Mortgage Rates Back on the Rise

Mortgage Rates Back on the Rise

Rates for 30-year fixed mortgages rose to 4.39 percent this week from 4.17 percent a week ago, and average interest on 15-year loans moved to 3.76 percent from 3.57 percent, said Freddie Mac.

Interest for five-year adjustable-rate mortgages jumped to 3.4 percent from 3.25 percent, meanwhile, and one-year ARMs held at 3.26 percent. Rates have climbed along with long-term Treasury yields as traders unloaded Treasurys purchased before the Federal Reserve announced a $600 billion bond purchase program.

Source: Chicago Sun-Times (11/19/10)

September Home Prices Declined 2.79 Percent Year Over Year

September Home Prices Declined 2.79 Percent Year Over Year

CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its September Home Price Index (HPI) that shows that home prices in the U.S. declined for the second month in a row after rising slightly for the first seven months of the year. According to the CoreLogic HPI, national home prices, including distressed sales, declined 2.79 percent in September 2010 compared to September 2009 and declined by 1.08 percent* in August 2010 compared to August 2009. Excluding distressed sales, year-over-year prices declined .73 percent in September 2010.
Highlights as of September 2010

• The top five states with the highest appreciation, including distressed sales, were: New York (+2.67 percent), North Dakota (+1.73 percent), California (+.86 percent), Nebraska (+.78 percent), and Virginia (+.77percent).
• The five states with the greatest depreciation, including distressed sales, were Idaho (-14.04 percent), Alabama (-8.9 percent), Mississippi (-8.3 percent), Florida (-7.68 percent) and New Mexico (-7.47 percent).
• Excluding distressed sales, the top five states with the highest appreciation were: New York (+3.82 percent), North Dakota (+3.19 percent), Rhode Island (+1.71 percent), Vermont (+1.64 percent), and Alaska (+1.53 percent).
• Excluding distressed sales, the five states with the greatest depreciation were: Idaho (-11.06 percent), Nevada (-6.86 percent), Arizona (-6.01 percent), Michigan (-5.67 percent) and Oregon (-4.61 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to September 2010) is -29.13 percent. Excluding distressed properties, the peak-to-current change in the HPI for the same period is -19.96 percent.

“We’re continuing to see price declines across the board with all but seven states seeing a decrease in home prices,” said Mark Fleming, chief economist for CoreLogic. “This continued and widespread decline will put further pressure on negative equity and stall the housing recovery.” Full-month September 2010 national, state-level and top CBSA-level data can be found at http://www.corelogic.com/About-Us/ResearchTrends/Home-Price-Index-Report---September-2010.aspx.
About CoreLogic
CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. Formerly the information solutions group of The First American Corporation, CoreLogic began trading under the ticker CLGX on the NYSE on June 2, 2010. The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2009 revenues of $2 billion. For more information visit www.corelogic.com.

Will Your House Be Worth More in the Spring?

Will Your House Be Worth More in the Spring?

This is a question anyone thinking about selling must ask. Should they sell now or should they wait for the spring? Most years that would be an interesting question. There is a belief that many buyers come out in the spring and, with that increase in demand for housing, prices may appreciate. This year is unlike any year in recent memory. Most experts believe there will be continuing depreciation of home values throughout the next 18 months.

See the rest of the article:
http://kcmblog.com/2010/10/29/will-your-house-be-worth-more-in-the-spring/

5 Reasons You Should Sell Your House TODAY!

5 Reasons You Should Sell Your House TODAY!

Selling your house in today’s market can be extremely difficult. It is for that reason that every seller should take advantage of each and every opportunity that appears. Each fall, such an opportunity presents itself. This fall, that opportunity may be just too good to pass up.

Below are five reasons you should consider when pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.

Read the rest of the article at:
http://kcmblog.com/2010/10/19/5-reasons-you-should-sell-your-house-today/

Unemployment/Foreclosure Petitions Drop in Massachusetts

The Massachusetts unemployment rate dropped from 8.8 percent in August to 8.4 percent in September, the steepest drop since January 1976, state labor officials said this morning.
"The rate, which has been trending downward from the 9.5 percent rate in January and February, remains below the 9.6 percent national rate," the state's Executive Office of Labor and Workforce Development said in a press release.

Also, the number of Massachusetts foreclosures started by lenders last month dropped about 23 percent from August 2010, and nearly 7 percent from a year ago said the Warren Group, a Boston firm that tracks local real estate activity.

In recent weeks, several big lenders, including Bank of America Corp. and GMAC, temporarily halted foreclosure proceedings in various states over allegations that they erred in processing documents, but now they have restarted the foreclosure process. (Click here to read an AP story on that subject that appeared in this morning's Boston Globe.)
"We will have to wait until the October statistics are tabulated to see the impact from Bank of America's decision to halt foreclosures in Massachusetts, pending a review of its paperwork and procedures," Warren Group chief executive Timothy M. Warren Jr. said in a statement. "From what we can see at the present time, Bank of America is involved in about 2,000 pending foreclosure cases in the Bay State."

Title companies want promises from 'robo signing' lenders

In addition to satisfying federal and state regulators that they're following the letter of the law, lenders embroiled in the "robo signing" scandal may soon have to provide warranties to title insurers in order to continue selling foreclosed homes.

Bank of America has already agreed to provide warranties to Fidelity National Financial Inc. that cover the title insurer's costs if employees processing foreclosure documents for the bank make mistakes, Bloomberg News reports, and is in talks with other title insurers to do the same.

See the rest of the article at Inman News

Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey

Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey

October 8, 2010, McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate dropped yet again to break the survey's all-time low; the 15-year fixed-rate did the same. The 5-year ARM also set an all-time survey low.
30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.8 point for the week ending October 7, 2010, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.87 percent.
15-year FRM this week averaged a record low of 3.72 percent with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.52 percent. A year ago, the 5-year ARM averaged 4.35 percent.
1-year Treasury-indexed ARM averaged 3.40 percent this week with an average 0.7 point, down from last week when it averaged 3.48 percent. At this time last year, the 1-year ARM averaged 4.53 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac report, "The 12-month growth rate in the core price index for personal consumption , which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease to new or near record lows this week."
"Housing affordability increased for the second month in a row in August to tie April's level, according to the National Association of Realtors® (NAR). As a result, pending existing home sales also rose for the second consecutive month in August to the strongest pace in four months, the NAR also reported. Furthermore, since the end of August, mortgage applications for home purchases were up over 14 percent for the week ended October 1st."

Beware of Resale Fees on Home Purchases

Resale Fees If you haven't heard about resale fees, then it's time you did. They are making headlines across the nation, and for good reason.


When you buy a house, how often do you read every line of your sales contract? If new legislation fails to pass, you'll need to read before signing anything.


Resale fees, also known as capital recovery fees or private transfer fees, are fees that a seller pays to the developer, each and every time the home sells for a specified period of time.
A recent article by the New York Times, detailed the story of one family who bought their dream home, only to find that resale fees allowed the developer to collect 1 percent of the sales price from the seller every time the property changes hands -- for the next 99 years.


This particular detail is typically hidden deep inside the sales contract. And homebuyers simply sign away their rights to that 1 percent, without ever having knowledge of it. Why would a builder or developer want to use this questionable practice?


The New York Times explains it this way, "Many developers see the resale fee as a creative way to get new financing. They are hoping to one day use the trickle of cash from these fees as collateral for a loan, or to get cash up front if pools of the fees are packaged into securities to be bought and sold on Wall Street." As they see it, developers are desperate.


How are resale fees legal? They may not be for long.


In September of 2010, US House Representatives Maxine Waters and Albio Sires introduced a bill called the "Home Equity Protection Act of 2010." The bill seeks to amend the Real Estate Settlement Procedures Act (RESPA) by prohibiting the collection of resale fees.
Proponents of the bill and changes to the legality of resale fees, believe the fee robs homeowners of their equity when they sell their property.


In addition, the Federal Housing Finance Agency proposed a similar rule to curb use of resale fees. Their proposal would keep Fannie Mae and Freddie Mac from insuring or purchasing mortgages that include such fees.


These fees have been such a point of contention, that The Coalition to Stop Wall Street Home Resale Fees has been formed. They responded to the news of the proposed legislation, saying, "This bill is an important step in enhancing consumer protections against these for-profit fees and safeguarding our already fragile real estate market from further abuse." They continued, "These fees add no benefit or value to a property, and are little more than a predatory scheme meant to take advantage of unsuspecting homeowners. Our Coalition thanks Congresswoman Waters and the bill's co-sponsors for recognizing the danger that these fees pose to homeowners and the real estate market."


Evan Fuguet, Senior Policy Counsel at the Center for Responsible Lending, noted, "The Home Equity Protection Act of 2010 is a strong step forward that would help consumers across the country, preventing unwarranted and spurious increases in the costs of homeownership. Unlike conveyances that support the community, affordable housing or the environment, these private transfer fees have no added benefit for homeowners and home buyers, and are reminiscent of the irresponsible fee-packing behavior we witnessed during the heyday of abusive subprime home lending ."


Though I have not run into resale fees so far on the north shore. be sure to talk to your agent about your contract and if resale fees could be an issue for you.    

30-Year Mortgage Rate Ties Low While 15-Year Sets New Record

30-Year Mortgage Rate Ties Low While 15-Year Sets New Record McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate dropped to tie the survey’s all-time low and the 15-year fixed-rate set another record low. 

30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.8 point for the week ending September 30, 2010, down from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 4.94 percent. 

15-year FRM this week averaged a record low of 3.75 percent with an average 0.7 point, down from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent this week, with an average 0.6 point, down from last week when it averaged 3.54 percent. A year ago, the 5-year ARM averaged 4.42 percent. 

1-year Treasury-indexed ARM averaged 3.48 percent this week with an average 0.7 point, up from last week when it averaged 3.46 percent. At this time last year, the 1-year ARM averaged 4.49 percent.
Frank Nothaft, vice president and chief economist at Freddie Mac, says, "Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week. The September Consumer Confidence Index by the Conference Board fell to the lowest level since February of this year, while the Business Roundtable CEO Business Outlook for the third quarter was the weakest in the past four quarters. Consequently, rates for the 15-year fixed mortgage and the 5-year hybrid ARM reached new all-time lows and rates for 30-year fixed mortgages tied its record set just four weeks ago." 

"Homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010 after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009, the Federal Reserve Board reported. This, in part, strengthened household balance sheets and reduced serious mortgage delinquencies. For instance, first mortgages 90-days delinquent or worse fell to 3.16 percent in August from 4.76 percent a year prior and was the lowest rate since June 2008, according to the S&P/Experian Consumer Credit Default Indices ."

September Real Estate Round Up

September Round Up: Rates Back Down In Freddie Mac's results of its Primary Mortgage Market Survey. The 30-year fixed-rate mortgage rate dropped to tie the survey’s all-time low and the 15-year fixed-rate set another record low.
30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.8 point for the week ending September 30, 2010, down from the previous week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 4.94 percent.
15-year FRM this week averaged a record low of 3.75 percent with an average 0.7 point, down from the previous week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent this week, with an average 0.6 point, down from the previous week when it averaged 3.54 percent. A year ago, the 5-year ARM averaged 4.42 percent.
1-year Treasury-indexed ARM averaged 3.48 percent this week with an average 0.7 point, up from the previous week when it averaged 3.46 percent. At this time last year, the 1-year ARM averaged 4.49 percent.
According to Frank Nothaft, vice president and chief economist, Freddie Mac: "Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week. The September Consumer Confidence Index by the Conference Board fell to the lowest level since February of this year, while the Business Roundtable CEO Business Outlook for the third quarter was the weakest in the past four quarters. Consequently, rates for the 15-year fixed mortgage and the 5-year hybrid ARM reached new all-time lows and rates for 30-year fixed mortgages tied its record set just four weeks ago."
"Homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010 after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009, the Federal Reserve Board reported. This, in part, strengthened household balance sheets and reduced serious mortgage delinquencies. For instance, first mortgages 90-days delinquent or worse fell to 3.16 percent in August from 4.76 percent a year prior and was the lowest rate since June 2008, according to the S&P/Experian Consumer Credit Default Indices."
Four Tips for Setting the Right Sales Price
Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.
It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps. "I want the answer to be an offer."

Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.

Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."

Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut. What's New in New Housing Design Below are the products grabbing the attention of the home building and remodeling industries:

Appliance Drawers. Small warning drawers, modest-sized dishwasher drawers for small loads, refrigerator drawers and microwave drawers.

Counter-depth refrigerators. Some are only 24 inches deep.

Motion-detecting faucets. Like you'd find in the restrooms of businesses.

LED lighting. These are used under cabinets and in ceiling fixtures as a longer-lasting, more efficient alternative to compact fluorescent lamps and incandescent bulbs.

Electric heated floors. A nice touch in bathrooms,

Showers with multiple heads and body sprays. Bathtubs are out. Sellers Quickly Transform Property with Paint
The best way to update a property is to paint it. It’s a job that many sellers can do themselves. Here are six suggestions for making the work go quickly.
1. Move the furniture. Get as much furniture as possible out of the way, and then cover what’s left with plastic drop cloths held in place with masking tape.
2. Buy good paint. Top-quality latex interior paint will hide what’s underneath and make the job go faster.
3. Tape the edges. Taping the edges with painters tape will speed up the job and make the results more professional.
4. Work top down. Paint the ceiling first, then the walls, then the windows and trim and finally the baseboards. This will cut down on time spent repairing drips and splatter marks.
5. Cut in the corners. Applying a three-inch band of paint around the edges will allow you to fill in the middle with a paint roller.
6. Apply paint generously. Trying to stretch the paint won’t save sellers any money if they have to repaint.

How Buyers Compete in a Sellers' Market

How Buyers Compete in a Sellers' Market No matter the market, sellers can find a competitive edge, whether it be through pricing, staging, or even negotiating closing costs.
What about buyers? Do they have any hope for an edge during a sellers market?
A sellers market is one which favors the seller. Perhaps you find yourself in a hot area where homes garner multiple offers and bidding wars. Or perhaps you live in an area where prices are appreciating or there is only a small inventory of homes for sale. No matter the situation, buyers can still find ways to gain an advantage.
Here are a few tips that might do just that.
1. Pre-approval: Be sure to start your home buying process by getting pre-approved for a mortgage. This will prove to your potential seller that you are ready, willing, and able to buy their home. A pre-approval will also give you an exact number of how much money you can borrow, and thus spend.
2. Be ready to buy: There can be no hesitation during a sellers market. There will be other buyers waiting to to grab up the same deal you just found. If the numbers work out in your favor for a home you like, then be ready to put in a strong offer.
3. Know your budget: You may be approved for a loan of up to $300,000, but you only want to spend $250,000 as your max. Be sure to know ahead of time what your budget really is.
4. Make a strong offer: In a sellers market, homes can expect to receive nearly if not all of their asking price. And in many cases, you may even find a home sells for more than the asking price. So, in order to make both a good impression on the seller so they take your interest seriously, as well as to beat out the competition, be sure to present a strong first offer.
5. Be willing to negotiate terms: This means if a seller needs 60 days until closing, do what you can do accommodate them. Or maybe they are unwilling to make a repair before you move in, but are willing to pay you the repair costs instead. Be willing to work with a seller, if it means getting the home you desire.
These simple tips can make a big difference when it comes to buying in a sellers market.

New Short Sale Bill Submitted to Congress

New Short Sale Bill Submitted to Congress U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.
The National Association of REALTORS are a strong supporter of the bill. Their President, Vicki Cox Golder, said, "The short sale, which requires lender approval, is an important instrument for homeowners who owe more than their home is worth. While the lending community has worked to improve the size and training of their short sales staffs, they still have a long way to go on improving response times."
And in a sticky financial situation such as a short sale, where time really counts, this bill comes as welcome news to many homeowners and buyers.
This legislation aims to "require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale." (Library of Congress)
In this bill, the terms "short sale" means the sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures a residential mortgage loan that:

• will result in proceeds in an amount that is less than the remaining amount due under the mortgage loan; and
• requires authorization by the securitization vehicle or other investment vehicle or holder of the mortgage loan, or the servicer acting on behalf of such a vehicle or holder.

Ms. Golder continued, "Unfortunately, homeowners who need to execute a short sale are severely hampered because lenders (loan servicers) are unable to decide whether to approve a short sale within a reasonable amount of time. Potential homebuyers are walking away from purchasing short sale property because the lender has taken many months and still not responded to their request for an approval of a proposed short sale price. Many consumers have mentioned that the delay in short sale price approval exceeds 90 days, and in many cases never arrives."
Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.

Written by Carla Hill

Pay Extra Attention To Mortgage Financing Contingency Clauses During Today’s Credit Crunch

by Rich Vetstein 

 
Today’s strict lending and underwriting environment has resulted in quite a few delays and even losses of buyers’ financing for home purchases. Loan commitment deadlines are being pushed back due to underwriting delays, regulatory compliance and appraisal issues, among other delays. The worst case scenario for any borrower is the wholesale rejection of financing in the middle of a transaction.
What Is The Typical Mortgage Contingency Clause?
The Massachusetts “standard” form purchase and sale agreement contains a mortgage contingency clause which protects the buyer (and his deposit) for the period of time until he can obtain a firm loan commitment. The date is negotiated by the buyer and seller, and is usually around 30 days from the execution of the purchase and sale agreement, depending on the closing date. If the buyer cannot get a firm loan commitment by the deadline, he can opt out of agreement with a full refund of his deposit. Here is how a typical Massachusetts mortgage financing contingency clause operates:

In order to help finance the acquisition of said premises, the BUYER shall apply for a conven­tional bank or other institutional mortgage loan of $300,500.00 at prevailing rates, terms and conditions. If despite the BUYER’S diligent efforts, a commitment for such a loan cannot be obtained on or before October 15, 2010, the BUYER may terminate this agreement by written notice to the SELLER in accordance with the term of the rider, prior to the expiration of such time, whereupon any payments made under this agreement shall be forthwith refunded and all other obligations of the parties hereto shall cease and this agreements shall be void without recourse to the parties hereto. In no event will the BUYER be deemed to have used diligent efforts to obtain such commitment unless the BUYER submits a complete mortgage loan application conforming to the foregoing provisions on or before 3 days from the execution of this Agreement.

What If There Are Delays In Obtaining My Loan Commitment?
The buyer really has only two choices if the lender cannot deliver a firm loan commitment by the mortgage contingency deadline: (1) ask the seller for an extension of the loan commitment deadline, or (b) terminate the transaction. There is, however, a smart way to handle this situation.
I always couple a request for a loan commitment extension with notice that if the seller does not agree, then the buyer will exercise his right to terminate the agreement. That way, the seller has to make a tough choice: grant an extension or lose the deal. If the seller does not want to grant an extension, the buyer really has no other choice but to move on to the next home for sale.
Parties need to make mortgage contingency deadlines workable and don’t wait until the last minute to ask for extensions. See this post about a recent case for what happens when you don’t do this.
What If There Are Conditions In My Loan Commitment That I Cannot Control or Meet?
Loan commitments are often riddled with conditions which must be reviewed carefully with counsel. Sometimes, there are conditions that a buyer simply cannot meet or control. To account for this I always insert this clause in my Massachusetts purchase and sale agreement rider:

Application to one such bank or mortgage lender by such date shall constitute “diligent efforts.”  If the written loan commitment contains terms and conditions that are beyond BUYER’S reasonable ability to control or achieve, or if the commitment requires BUYER to encumber property other than the subject property, BUYER may terminate this agreement, whereupon any payments made under this agreement shall be forthwith refunded and all other obligations of the parties hereto shall cease and this agreement shall be void without recourse to the parties hereto.

This protects the buyer in case there are those uncontrollable conditions, and also limits the buyer’s efforts in applying for a mortgage to 1 application.
What If There Are Title Defects Which Delay The Transaction And My Rate Lock Expires?
Under paragraph 10 of the Massachusetts standard form purchase and sale agreement, the seller has the option (or the requirement, depending on the negotiation of the agreement) to cure any title defects, and has up to 30 days to do so. Sometimes, during this 30 day cure period, the buyer’s rate lock will expire. In this situation, I insert the following clause into the purchase and sale agreement:

MODIFICATION TO PARAGRAPH 10: Notwithstanding anything to the contrary contained in this Agreement, if SELLER extends this Agreement to perfect title or make the Premises conform as provided in Paragraph 10, and if BUYER’S mortgage commitment or rate lock would expire prior to the expiration of said extension, then such extension shall continue, at BUYER’S option, only until the date of expiration of BUYER’S mortgage commitment or rate lock.  BUYER may elect, at its sole option, to obtain an extension of its mortgage commitment or rate lock.

This gives the buyer an “out” of the transaction if his rate lock expires.

Reprinted with permission. 
http://www.massrealestatelawblog.com/pay-extra-attention-to-mortgage-financing-contingency-clauses-during-todays-credit-crunch/

5 Reasons Why Massachusetts Home Sales Will Continue To Rise

 Debunking The July 2010 Housing Report: 5 Reasons Why Massachusetts Home Sales Will Continue To Rise

by Marc Canner on August 27, 2010

in Massachusetts Property Values

A National Association of Realtor’s report released Wednesday indicated that home purchases fell 27% in July, a drop that jolted the real estate industry, according to the Wall Street Journal, and sent shock waves through the broader economy. As a result, a number of economists provided dire warnings of a continued down slide in real estate prices.
At first blush, this news could have the “echo chamber” effect of  turning the purported downturn into a self-fulfilling prophecy, discourage consumer confidence, and sidelining a number of prospective Massachusetts home buyers from the fall housing market.  Here are 5 reasons why the national housing report won’t impact the Massachusetts real estate market.
1.  Massachusetts Has a Strong Housing Market.
Massachusetts has bucked the national trend as its housing market has remained strong. Indeed, parts of the Massachusetts housing market actually saw a surge in activity in July 2010:

• From July ’09 to July ’10, these towns had an increase in sales:

1. Norwood (+117%)
2. Bedford  (+78%)
3. Easton (+27%)
4. Brookline (+20%)
5. Melrose (+20%)

• Several towns saw an  increase in year-to-date median home prices in July, including:

1. Cohasset (+25%)
2. Marblehead (+12%)
3. Dennis (+6%)
4. Norwood (+5.9%)
5. Melrose (+4%)

2.  The June 1^st Time Tax Buyer Credit Caused An Artificial Decrease in July Purchases.
The government stimulus program brought out the seasonal first time buyer’s in full force during June. Thus, the normal sales cycle was altered which skewed the July numbers
3.  Massachusetts Is Always Out In Front Of The National Numbers
The national housing report gives equal weight to markets blighted with foreclosures and economically hard hit areas like Detroit, Las Vegas, Florida, Arizona and parts of Southern California. Greater Boston has historically been a unique “inelastic” market along the lines of Washington, D.C. and San Francisco. Negative national trends do not necessarily correlate to the Massachusetts real estate market.
4.  “It’s the Economy, Stupid.”
Massachusetts has a strong and diverse economy, a number of high paying jobs (no, I’m not running for governor), a very limited number of new housing starts, and several industries that have constant employment turnover- a tried and true recipe for a hot housing market.
5.  Historically Low Interest Rates
The average rate for a 30 year mortgage has fallen to 4.5%, a 50 year low! Prospective borrowers who pass on this- caveat emptor “buyer beware.” A number of economists predict that the Fed will gradually ease rates back up to counter inflation.

Reprinted with permission from The Massachusetts Real Estate Blog

Fewer Home Owners Are Under Water

Fewer Home Owners Are Under Water

 
In the second quarter of 2010, 21.5 percent of borrowers owed more than their homes were worth. That’s down 7.7 percent from the first quarter of the year when 23.3 percent of home owner with mortgages were under water.

Much of the improvement came from homes falling into foreclosure, wiping away negative equity. Rising home values also improved the situation in 45 of the metropolitan statistical areas, including the northeast region of the United States.

Mortgage Rates for Massachusetts at All-Time Lows...Again!

Mortgage Rates are at all-time lows right now; 30 year fixed, 20 year fixed, 15 year fixed and even Jumbo Rates, and they're showing no signs of rising! I don’t see them going any lower, but staying down at these levels for a while.

What’s moving Mortgage Rates? No one really knows right now but this is usually what happens, bonds go up, stocks go down.  Stocks go up, bonds go down. It’s really pretty easy to understand. However this mortgage market that we are in  is no where near normal.  In fact, it’s the total opposite, it’s like nothing we’ve ever experienced.

Refinance loans account for the majority of all present loan production, but home buyers are getting these incredible rates, too! What I don't understand is why there are not more home buyers placing offers, and why some properties just languish on the market when they are priced competitively. I have to think that the home buying consumer just does not have enough confidence in the overall economic outlook yet. I'm just afraid these same people may miss out on a rare real estate buying opportunity...low home prices and rock bottom mortgage interest rates.

30 year fixed mortgage rates remain in the 4.375% to 4.625% range.  The 30 year fixed rate mortgage is 4.375% for a qualified borrower.

Do I Need a Buyer’s Agent for Home Purchase?

 Do I Need a Buyer’s Agent for Home Purchase?

Q: We own a home now in town for 14 years. We’ve done a drive-by and are interested in a different home in a rural setting. We have made an appointment with the listing agent to see the house on our own. If we are still interested after seeing the house, we will need to sell ours in order to buy it. We may or may not continue looking if that one is not “the one.” A friend is urging us to have our own REALTOR® now to represent our interests before our appointment next week. I don’t see the need until we’ve decided that we’re ready to give up our current home for another. What do you advise?
~ Brenda
A: Brenda, there are a couple of problems with looking at homes without your own Realtor (working as a Buyer’s Agent). First, the listing agent is representing the seller, and cannot give you any information on the property other than what the seller would allow.

The other issue is that the compensation for representing a buyer typically goes to the agent who first showed the property to the buyer. So, if you go to see a home with the listing agent, then your agent could possibly be cut out of receiving any compensation from the transaction if you decide that you want to make an offer. Your agent may not even want to represent you because of that fact, or you may have to pay your agent out of your own pocket.
If you want to see homes without your agent, then you could go to open houses. If you need to make an appointment to see a property, then you should go through your own Realtor. As a Realtor, this is part of our job. So don’t hesitate to give him/her a call.
~ Jim Armstrong


Jim Armstrong is a Realtor-Broker with Armstrong Field Real Estate in Essex County, MA.

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June 2010 REALTOR® Market Index Down but Price Index is Up

June 2010 REALTOR® Market Index Down but Price Index is Up

The June 2010 REALTOR® Market Index Down Compared to the Same Time Last Year. REALTOR® Price Index up for the 11th time in the past 12 months.   WALTHAM, Mass. – The Massachusetts Association of REALTORS® (MAR) announced that after 16 straight months of annual increases, the June REALTOR® Market Index (RMI) is down for the first time since February 2009.  Despite the drop, the June REALTOR® Price Index was up compared to the same time last year. “The combination of the post-tax credit lull and buyers who may have moved up their plans for a summertime purchase to take advantage of the tax credit which expired in April, is having an impact on how REALTORS® are feeling about the current market as reflected in the low Market Index number,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield.  “Despite this combination of events, REALTORS® do see home prices starting to move up over the next 12 months, which indicates to me that members believe the market will continue to improve.” In June 2010, the REALTOR® Market Index was 28.36, which was 24.8 percent lower than the 37.70 score recorded in June 2009.  On a month-to-month basis, the June 2010 RMI was down 28.19 percent from the May 2010 score of 39.49.  Measured on a 100-point scale, a score of 50 is the midpoint between a “strong” (100 points) and a “weak” (0 points) market condition.     The REALTOR® Price Index was up 6.34 percent in June 2010 compared to the same time last year (44.06 in 2009 to 46.85 in 2010).  On a month-to-month basis the June index number was up 22.07 percent from the Home Sales Price Index number in May 2010 (38.38). When REALTOR® members were asked how they would describe their clients’ ability secure financing in the current lending environment, 60 percent of respondents reported that it was either “somewhat” more difficult (37 percent) or “significantly” more difficult (23 percent).  Thirty-two percent of respondents reported that securing financing had “remained the same”, while 11 percent reported that financing was “somewhat” easier to secure.  Zero percent of the respondents reported that financing was “significantly” easier to obtain. About the REALTOR® Index Methodology: The Massachusetts REALTOR® Market Index (RMI) and Price Index (RPI) are based on monthly responses from a random sampling of Massachusetts Association of REALTORS® members on the state of the housing market.  More specifically, the survey asks members two basic questions pertaining to the real estate business in their market area in Massachusetts. 1. How would you describe the current housing market? 2. What are your expectations of home prices over the next year? In addition to these standard questions, the survey each month includes one wildcard question that changes each month and is based on an industry hot topic. The RMI is calculated in the following way.  Respondents indicate whether conditions are, or are expected to be “strong” (100 points), “moderate” (50 points), and “weak” (0 points).  The results are the average score for each question.  A score of 50 is the threshold between a “strong” and a “weak” condition.  Similarly, the question about home prices over the next year (REALTOR® Price Index) is calculated using five categories: “Rise 0-5%” (75 points), “Rise 5%+” (100 points), “Level” (50 points), “Fall 0-5%” (25 points), and “Fall >5%” (0 points).

Closing Deadline Extended for Tax Credit

July 1, 2010 - Last night, Congress passed an extension of the closing deadline for the Homebuyer Tax Credit, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010, that have not yet closed. The legislation is designed to create a seamless extension; the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30 and the date the President signs the bill into law. Extending the tax credit closing deadline will help provide additional stability to real estate markets across the nation.
Our Government Affairs team worked closely with Congressional leaders on both sides of the aisle to enact this important legislation.
NAR is still working on restoring the 502 single-family rural housing loan guarantee program. Language is included in H.R. 4899, the Emergency Supplemental Appropriations bill, that is currently in conference between the House and Senate.  We expect the House to pass that bill shortly and are hopeful the Senate will do the same when they return the week of July 12. When that bill passes, the program will be restored through the end of the fiscal year.



Additionally, the Senate passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date of enactment of the extension. The National Association of REALTORS (NAR) members sent more than 250,000 letters to Members of Congress encouraging them to extend the program.

For additional information on the tax credit extension, the flood insurance program and rural housing, please visit www.realtor.org/government_affairs

Senate approves extension to qualify for homebuyer tax credit

The proposal pushes the closing deadline back to Sept. 30, 2010, from the previous June 30 deadline.
By a 60-37 vote, the Senate on Wednesday approved a measure extending the closing deadline for qualifying for the homebuyer tax credit. The proposal is expected to be added to a slimmed-down tax extenders bill that Senate Democratic leaders are expected to unveil Wednesday.

To qualify for the credit, homebuyers have until June 30 to close on the purchase. The proposal pushes the closing deadline back to Sept. 30, 2010.

  Senate Majority Leader Harry Reid (D-Nev.), Senate Banking Chairman Chris Dodd (D-Conn.) and Sen. Johnny Isakson (R-Ga.) authored the proposal. The senator from Georgia tried but failed to offset the amendment's cost with unspent stimulus dollars. His proposal failed by a 45-52 vote. The proposal that is expected to be added to the extender bill is offset by denying the tax deduction for certain punitive damages, which raises $315 million over 10 years. The cost for extending the closing date is $140 million, which means the provision reduces the deficit by $175 million over 10 years.

Congress originally passed an $8,000 tax credit for first-time homebuyers as part of the stimulus bill President Barack Obama signed into law in February of 2009 (In fact, the original tax credit was in 2007 for $7,500, but had to be paid back). Lawmakers extended and expanded the measure last November to include a $6,500 tax credit for buyers who have already owned a home. Both of these measures expired at the end of April for buyers that enter into a contract to purchase a home. Wednesday's measure only extends the cut off date for closing on the property.