April 30, 2017

Money Is Going Into Us

A report from the California Report. “‘Buy a Home, 1% Down, Free Recorded Message,’ reads a sign at the edge of a vacant lot in the scrappy working-class town of Bloomington near Riverside. It’s a tempting pitch. But it sounds a little suspicious to those who remember subprime lenders and the mortgage meltdown. I don’t leave a message. But somehow I get a call back anyway from a broker based in L.A. who says he’s authorized to sell these new 1 percent down home loans through United Wholesale Mortgage. It’s a licensed private lender in Michigan. When I tell him I’m just fishing for information and not looking for a new mortgage, he’s reluctant to say much more. So I pay a visit to the storefront mortgage company of veteran broker Theresa Tims in the leafy business district of Upland, about 30 minutes outside L.A.”

“‘I specialize in these low down loan type of programs and they fit our area perfectly,’ Tims tells me. Tims does a lot of business in the Riverside-San Bernardino area, the Inland Empire, where median home prices are still comparatively cheap: about $300,000 for a basic three- or even four-bedroom home. ‘Right now one of the only feasible programs is the 1 percent down with equity boost,’ says Tims.”

“She has been offering 1 percent down conventional loans since late last year, when they first became available through United Wholesale Mortgage and its Detroit-based rival Quicken Loans. Right around Christmas, Abraham Bustillos moved his wife and three kids into a 1,300-square-foot home in Riverside with one of these 1 percent down conventional loans. The balance on Bustillos’ loan is around $350,000 stretched over a 30-year fixed mortgage. ‘Yes, it is a little bit more than we were paying as renters,’ says Bustillos, a FedEx delivery driver. ‘But at the same time, now we’re not just throwing the money up in the air or paying the owner’s mortgage for him. You know, money is going into us.’”

From The Oklahoman. “People with student loan debt wanting to buy a house or refinance with a conventional mortgage got two legs up from Fannie Mae this week. It was enough for loan officer Scott Senner of Interlinc Mortgage LLC to advise me to ’stop the presses.’ ‘What that means from a practical standpoint is if you have a $50,000 student loan debt and your payments are only $100 per month, that’s the number we can use. Before, we would have to use at least $500 as the payment because that was 1 percent of the balance. This is a really, really big deal.’”

“Now, Senner said, ‘If someone else is actually making a payment for you, i.e., if a parent or other co-signer is making the payment on the student loans, and we can document that someone has been doing that for 12 months, we don’t have to count that payment against the borrower for qualifying purposes. So that’s also exciting. My guess is that FHA will start feeling pressure to keep up with Fannie Mae in a few months, because this change will definitely pull more business to conventional loans.’”

From CBS 6 Albany in new York. “‘We are seeing properties that sat maybe 3 or 4 months ago, now getting a lot of activity,’ said realtor Brian Sinkoff. ‘If a year ago we had 50 buyers and 50 houses, that’s going to work out. Now, if we have 100 buyers and 70 houses, we have a little bit of a problem,’ he said. Sinkoff says right now the average price of a 3 bedroom 1 bathroom home in the Capital Region is about $220,000, and the average market time is about 33 days. He says there’s no reason to fear a housing bubble burst we saw about a decade ago - as he says lending practices have become much more strict.”

From ABC 6 News in Minnesota. “Twin Cities housing experts say the housing market is hot, with homes going off the market fast and above asking prices. Buyers know in a market like this, where new listings are getting multiple offers, everything counts. ‘Sometimes I can get my clients in to look at a house even before it lists and hits the market, that way they have the opportunity to jump in before competing with everyone else,’ said Ellen Westin with Edina Realty.”

“Another tactic to get a home is writing love letters. They are letters written by the prospective buyers to the sellers.”

The Daily Herald. “Utah County’s home prices have been on a steady uptick since 2012. The average Utah County home value in 2012 was approximately $291,000. In 2016, that average value had risen to $366,000, according to data from the Utah County Assessor’s Office. ‘There are some (housing) projects that have opened up in Santaquin and sold out in a matter of days,’ said Aaron Drussel, president of the Utah Central Association of Realtors. ‘In the past, you had to do a ton of marketing to get people to even consider (Santaquin) … it’s just getting the perception of making people realize it’s not that far.’”

The Naples News in Florida. “Naples Realtors have no reason to panic. That was one of the key takeaways from the sixth annual Naples Area Board of Realtors Economic Summit. ‘Almost everywhere you look it’s a pretty good story. Great? No,’ said Elliot Eisenberg, a nationally acclaimed economist with Graphs and Laughs LLC. But ‘pretty good’ is OK, he emphasized in an impassioned talk that brought plenty of laughs from a crowd of more than 400.”

“Cindy Carroll, with Carroll & Carroll Appraisers & Consultants in Naples, said housing inventory in the Naples area climbed 23 percent from March 2016 to March 2017, but she told the Realtor-packed audience ‘not to panic about this.’ She pointed out the increase wasn’t nearly as big as the year before, when the number of homes on the market rose by 35 percent over 12 months. ‘We all felt that,’ she said. Over the past year the largest increase in listings in the single-family market has been in the $1 million to $2 million price range, which rose 18 percent, Carroll said.”

“The inventory of condominiums in the under $300,000 market has increased 25 percent in the past year after rising 33 percent the year before. Carroll said the huge increase is a ‘mystery to me.’”

From the Winston-Salem Journal in North Carolina. “Lori Gaines can’t believe her house on Hege Street has a tax value of only $81,400. It’s a brick house in good shape with 1,600 square feet and a basement. It sits on nearly an acre of land. It was valued at $92,800 in 2013, and even that was too low, she thinks. ‘I kind of freaked out and said ‘No,’ Gaines said, recalling her reaction when she got her reappraisal notice from the Forsyth County tax office in the mail. ‘I was furious. Every time they revalue it seems like the price is always much lower than what the property has been listed at, so it is really frustrating. I’m just looking for fair.’”

“Jack Messick, who has a brick house with about 1,800 square feet on Silas Ridge Road in northwest Winston-Salem, thinks his house is overvalued at $197,000. The tax value was set at $181,800 in 2013. Messick said he has looked at nearby sales and thinks $170,000 is a better number. ‘I went online and got the price of three houses close by me that had sold in the past year, and sent that in with the protest,’ Messick said.”

“Property values are reappraised here every four years. It was a huge shock to many city residents, especially people living in predominantly minority parts of town, when the 2013 reappraisal showed sharp declines in many house values. The reappraisal was the first to fully take into account the housing bust and recession. People who saw their house values drop by sometimes as much as 50 percent or more felt the value of their life’s work had gone up in smoke.”

“Brenda Diggs, who lives in eastern Winston-Salem, said she is frustrated that she has to keep going back to ask appraisers to increase the value on her home. She’s asking for a $4,000 increase on a house the county appraisers value at $220,000. She wonders if there is merit to the argument that valuations in eastern Winston-Salem are done unfairly. ‘It is a little bit ridiculous,’ Diggs said. ‘For me it is not about a principle of taxes, it is a principle of equity. It really comes down to the value of me as a taxpayer and a citizen in this community. You paint it with a broad brush to say because it is on the east side of town that we can’t do any more.’”