Thinking About Upsizing Your Home?
Thinking About Up-sizing Your Home? Was your current home intended to be a starter home? Is your neighborhood changing or has your job relocated? There are plenty of reasons why your current home may not be fulfilling your growing family’s needs, and maybe you’re questioning whether or not you should move into a more spacious or desirable home. If you’re hesitant to consider a home purchase during this time you might want to explore a few ideas before making a final decision. The first step in the process is to think about interest rates, which are currently at historic lows. The most efficient way to get the best information is to contact a Guaranteed Rate mortgage lender who will help you figure out which rates and loans are most appropriate for you. The rates will fluctuate according to which loan you apply for. Remember to be honest with yourself about your income and budget as a larger or more desirable house will likely come with a larger mortgage payment. One way to lessen, or all together avoid a larger mortgage payment is to evaluate the equity you have built in your current home. If it is substantial enough and you’re expecting to receive your asking price, then you can place the profits of your sale into your new mortgage payment. Contact Guaranteed Rate to find out about your local market conditions and which rates are available to you today.
Luxury Sales Bounce Back
Bidding wars for a $2 million house? In some markets, sales of high-end homes return to levels not seen since the boom
By JULIET CHUNG and JAMES R. HAGERTY -
WS Journal May 28, 2010 For years, Jennifer Metz and her husband John yearned for a bigger home in San Francisco. Three months ago, the couple started looking, figuring that in this shaky economy, their $3 million budget should provide them a pick of attractive homes and accommodating sellers. They were wrong. Hours after seeing a 5,000-square-foot fixer-upper in Presidio Heights with an asking price around $2.7 million, the Metzes put in a bid—and lost. Soon after, they made another offer on a four-bedroom in Russian Hill. Their bid was rejected. Last week, the Metzes rushed over to a large, dilapidated home in Pacific Heights that needed a lot of work but was asking the (relatively) low price of $2.25 million. The Metzes put in their over-ask bid the next day, but lost that one too: There were nine offers; the winning bid was $2.56 million.
“It’s frustrating,” says Ms. Metz, a 44-year-old stay-at-home mom whose husband works in finance. “You think you put in a good offer but, no.”
After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer confidence, improved financing conditions and more-realistic seller pricing. Despite the housing downturn, attractively priced homes in some of the nation’s most coveted neighborhoods are selling, sometimes fast and sometimes with multiple offers. Nationwide, sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32% from a year before, says CoreLogic. That sales are up from last year shouldn’t come as a big surprise. The shock of the financial panic in the fall of 2008 left many potential buyers too nervous to bid, and those who were willing to wade in found it hard to get financing. But a study for The Wall Street Journal by MDA DataQuick, a real-estate data provider, found that in some areas of the country, sales of homes over $2 million in the first quarter were actually on par with the levels of 2005, the peak year for existing-home sales volume nationwide. In San Francisco, 49 homes sold for $2 million or more in this year’s first quarter, according to the study, compared to 47 in 2005. In Manhattan, there were 402 sales of $2 million or more in the latest quarter, compared with 311 in the first quarter of 2005, according to the appraisal firm Miller Samuel Inc. Other areas with strong rebounds included New York’s Hamptons, Menlo Park, Calif., and Beverly Hills. Even a couple of troubled housing markets experienced a strong uptick. In Las Vegas, there were 21 such sales in the first quarter, up from 15 in the first quarter of 2005, according to DataQuick. In Miami, 21 such sales of $2 million or more were recorded in the first quarter, up from 15 last year and close to the 23 that sold in that time five years earlier. Of course, many markets including Greenwich, Conn. and parts of New Jersey are still ailing. Brokers say pricey homes in outlying suburbs are more likely to sit than sell. Miami-Dade County still has enough homes priced at $2 million or more to last 41 months at the current sales pace, though down from 116 months a year earlier, says Ron Shuffield, president of EWM Realtors, a large local brokerage. The recent stock market tumble could unravel the turnaround. Unlike the rest of the housing market, which is driven largely by employment trends, housing analysts say high-end buyers are much more sensitive to changes in the stock market, which for the first quarter was helping them feel even wealthier. “If the markets don’t recover soon, it will scare people” and hurt demand for high-end homes, says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. In the meantime, some high-end renovators are making quick sales. Koby Kempel bought a colonial in Brookline, a posh suburb of Boston, last year for $1.45 million. He raised the ceilings, rebuilt the interior, expanded the home by about 50% and added a heated garage. The six-bedroom home was listed by Mona Wiener of Hammond Residential on a Friday in early May and was under contract the next day for the asking price of nearly $3.5 million. Back in San Francisco’s Pacific Heights neighborhood, a four-bedroom home on Broadway, with a spa and views of the Golden Gate Bridge, was renovated by Gregory Malin. It went on the market in late January and sold two weeks later for $13.5 million, compared with the $14 million asking price. The listing agent, Val Steele of Sotheby’s International Realty, says the sale, at $2,146 per square foot, marked the first time a home in San Francisco topped $2,000 a square foot since early September 2008. Luxury Sales Bounce Back Bidding wars for a $2 million house? In some markets, sales of high-end homes return to levels not seen since the boom By JULIET CHUNG and JAMES R. HAGERTY - WS Journal May 28, 2010 For years, Jennifer Metz and her husband John yearned for a bigger home in San Francisco. Three months ago, the couple started looking, figuring that in this shaky economy, their $3 million budget should provide them a pick of attractive homes and accommodating sellers. They were wrong. Hours after seeing a 5,000-square-foot fixer-upper in Presidio Heights with an asking price around $2.7 million, the Metzes put in a bid—and lost. Soon after, they made another offer on a four-bedroom in Russian Hill. Their bid was rejected. Last week, the Metzes rushed over to a large, dilapidated home in Pacific Heights that needed a lot of work but was asking the (relatively) low price of $2.25 million. The Metzes put in their over-ask bid the next day, but lost that one too: There were nine offers; the winning bid was $2.56 million. “It’s frustrating,” says Ms. Metz, a 44-year-old stay-at-home mom whose husband works in finance. “You think you put in a good offer but, no.” After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer confidence, improved financing conditions and more-realistic seller pricing. Despite the housing downturn, attractively priced homes in some of the nation’s most coveted neighborhoods are selling, sometimes fast and sometimes with multiple offers. Nationwide, sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32% from a year before, says CoreLogic. That sales are up from last year shouldn’t come as a big surprise. The shock of the financial panic in the fall of 2008 left many potential buyers too nervous to bid, and those who were willing to wade in found it hard to get financing. But a study for The Wall Street Journal by MDA DataQuick, a real-estate data provider, found that in some areas of the country, sales of homes over $2 million in the first quarter were actually on par with the levels of 2005, the peak year for existing-home sales volume nationwide. In San Francisco, 49 homes sold for $2 million or more in this year’s first quarter, according to the study, compared to 47 in 2005. In Manhattan, there were 402 sales of $2 million or more in the latest quarter, compared with 311 in the first quarter of 2005, according to the appraisal firm Miller Samuel Inc. Other areas with strong rebounds included New York’s Hamptons, Menlo Park, Calif., and Beverly Hills. Even a couple of troubled housing markets experienced a strong uptick. In Las Vegas, there were 21 such sales in the first quarter, up from 15 in the first quarter of 2005, according to DataQuick. In Miami, 21 such sales of $2 million or more were recorded in the first quarter, up from 15 last year and close to the 23 that sold in that time five years earlier. Of course, many markets including Greenwich, Conn. and parts of New Jersey are still ailing. Brokers say pricey homes in outlying suburbs are more likely to sit than sell. Miami-Dade County still has enough homes priced at $2 million or more to last 41 months at the current sales pace, though down from 116 months a year earlier, says Ron Shuffield, president of EWM Realtors, a large local brokerage. The recent stock market tumble could unravel the turnaround. Unlike the rest of the housing market, which is driven largely by employment trends, housing analysts say high-end buyers are much more sensitive to changes in the stock market, which for the first quarter was helping them feel even wealthier. “If the markets don’t recover soon, it will scare people” and hurt demand for high-end homes, says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. In the meantime, some high-end renovators are making quick sales. Koby Kempel bought a colonial in Brookline, a posh suburb of Boston, last year for $1.45 million. He raised the ceilings, rebuilt the interior, expanded the home by about 50% and added a heated garage. The six-bedroom home was listed by Mona Wiener of Hammond Residential on a Friday in early May and was under contract the next day for the asking price of nearly $3.5 million. Back in San Francisco’s Pacific Heights neighborhood, a four-bedroom home on Broadway, with a spa and views of the Golden Gate Bridge, was renovated by Gregory Malin. It went on the market in late January and sold two weeks later for $13.5 million, compared with the $14 million asking price. The listing agent, Val Steele of Sotheby’s International Realty, says the sale, at $2,146 per square foot, marked the first time a home in San Francisco topped $2,000 a square foot since early September 2008.
Rates Are Fantastic
Check out this rate comparison of the top lenders in the country. https://www.guaranteedrate.com/samashton
Mortgage delinquencies hit 10%
By Les Christie, staff writerMay 20, 2010: 1:22 PM ET
NEW YORK (CNNMoney.com) — A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.
The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.
The rate has been inching steadily toward this record, having ticked up almost a full point since a year go.
The report contained a sliver of good news, however. The non-seasonally adjusted delinquency rate dropped almost one point to 9.38% between the fourth quarter 2009 and first quarter 2010.
So while the seasonally adjusted number saw growth during that period, the non-seasonally adjusted number followed the traditional pattern. Rates usually peak in the fourth quarter, as holiday spending and heating bills kick in causing people to put off paying their loan. But then, when they get caught up in the first quarter, delinquencies fall again.
“The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement,” said Jay Brinkmann, MBA’s chief economist. “The normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which.”
The foreclosure inventory rate, which represents the percentage of mortgaged homes repossessed by lenders, was fairly flat quarter-over-quarter, inching up to 4.63% from 4.58%. But it jumped a lot from 12 months earlier, when the rate stood at 3.85%.
Nearly all varieties of loans suffered increased delinquencies compared with 12 months earlier. Prime fixed-rate loans hit 6.17%; prime adjustable-rate mortgages (ARMs) tipped 13.52%. Subprime fixed-rates jumped to 25.69%; and subprime ARMs are a whopping 29.09%.
The one bright spot was that delinquencies for FHA loans, the mortgages guaranteed by the Federal Housing Authority, dropped slightly to 13.15%.
The improvement is likely due to tighter FHA underwriting standards, which it adjusted after loans issued in 2007 and 2008 started souring. That should be a relief for taxpayers, who will be on the hook for any losses the FHA suffers.
Most of the overall rate increases are attributable to the seriously delinquent loans, Brinkmann said. Those loans, which are 90 days or more late, are going all the way through to foreclosure, but are not being foreclosed, keeping people in the system longer.
In the pre-housing-bust world, many borrowers would have already lost their homes and their delinquencies would no longer be counted in the survey.
Lenders have slowed repossessions for various reasons: They may not have enough staff yet to handle the volume; the foreclosure prevention initiatives, such as the Home Affordable Modification Program, is postponing many foreclosures; and the banks themselves are trying to prevent defaults by approving more short sales.
There has been a fundamental change in the nature of the loans causing the most default problems, according to Brinkmann. And, he added, unemployment is the culprit. “Delinquencies are much more driven by the recession than by any one loan type now,” he said.
Subprime ARMs accounted for nearly 30% of all delinquencies a year ago, but just under 15% now. Meanwhile, prime fixed-rate loans delinquencies have grown so much that they represent the single biggest bucket of delinquent mortgages: 37% up from 29% a year ago.
Some of the prime loan defaults stem from an increase in people deliberately “walking away” from mortgages. These are homeowners who can pay their loans but choose not to because their homes have dropped so much in value.
According to a recent report, as much as 31% of all defaults in March were strategic.
Brinkmann opined that many of these “strategic defaulters” may be underestimating the impact of walking away. It may take them much longer to repair their credit histories than they realize as lenders assess more than their credit ratings to determine whether to finance future home purchases.
Underwriting involves more than just checking credit scores, and if a lender sees a strategic default on their records, homebuyers may not qualify for loans.
“They may be able to repair their credit scores,” he said, “but their ability to buy a home in the future may be negatively impacted for years to come.” 
Loan Mods Just Got Harder
New Treasury Department guidelines will go into effect June 1; these guidelines will require loan servicers to verify applicant’s income and financial situation before placing them into trial modification.
This will make it more difficult to get a relief from unaffordable mortgage payments, but if people make it into trial modification they are more likely to get long term assistance.
But all this paperwork has caused all sorts of problems for The President’s foreclosure rescue program, originally it was intended to last three months, the trial period allow troubled homeowners a chance to prove that they can really make the modified payments and qualify for a so called permanent modification.
But many homeowners have been stuck into these trial modifications for many months while they fight with officials over the documentation requirements, but financial institutions say that they are not sending the forms correctly, but the homeowners claim the servicers are losing the paper work.
Paul Koches, executive vice president at Ocwen, said many loans didn’t require much documentation when they were originated, which makes gathering the paperwork during modification process more difficult. “It puts us in a better position to determine the specific terms and conditions of the modified loans that will make it more likely that they will stick.”
Eunice Mejia
Daily Rate Comparison For 5/28
Energy Efficient Tax Credits
One of the most best kept secrets in my market and just at the same time is one of the programs that makes the most sense is the energy efficient FHA financing. This program allows for you to financing into the mortgage loan up to $8000.00 in energy efficient improvements without the property having to appraise or the seller having to agree with anything as it is not a condition on the purchase contract.
Here is an example:
You buy a home from the 1050′s. They didn’t care about energy efficiency back then
The home has an old furnace that is 60% efficient.
The window have old window frames and are single pane.
Now with the energy efficient financing you can finance into the purchase up and above the sales price of the home a new energy-efficient furnace that is 90% efficient and new UV reflective double pane windows. This might give you monthly savings of $50.00(an estimate as every house is different). That is on top of your already awesome rates you get with Guaranteed Rate.
This program also is great if your furnace or air-conditioner is out or needs to be upgraded. We can refinance your home replace the appliance that needs to be replace with a top-notch system and in most cases save you money on your monthly payment. We work with Heating and Air Conditioning contractors statewide.
If you are a Realtor, you should be advertising this on all your homes that qualify. Call me to discuss some joint marketing ideas. You know and I know that water heaters and furnaces can be big deal killers. Now they never should be. Call me at 800-476-4194 or email me at sam.ashton@guaranteedrate.com
A Low Mortgage Rate Isn’t Complicated
Our Growth: Provide A Low Rate Mortgage
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Compare Our Low Mortgage Rates and Fees To Our Competitors
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The Federal Reserve recommends comparing several lenders when looking for lowest cost mortgage rates and fees. The FDIC agrees comparison shopping is necessary when getting the best mortgage rate. As the mortgage company with the best rates and best fees, we have the confidence to publicly display our mortgage rates compared to our competitors daily. When you ask yourself, “Where can I get the lowest mortgage rate?” ask yourself where the lender that guarantees the lowest rates and fees is. There’s only one in the entire country.
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In an independent study of over 16,000 Realtors by Chicago Agent Magazine, Guaranteed Rate was voted the best mortgage lender. We’ve developed partnerships with more than 1,100 of the best real estate agents in the area by consistently delivering the lowest rates with best-in-class service to their clients.
Realtors trust Guaranteed Rate offers the lowest mortgage rates because we provide:
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Market Update 03/16 Happy St. Patricks Day
Top of the mornin’ to ya Lads and Lassies! For better or worse, Fed policy, as dictated in yesterday’s meeting, will keep the bond market stuck in a range. Given the supply/demand issues with quantitative easing, our mortgage pricing we have seen over the past month could continue for weeks. On one hand we have the Fed stopping its purchase of mortgage backs at the end of the month. They have been buying 10 billion a week. On the other side, the market has built up a sizable short position in MBS from both the portfolio side and the Fannie/Freddie buy back that will last until August. As we mentioned yesterday, all the Fed can do is manage their way to the end game, looking for the private sector to pick up steam so we can get back to “normal”. Earlier today, PPI, inflation at the wholesale level, fell .6% headline while the core index (ex-food and energy) rose .1%. This is the largest decline in seven months. Energy prices were the heavy hitter, falling 2.9% with gasoline prices down 7.4%. Inflation by any standard is a non-issue given this data. Fed Chief Ben Bernanke will be on the hill today, testifying before the House Financial Services Committee. Never know what the gentle one will say. Currently, everyone is wearing green as the 10 year note is up 2/32’s (3.64% yield), MBS up 1/32nd, and stocks up 30 something on the big board. Technically, the 10 year note retested the peak set on February 5th, pulled back a little, but still trades in the upper end of the range. The trade doesn’t seem to have a lot of momentum, telling us that this is more about short covering (traders who bought the market now selling) than it is about new buyers coming into the market. Stocks are at a crossroads as well, grinding higher in what looks like a gravity defying move. “If” the health care bill comes to a vote this week and passes, stocks could very well change their tune. Bottom line here is that most markets are neutral, waiting for something to fuel a trend change.
FOMC Update
Press Release
Release Date: March 16, 2010
For immediate release
Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.
Sam Ashton
