TOP 7 REASONS BANKS ARE DENYING HOME LOAN REQUESTS:
1. Poor credit. Even FHA loans have an average credit score of 693.
2. Insufficient liquidity. A heavy down payment (20-30%) & strong excess liquidity are needed.
3. Lack of income. Consistent proof of income for 2-5 years
4. Lying on the application
5. Debt. Debt to income ratio exceeds bank’s guidelines
6. Unemployment
7. Self employment
§ Make sure you warn your clients to stop using their credit cards – especially for large purchases while they’re waiting to close on a property. After June 1, 2010, Fannie Mae instructed lenders to pull an updated credit report just prior to closing. Your buyers could be approved, and a change in their DTI could result in the loan being pulled.
§ Comment from RealTrends: “While those who study the housing market look a various data to report on trends, what brokers and sales professionals know right now is that written business has fallen in most markets since April, that inventory is rising and that sellers remain stubborn about pricing their homes where buyers will buy. We continue to be bullish long term, but for the remainder of this year, business will likely be down from the same period last year … Focus on finding and serving every potential client and customer and watch costs religiously for the next 12 months.”
I looked at CC&IMLS Barnstable County stats for July, and here’s what I found: July 2010 dollar volume is 62.29% of June 2010 (down 37.71%), and 88.73% of July 2009 (down 11.27%).
A University of Texas study of 60,000 residential real estate transactions, listings that mentioned new paint, new carpet and/or roof work sold, on average, for slightly less than those that did not.
KnowYourOptions.com is a new Fannie Mae site designed to help homeowners stay in their homes.
Friday, August 27, 2010
Friday, August 20, 2010
Friday Facts Aug. 20, 2010
FRIDAY FACTS
August 20, 2010
An interesting blog by Bianca Torres in the San Francisco Business Times on Gen Y and home buying delay notes first that Gen Y’s were raised with a lot of self esteem building and reassurance. They tend to take breaks in their 20’s and 30s to travel and to go to grad school which is fulfilling but costs a lot of lost wages and earning potential. They choose where to live based on lifestyle, not job relocation. In the Bay area, a Gen Y household would need an annual income of $142,000 to afford a home where a Boomer in the 1980’s needed $48,000. What does this all mean? Part of the sluggish real estate market may reflect this delay in home buying – real estate depends on entry level buyers.
Neighborhood Scout Reports is a subscription based neighborhood information site that gives a profile of the neighborhood including home values, density, character, age, racial, occupational and language demographics.
Homeownership rates fell in the second quarter of 2010 to 66.9% which is equivalent to that of 1999. The Northeast stayed level at 54.2%, and the West saw the biggest drop to 61.4%.
Here’s a notable quote from Bernice Ross of Inman News: “If your website is merely an infomercial for you, visitors will surf to your site and then surf elsewhere in a matter of seconds. In fact, having your picture on the home page of your site causes up to 50% of your web visitors to leave. The reason? It’s about you rather than being about them.”
A coalition of 11 groups including the National Association of Realtors sent a letter to Treasury Secretary Geithner urging a ban of Wall Street Home Resale Fees. Recorded by covenant or sales contract by private third parties, every time a home is sold for the next 99 years, a percentage (usually 1%) of the sales price must be paid to the third party. To date, 17 states have restricted or banned the practice.
August 20, 2010
An interesting blog by Bianca Torres in the San Francisco Business Times on Gen Y and home buying delay notes first that Gen Y’s were raised with a lot of self esteem building and reassurance. They tend to take breaks in their 20’s and 30s to travel and to go to grad school which is fulfilling but costs a lot of lost wages and earning potential. They choose where to live based on lifestyle, not job relocation. In the Bay area, a Gen Y household would need an annual income of $142,000 to afford a home where a Boomer in the 1980’s needed $48,000. What does this all mean? Part of the sluggish real estate market may reflect this delay in home buying – real estate depends on entry level buyers.
Neighborhood Scout Reports is a subscription based neighborhood information site that gives a profile of the neighborhood including home values, density, character, age, racial, occupational and language demographics.
Homeownership rates fell in the second quarter of 2010 to 66.9% which is equivalent to that of 1999. The Northeast stayed level at 54.2%, and the West saw the biggest drop to 61.4%.
Here’s a notable quote from Bernice Ross of Inman News: “If your website is merely an infomercial for you, visitors will surf to your site and then surf elsewhere in a matter of seconds. In fact, having your picture on the home page of your site causes up to 50% of your web visitors to leave. The reason? It’s about you rather than being about them.”
A coalition of 11 groups including the National Association of Realtors sent a letter to Treasury Secretary Geithner urging a ban of Wall Street Home Resale Fees. Recorded by covenant or sales contract by private third parties, every time a home is sold for the next 99 years, a percentage (usually 1%) of the sales price must be paid to the third party. To date, 17 states have restricted or banned the practice.
Friday, August 13, 2010
Friday Facts Aug. 13, 2010
August 13, 2010
FHA changes now and coming impact your clients. From RealTrends blog:
Increase in FHA up front mortgage insurance premium as of 4/1/10 from 1.75% of loan amount to 2.25%. Impact: Higher upfront and/or monthly expense if fee is financed.
The increase of FHA monthly insurance (not yet enacted) will increase monthly expense to consumers. Impact: Buyers with tight debt ratios will qualify for lower loan amounts.
The decrease in maximum seller contributions from 6% to 3% of contract price (not yet enacted) may negatively affect sales in some markets. Impact: those who are reliant on seller contributions will no longer be in a position to purchase.
§ Kevin Brass reports in the International Property Journal that the only home Marilyn Monroe ever owned, and where she was found dead, is on the market. This 2600 square foot Spanish Colonial is located on a secluded Brentwood cul-de-sac. The lot is a “whopping 23,300 square feet including a small pool and citrus grove”. The listing price is $3.595 million, a bargain compared to the burial plot beside Monroe in Westwood which sold for $4.6 million last year.
§ RISMedia notes that “the massive financial reform law that just passed Congress has two main components that could negatively impact homeowners and homebuyers: It will be harder to qualify for a mortgage … and, higher mortgage rates … The takeaway is that if you can qualify for a mortgage now, you should do so, and not gamble your homeownership goals on the future impact of the new law.”
§ Think Big Work Small give the following loan qualifying tip: Most, if not all lenders will not use the income of the mother is she’s actively on maternity leave, even if there is a letter from the employer guaranteeing future employment and income.
§ Kris Berg writes in Inman News: “Make no mistake, I am a big fan of social media. It has become essential for marketing our services and for connecting with customers, not to mention maintaining relationships with our past clients. It is the language the world speaks and we need to be part of that conversation if we are going to eat tomorrow.”
FHA changes now and coming impact your clients. From RealTrends blog:
Increase in FHA up front mortgage insurance premium as of 4/1/10 from 1.75% of loan amount to 2.25%. Impact: Higher upfront and/or monthly expense if fee is financed.
The increase of FHA monthly insurance (not yet enacted) will increase monthly expense to consumers. Impact: Buyers with tight debt ratios will qualify for lower loan amounts.
The decrease in maximum seller contributions from 6% to 3% of contract price (not yet enacted) may negatively affect sales in some markets. Impact: those who are reliant on seller contributions will no longer be in a position to purchase.
§ Kevin Brass reports in the International Property Journal that the only home Marilyn Monroe ever owned, and where she was found dead, is on the market. This 2600 square foot Spanish Colonial is located on a secluded Brentwood cul-de-sac. The lot is a “whopping 23,300 square feet including a small pool and citrus grove”. The listing price is $3.595 million, a bargain compared to the burial plot beside Monroe in Westwood which sold for $4.6 million last year.
§ RISMedia notes that “the massive financial reform law that just passed Congress has two main components that could negatively impact homeowners and homebuyers: It will be harder to qualify for a mortgage … and, higher mortgage rates … The takeaway is that if you can qualify for a mortgage now, you should do so, and not gamble your homeownership goals on the future impact of the new law.”
§ Think Big Work Small give the following loan qualifying tip: Most, if not all lenders will not use the income of the mother is she’s actively on maternity leave, even if there is a letter from the employer guaranteeing future employment and income.
§ Kris Berg writes in Inman News: “Make no mistake, I am a big fan of social media. It has become essential for marketing our services and for connecting with customers, not to mention maintaining relationships with our past clients. It is the language the world speaks and we need to be part of that conversation if we are going to eat tomorrow.”
Friday, August 6, 2010
Friday Facts 8-6-10
FRIDAY FACTS
August 6, 2010
Here’s a notable quote by Teresa Boardman in Inman News that you can use to help make your sellers see reality: “Over the years I have watched these sellers chase the market down. I saw one instance in which a home was on the market for more than 400 days and now it is priced right but in the time it has been on the market it has lost as least 30% of its value”.
From a RealTrends comment noting that it’s okay to laugh sometimes: A US Senator, when commenting on the rejection of an amendment to require higher down payments for federally insured mortgages, reportedly said, “If we raise down payment requirements, then the only people who will be able to buy homes will be those who can afford to own a home”.
Bloomberg reports that homeowners are buried under $4 trillion in excess mortgage debt. This was compiled by the Federal Reserve by taking the total amount of home loans combined with the total amount of residential value.
A shift. Thing Big Work Small notes that purchases of REO’s now outnumber that of new homes. New home purchases usually represent 20% of the market and are now a little less than 11%, 19.5% are REO’s, and 69.5% are re-sales including short sales.
Inman News has an article about a new kind of real estate walk-through using Photosynth, a free web software that allows users to stitch photos together to create 3-D immersive renderings that consumers can click, drag and zoom in and out of. For example, you can click on the front door to “open” it and jump inside the house. Or, you can jump into the backyard through a window.
August 6, 2010
Here’s a notable quote by Teresa Boardman in Inman News that you can use to help make your sellers see reality: “Over the years I have watched these sellers chase the market down. I saw one instance in which a home was on the market for more than 400 days and now it is priced right but in the time it has been on the market it has lost as least 30% of its value”.
From a RealTrends comment noting that it’s okay to laugh sometimes: A US Senator, when commenting on the rejection of an amendment to require higher down payments for federally insured mortgages, reportedly said, “If we raise down payment requirements, then the only people who will be able to buy homes will be those who can afford to own a home”.
Bloomberg reports that homeowners are buried under $4 trillion in excess mortgage debt. This was compiled by the Federal Reserve by taking the total amount of home loans combined with the total amount of residential value.
A shift. Thing Big Work Small notes that purchases of REO’s now outnumber that of new homes. New home purchases usually represent 20% of the market and are now a little less than 11%, 19.5% are REO’s, and 69.5% are re-sales including short sales.
Inman News has an article about a new kind of real estate walk-through using Photosynth, a free web software that allows users to stitch photos together to create 3-D immersive renderings that consumers can click, drag and zoom in and out of. For example, you can click on the front door to “open” it and jump inside the house. Or, you can jump into the backyard through a window.
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