Monday, June 24, 2013

Bizarre Mortgage Requests Delay Borrowers

Bizarre Mortgage Requests Delay Borrowers


Underwriters are being extra vigilant in verifying every detail of a mortgage application, and some of their requests for information, borrowers say, are downright odd.

For example, one borrower says an underwriter demanded a letter from his doctor that an illness he had would never come back. Another borrower says that an underwriter told her she needed to get verification from her employer on her employment status when she listed “homemaker” as her occupation.

A borrower said an underwriter asked him for a letter of explanation on a $6 deposit he made (the borrower earned $10,000 a month at the time).

"I don’t know whether to laugh or cry," says Karen Deis, who operates MortgageCurrentcy.com, and who collected dozens of anecdotes on her Facebook page about bizarre underwriting requests. "People are scared. All you hear about are buybacks, audits, and people losing their jobs" because they didn't verify this or confirm that.

Banks are requiring more documentation when approving a mortgage, and some of the extra requests have caught borrowers off-guard. For example, Deis says one borrower said that an underwriter demanded a letter from her explaining why she changed her name after she got married. A single father who had custody of his child said he was asked for a letter saying he did not have to pay child support. Another borrower who had been out of school for years said he was asked to produce his high school transcript.

Despite some of the extra documentation requests, recent surveys are showing that banks lately are easing up slightly on their underwriting standards.

However, "even though there has been some loosening, what they're asking of people is not changing,” says Jonathan Corr, Ellie Mae president. “It's still pretty comprehensive, and we're going to continue to hear stories like this."


Wednesday, June 19, 2013

Time to Sell May be NOW

five fingersMany are talking about why now is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

1.) Demand Is High

Homes are selling at the fastest pace since November 2009 when the market spiked in response to the home buyer tax credit. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that monthly sales increased 9.7% over the same month last year. Total sales have been above year-ago levels for 22 consecutive months. There are buyers out there right now (buyer traffic is 31 percent stronger than a year ago) and they are serious about purchasing.

2.) Supply Is Beginning to Increase

Total housing inventory last month rose 11.9% to 2.16 million homes for sale. This represents a 5.2-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as more sellers escape the shackles of negative equity. Selling now while demand is high and before supply increases may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 3.98% which represents a jump of more than ½ point since the beginning of the year. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst at Bankrate.com said:
“Rates are unlikely to keep going up so quickly and should remain below 5%.”

Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.


Tuesday, June 18, 2013

May Busts Loose With the Biggest Sales Increase in Years

by Marc Lebowitz, RCE, CAE

Executive Director, Ada county Association of Realtors

Single family home sales in May 2013 were 815 in Ada County, an increase of 32% compared to May 2012. This is the largest monthly sales figure since April 2006…when sales were moving down from historic highs.

Year-to-Date sales in 2013 are 2,931; up 18% over YTD 2012 sales of 2,650.

Dollar volume for May was up 44% to $191 Mil.

Days on Market averaged 46 in May; down 10 days from last month!  On average a home sold in nearly two week’s less time in May than in April.  For the first five months we averaged 58 days-on-market.

New homes sold in May totaled 158, an increase of 17% compared to new homes sold in May of 2012.  Sales of existing homes were up 36% in May; the highest year-over-year increase in many years.

Historically, May sales increase by 8% over April.  May 2013 sales increased by 16% compared to April 2013. This is the strongest May over April sales increase since 2006.  Note: The second strongest is a tie between 2002 and 2005 (15%).  This could be a key indicator for the rest of this year.

Of our total sales in May… 12% were distressed (98 total sales)….down 9% from April 2013. In May 2012, 29% of our sales were distressed.  In May 2013 40% of distressed properties were REOs (39 total sales ) and 60% were short sales (58 total sales).

This is fourteen months with short sales being the larger percentage of distressed properties sold.  Before the bubble and “the dark days” that came after we didn’t routinely include this data point in our analysis…in the 2001-2003 period we did average about 10-12% of total sales were either short sales or REOs.

Pending sales at the end of May were 1,423; down very slightly from April. In general pending sales in May are the highest of the year; and June the second highest.  Pending sales at the end of April were the highest in four years! The percentage of pending sales in distress did not change from the end of April, totaling 14% overall.

Of Pending sales in distress, short sales outnumbered REO’s 1.6 to 1.

At the end of May, we had 13% more sales pending than at the end of May 2012.

May median home price was $195,000; up 8% from May 2012. Median home price is above $190,000 for the first time in five years!  We continue to outpace our national recovery; according to NAR’s most recent report; national median price is $192,800.

New Homes median price for May was $272,425; up 18% from May 2012. For Existing homes the increase is 9%.  I know of at least one builder who recently increased base price because of soaring materials costs.

The number of houses available at the end of May increased 1% from April 2013 to 1,893.  This is 8% less than last year at this time. Since January we have increased the number of single family homes for sale by 123%.  This is what is allowing us to sustain our YTD sales increase.

The overall increase in active listings continues to be driven by the addition of existing homes to the market; increasing 5%. The number of New Homes available has decreased a little from April.  With Existing Home’s median price up 21% YTD it’s clear that more owners are getting their relationship with their mortgage “right side up” and electing to list their homes for sale.

At the same time, the percentage of distressed active listings decreased 3% to 14% overall. Last month we predicted that this indicator would be “under 20%…by the end of April”.  It’s sure fun being right about good numbers…

With an inventory increasing and the percentage of distressed inventory decreasing; median home price will continue to strengthen well into 2013.

Of our Distressed Inventory 82% is Short Sales (214 homes) and 18% is REO (47 homes).

Available inventory increased (a little bit) at most price points. Everything from $200,000 to $500,000 increased in May. The price range adding the most homes to the market…$300,000 to $400,000 with an increase of 20 homes.

In Ada County we now have 2.5 months of inventory on hand.

The price category in shortest supply is <$120,999 where we have 1 month. All price points up to $500,000 have a <4 month’s supply.

Based on May sold data, our most desirable price point is $120,000 to $160,000 which was 22% of total sales. The next largest price point sold is $160,000 to $200,000 at 20% of all sales. Coming in a strong third are the three price points between $200,000 – $400,000 which were 12% each. The category most improved is $300,000 – $400,000 which was up 33% from April to May.


The Price of Ignoring Home Repairs

Monday, June 3, 2013

When to Buy a House? RIGHT NOW!

traffic lightsAfter witnessing the housing bubble ‘pop’ just a few years ago, many would be buyers may be hesitant to pull the trigger. Today, we want to explain that the greatest risk a buyer can take right now is actually waiting to buy a home.

We realize that every purchaser wants to be able to get the best deal. They want a great price and the lowest mortgage interest rate possible because those to items together will determine the monthly cost their family will pay. Let’s look at each one:

Are home prices rising?

Just last week, the Case Shiller Pricing Index was released. The index revealed that U.S. home prices increased by 10.2% over the last twelve months. Last month, the Home Price Expectation Survey was released predicting that home values would increase by at least an additional 3.5% for each of the next five years.

If you were waiting for the absolute bottom of the home price declines, you already missed it.

Are interest rates rising?

According to Freddie Mac’s Weekly Primary Mortgage Market Survey, the 30 year mortgage rate shot up to 3.81% last week – the highest level in over a year. This is an increase of a half of a percentage point in the last six months. And the Mortgage Bankers AssociationFannie Mae and the National Association of Realtors all predict that rates will continue rise over the next eighteen months.


If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.