not have been made if the more than 10,000 unlicensed loan officers working then had been subject to more oversight.

Investors sticking with real estate - Two things historically hold true when it comes to investment dollars floating around Arizona. In the best of times, investors jump full force on the real estate bandwagon - most recently financing everything from subdivisions in far-flung cities and towns to urban condos in downtown Phoenix and Tempe. In the worst of times, investors also gravitate toward real estate, seduced by the lure of bargain buys on foreclosed homes and commercial properties as they bank on population growth to help Arizona's economy rebound.

Senate Approves Increase in FHA Fees - Last week, the Senate gave the FHA the go-ahead to raise monthly fees that borrowers pay the agency. The annual fee is expected to rise from the current rate of 0.55% to 0.9% of the total loan. The bill gives the FHA the authority to raise the annual fee as high as 1.55%. The agency plans to lower the loan initiation fee that was raised from 1.75% to 2.25% earlier this year - perhaps dropping the up-front fee down to 1% of the total mortgage amount.

$3 Billion more for jobless homeowners - The Obama administration is making $3 billion in additional funds available to help troubled homeowners avoid foreclosure, according to an announcement made yesterday. One part of the plan includes a new $1 billion program that will offer loans to unemployed borrowers at risk of losing their homes. The loans, which will be dispersed through nonprofit and housing agencies, will carry 0% interest and be good for a maximum of $50,000 for up to two years.

08/06/2010 - Mortgage Rates Hit Low of 4.49 Percent! - Mortgage rates dropped to the lowest level in decades for the sixth time in seven weeks - offering the most attractive opportunity for those who qualify to refinance or purchase a home. The average rate for 30-year fixed loans this week was 4.49% - down from 4.54% last week, according to Freddie Mac. Applications to refinance loans increased 1.3% and those to purchase homes increased 1.5%, according to the Mortgage Bankers Association.

Sales of existing Scottsdale homes up 36% in 1st half of year! - Existing-home sales in Scottsdale jumped 36% in the first half of this year, while home construction picked up slightly. Foreclosures accounted for a quarter of the 3215 homes sold in Scottsdale through June, according to ASU Realty Studies report. Foreclosures and short sales continue to put downward pressure on prices. Scottsdale's median-home price in June was $378,600, up less than 1% from a year earlier. But it was the first year-over-year monthly increase during the first half of 2010. The city has issued 100 single-family building permits from Jan. 1 through this week and is on pace for about 171 new homes in 2010. Last year, Scottsdale approved just 130 home permits.

Home loan purchase demand up again! - The demand for U.S. mortgage applications to purchase homes rose last week for a third straight week as interest rates tumbled, according to the Mortgage Bankers Association. The low rates also buoyed demand for home refinancing loans, with activity rising in five out of the past eight weeks. The MBA's seasonally adjusted index of mortgage applications, which include both purchase and refinance loans - increased 1.3% in the week ended July 30. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.3%. The seasonally adjusted purchase index, a tentative early indicator of home sales, increased 1.5%.

Glendale Planning Commission OKs rezoning for Bidwill development plans - The city of Glendale moved forward plans by the Bidwill family Thursday night to develop two hotels, 4.5 million square feet of office space and urban residences in what now are parking lots at University of Phoenix Stadium. The Glendale Planning Commission voted 5-1 to approve rezoning of the parking lots to accommodate the developments and allow for more special events and festivals to be held outside the stadium. The plans now move to the Glendale City Council for final approval.

Real Estate Outlook: Sales Jump - The economic recovery continues to bump along in a "fits and starts" pattern, but what's important to keep in mind is that the core trendline remains positive. New home sales, which had been anemic following the expiration of the tax credit deadlines, bounced back with vigor in June, according to the Commerce Department. Single family sales jumped by 24% seasonally-adjusted basis over May, and were 19% above the totals for June 2009. Prices of all homes -- existing and new -- also continue on a path of modest recovery, according to the latest S&P Case-Shiller index. On a national average basis, home prices were 1.3% higher compared with the month before, but they gained 4.6% year-over-year.

07/30/2010 - Arizona Home Builders Buying Land Again! - So far this year, according to the Arizona brokerage firm Land Advisors, homebuilders here have spent $90 million on land purchases for new homes. That's the most builders have invested in the region's land in any year since the peak of the housing boom in 2006. New land purchases are a sign the cycle is stirring to life again in a retooled housing industry. The parcels of land and the pool of builders buying them are both much smaller than before the real estate crash. But residential lot prices are climbing as a steady stream of purchases by builders the past six months restarts the region's new-home industry.

Phoenix is ranked 15th overall in a list of 50 U.S. cities that offer the most to working moms, as published by ForbesWoman. - The ForbesWoman team started with the 50 largest metropolitan statistical areas in the U.S., while keeping in mind that "best" means different things to different women. They took into account safety, schools, health care, job opportunities, earning potential and cost of living when crunching the numbers. Each city was ranked in the individual categories, and then those scores were averaged to get a final ranking. Phoenix ranked 19th in women's income, 24th in cost of living, 10th in pediatricians, 21st in unemployment and 47th in spending per pupil. Minneapolis-St. Paul, Washington, Boston, Pittsburgh and Baltimore-Towson filled the top five spots. Minneapolis-St. Paul also held the No. 1 spot last year.

Homes will sell if priced right! - Foreclosures have impact, according to USA Today, no matter what Emily Rennie thinks her house is worth, what matters is what buyers are willing to pay. That can be a lot less in areas where the supply of houses for sale is swollen by foreclosures and short sales, often priced 20% to 30% below the ones being sold by financially healthy owners. Nationally, such properties account for a third of all sales. Real estate professionals say Rennie is in good company. Nationally, 30% of the houses for sale were reduced in price in June, according to Zillow.com, an online real estate site. "It's one of the hardest things for sellers to do. They have an emotional attachment to their house," says Amy Bohutinsky, a spokeswoman for Zillow.com. "For sellers to understand how they should price, they should deeply understand their market and competition - what's on the market now, not just what's sold."

Fannie Mae Addresses Appraisal Concerns as reported by The Realty Times - Fannie Mae has updated its appraisal policies to address the practice of lenders changing the appraiser's opinion of market value. The guidelines make it clear that the lender may contact the appraiser to address any perceived deficiencies, and that, if that cannot be accomplished, a review of the report may be obtained. The revised guidelines also make clear that lenders must use appraisers who "have the requisite knowledge required to perform a professional quality appraisal for the specific geographic location and particular property type," and also "who have the requisite knowledge about, and access to, the necessary and appropriate data sources for the area in which the appraisal assignment is located."

More homeowners get help outside of federal program! - As reported by USA Today, despite the attention given to the federal government's $50 billion Home Affordable Modification Program (HAMP), a program to lower monthly mortgage payments for five years, the majority of financially distressed homeowners are getting alternative modifications through their lenders without any government involvement. Since its start in spring 2009, HAMP has produced only 389,198 permanent modifications through June. Recent reports by the government and private analysts show the modifications that servicers make on their own are growing compared with a year ago, and according to Hope Now, a consortium of counseling agencies, servicers and investors, more than 800,000 alternative modifications have been made so far in 2010 with borrowers.

07/23/2010 - Housing Index Stays Positive! - A key indicator of the Phoenix-area housing market's overall health showed mild improvement in June. The ASU Repeat Sales Index clocked in at about 2 in June, according to preliminary data. This means the average price of resale homes was slightly better than it had been a year earlier. June was the third consecutive month with a positive index number - that's a significant recovery from its all-time depth of -35 points in April 2009. Home prices are up overall in Metro Phoenix. The prices of foreclosed homes and lower-priced homes are improving, but non-foreclosure homes and more expensive houses remain down in value compared to last year, according to a new report from ASU. April was the first month that the overall market showed a year-to-year increase since the recession began, with a 0.7% rise. The increase from June 2009 to June 2010 is estimated to be about 1.8%.

Mortgage Rates Fall to 4.59%, Enough To Move Demand - Finally! Record low mortgage rates spurred an uptick in new-purchase mortgage applications last week for just the second time in the past two months, while more Americans also applied to refinance, according to the Mortgage Bankers Association. Rates fell last week to 4.59% on an average 30-year fixed-rate mortgage, which is down from 4.69% one week ago and the lowest ever recorded by the trade group since its survey began in 1972. Other measures show that rates continued to fall this week: Zillow's Mortgage Marketplace quoted an average of 4.37% on Tuesday.

New home construction drops, but outlook brightens - While new home construction fell to the lowest level of the year in June, there were indications of increased activity in coming months, the government said Tuesday. Housing starts fell 5% from May to a seasonally adjusted annual rate of 549,000 last month. Economists had been expected a 5.8% drop. But building permits, a gauge of future construction activity, rebounded last month, posting the first gain since March. Permits rose to a seasonally adjusted annual rate of 586,000 last month - up 2.1% from a revised 574,000 in May. Economists expected permits to drop to 572,000.

Despite boycotts, depleted government coffers and one of the nation's tougher economic climates, two Valley communities have been named among the country's "Best Places to Live" by Money magazine. The magazine's annual rankings snubbed the state last year, but Gilbert (36) and Scottsdale (71) finished in the top 100 this time around. Both communities were lauded for their shopping and dining offerings, but the magazine said, "The housing market was hit here hard, and it has yet to recover." Money looked at crime, schooling and local economic conditions in its evaluation of 746 small cities, defined as having populations of 50,000 to 300,000. The full list appears in the magazine's August issue. Scottsdale was identified in Parenting as the nation's safest city and also scored well in recreation.

Fannie Mae gets tough on 'strategic' mortgage defaults - Borrowers who walk away from mortgages they can afford to pay - making "strategic defaults" - are running increasing risks that they'll be penalized for doing so. Starting in October, strategic defaulters will be disqualified for new Fannie Mae-backed loans for seven years after their foreclosures. Fannie also plans to go to court where it can to recoup outstanding mortgage debt from borrowers who strategically default. Under a bill that's passed the House and awaits Senate action, the Federal Housing Administration would be barred from insuring mortgages for those who previously ditched a mortgage they had the ability to pay.

Paul Pastor, ABR, CRS, GRI
Broker-Owner

8494 E. Cactus Wren Circle
Scottsdale, AZ 85266

Office: (480) 575-5290
FAX: (480) 575-5291

Email:
Paul@paulpastor.com
PJ@paulpastor.com
Kasey@paulpastor.com

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Paul Pastor Blog

Paul Pastor, ABR, CRS, GRI Broker-Owner

Paul Pastor, ABR, CRS, GRI
Broker-Owner