Selling AZ With Rebecca

Wednesday, September 26, 2012

Foreclosures Continue to Fall From Last Year’s Levels

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 18, 2012

Foreclosure starts are down 13 percent from a year ago when they had reached a 17-month high, RealtyTrac reports. Foreclosure starts include default notices or scheduled foreclosure auctions.

Many experts had been predicting a foreclosure wave to occur this summer with foreclosuresreaching elevated levels. But the “wave” has yet to materialize. Foreclosure starts increased 1 percent in August from July but remain well-below year ago levels.

Several states saw large decreases in foreclosure starts in August:

Oregon - 89% decrease

Nevada - 64% decrease

Utah- 57% decrease

Massachusetts - 47% decrease

California - 42% decrease

Arizona - 41% decrease

Georgia - 31% decrease

Foreclosure filings—which includes default notices, scheduled auctions, and bank repossessions—increased 1 percent in August compared to July, but were still down 15 percent from last year’s levels. Also, bank repossessions decreased in August by 2 percent compared to the previous month, marking the 22nd month for declines, RealtyTrac reported.

Source: RealtyTrac

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Tuesday, September 25, 2012

In Buy vs. Rent, Home Buying Wins Again

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 18, 2012

A new Trulia study shows that owning a home is more affordable than renting over a seven-year time frame in America’s 100 biggest cities.

Trulia collected data on homes for sale and for rent from its Web site between June 1, 2012 and August 31, 2012, and factored in such items as transaction costs, taxes, and opportunity costs. The study assumes that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other costs. The cost of renting includes security deposit and renters insurance.

Trulia found that nationally, owning is 45 percent cheaper than renting, with affordability highest in Detroit and lowest in Honolulu and San Francisco.

Download Trulia’s full buy vs. rent cost analysis (PDF).

Source: “Homeownership 45 Percent Cheaper Than Renting, But Factors Vary,” eCredit Daily (09/17/12)

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Monday, September 24, 2012

Rising home prices lift 1.3 million out from underwater

CoreLogic: 5 percent price gain would give another 2 million equity in their homes

BY INMAN NEWS, WEDNESDAY, SEPTEMBER 12, 2012.

Inman News®

Rising home values helped 1.3 million homeowners get out from “underwater” in the first half of the year, and another 2 million would get equity if national home prices increase by another 5 percent, data aggregator CoreLogic said today.

CoreLogic estimates that 22.3 percent of all residential properties with a mortgage were worth less than what was owed on their mortgages at the end of June, down from 23.7 percent at the end of March.

That translates into 10.8 million homeowners who owed more than their homes were worth at the end of June, down from 11.4 million at the end of March and 12.1 million at the end of 2011, CoreLogic said.

“Surging home prices this spring and summer, lower levels of inventory, and declining REO sale shares are all contributing to the nascent housing recovery and declining negative equity,” CoreLogic Chief Economist Mark Fleming said in a statement.

Nevada had the highest percentage of mortgaged properties that were underwater (59 percent), followed by Florida (43 percent), Arizona (40 percent), Georgia (36 percent) and Michigan (33 percent).

Those five states accounted for 34.1 percent of the $689 billion of negative equity in the U.S.

http://www.inman.com/news/2012/09/12/rising-home-prices-lift-13-million-out-underwater

Friday, September 14, 2012

Low-Wage Earners Struggle to Attain Home Ownership

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 10, 2012

A study shows that most of the new jobs created post-recession have been low-wage jobs, which doesn’t bode well for helping to lift the housing market.

From the first quarter of 2010 through the first quarter of 2012, low-wage jobs rose 2.7 times faster than mid to higher-wage jobs, according to a study by the National Employment Law Project.

For the study, the advocacy group labeled low-waged jobs as those that pay between $7.69 to $13.83 per hour; mid-waged jobs between $13.84 to $21.11 per hour; and high-waged jobs between $21.14 to $54.55 per hour.

"The recovery continues to be skewed toward low-wage jobs, reinforcing the rise in inequality and America's deficit of good jobs," noted Annette Bernhardt, the study’s author. "While there's understandably a lot of focus on getting employment back to pre-recession levels, the quality of jobs is rapidly emerging as a second front in the struggling recovery."

As HousingWire notes, a person in the low wage category may earn $20,800 a year and a person in the mid-range income category may bring $28,000 per year.

“Neither salary would put a person in the position of easily affording a home,” a HousingWire article about the study notes. “For the housing market, the quality of jobs percolating throughout the economy is a key factor in deciding whether there are enough potential buyers to maintain home ownership.”

Source: “Higher Pay Drives Home Sales, But Most New Jobs Are Low Wage,” HousingWire (Aug. 31, 2012)

Wednesday, September 12, 2012

Another Sign That Home Prices Have Hit Bottom

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 10, 2012

Economists are increasingly confident that home prices have bottomed out.

For the last three years, home prices have usually risen in the spring and summer to only then lose all of those increases—plus more—in the fall and winter months. However, economists expect this year to be different and do not foresee such a big drop to occur to home prices in the colder months ahead, The Wall Street Journal reports.

While the fall months likely will bring out some sort of decrease in recent home price increases, “we have a much better supply and demand dynamic” than in previous years, Mark Fleming, CoreLogic’s chief economist, told The Wall Street Journal.

Home prices have posted some of their largest year-over-year jumps compared to the last six years. According to CoreLogic, home prices have risen 9.6 percent from February, which was the month prices reached their lowest levels since the housing slowdown. Economists say it’s unlikely that, given recent indicators, home prices will reverse course steeply and fall 9.6 percent or even more in the coming months. Home prices haven’t dropped by that type of percentage since the economy was in a recession.

Monday, September 10, 2012

10 tax tips for home sellers

Real Estate Tax Talk

BY STEPHEN FISHMAN, FRIDAY, SEPTEMBER 7, 2012.

Inman News®

It is so hard to believe we are sneaking upon a new year. Where does the time go? But here are some things to remember when buying and selling a home!

The IRS has recently issued a helpful list of 10 tax tips all homeowners should keep in mind when selling a home:

1. You are usually eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it onForm 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

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Tuesday, July 17, 2012

Have an FHA Loan? It Might Make Sense to Refinance in 2012

If you have an FHA loan, there hasn’t been a better time to take advantage of lower interest rates, and the government has lowered prices on mortgage insurance to help make it more affordable.

The FHA streamline refinanceprogram has been around for years, but most people don’t realize that the Department of Housing and Urban Development is constantly tweaking the mortgage insurance premiums that are required on FHA loans. As a result of these changes, the FHA streamline guidelines have an impact on whether it makes sense to refinance — not just interest rates.

What’s new?

For years, HUD has required that each FHA borrower pay an up-front mortgage insurance premium as well as a monthly mortgage insurance premium (MIP), and finding the information about guideline changes on these requirements can be difficult.

Currently, the most important date to be aware of when thinking about an FHA streamline refinance isJune 1, 2009. FHA loans that were endorsed (note: the endorsement date is usually a few weeks after your closing date) prior to June 1, 2009, now have different — and lower — mortgage insurance costs than FHAloans that were endorsed after that date.

MIP requirements for FHA streamline loans endorsed prior to June 1, 2009
Up-front MIP = 0.01 percent
Annual (paid monthly) MIP = 0.55 percent

MIP requirements for FHA streamline loans endorsed after June 1, 2009
If your FHA loan was endorsed after June 1, 2009, the MIP calculations can be somewhat confusing. MIP will vary based on loan-to-value ratio and the term of the loan.

15-year FHA loan, LTV over 90 percent: 0.60 percent
15-year FHA loan, LTV under 90 percent: 0.35 percent
15-year fixed-rate loan with LTV of 78 percent or less : no annual MIP
30-year FHA loan, LTV over 95 percent: 1.25 percent
30-year FHA loan, LTV under 95 percent: 1.20 percent

These are annual amounts and are paid monthly. So for a $100,000 loan with a 0.60 percent annual MIP, it would be 100,000 x .006 = 600 / 12 = $50 per month.

FHA streamline requirements in 2012

Net Tangible Benefit: Each FHA streamline has to pass the Net Tangible Benefit test, and mostlenders use a worksheet to make sure the scenario “makes sense” for the borrower. One specific requirement is that the principal, interest and mortgage insurance portion of your new mortgage payment must go down by 5 percent or more. You would also be eligible if you’re refinancing from anadjustable-rate mortgage into a fixed-rate mortgage.

Loan balance can’t increase to cover closing costs without an appraisal: HUD doesn’t allow you to “roll the costs in” and increase your loan balance on the FHA streamline without an appraisal. The total amount of your new loan can’t be higher than your current principal balance plus the up-front mortgage insurance premium. The most common way for people to pay for closing costs is to be credited by the loan officer for their closing costs, but I have seen some people bring cash to closing as well.

Credit qualifying vs. non-credit qualifying: Some lenders will offer a different interest rate for people who can credit qualify and for people who opt for a non-credit qualifying FHA streamline. Be sure to ask your loan officer if the lender offers a difference in rate between the two.

Credit scores required (generally): Most lenders (although maybe not all) will require a minimumcredit score on an FHA streamline. The most popular minimum credit score I see at lenders today seems to be 640, but be aware that some lenders may have a lower minimum credit score — or maybe even no credit score requirement at all.

FHA streamline for non-owner occupied homes: Many people have become “forced landlords” in the past few years and for whatever reason now have an FHA loan on a property they are currently renting out. The FHA streamline program can be done for these types of situations as long as theowner occupied the home for a least 12 months. When doing this kind of streamline, there is no appraisal option — meaning you can’t finance any of the closing costs except the up-front MIP.

Late payments: In order to be eligible for the FHA streamline program, most lenders will require that you have made the past 12 payments on your current FHA loan on time.

With the significant reductions in the mortgage insurance premiums for FHA loans endorsed prior to June 1, 2009, it makes sense that many more people are searching for a lender that can help them get a lower interest rate and save a significant amount on their mortgage payment. As with all mortgage programs, be sure to shop around for a good lender; you may be surprised to find not only differences in rates and fees, but also in expertise and service.