Welcome to the "Z" Team!

Waiting a few years to sell? Make a few changes for your desires?  Many home owners are opting to tackle improvement projects around the house, according to a new survey of 1,500 adults by American Express Spending and Saving Tracker.

Seventy percent of home owners surveyed say they intend to take on a home improvement project this year, and they plan to spend about $3,500 on sprucing up their home, according to the survey. That’s an increase of about $100 compared to last year.

The projects will primarily concentrate on the indoors, according to the survey. More than one-third of those polled say they are devoting some of that budget to home accessories, such as throw pillows, or on appliances and new furniture.

The top home project they have lined up? Painting, which 37 percent of those surveyed say they plan to do this year. Twenty-four percent said they will do landscaping projects. These could be improvements or upgrades to increase value for a future sale?

Also, more home owners this year compared to last year say they’re going the do-it-yourself route, with plans to refurbish their houses themselves rather than hiring a professional to do it. In the survey, 43 percent of owners say they’ve been inspired to tackle home projects themselves by watching design shows on television, followed by seeing in-store displays or from viewing online design and do-it-yourself Web sites.

Source: “Home Decision 2012: Improving or Moving?” American Express (3/12)

Interesting update news to share!  An improving economy is contributing to a gradual rebound in home prices across the country, according to mortgage giant Freddie Mac’s 2012 Economic Outlook report, released Wednesday. But there is still a way to go in the road to recovery for the housing market, the report noted.

“The housing market is showing some signs of shaking off the depression-like conditions that have plagued it for much of the past few years,” according to the report. “As if awakening from hibernation, housing starts and home sales moved to higher levels of activity.”

In fact, the signs have prompted Freddie Mac to revise its forecast upwards for home sales and originations. One economic contributor that’s helping to stabilize housing: The drop in the unemployment rate to 8.3 percent, its lowest level in three years, according to the report.

“A variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery … and more neighborhoods may see a stabilization in overall demand and housing values this spring,” says Frank Nothaft, Freddie Mac’s chief economist. Please proide your thoughts or comments!?!

Source: “Freddie Mac: Economic Growth Expected to Stabilize Housing Market” Dow Jones Newswires (March 28, 2012)

Two-thirds of renters — across educational and demographic levels — say they want to purchase a home in the future, according to a quarterly national housing survey of 3,000 Americans conducted by Fannie Mae. But they’re spooked about the mortgage process.

“In spite of the impact of the housing crisis on home values and home ownership rates across the country, Americans by and large still hope to become home owners,” says Doug Duncan, Fannie Mae’s chief economist. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

Realtors ease the homebuying process of qualifying and navigating the mortgage process. Coordinating and informing buyers about financing their home is the key!   

“If potential home owners avoid the process because they believe it to be too complex, we will likely see a continued impact on home ownership rates,” Duncan says.

Source: “Fannie Mae Finds Americans Remain Committed to Homeownership,” HousingWire (3/27/12)

Fannie Mae and Freddie Mac reportedly are in talks with their regulator to allow principal write-downs in order to minimize losses and prevent foreclosures. Both firms seem to have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases.

“Principal reduction works,” says Mark Zandi, chief economist of Moody’s Analytics. “If someone gets a reduction in their principal amount, it gives them a powerful hook to really fight to try to hang on to the home and not go into foreclosure.”

The Obama administration has increased incentives to lenders for write-downs, reimbursing half of what the lender writes off in some instances. Your comments?

More information at source: “ Fannie, Freddie Press for Mortgage Write-Downs,” WBUR.org (3/23/12)

Great real estate market news to share! Mortgage rates are staying low by historical standards, despite inching slightly higher this week following a positive job report and increasing bond yields, Freddie Mac reports in its weekly mortgage market survey.

“An upbeat employment report for February caused U.S. Treasury bond yields to increase over the week, and mortgage rates followed,” says Frank Nothaft, Freddie Mac’s chief economist. “Job growth over the last six months was the strongest since 2006.”

The following is a closer look at rates for the week ending March 15:

•30-year fixed-rate mortgages: averaged 3.92 percent, with an average 0.8 point, inching up from last week’s 3.88 percent average (which was only 0.01 percent above an all-time record low). A year ago at this time, 30-year rates averaged 4.76 percent.

•15-year fixed-rate mortgages: averaged 3.16 percent, with an average 0.8 point, climbing from last week’s record reaching 3.13 percent average. Last year at this time, 15-year rates averaged 3.97 percent.

•5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.8 point, also slightly up from last week’s 2.81 percent average. Last year, 5-year ARMs averaged 3.57 percent at this time of year.

Source: Freddie Mac

Great news to share with you! The U.S. Supreme Court handed private property owners a victory yesterday with a decision allowing a couple to appeal an EPA ruling that their property contains a wetlands. Please view and provide your comments.

The court’s decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.

The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA’s wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities? Noncompliance with the directive can subject violators to fines of up to $75,000 a day!

Lower courts have sided with the EPA, saying the agency’s compliance orders aren’t subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it’s appropriate to allow parties to contest agency decisions before having to first comply with the order.

NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.

In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.

The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn’t be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.

With the Supreme Court decision, the Sacketts can now get their day in court.

We appreciate this source from Robert Freedman, REALTOR® Magazine

Economists say the housing market is starting to heal, but many people aren’t aware of it because they’re judging a housing recovery on the wrong sign: What’s happening with home prices? Let’s consider some other points of interest!

Paul Dales at Capital Economics says higher prices won’t be the sign that the housing market is on the mend — that can be a lagging indicator — but rather an increase in overall home sales. And that’s showing signs of improvement: Existing home sales in 2011 rose to 4.26 million compared to 4.19 million in 2010. In the last six months alone, home sales have increased 13 percent.

Please provide your thoughts of this article form Fortune pointing out, “The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won’t happen for another few years.”

Source:  “The One Number to Watch for a Housing Recovery,”  Fortune (3/20/12)

Cash-strapped seniors are reaching into their home’s equity to find extra cash, according to a new report by the MetLife Market Institute and the National Council on Aging.

Reverse mortgage applications have increased 15 percent since 1999 among Americans age 62 to 64, according to the report.

“The average age for taking out reverse mortgages has been around 71,” says Sandy Timmerman, director of the MetLife Market Institute. “But with job losses, higher debt and living costs, more and more of the ‘younger’ seniors are looking at reverse mortgages as a way to pay their bills and keep their homes. It shows the devastation some seniors have gone through since the financial downturn.”

Reverse mortgages allow home owners to borrow against the value of their homes. In 2010, more than 80,000 Americans over the age of 62 took out a reverse mortgage–that’s compared to 25,000 in 1995.

“It’s not surprising that more seniors are doing this at an earlier age,” Karl Byrd, vice president at Security Ballew Wealth Management, told CNBC.com. “We live in a time when people are not planning for their retirement or can even get out of debt. Some seniors can’t even buy groceries right now.”

Reverse mortgages are not for everyone. We recommend careful family considerations be give after fully understanding the pros and cons. 

Source: “More Seniors Using Reverse Mortgages to Raise Cash,” CNBC.com (3/16/12)

Encouraging news to share! As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.

Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.

Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale.

Servicers are also required to form an internal group to review all short sale requests.

Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests. Violations can carry fines of up to $1 million and $5 million for repeat offenses.

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”

Source: “AG Settlement Starts the Clock on Short Sales,” HousingWire (March 14, 2012)

Four of the the country’s 19 largest banks do not have enough capital to withstand another economic downturn, if one occurs, according to the Federal Reserve’s latest stress test for banks.

Would you have guessed the four banks at risk named in the report are Citigroup, SunTrust, Ally Financial, and MetLife?

The hypothetical stress test, conducted annually by the Federal Reserve but not usually released publicly, analyzes if banks could weather the storm if the economy saw a 21 percent reduction in home prices, 13 percent unemployment, and a 50 percent drop in stock prices. The test aims to see which banks would be able to continue to lend money to individual and businesses even if such catastrophic losses occurred.

For any banks that fail the stress test, the Fed can force them to raise money, such as by selling additional stock or issuing debt.

For the banks that did pass, they are able to raise their dividends and take action in luring more investors to their stocks. This year’s results are “clearly good news — the U.S. banking system can now withstand a quite severe recession without falling over,” Douglas Elliott, a fellow at Brookings Institution, told the Associated Press. Among the banks that passed the stress test are U.S. Bancorp, JPMorgan Chase, and Wells Fargo.

Source: “Federal Reserve Annual Stress Test Fails 4 of 19 Big Banks,” The Associated Press (March 12, 2012)