MARKET UPDATE
FEBRUARY 2011
HOME SALES ON THE RISE AGAIN
The housing market continues to show signs of recovery. For the fifth consecutive month, existing home sales are up.
“Previously-owned home sales climbed 12.3% in December…” – cnnMoney.com
As employment continues to strengthen, so will the housing market. Home sales should rise gradually through 2011 but “shadow inventory” (foreclosed homes owned by the banks that are not yet on the market) will put pressure on home prices.
SBA OFFICE OF ADVOCACY VS THE FED RULE
The Federal Reserve Board’s final rule on loan officer compensation is set to take effect April 1st, 2011. On January 13th, 2010, the Small Business Administration Office of Advocacy has requested that the FED delay the implementation of the final rule.
Advocacy is concerned that the Board may not have published a compliance guide as required by the Small Business Regulatory Enforcement Fairness Act (SBREFA)(2). Advocacy recommends that the Board publish a compliance guide in the immediate future and extend the time for small entities to comply to reflect the delay in the availability of the guide…
To date, the FED has not issued any guidance on the implementation of the FED rule with regards to loan officer compensation.
As stated in the preamble to the final rule, this rulemaking requires small entities to “alter certain business practices, develop new business models, re-train staff, and reprogram operational systems to ensure compliance with the final rule.”(5) Without proper guidance, a small entity could develop new business models, reprogram equipment and re-train staff only to learn that the steps taken do not comply with the new regulations. In such a situation, the small entity would incur additional costs that could be avoided if they have the compliance guide…
Without clear guidance from the FED, the final rule may in fact be a violation of the law. Regardless, with a little over two months before the final rule goes into effect, both large mortgage banks and smaller local mortgage brokers are still uncertain how to compensate loan officers and how to disclose to the consumer, loan officer compensation.
The FED final rule goes into effect just 15 months after HUD already reformed loan officer compensation with RESPA 2010. Can we just leave it alone?
FHA TO SUSPEND ANTI-FLIPPING RULE
“The Federal Housing Administration will suspend its anti-flipping rule for a second year in 2011, a spokesman confirmed to HousingWire Friday.” – housingwire.com
This is great news for investors and homebuyers alike. The suspended FHA anti-flipping rule will allow investors to buy and immediately sell (flip) the property to a buyer using FHA financing.
If the property is being resold for more than 20% over the initial purchase price by the seller, two appraisals will likely be mandated by the lender. The second appraisal cannot be paid for by the buyer. Most lenders will not allow property flipping if the sales price has been inflated by more than 20% over the price the seller paid; regardless of improvements.
FINANCIAL REFORM TO BE REFORMED
President Obama has come under fire from businesses over financial reform. In an attempt to improve the President’s relationship with Wall Street, some financial regulations may get an overhaul.
“The president, in an op-ed piece in the Wall Street Journal, wrote that his order will prompt "a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive." "It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades," Obama wrote.” – cnnMoney.com
FORECLOSURES SET RECORD IN 2010
Nearly 3 million foreclosure notices were filed in 2010. That resulted in over 1 million foreclosures, marking a record high for 2010.
“For the fourth consecutive year, Nevada led the nation in the rate of foreclosures with one of every 11 households there receiving at least one filing in 2010. Still, that constituted a 5.3% improvement from a year earlier. In Arizona, one of every 17 households received a filing in 2010, down 4.5% for the year. Florida's 2010 foreclosures (one in 18 households) dropped 6.1% year-over-year, and California (one in 25) fell 8.5%.” – cnnMoney.com
U.S. DEBT – FOREIGN INVESTORS JUST CAN’T GET ENOUGH OF IT
“Foreign investors bought $93.9 billion in long-term Treasuries in November, increasing their net holdings after purchasing $56 billion the month before, the Treasury Department said Tuesday.” – cnnMoney.com
China remains the largest holder of U.S. debt, owning nearly $900 billion in U.S. Treasuries. Japan sits shotgun with $877 billion in U.S. debt.
RATE WATCH
Mortgage Type Interest Rate APR
30 Year Fixed 4.500% 4.548%
15 Year Fixed 3.750% 3.832%
5/1 ARM 2.625% 2.935%
Interest rates as of 01/24/10. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to values not to exceed 80%. 720+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.
Conventional Refinance: If you have a conventional mortgage (must be owned or guaranteed by Fannie Mae or Freddie Mac) without mortgage insurance, you may be able to refinance up to 125% of the home’s value. Owe more than 125%? With enough compensating factors (i.e. credit, assets, etc.), you may be able to get an appraisal waiver and slip into the 125% range you need to be in. Rates are slightly higher than a standard conventional loan, but with good credit, they are still quite low.
FHA Streamline Refinance: FHA streamlines do not require an appraisal. It does not matter how much you owe verses the value of the home. Anyone with a 5% interest rate or more should look into a streamline refinance. A streamline refinance allows the homeowner to lower their rate with little or no closing costs, and no appraisal. It will not solve your value issues, but it will lower your payment. Streamline refinances are applicable for owner occupied and non-owner occupied properties.
THE SOCIETY FOR FINANCIAL AWARNESS
Geneva Financial, LLC has recently joined of The Society for Financial Awareness (SOFA), which is a 501c3 non-profit, educational speaker’s bureau. In our ongoing commitment to help inform and educate people on homeownership, through our newly formed association with SOFA, we will be giving free workshops to companies and organizations whose employees and members can most benefit.
“SOFA is a non-profit corporation, comprised of various financial professionals (CPA’s, Estate Planning Attorneys, Financial Advisors, Insurance Professionals, Realtors, Health and Wellness Experts, Mortgage Brokers, and other specialized persons) who provide financial and health education to various companies, family businesses and organizations.” - www.sofausa.org
The educational workshops are free to companies and organizations that wish to participate. Please contact me if your company or organization would like to find out more about The Society for Financial Awareness.
MARKET UPDATE brought to you by:
Chris Tiller, Realtor
Phone: 602-561-1346
Fax: 602-595-5450
Email: tiller34@hotmail.com
via: Geneva Real Estate and Investments
FEBRUARY 2011
HOME SALES ON THE RISE AGAIN
The housing market continues to show signs of recovery. For the fifth consecutive month, existing home sales are up.
“Previously-owned home sales climbed 12.3% in December…” – cnnMoney.com
As employment continues to strengthen, so will the housing market. Home sales should rise gradually through 2011 but “shadow inventory” (foreclosed homes owned by the banks that are not yet on the market) will put pressure on home prices.
SBA OFFICE OF ADVOCACY VS THE FED RULE
The Federal Reserve Board’s final rule on loan officer compensation is set to take effect April 1st, 2011. On January 13th, 2010, the Small Business Administration Office of Advocacy has requested that the FED delay the implementation of the final rule.
Advocacy is concerned that the Board may not have published a compliance guide as required by the Small Business Regulatory Enforcement Fairness Act (SBREFA)(2). Advocacy recommends that the Board publish a compliance guide in the immediate future and extend the time for small entities to comply to reflect the delay in the availability of the guide…
To date, the FED has not issued any guidance on the implementation of the FED rule with regards to loan officer compensation.
As stated in the preamble to the final rule, this rulemaking requires small entities to “alter certain business practices, develop new business models, re-train staff, and reprogram operational systems to ensure compliance with the final rule.”(5) Without proper guidance, a small entity could develop new business models, reprogram equipment and re-train staff only to learn that the steps taken do not comply with the new regulations. In such a situation, the small entity would incur additional costs that could be avoided if they have the compliance guide…
Without clear guidance from the FED, the final rule may in fact be a violation of the law. Regardless, with a little over two months before the final rule goes into effect, both large mortgage banks and smaller local mortgage brokers are still uncertain how to compensate loan officers and how to disclose to the consumer, loan officer compensation.
The FED final rule goes into effect just 15 months after HUD already reformed loan officer compensation with RESPA 2010. Can we just leave it alone?
FHA TO SUSPEND ANTI-FLIPPING RULE
“The Federal Housing Administration will suspend its anti-flipping rule for a second year in 2011, a spokesman confirmed to HousingWire Friday.” – housingwire.com
This is great news for investors and homebuyers alike. The suspended FHA anti-flipping rule will allow investors to buy and immediately sell (flip) the property to a buyer using FHA financing.
If the property is being resold for more than 20% over the initial purchase price by the seller, two appraisals will likely be mandated by the lender. The second appraisal cannot be paid for by the buyer. Most lenders will not allow property flipping if the sales price has been inflated by more than 20% over the price the seller paid; regardless of improvements.
FINANCIAL REFORM TO BE REFORMED
President Obama has come under fire from businesses over financial reform. In an attempt to improve the President’s relationship with Wall Street, some financial regulations may get an overhaul.
“The president, in an op-ed piece in the Wall Street Journal, wrote that his order will prompt "a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive." "It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades," Obama wrote.” – cnnMoney.com
FORECLOSURES SET RECORD IN 2010
Nearly 3 million foreclosure notices were filed in 2010. That resulted in over 1 million foreclosures, marking a record high for 2010.
“For the fourth consecutive year, Nevada led the nation in the rate of foreclosures with one of every 11 households there receiving at least one filing in 2010. Still, that constituted a 5.3% improvement from a year earlier. In Arizona, one of every 17 households received a filing in 2010, down 4.5% for the year. Florida's 2010 foreclosures (one in 18 households) dropped 6.1% year-over-year, and California (one in 25) fell 8.5%.” – cnnMoney.com
U.S. DEBT – FOREIGN INVESTORS JUST CAN’T GET ENOUGH OF IT
“Foreign investors bought $93.9 billion in long-term Treasuries in November, increasing their net holdings after purchasing $56 billion the month before, the Treasury Department said Tuesday.” – cnnMoney.com
China remains the largest holder of U.S. debt, owning nearly $900 billion in U.S. Treasuries. Japan sits shotgun with $877 billion in U.S. debt.
RATE WATCH
Mortgage Type Interest Rate APR
30 Year Fixed 4.500% 4.548%
15 Year Fixed 3.750% 3.832%
5/1 ARM 2.625% 2.935%
Interest rates as of 01/24/10. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to values not to exceed 80%. 720+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.
Conventional Refinance: If you have a conventional mortgage (must be owned or guaranteed by Fannie Mae or Freddie Mac) without mortgage insurance, you may be able to refinance up to 125% of the home’s value. Owe more than 125%? With enough compensating factors (i.e. credit, assets, etc.), you may be able to get an appraisal waiver and slip into the 125% range you need to be in. Rates are slightly higher than a standard conventional loan, but with good credit, they are still quite low.
FHA Streamline Refinance: FHA streamlines do not require an appraisal. It does not matter how much you owe verses the value of the home. Anyone with a 5% interest rate or more should look into a streamline refinance. A streamline refinance allows the homeowner to lower their rate with little or no closing costs, and no appraisal. It will not solve your value issues, but it will lower your payment. Streamline refinances are applicable for owner occupied and non-owner occupied properties.
THE SOCIETY FOR FINANCIAL AWARNESS
Geneva Financial, LLC has recently joined of The Society for Financial Awareness (SOFA), which is a 501c3 non-profit, educational speaker’s bureau. In our ongoing commitment to help inform and educate people on homeownership, through our newly formed association with SOFA, we will be giving free workshops to companies and organizations whose employees and members can most benefit.
“SOFA is a non-profit corporation, comprised of various financial professionals (CPA’s, Estate Planning Attorneys, Financial Advisors, Insurance Professionals, Realtors, Health and Wellness Experts, Mortgage Brokers, and other specialized persons) who provide financial and health education to various companies, family businesses and organizations.” - www.sofausa.org
The educational workshops are free to companies and organizations that wish to participate. Please contact me if your company or organization would like to find out more about The Society for Financial Awareness.
MARKET UPDATE brought to you by:
Chris Tiller, Realtor
Phone: 602-561-1346
Fax: 602-595-5450
Email: tiller34@hotmail.com
via: Geneva Real Estate and Investments
I truly appreciate the informative information you have provided..After reading this blog I feel that I may have a firm grasp and understanding of today's Arizona real estate market..Thank you
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