Tag Archives: intero real estate

The Party Might Just Be Ending for Low Interest Rates

It’s safe to say that mortgage interest rates have been at historic lows since the summer of ’09, mostly around and sometimes even under 5%.  Currently, they’ve been floating around the 5 & 1/8% range.

Part of the reason for these low rates has been because the Fed has been on a buying binge of Mortgage Backed Securities (MBS).  The Fed has been buying $1.25 trillion in mortgage-backed securities in its effort to prop up the economy but has said it will end those purchases March 31.

As I speak fairly regularly with seasoned, well-informed, and intelligent mortgage lenders and brokers, one thing they all seem to agree on is that the expectation is that, after March 31st,  rates will head upwards, and will likely be in the 6% range.

Still pretty low, historically – but, a significant impact to the buying power of home buyers out there.

Just think about it, if you’re looking at a loan amount of say $700,000, this means that a 1% increase in interest rate translates to paying $450 MORE per month on the same loan.  Or looked at another way, a 1% increase in rate just reduced the sale price you can afford by about $80,000.

Quoting some highlights from a recent WSJ article:

What happens when it (the Fed) stops buying hundreds of billions of dollars in financial assets?

In its monetary-policy statement, the Fed said it would “gradually slow the pace of these purchases in order to promote a smooth transition in markets.” Suddenly cutting to zero, presumably, could prove too much of a jolt.

But even a gradual pullback could have big repercussions. Zero interest rates and Fed purchases — financed by printing money — have played a massive role in reviving stocks and bonds and rekindling the economy.

Mortgage rates will likely move up, as private-market buyers will charge more than the Fed for bearing the risks of holding government-backed mortgage securities. Now, the Federal Reserve has said they would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness

In its best corporate-speak, the Fed said they will “evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.”  That is, if markets play along. Investors are already balking at the heavy use of printing presses. Just look at the sliding dollar.

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When Does YOUR Street Get Sweeped? …Some Cool Online Tools on Redwood City’s Website

Upon receiving my latest email installment of Redwood City e-news (which you can get by signing up at www.redwoodcity.org), Malcolm Smith, their Public Communications Manager, highlighted to me useful tools that the city provides on their website.

Want to know when your street is going to get a visit from the City Street Cleaning sweepers, for every month in 2010? Then check out this link here:  http://www.redwoodcity.org/publicworks/streets/pdf/Street-Cleaning-Schedule.pdf

An even more cooler tool is the Community GIS (Geographic Information System). This tool is a computer-based mapping tool that takes location information — such as streets, water features, schools and day care centers, neighborhood associations, census and demographic info, zoning, parks and places of interest, historic resources, parcel information, community information centers and more — and turns it into visual layers on a map, while also providing detailed data about a specific parcel.   Check it out at: http://pubgis.redwoodcity.org/communitygis/

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Crazy Urban Legend Hits the Real Estate World

Be forewarned — no, this is not about kidney harvestingNigerian Lottery winnings, or Bill Gates giving everyone lots of money for forwarding an email — there is an email making the rounds titled “HR 2454: CAP AND TRADE ENERGY BILL”, which purports that new legislation will require all homes to retroactively pass new energy standards before they are sold.

Some even say that all homes will now be required to get a “label” for your house every year, proving that your home meets new energy standards.

This is all patently and unequivocally FALSE. (and you can even checkSnopes.com here to doublecheck)

Firstly, whoever started this email has a serious conspiracy theory complex. They also probably fall into the category of “birther”, “teabagger party member”, or “Glenn Beck-lover”.

Bottom line, our gub’mint is not going to do anything – ANYTHING – that will adversely affect the real estate market, which is absolutely one of the key elements in our ongoing, slow economic recovery. Why do you think they recently overwhelmingly voted to extend the first time buyer $8K tax credit bill, as well as extend the $729K conforming loan limit? They want to encourage people to have more confidence in home ownership.

Anyway, I also consulted our National Association of Realtors (NAR) position on this, and below is what it said. The most revealing statement, which contradicts this email is that this bill  “Does not create a federal energy audit requirement for real property”

“The U.S. House of Representatives approved H.R. 2454, the American Clean Energy and Security Act by Reps. Waxman (D‐CA) and Markey (D‐MA). Following NAR’s long‐standing policy to only take a position on legislation, or provisions within legislation that have a direct affect on real estate, NAR worked with our Congressional allies to strip the Energy Bill of provisions that would have adversely affected our industry.

After multiple consultations with the NAR Climate Presidential Advisory Group, the NAR Land Use, Property Rights and Environment Committee, and state associations who had dealt with energy audit legislation at the state level, the Land Use, Property Rights and Environment Committee directed NAR staff to concentrate on the real estate provisions in the bill.  As a result, NAR issued calls for action and made this a talking point for Capitol Hill visits during its recent Midyear meeting.

Overall, REALTORS® succeeded in making a number of positive changes affecting the real estate provisions of the bill. The House‐approved bill:

  • Does not create a federal energy audit requirement for real property;
  • Exempts existing homes and buildings from any federal guidelines for new construction energy efficiency information labels.
  • Prohibits the implementation of any labeling during a sales transaction.
  • Leaves the decision to states as to whether to require energy audits, disclosures, etc.
  • Provides property owners with significant financial incentives, matching grants and tools to make property improvements and reduce their energy bills;
  • Prohibits the Environmental Protection Agency from regulating residential and commercial buildings under the Clean Air Act;
  • Eliminated an early proposal to allow citizens to sue over minor climate risks under the Clean Air Act; and Establishes green building incentives for HUD housing, including a loan program for renewable energy, block grants and credit for upgrades in mortgage underwriting.”

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Here Comes the Mt. Carmel Holiday Home Tour!

It’s that time of year again, for the Mt. Carmel Holiday Home Tour!


Event Logo Image On Saturday, December 12th, from 11:00 a.m. – 3:00 p.m., you can visit four beautiful Mount Carmel and Edgewood Park area homes splendidly decorated for the holidays. Even if you can’t make the Tour, come shop the wonderful Gift Boutique at the school, at 301 Grand Street! The boutique is open to the public from 10:00 a.m. –4:00 p.m.


Tickets can be purchased directly through me (contact me at ed@edgory.com), or online here.

There will also be a Holiday Home Tour Raffle. First prize will be: Your choice of Six Waterford “Lismore Jewels Diamond” Toasting Flutes and a Limited Edition Champagne Bucket, as well as extra New Year’s goodies, or Pottery Barn Holiday Table ware – 12 “Twelve Days of Christmas” salad plates, 12 large white dinner plates and coordinated napkins.

Second prize will be Williams-Sonoma “Nutcracker” dessert dishes, cereal bowls and mugs for 6!

Raffle tickets are $5 each or 5 for $20! You can also purchase these from me (ed@edgory.com) as well!  The raffle will be pulled at the end of the Home Tour Event.  No need to be present to win.  All proceeds benefit Our Lady of Mount Carmel School.

Please note that this event has been planned with adults in mind. Strollers will not be allowed in the homes and we ask that you do not bring young children.

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Don’t Forget to Vote Today!

voting

Redwood Citizens, don’t forget to vote today, November 3rd! The following info on today’s election also be found on theCounty of San Mateo’s web site:

The Consolidated Municipal, School and Special District Election will be held on Tues., Nov. 3. The polls will be open from 7 a.m. to 8 p.m.

According to Chief Elections Officer Warren Slocum,”All voters should double-check the location of their polling place before they head out to vote in these important local elections,” All jurisdictions in the county are participating except Daly City and Pacifica as they do not have candidates or measures on the ballot.

Voters can lookup the location of their polling place online at www.shapethefuture.org or by calling the Elections Office at (650) 312-5222. Voters can also view (or print) their Sample Ballot. And for those that vote by mail, the website provides peace of mind through the Track & Confirm feature that gives the voter confirmation that his/her voted mail ballot was received by the Elections Office.

On Election night, Chief Election Officer Warren Slocum will host a celebration for anyone interested in gathering to watch the election night returns as they are reported. Join community leaders, citizens and elected officials and share in an old-fashioned evening of election returns. All are welcome.

The Election Night gathering will be held at the Rotunda at 555 County Center in Redwood City starting at 7:30 p.m.

Election night returns will be issued at 8:05 p.m. and on the half-hour for the rest of the evening until the count is completed. The results will be issued in person and on the Elections website according to the following schedule:
Vote by Mail Ballot Results         8:05 p.m.
All-Mail Ballot Precinct Results    8:30 p.m.
Early Voting Center Results        9:00 p.m.
Live Precinct Results                  9:30 p.m.
Live Precinct Results                10:00 p.m.
Live Precinct Results                10:30 p.m.
Live Precinct Results                11:00 p.m.
Live Precinct Results                11:30 p.m.

Interim reports will be issued until all the precinct votes have been counted.

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Tales of Buffoonery, aka What the Heck is Bank of America Smoking?

Ok, I only republish these three stories below because the last two transactions I’ve had where B of A was the buyer’s lender have me totally convinced that BofA’s left hand does not even KNOW there is a right hand. Ok, ok, I know that mortgage regulations did need to be more restrictive compared to the free-wheeling days of 2003-2006 — but boy, the pendulum has just swung so far to the other end of the spectrum, it can just make a buyer pull their hair out while continually uttering “WTF?”

Read on:

BofA requires armless man to provide fingerprints to access his cash:

http://www.huffingtonpost.com/2009/09/02/bank-of-america-asks-arml_n_275882.html

BofA forces homeowner to buy flood insurance (when she lives on the crest of a big hill)

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=6996278

Tales of Short Sale insanity in dealing with BofA

http://agentgenius.com/g-rants-insanity-more/realtors/bank-of-america-retard-division-for-short-sales/

(quick note: I’m just republishing this one, I’m not condoning his metaphor….but do note this, the thesaurus usage of “retard”:  “the process is retarded by bureaucratic red tape delay, slow down, slow up, hold back, hold up, set back, postpone, put back, detain, decelerate; hinder, hamper, obstruct, inhibit, impede, check, restrain, restrict, trammel.”)

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The New HVCC Law – Does It Help, or Just Plain Suck?

aretheyinsanelgSo there’s this new law affecting the real estate and mortgage industry, called the HVCC – short for “Home Valuation Code of Conduct”, which went into effect last month, and is the byproduct of a legal settlement between NY attorney general Andrew Cuomo and Fannie Mae & Freddie Mac.

Here’s how it was “supposed” to help: to assure appraisers that they would not be unduly influenced by lenders in the appraisal process.

Here’s where it proverbially, “sucks”: costs rose, and accuracy in appraisals took a nosedive. Moreover, appraisers that are unfamiliar with local markets, inexperienced or both, are using distressed sales – foreclosures and short sales of existing houses – as their comparables

Kenneth Harney from the Washington Post (in my opinion, probably the best columnist covering real estate issues, bar none), wrote a great article recently(full contents here, but I’ll quote some of the highlights below).

How it can affect everyone:

It could directly affect the value of your house – probably negatively – by tens of thousands of dollars

The issue concerns low valuations and the new rules guiding appraisers in both price-depressed and rebounding markets. Consider these snapshots of what’s going on:

  • In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision. Prices range from $340,000 to $350,000. But recently there’s been a major hitch: Appraisers assigned by banks are coming in with valuations $60,000 or more below Doyle’s selling prices. The appraisers, who Doyle says are unfamiliar with local markets, inexperienced or both, are using distressed sales – foreclosures and short sales of existing houses – as their comparables. Some of the distressed properties are in poor condition, and all of them offer fewer amenities, according to Doyle.
  • In Wilmington, N.C., a loan applicant with a house in excellent condition, and an unblemished payment record, sought to refinance into a 4 3/4 percent mortgage. She had purchased the property four years ago for $160,000 and made about $20,000 worth of improvements in the interim. Her loan application, according to Paul Skeens, president of Colonial Mortgage Group of Waldorf, Md., was “a slam dunk. Nothing to it.” The house was worth $180,000 to $200,000, according to one estimate.

But when an appraiser with little local knowledge was sent in by a bank to value the house, he chose two short-sale properties that had both closed in the mid-$140,000 range, and one inheritance sale around $155,000. The last property was “in horrible condition,” said Skeens. “I’d call it dog meat.” The deal-paralyzing appraised value that came in for the cream-puff refi: $149,000.

Complaints about lowballed appraisals – from builders, realty agents, consumers and mortgage companies – have erupted since May 1, when government-sponsored Fannie Mae and Freddie Mac put their new appraisal rules into effect nationwide. Critics charge that the new system is fostering the use of appraisers willing to work for low fees – sometimes 50 percent below previous standards – and who are willing to conduct home appraisals far outside their typical areas of activity.

Under the HVCC, appraisers are now routinely assigned by appraisal management companies rather than being selected by mortgage companies or loan officers. The management companies pocket as much as 40 to 50 percent of the appraisal fee.

Frustration with the new system boiled over and made its way to Capitol Hill late last month. The National Association of Home Builders called for an immediate change in the rules governing the use of foreclosures, short sales and other distress transactions as comparables for appraisals on non-distressed, typical homes, whether new or resale.

Two congressmen – Travis Childers, D-Miss., and Gary Miller, R-Diamond Bar (Los Angeles County) – have introduced legislation calling for an 18-month moratorium on the appraisal code. In identical letters to James Lockhart, the top regulator of Fannie Mae and Freddie Mac, and Cuomo, the National Association of Realtors also requested a moratorium and complained that the code is raising costs to borrowers, distorting property values and killing sales.

Asked for comment, Lockhart said through a spokesperson that his agency is monitoring the situation, and considers “the views of market participants important.”

Bottom line: Be aware of the issue. It affects your equity, even if you’re not buying or selling. And watch to see whether Congress fixes the problem.

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