Welcome to the "Z" Team!

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 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)

This ‘Mega Force’ is becoming a growing force in the housing market, with this demographic’s purchasing power more than doubling over the past decade, according to a new report by the National Association of Hispanic Real Estate Professionals called “The State of Hispanic Home Ownership 2011.”

Reconizing the purchasing power of Latinos grew to $1.1 trillion in 2011 and is projected to reach $1.6 trillion by 2016, according to NAHREP. We assist in helping Hispanic Clients!  Hablamos Espanol, www.dougandbudzeller.com or zeller123@gmail.com

Rapid population growth (the Hispanic population more than tripled between 1980 and 2010), the population’s relatively young age, dramatic employment growth, and growing incomes are all triggering a higher rate of Hispanic home buyers, according to NAHREP. Fifty-three percent of the total U.S. population’s 545,000 new owner-occupants in the third quarter of 2011 were Hispanic home owners, according to Census Bureau data.

What’s more, about two-thirds of Hispanic renters have said they plan to purchase a home, according to a 2011 Fannie Mae survey.

“Despite recent losses suffered by Hispanics during the housing crisis, young Latino families that were unaffected by foreclosure or lost home values are ready to enter the market,” says NAHREP President Carmen Mercado. “When they do, they will have an exponential impact on housing sales.”

New household growth is projected to be greater for the Hispanic population than any other demographic, says David Stevens, president of the Mortgage Banker’s Association. “The need to recognize the most critical variables in housing type, price range, affordability, and mortgage product terms will be critical for all housing stakeholders — from lenders and [real estate professionals] to policy makers — in order to ensure that the home ownership needs of Hispanics and other Americans are met,” he says.

Source: National Association of Hispanic Real Estate Professionals 

Interesting that nearly half of home owners recently polled in an online survey said they would walk away from their mortgage if home prices continued to fall. The poll included 1,000 visitors to HousingPredictor, a real estate Web site.

While the poll is unscientific, we question whether home owners are starting to grow more acceptance of the strategic default idea? Strategic default is when home owners walk away from their mortgage obligations, despite being able to make their payments.

In a similar poll in March 2010, HousingPredictor found that 32 percent said they would strategic default if prices fell further — compared to 47 percent in the most recent poll.

But for home owners who walk away from their mortgage obligations, they often do so with later regrets. Experts caution that home owners take a big hit to their credit score — a 30-day late payment alone could bring your credit score down by 100 points, says Glamis Haro, a lending manager who was interviewed by AOL Real Estate. Defaulters may also have to wait up to seven years to even apply for a mortgage again.

Source:“Strategic Default: Would Half of Home Owners Walk Away?”  AOL Real Estate (March 9, 2012)

Information we’d like to share! Fifty-one percent of Americans in a recent poll say that if their financial situation were to improve, they’d buy a home. Coming in second on the list of wishes, they’d make repairs or improvements to the home they already have, according to the poll of more than 1,400 Americans conducted by the National Foundation for Credit Counseling Web site, www.DebtAdvice.org 

Meanwhile, 17 percent of Americans polled said they’d upgrade their car and 9 percent said they’d take a vacation. Please comment on what would be your decision?  

“Home ownership has traditionally been a part of sound financial planning,” says Gail Cunningham, spokesperson for the NFCC, a nonprofit credit counseling organization. “With a combined total of 74 percent of respondents selecting a home-oriented option, the poll results strongly suggests that people continue to place value in owning a home, and are anxious to buy a house or improve their existing one.”

Based on data from Melissa Dittmann Tracey for REALTOR Magazine Daily News