Real Estate Central

Texas

2009-06-18T08:22:00.000-07:00

1st Quarter of 2009 NTREIS Market Watch

2009-06-01T08:25:00.000-07:00

Click here to view the 2009 1st Quarter Market Watch Report compiled the the North Texas Real Estate Information System and the National Association of Realtors

This month in real estate 2009

2009-05-21T02:02:00.000-07:00

First time home buyer tax credit explained

2009-05-13T20:17:00.000-07:00

Another funny Realtor skit

2009-05-07T14:44:00.000-07:00

National Association of Realtors

2009-03-30T07:31:00.001-07:00

Don't Try This At Home

2009-02-27T08:51:00.000-08:00

How Do Houses Get Sold:

4% for sale signs
6% magazine advertising (home magazines)
3% newspaper advertising
4% other media
5% direct mail pieces
14% internet marketing and advertising (Realtor.com, JJChapa.com, etc.)
7% other (undefined)
3% open house
54% coop Realtors through MLS

Are you planning on utilizing all of these resources to get your home sold fast and for top dollar? Could your sales efforts benefit from a complete marketing approach that encompasses these tools? J.J. Chapa's 25-step marketing program will maximize your homes exposure and get your home sold fast and for top dollar.

Call me today at 972-254-2011.

I have the keys to getting your home sold. You have the lock!

An opportunity of a lifetime....

2009-02-26T09:51:00.000-08:00

Warren Buffet says, "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." While Mr. Buffet was writing about buying stocks, the same can be said for housing today.

Housing issues have permeated the economy both locally and nationally. This week, one index that tracks housing prices, S&P/Case-Shiller Home Price Indices, indicated home values fell the most since 1968, declining 18.5% in December from the year before.
Looked at from a different perspective, this means home prices have fallen to levels not seen in six to twelve years, depending on individual markets. Following the Case-Schiller report was the report from the National Association of Realtors (NAR) recently. The NAR reported that home prices for the month of January fell by 14.8%.

The bright spot though in contrast was that the number of homes sold in December increased. Home buyers from coast-to-coast have been buying distressed properties at the rate of 45% of total sales.
Recognizing that now is the time to buy, everyone – from those looking to purchase their first home to seasoned real estate investors – is buying homes today. Bruce Norris, the head of an investment group in Southern California, expects to buy at least 100 homes this year as, "This is the buying opportunity of our lifetime."

Fundamentals Point to Strength
The basic fundamentals of the housing market point to higher prices ahead. Almost half of the properties being sold today are existing homes that are either owned by banks or homes on which banks are accepting short sales, allowing them to be sold for less than what is owed.
New homes or homes under construction are near all-time lows. The country's demographics point to more potential buyers coming into the housing market than projected inventory in coming years. This all points to higher prices on the horizon as demand will be greater than supply. This is supported by the fact that the inventory of unsold homes fell 2.7% in January.

Why Buy Now?
Three very important reasons to buy now are:
Interest rates are near all time lows;
Home prices have declined to levels not seen in years; and
Qualified first-time home buyers are now eligible for up to an $8,000 tax credit.
Lower Prices Don't Always Equate to Lower Payments
One final point to consider. Even if you believe that home prices will continue to decline, it's very difficult to believe that interest rates will remain at these low levels.
Did you know that even if home prices were to decline 10% but also during that time, interest rates available for home loans were to increase by 1.00%, your monthly principal and interest payment would actually be higher? It's true. So, if you are thinking of buying or the end of your lease is near, get busy and get in the game. To quote Mr. Buffet again, "If you wait for the robins, spring will be over."

Call me and we can discuss the best options for you today.

The Realtor...not everything has to be so serious

2009-02-13T03:37:00.000-08:00

S&P: Dallas-area home prices down 3.3%

2009-01-27T11:39:00.000-08:00

S&P: Dallas-area home prices down 3.3%

11:57 AM CST on Tuesday, January 27, 2009
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

Dallas home prices dipped by more than 3 percent in the latest gauge of nationwide home values.

But Dallas' decline in November from a year earlier was the lowest of any U.S. market in the closely-watched Standard & Poor's/Case-Shiller Home Price Index.

Nationwide home prices dropped by a record 18.2 percent in the monthly report while Dallas prices fell by only 3.3 percent, according to the report released early Tuesday.

“The freefall in residential real estate continued through November 2008,” S&P's David M. Blitzer said in the report.

It was the 28th consecutive month of nationwide price declines.

In the Dallas area, prices peaked in June 2007. Since then, they've declined by about 6 percent.

Phoenix, with a decline of 32.9 percent, and Las Vegas, down 31.6 percent, had the biggest annual declines in the just-released Case-Shiller report.

The survey tracks the prices of typical single-family homes located in each metropolitan area. The index survey does not include condominiums and townhouses. It only covers pre-owned properties – no new construction.

The Case-Shiller researchers compare sales of specific single-family homes over time.

The November Dallas price decline was in line with other recent studies which show that overall home prices in North Texas have fallen only slightly in the last year.

Along with Dallas, the lowest U.S. home price declines were reported in Denver (-4.3 percent) and Charlotte (-5.3 percent).

S&P/CASE-SHILLER HOME PRICE INDEX
Metropolitan area November 1-year change
Atlanta -11.2%
Boston -7.4%
Charlotte -5.3%
Chicago -12.5%
Cleveland -5.2%
Dallas -3.3%
Denver -4.3%
Detroit -20.7%
Las Vegas -31.6%
Los Angeles -26.9%
Miami -28.7%
Minneapolis -16.3%
New York -8.6%
Phoenix -32.9%
Portland -11.5%
San Diego -25.8%
San Francisco -30.8%
Seattle -11.2%
Tampa -20.9%
Washington -19.4%
Composite-20 city -18.2%

Don't put off buying a home with todays interest rates and low home prices

2009-01-21T07:58:00.000-08:00

My numbers for 2007

2009-01-19T10:07:00.000-08:00

The measure of a good real estate professional is results. That's it. Period. Just results. Can your agent close deals?

Well, for 2006 and 2007, there have been no agents with Keller Williams Coppell that have sold more real estate than I. 2008 wasn't as good a year for me but my drop to third can be explained by my market.

In 2007, I sold 68 houses. The average agent will sell 15 houses. Last year In fell to 45 houses. My main market (North Collin county) has been devastated by high gas prices and high foreclosure rates.

I still had a great year. But for my goals, the results don't match up to what I expected.

To get the results you need out of your 2009 real estate transaction, put my experience work for you today!

Mortgage Applications Rise as Refinancing Jumps

2009-01-15T08:47:00.000-08:00

Mortgage Applications Rise as Refinancing Jumps

U.S. mortgage applications jumped in the first full week of 2009 as record low interest rates spurred the greatest demand for home refinancing loans in over 5-1/2 years, data from an industry group showed on Wednesday.

Low mortgage rates, however, have yet to fuel demand for loans to purchase homes.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Jan. 9 increased 15.8 percent to 1,324.8, the highest reading since the week ended July 11, 2003, when it reached 1,358.2.

Thirty-year mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan in late November to buy as much as $500 billion of mortgage securities backed by Fannie Mae [FNM 0.66 -0.03 (-5.06%) ], Freddie Mac [FRE 0.65 -0.05 (-6.56%) ] and Ginnie Mae.

The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

The refinance share of applications increased to 85.3 percent from 79.8 percent the previous week, the highest level since the MBA started conducting its survey in 1990.

Spencer Rascoff, chief operating officer at Zillow.com, an online real estate service company based in Seattle, said loan requests to his company are up more than 200 percent from just two months ago, with loan requests on pace to hit about 25,000 in January and loan quotes on pace to hit 200,000.

"Many experts agree that rates will stay relatively low for at least the next few months since the federal government is now committed to buying mortgage-backed securities to keep borrowing costs low," Rascoff said on Tuesday.

"But the future of rates isn't certain, so locking in these low rates now is a smart move," he said.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.89 percent, down 0.18 percentage point from the previous week, the lowest level recorded in the MBA's survey's history.

Interest rates were well below year-ago levels of 5.77 percent.

"Our business has definitely increased dramatically in the past few weeks with rates dropping," Melissa Cohn, chairman and chief executive CEO of Manhattan Mortgage Company in New York, said on Tuesday.

Cohn said the telephones at her company have been ringing off the hook and while the company has not hired additional staff, it has retained as many people as possible.

"We are just working twice as hard to handle the increased volume," she said.

Meanwhile, though, the MBA's seasonally adjusted purchase index fell 14.1 percent to 295.8.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 10.8 percent.

Weekly Refinancing Activity Surges

The prospect of affordable home financing has provided a glimmer of hope for the U.S. economy with the housing market in the worst downturn since the Great Depression.

Mortgages

30 yr fixed 5.09% 5.25%
30 yr fixed jumbo 6.79% 6.91%
15 yr fixed 4.73% 4.95%
15 yr fixed jumbo 5.73% 5.83%
5/1 ARM 5.71% 5.16%
5/1 jumbo ARM 5.84% 5.10%

The Mortgage Bankers seasonally adjusted index of refinancing applications jumped 25.6 percent to 7,414.1, the highest reading since the week ended June 27, 2003, when it reached 8,599.1.

The adjustable-rate mortgage share of activity increased to 1.1 percent, up from 0.9 percent the previous week.

Fixed 15-year mortgage rates averaged 4.63 percent, down from 4.67 percent the previous week.

Rates on one-year ARMs decreased to 5.89 percent from 5.90 percent.

Copyright 2009 Reuters. Click for restrictions.

Local market from my perspective

2009-01-12T08:53:00.000-08:00

From Thanksgiving to the end of January, the Real Estate Market has typically been very slow. This year is no exception.

Not to say that I haven't been selling, just selling a lot less than I normally do. The economy overall has been taking a pounding. Enough to shut down car manufacturers for short time periods which I never thought would happen.

When buyers are cautious about buying a sweater, television or even a car, can you imagine their thoughts about buying a house? We are all in this market together so I'm sure you understand where I'm coming from.

The good news for our market is #1. House prices in our market have not taken a beating. Are we down a little in value? Sure. But it is a slight correction and our home prices are stable and sound and have paved the way for #2. We have a strong job market. Business is moving out of high priced areas and coming to places where cost of living is much less. Dallas is the 3rd strongest market right now behind Seattle and Houston. #3. Business relocation will continue to bring new buyers into our market and builders have slowed with oversupply. This should start healing the balance between supply and demand.

Call me and lets talk your real estate needs through. Thanks JJ.

Citi Reaches Agreement on home loans

2009-01-09T08:43:00.000-08:00

WASHINGTON (AP) -- Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.

The lawmakers aim to attach the plan to President-elect Barack Obama's economic stimulus legislation, and said Thursday the change in bankruptcy law could ease the foreclosure crisis that has dragged the economy into the worst recession in decades.

The compromise between Citigroup and Sens. Richard Durbin of Illinois, Charles Schumer and Christopher Dodd of Connecticut, would be limited to loans made before the bill is signed. Obama has said he backs the concept.

Schumer said he received calls Thursday from several banks - which he did not name - indicating their potential interest in supporting the idea.

"This is a breakthrough day," the senior senator from New York said in a news conference on Capitol Hill. "We've been stymied because the banking industry opposed this simple provision, which is key to getting a floor to the housing market."

In a letter to lawmakers, New York-based Citigroup's chief executive, Vikram Pandit, said the change to bankruptcy law "will serve as an additional tool to the extensive home-retention programs already in place to help at-risk borrowers."

The so-called "cramdown" proposal has been backed by Democrats over the past year as a potential solution to the foreclosure crisis. Consumer advocates and Democrats say it would prod the lending industry to be more aggressive about modifying loans because of the looming threat of having a bankruptcy judge involved.

But the lending industry has battled fiercely against the idea, arguing it would force lenders to hike mortgage rates because they would have to charge more for loans that could be altered later by a judge.

"This would hurt the housing market at the exact time we're trying to stimulate it," said Scott Talbott, chief lobbyist at the Financial Services Roundtable, which represents large banks and insurance companies.

To qualify, borrowers would need to demonstrate that they have asked their lender for a loan modification before filing for bankruptcy.

Currently, a 1993 Supreme Court decision bars judges from altering first mortgages on primary homes, though such changes are allowed on loans for vacation homes, motorcycles, boats and other kinds of property.

Consumer advocates say that is unfair, while mortgage lenders contend it benefits the vast majority of borrowers who don't fall into bankruptcy because it keeps mortgage credit for primary residences cheap.

Other attempts by the government to deal with the surge in foreclosures over the past two years haven't made much of a dent in the problem.

A federal program, dubbed Hope for Homeowners, was intended to let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed-rate loans with lower rates. But the early results have been disappointing, with fewer than 400 applications since the program's launch on Oct. 1.

In an interview earlier this week, a lobbyist for the mortgage industry vowed to keep the bankruptcy judge plan out of the economic recovery bill.

"We think that's an unwise move that could delay the stimulus package," said Francis Creighton, the Mortgage Bankers Association's chief lobbyist.

In a speech Thursday at George Mason University outside Washington, Obama asked Congress to work with him "day and night, on weekends if necessary" to pass an economic revival plan within the next few weeks so that it can be ready for his signature shortly after he takes office on Jan. 20

Obama promised to rewrite financial regulations and pledged to launch "a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes."

Economic and Market Watch Report 2nd Quarter 2008

2009-01-06T06:08:00.000-08:00

Click here to veiew the best numbers regarding our North Texas Real Estate Information System Economci and Market Watch Report for the 2nd Quarter for 2008.

If you should have questions regarding this important information, please feel free to call. Like every year, the market takes a slow down from Thanksgiving to the end of January.

CBS NEWS VIDEO

2008-12-22T08:26:00.000-08:00

Mortgage meltdown to continue. Some areas are to be more affected than other areas.

CLICK HERE TO WATCH 60 MINUTE SPECIAL

Message from Gov. Perry, Lt Gov. Dehurst, Speaker Craddick

2008-12-19T09:34:00.000-08:00

Perry, Dewhurst and Craddick: Texas has economic edge 04:30 PM CST on Tuesday, December 16, 2008
Over the past several weeks, the news has been dominated by the worldwide financial crisis and the federal government's response, best described as wildly throwing borrowed money at problems, piling debt on top of debt.
In the midst of this turmoil stands Texas, a state with a remarkably durable economy that has led the nation in exports for six years, is home to more Fortune 500 companies than any other and created half the new jobs in the U.S. over a recent 12-month period.
Inquiring minds that want to know how we got here need look no further than the team approach we have taken to creating a fertile climate for economic development in Texas. When contemplating where to locate a company (and the jobs and investment that go with it), business owners are increasingly drawn to our state's low taxes, sensible regulatory climate and a legal system that protects them from frivolous lawsuits.
Imagine the financial situation our country would be in had the federal government applied the same principles that have made Texas the envy of the nation. America's current circumstances are not unlike those Texas faced in
2003 when we had to solve a $10 billion deficit. Rather than raise taxes or ask for a handout, we balanced the state budget the same way any family or business must: by bringing spending in line with income. Our common-sense solution was certainly unpopular in some quarters, but our willingness to choose the tougher course of action has clearly paid dividends with respect to our state's economic strength.
The unique spirit of teamwork among our three offices has extended through the years into other successful efforts, including overhauling our state's workers' compensation system, implementing innovative job creation vehicles like the Texas Enterprise Fund and investing in research and innovation through the Texas Emerging Technology Fund. In the months to come, we are committed to exploring the full range of options for funding our state's growing infrastructure needs. As teammates, we're not averse to butting heads, but we do so from a place of honest respect in the interest of improving the state we love so much.
The upcoming legislative session provides another opportunity to build on the foundations we established in past years and continue improving the quality of life in Texas. Surely, we face many challenges along the way, including unnecessary meddling by the federal government and costly mandates imposed by Congress. Our plan is to keep working together.
In the upcoming legislative session, we will remain focused on keeping the wheels of the Texas economy turning and Texans working. That includes greater efforts to ensure more deserving young people can afford college and that their education prepares them for an increasingly high-tech workplace.
We must also explore ways to further streamline our regulatory environment so we don't kill off companies already weakened by these tough times.
Our state's future economic viability also depends on our ability to provide Texas families, businesses, churches and schools the energy they need. We will strengthen our state's position as an energy leader with an all-of-the-above approach including nuclear, fossil fuels, wind, solar and more. These deliberate steps, shaped by careful planning, spirited debate and a shared passion for our state, will keep Texas moving forward.
We firmly believe our state's number one resource is Texans. Our job is to provide them an environment that encourages their success then get out of their way so they can do what Texans do best: work hard, take risks and create jobs. As leaders, but more importantly as Texans, we remain united in our efforts to maintain our economic edge and enhance the future prosperity of our great state.
Texas Gov. Rick Perry, Lt. Gov. David Dewhurst and Speaker of the House Tom Craddick co-authored this commentary.

Dallas housing market

2008-12-16T07:20:00.000-08:00

Yes. Houses are still selling. Buyers are still buying. There is just a lot less of it happening in todays market. Like everything, ever market must shift. The excess in our housing market and the excess values (in some parts of the nation) have reared their heads.

The PRO is that the DFW market, while slow, is still one of the strongest in the nation. Why? With the tremendous burdens our nations businesses are facing, many of them are choosing to re-locate into the DFW area where the cost of living is one of the most affordable in the nation.

Call me and let's discuss your re-location needs or your need to up-size or down-size your housing.

DFW Home Sales Drop

2008-12-15T19:45:00.000-08:00

Dallas-Fort Worth home sales drop 33%

11:42 PM CST on Tuesday, December 9, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

Sales of pre-owned homes in North Texas dropped by a stunning 33 percent in November as worries about the national economy kept homebuyers on the sidelines.

The decline in local home sales from last year is the largest since records have been kept and is evidence that the national housing downturn is finally hitting Texas.

The median price of homes sold in North Texas was also down, by 7 percent – more than double the rate so far this year, according to statistics released Tuesday by Texas A&M University's Real Estate Center and North Texas Real Estate Information Systems Inc.

November's drop in home sales compared with last year was almost double the decline in October.

"Not just Realtors but also builders noted that November sales and traffic were extremely weak," said D'Ann Petersen, an economist with the Federal Reserve Bank of Dallas. "There were reports from builders that cancellations were outpacing closings, and some buyers were just walking away leaving deposits.

"With economic and financial worries at the forefront, buying a home is definitely one of the last things on consumers' minds at this point."

And homebuyers haven't been wooed to the market by lower interest rates and bargain pricing.

"A lot of buyers have been spooked by the downturn in the credit and equities markets and just don't have the confidence to close today," said Dallas-based housing analyst Ted Wilson of Residential Strategies Inc.

"Most builders say that the buyers are looking for some good news to give them confidence to purchase, only the news continues to be bad."

The dips keep coming

North Texas real estate agents sold just 4,146 pre-owned homes last month through the industry's Multiple Listing Service. That's the lowest monthly total in more than five years.

And last month's median home sales price of $133,900 is down 15 percent from the peak in the summer of 2007.

The decline in overall home prices is partly due to the large number of sales of foreclosed homes. The National Association of Realtors reports that in the third quarter, more than 40 percent of home sales nationwide were distressed properties.

Ms. Petersen said foreclosed home sales by lenders are also affecting the North Texas market and no doubt contributed to November's larger-than-expected price declines.

"It is unwelcome news for an industry that has been hurting for some time," she said. "Hopefully, though, we will not see the double-digit declines that have been recorded in some other areas of the country, where job losses are steep and foreclosure rates are much higher."

Through the first 11 months of 2008, real estate agents have sold just over 71,000 homes in the 26-county area, a decline of 14 percent from the same period of 2007.

The drop in condominium sales in November was even steeper than in the single-family market – down 44 percent.

On a positive note

The one bit of positive news in the latest local housing report is that there was a significant decline in the number of homes listed for sale.

A total of 39,255 single-family homes are on the market in North Texas. That's a decline of 14 percent from November 2007 and the lowest total in more than three years.

The average time it takes to sell a house was unchanged at 80 days.

Longtime Dallas real estate agent Barry Hoffer said the November sales drop reflects a slowdown that hit when the stock market began to drop in late September.

"Buyers have become apprehensive in making a decision to purchase a new home with the constant bombardment from the news media about layoffs, bailouts and impending bankruptcies," said Mr. Hoffer, who works with Ebby Halliday Realtors. "This too shall pass, and we look forward to an improving local housing market by spring."

Jim Fite, president of Dallas-based Century 21 Judge Fite Realtors, said home sales are traditionally slow before a presidential election, and this year there were added worries about the stock market and the economy.

"It's a really a perfect storm," he said. "Buyers are sitting on the fence."

There's talk in Washington about cutting mortgage rates, which could be holding homebuyers back while they wait for lower rates, he said.

And, Mr. Fite said, November's grim report shouldn't be taken out of context. "As we know, a single month does not make a market."

Make Sure Your Home Will Sell

2008-12-03T13:01:00.000-08:00

According to the National Association of Realtors, the 2008 Remodeling Cost vs. Value Report compares construction costs with resale values for 30 midrange and upscale remodeling projects comprising additions, remodels and replacements in 79 markets across the country, expanding from 60 markets last year.

Where Should You Start?

Kitchen. In addition to wood decks and siding, window replacements and kitchen remodels also returned a relatively high percentage of remodeling costs on a national basis. All types of window replacements – upscale and midrange wood and upscale and midscale vinyl – returned more than 76 percent of costs. A major midrange kitchen remodel returned 76.0 percent of project costs, while a minor midrange kitchen remodel returned 79.5 percent of costs.
Bathroom. On a national level, bathroom remodels, while still a relatively good investment, do not return as high a percentage as in previous years. A midrange bathroom remodel was estimated to return 74.4 percent on resale, comparable to a midrange attic-to-bedroom conversion, at 73.6 percent of costs recouped, and a midrange basement remodel, at 72.7 percent of costs recouped.

Where Should You Avoid?
As in last year’s report, the least profitable remodeling projects in terms of resale value were home office remodels, sunroom additions, and back-up power generators, returning only 54.4 percent, 56.6 percent, and 57.1 percent, respectively, of project costs.

Just Trying to Come Out on Top?
Because many homeowners may be unable to totally remodel a room or two, or buy a storage shed or deck for the backyard, a good rule-of-thumb is to market your home in "move in" condition. Examples of "move-in ready" homes are:

No Trash - if you don't want those shirts in the closet or that desk in the back room, throw them away or donate them. Don't leave them for your buyer to dispose of.
Vacuum and dust, sweep and mop
Wipe down baseboards, ceiling fans, windows, etc.

Make sure that when a potential buyer comes in to your home, they see clean and smell clean. Buyers also like light. Keep you curtains pulled back or leave on lights in not-so-well-lit places.

A good Realtor will market and sell your home. You just need to make it marketable!

Imporant news regarding FHA Loans

2008-11-26T12:16:00.001-08:00

Understanding FHA

By Jason Kotar

RISMEDIA, Oct. 21, 2008-With the Federal governments re-emphasis on the FHA as a key vehicle for resuscitating the real estate market, now is a good time to review FHA in more detail.

Let’s start with some basics. First, the FHA insures loans that approved lenders make, it does not purchase them as Fannie and Freddie do. If a FHA insured home goes into bankruptcy, FHA pays off the mortgage to the Lender, takes ownership of the home, and then proceeds to sell it (a HUD home.)

To mitigate its risk and provide income to offset foreclosures and defray their expenses, FHA charges the borrower insurance premiums, both an up-front and a monthly premium. The up-front premium can be included in the mortgage amount.

FHA loans are available for purchasing or refinancing a 1 to 4 unit, owner occupied home. There a number of FHA programs that cover the gamut of real estate offerings, from your “vanilla” FHA loan to Condos to REO’s to Reverse Mortgages to Rehab to Veteran loans and more. In subsequent articles we will be reviewing these programs in more detail.

Over the last number of months, FHA began implementing some changes to their programs. In addition, the Housing and Economic Recovery Act placed additional changes in FHA practices, some of which modified FHA proposed changes. I have listed some of those changes below.

Converting Existing Homes to Rentals

The FHA changed their underwriting rules to limit the ability of a homeowner to use rental income from a previous residence that it converted to a rental property, when applying for a new mortgage on a second property. Under the new rule, the homeowner must prove sufficient income to make both mortgage payments without the rental income or has an equity position in the rental property that it will not likely result in defaulting on that mortgage. There can be an exception to this rule for employment relocations.

This change mirrors the announcement by Fannie in August. Apparently, homeowners, in increasing numbers, are choosing to vacate their existing principal residence and purchase a new residence. They are then providing misleading information on the rental income of the property being vacated to justify the new mortgage. These changes effectively end “bail and buy” loans.

Moratorium on Risk Based Premiums

The Housing and Economic Recovery Act provided for a one-year moratorium on the implementation of the FHA’s risk based premiums beginning October 1, 2008. The effect of the risk based premium was to increase the premium based on the amount of the down payment.

This will not delay the implementation of an upfront premium as well as well as monthly premiums on all loans.
Seller concessions of 6% are still allowed; however, down payment assistance programs have been eliminated effective October 1, 2008.

Down Payment Requirements

The Housing and Economic Recovery Act also called for an increase in down payment required to 3.5%. That change will not go into effect until January 1, 2009.

As with any loan program, there are a number of stipulations that need to be met to gain approval. That is why it is important to choose the right FHA approved lender. Not all FHA approved lenders service all FHA loan programs.

Short sale press release

2008-11-10T10:01:00.000-08:00

Today’s homeowner can rest assured that there are options when being faced with a foreclosure situation.
Reinstatement, forbearance, rent out the property, mortgage modification, refinance or sell the home are the typical options that could fit a homeowner trying to avoid foreclosure. Each one of these options bring its fair share of pros and cons.
There are record numbers of defaulted loans that are impacting North Texas.
"I’m seeing more and more families and individuals who are having a problem keeping up with their mortgage payments in the North Texas area," said J.J. Chapa, a Broker with Keller Williams Realty. "These scenarios are caused by a myriad of different individual issues. It is causing real estate professionals to think outside the box when it comes to finding solutions for these homeowners."
Some causes of default are the typical scenarios; job loss, medical debts, divorce to name a few. The biggest culprit, however, is the adjusting rates from adjustable rate mortgage (ARM) loans.
"The ARM was not the best product for many homebuyers," Chapa said. "However, the consumer is in the ARM and when that monthly payment goes from $1000 a month to $1400 a month, something is gonna give."
What typically "gives" is the owner. Most of the time, they don’t understand their options. Most owners believe that their only option is to let the property foreclose.
The short sale has become one way to save an individual or family from a foreclosure.

Dallas Fort Worth homes will hold their values

2008-10-30T15:37:00.000-07:00

By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
One of the biggest worries for today’s homebuyer is the continued drop in home prices.
While cheaper housing costs are appealing, many consumers fret that prices will keep falling after they buy.
Texans shouldn’t be so concerned, according to a new report by the Center for Economic and Policy Research and the National Low Income Housing Coalition.

The analysis of the 100 largest U.S. home markets shows that Dallas-Fort Worth homebuyers are more likely to preserve home equity during the next four years.
Houston, D-FW and San Antonio are among the tops in the country in this forecast.

The study is based on a purchase of homes priced at 75 percent of the median price, which is about $150,000 in D-FW. The home purchase is financed at between 6 and 8 percent interest.
By 2012, the purchaser of a mid-priced home in Houston, D-FW and San Antonio will have, on average, more than $80,000 in equity in the house, the researchers predict.

While such forecasts are often academic, the trend it highlights toward higher home equity here is important. Almost a third of the metropolitan areas in the report are forecast to see a net decline in home equity during the same period.

The study concludes that home prices in “many communities have yet to hit bottom and significant price declines must be reckoned with.”
The remaining downside is worst in regions of the country that saw big run-ups in home prices before the current decline.

The researchers warn that it would be a mistake for governments to try and stop the current housing market correction and “maintain what are historically unprecedented high home prices.”

The positive outlook for Texas home equity growth isn’t a surprise to Mark Dotzour, top economist with Texas A&M University’s Real Estate Center.
“It confirms that there never was a price bubble in any Texas city and consequently the likelihood of equity increase is higher,” Dr. Dotzour said. “I find it interesting that their policy decision is to recommend that government allows prices to continue to fall.”
Median preowned home prices have fallen by between 2 percent and 3 percent in North Texas since peaking in mid-2007.
During the last year, nationwide home sales prices have dropped by more than 15 percent.

WHERE'S THE EQUITY?
Forecast of average home equity a buyer of a home priced at 75 percent of the median price could see during the next four years. From a comparison of 100 largest U.S. housing markets.
GREATEST INCREASES
McAllen
$90,795
Houston
$82,735
Dallas-Fort Worth
$81,338
San Antonio
$81,308
Rochester, N.Y.
$78,947

SHARPEST DECLINES
San Jose
-328,394
San Francisco
-226,489
Los Angeles
-168,069
Bridgeport, Conn.
-164,671
Oxnard, Calif.
$148,076

2008-10-23T14:30:00.000-07:00

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