Category Archives: Lewisboro

America’s housing policy: The definition of insanity | South Salem Real Estate

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If the definition of insanity is “doing the same thing over and over again and expecting a different result,” then clearly Albert Einstein is not responsible for America’s housing policies.

Federal Housing Finance Agency director Mel Watt on Tuesday unveiled new regulations that would make it easier for Americans to buy a house with little or no money down. The rules are aimed at private lenders who opposed a proposal that borrowers make a 20% down payment.

“Finalizing this rule represents a major step forward to providing greater certainty to the housing finance market and paves the way for increased participation by the private sector,” Watt said Tuesday at the Mortgage Bankers Association’s annual conference held at the Mandalay Bay in Las Vegas (A casino? Really? The optics couldn’t be worse.)

In 2013, less than 2% of the $1.6 trillion of MBS issued were so-called private-label securities, meaning they did not have government backing.

In separate but related news, Watt earlier this week announced that Fannie and Freddie are planning to guarantee loans with down payments as little as 3%, down from 5% previously and back to pre-crisis levels.

Insanity number one is the government bending to industry lobbying against proposed rules designed to tighten lending standards and force borrowers to have more “skin in the game” vs. less. The FHFA also loosened proposals to ensure banks have some “skin in the game” by forcing them to hold a small portion of the loans rather than bundling them together and selling them as mortgage-backed securities (MBS). The 5% “risk-retention rule” requires banks to hold onto 5% of loans they sell but exemptions “may enable the banks to hold less or nothing,” The NYT reports.

Insanity number two is the federal government saying they want to encourage private lending but at the same time “shifting course on Fannie Mae and Freddie Mac, announcing plans to use the mortgage giants to expand credit rather than reducing their outsize role in the housing market,” as The WSJ put it.

Fannie and Freddie already back 60% of all mortgages originated in the private market and guarantee 90% of all new mortgages underwritten, according to Investors Business Daily.

The root of all this insanity is a housing market that not only needs the Fed to keep rates at zero “for a considerable time” but also massive government-sponsored subsidies to maintain altitude. After two years of strength, the housing market has clearly cooled in recent months. From August 2013 to February 2014, the year-over-year increase in the Case Shiller national home price index exceeded 10%. The pace of increase has declined every month so far in 2014 and was at 5.6% in July, the most recent available, the slowest pace since November 2012.

The Obama administration, the Fed and the private lenders all share the same concern: That the housing market rebound is running out of steam and will start to rollover without additional incentives for banks to lend — and Americans to borrow. The MBA expects total lending for home purchases to fall 13.5% in 2014, The WSJ reports.

 

 

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http://finance.yahoo.com/news/america-s-housing-policy–the-definition-of-insanity-145304611.html

Top Subprime Mortgage Firm Accused of Abuses | #WaccabucRealEstate

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The nation’s largest servicer of subprime mortgages has engaged in abuses that could potentially harm hundreds of thousands of borrowers, according to the New York Superintendent of Financial Services.

The state regulator issued a letter Tuesday to Ocwen Financial Corp., documenting many of the same kinds of abuses that worsened the housing crisis and the Great Recession.

Ocwen inappropriately backdated foreclosure warnings and letters that denied mortgage loan modifications, making it nearly impossible for borrowers to appeal the company’s decision, according to the letter from Benjamin Lawsky, New York’s Superintendent of Financial Services.

Many borrowers who had fallen behind on their payments also received warning letters months after the deadline for avoiding foreclosure had already passed.

The agency also determined that Atlanta-based Ocwen failed to investigate the backdating of its letters to borrowers nearly a year after an employee raised questions about the practice.

“The existence and pervasiveness of these issues raise critical questions about Ocwen’s ability to perform its core function of servicing loans,” Lawsky wrote in the letter.

The letter refrains from saying whether the backdating was intentional or the result of poor oversight by Ocwen.

In a statement Tuesday, Ocwen blamed software errors in the company’s correspondence systems for the improperly dated letters to at least 281 of its borrowers in New York who received letters with incorrect dates.

The company added that it is investigating two other cases and cooperating with New York’s Financial Services department.

“We believe that we have resolved the letter-dating issues that have been identified to date, and we continue our investigation as to whether there are additional letter-dating issues that need to be resolved,” the company said.

Lawsky launched a probe into Ocwen in August amid allegations that Ocwen overcharged struggling homeowners on a product called force-placed insurance, which servicers force borrowers to buy if they don’t maintain voluntary homeowners’ insurance.

If mortgage borrowers don’t pay up for newly purchased insurance, Ocwen forecloses on their homes.

 

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http://abcnews.go.com/Business/wireStory/top-subprime-mortgage-firm-accused-abuses-26348931

Why Boomerang Kids Bounce Back | Katonah Real Estate

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Not only are the numbers of young people over 18 who live with their parents reaching unprecedented numbers, higher than previously assumed, they are not necessarily moving out when their financial situations improve, a according to a new study by Federal Reserve economists that may have important ramifications for housing marks.

The fraction of young adults residing with parents has reached a historic high of 36 percent. This new trend has grabbed the attention of journalists and policy makers alike, who have popularized terms likethe “boomerang generation,” referring to young adults who move back in with their parents after having lived on their own.  Young adults who “boomerang” are generally described as unable to live independently due to poor economic outcomes. Debt, and particularly student loans, among young adults has also expanded substantially over the past decade.

Nearly 40 percent of young adults carried student loans in 2010, up from 26 percent in 2001, and aggregate student loan balances have exploded in recent years, exceeding $1 trillion in 2013. The fraction of young adults living at home rose from 31.3 percent in first quarter of 2005 to 35.9 percent in first quarter of 2014.

Economists Lisa J. Dettling and Joanne W. Hsu found that increased indebtedness and problems managing debt – as measured by larger account balances, falling credit scores and delinquency on account(s)– increase large numbers of young people who return home to live with their parental co-residence.  Between 2005 and 2013 increases in student loan debt and delinquency and declines in credit card and auto debt account for 30 percent of the increase in flows into co-residence with parents and 26 percent of the increase in median time young people spent in co-residence.

However, less debt does not necessarily lead to a return to independent living.   “In fact, it seems highly likely the decision to move out will be more nuanced and idiosyncratic than the decision to move in: a period of financial distress may force an individual to move in with a parent, but a return to financial solvency does not necessarily force, or even create a sense of urgency for an individual to move out,” they said in a paper published last month by the Federal Reserve.

Large debt balances can actually shorten the time young people spend at home. The study found that young people with larger student loan and auto loan balances decrease the duration of time spent at home: a $10,000 increase in loans decreases the duration of co-residence by 1.5 percent for student loans and 4.9 percent for auto loans. Credit card balances also slightly reduce the time spent at home, though the effects were not precisely measured. Similarly, for each loan type, being current on payments reduces the duration with parents by 10 to 18 percent, relative to not having that loan type.

For student loans, each loan status reduces durations in co-residence relative to having no student loans– except for severe delinquency. Delinquency of 90 days or more, however, is associated with a 7.5 percent increase in the duration in co-residence. A student loan in deferment increases time spent in co-residence relative to being current, but durations are still almost 10 percent lower than those without student loans.  This indicates that deferment enables a young adult to reduce the length of time spent in co-residence, relative to those who become severely delinquent during the period of co-residence.

For auto loans, severe delinquency increases time spent in co-residence relative to mild delinquency and being current. For credit cards, being current and being seriously delinquent have similar effects on the duration.

 

 

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http://www.realestateeconomywatch.com/2014/10/why-boomerang-kids-bounce-back/

 

Home prices continue to level off | Cross River Real Estate

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The pace of home price appreciation in San Diego County fell to a level near its historical average in September, as the housing market continued its return to normalcy after last year’s investor-led run-up in prices.

In September, the median price for a home sold in the county was $445,000, up 5.5 percent from a year earlier, DataQuick reported Monday. Since the real-estate tracker began collecting the data in 1988, San Diego County has averaged an annual home-price gain of 5.2 percent.

“It’s difficult to talk about normal in a boom-bust state, but this is in line with the long-term average and certainly more sustainable,” said DataQuick analyst Andrew LePage.

In August, when annual appreciation was 8.1 percent, the median home price was $448,500.

The slowdown to 5.5 percent in September marked first time the annual pace of home-price appreciation has been near its historical average since July 2012. At that time, however, home values were recovering from the Great Recession, and annual appreciation was on its way to more than 24 percent year-over-year gains, which it reached in June 2013.

Those big home price gains came largely due to investors fixing and flipping distressed properties. Most of that activity is now in the past, with foreclosure resales making up 3.3 percent of the transactions in September. Now, market prices are being driven by traditional factors, such as incomes, supply and mortgage rates.

“Wages aren’t going up, gas, energy, insurance, everything else is going up faster than wages,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “It’s going to squeeze the housing dollar.”

The number of transactions was nearly flat over the month, declining by 19 sales to 3,305. Activity in the county’s housing market is down 2.3 percent from September 2013, when 3,383 properties changed hands.

Jordan Levine, director of economic research at Beacon Economics, said that his organization is forecasting 4 percent to 6 percent annual appreciation. He noted that DataQuick reports a median price for all homes sold, meaning that even in the days of d

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http://www.utsandiego.com/news/2014/oct/13/

Third quarter homes sales slow but steady | #Waccabuc Homes

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If you suspect there were fewer home sales this summer you are correct. But that is not necessarily a bad sign for the real estate market.

Homes sales are returning to a more stable market, say Realtors, noting that a lower number of closings recorded this third quarter compared with the same time period last year is actually a reflection of the long bad-weather winter that held down showings and inventory.

“There is not a lot of volatility in the current market. We are clearly in a stable recovery. And stability is good for the real estate market,” said J. Philip Faranda, president of the Hudson Gateway Multiple Listing Service, part of the Hudson Gateway Association of Realtors, which released its quarterly report Tuesday.

Home sales in all four counties serviced by the Hudson Gateway Multiple Listing Service was 4,545 units, just 90 units or 1.9 percent fewer than in 2013.

Westchester, the largest county in the MLS region, posted a sales decrease of 2.7 percent, to 2,863 units. Rockland followed closely with a 2.4 percent decrease. In Putnam sales actually increased by 3.1 percent, although that was measured against a small base of a few hundred units, according to the association.

“The pace of real estate sales in the third quarter of 2014 was just a shade slower than it was in 2013 when there was a very strong post-recession recover under way,” says the realty group.

By contrast in the first quarter of the year sales soared with a roughly 10 percent jump, but have clearly quieted down.

“Even though sales are down, prices are up — which is a very good sign of the recovery,” said Joseph Rand, manager partner of Better Homes & Gardens Rand Realty.

His high-end condominium in Nyack recently sold at just under $1.3 million.

“We are seeing growth and the market is getting stronger,” he said. “Don’t read too much into one quarter. Now the trajectory is very good and well paced.”

Nationally, there was a decline in existing home sales this summer with analysts seeing it as part of a larger market reset over the past seven or so years.

National Association of Realtors’ Chief Economist Lawrence Yun says one possible reason for the slight decline in sales this summer are modest price appreciations in homes and a lower inventory. The market is less appealing to investors, he said.

Another example of stability in the market is that mortgage interest rates remained relatively low. The average rate for a 30-year conventional mortgage hovered between 4.4 and 4.2 percent during the quarter.

All-cash sales remained popular in closing a deal, said RealtyTrac in noting that almost half the homes sold in the New York metro area in the first half of 2014 had no loan situation.

Price levels appear to be emerging from the recession with increases in median home prices in Westchester and Rockland counties.

The median sale price of a single-family house in Westchester was $682,500, up by 4.7 percent over 2013. In Rockland, the median house was $415,000, up by 2 percent.

However, in Putnam County there was a decrease in single-family houses with the current median price at $320,000, down 3.8 percent from last year but with a relatively low sales volume.

 

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http://www.lohud.com/story/news/2014/10/16/

 

Builders Adjust Sentiment | Katonah Real Estate

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Builder sentiment as measured by the NAHB/Wells Fargo Housing Market Index fell five points in October to a level of 54. Any value above 50 means more builder see the market favorably over those who see unfavorable conditions. The drop was from a 9 year high of 59 in August and returns the index to summer 2014 levels.

Conditions across markets continue to vary with some markets, notably those in the oil and energy belt, continuing with positive outlooks whereas markets struggling where employment trends have not been as strong. Builders continue to note shortages of buildable lots and a scattered concern about skilled labor shortages.

All three components of the index declined with the current sales index down 6 points to 57, expectations for future sales down 3 points to 64 and traffic down 6 points to 41. In every case, these levels are very close to the July-August 2014 levels. The three month moving averages for the four census regions were relatively steady since they span two similar months (August and October) with a high in September.

The housing recovery continues to show the same month to month volatility while generally moving in a positive direction and NAHB expects the trend to continue as mortgage rates remain historically low, house prices rise slowly keeping affordability at a reasonable level and pent-up demand builds.

 

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http://eyeonhousing.org/2014/10/builders-adjust-sentiment/

Mortgage rates dip below 4 percent | South Salem Homes

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Mortgage rates are moving below 4 percent for 30-year fixed conforming loans with balances below $417,000 for the first time since they spiked in June 2013. It’s not a huge move by the numbers, but psychologically it could be a major boost—potentially prompting a leap of faith for home buyers, but more likely a push for those looking to refinance existing loans.

“Rates have been under a bit of pressure so far this morning,” Mortgage News Daily’s Matthew Graham said Tuesday. “The first few rate sheets are right on the edge of 3.875 percent. Four percent would still be significantly more prevalent today, but 3.875 percent is out there for a few lenders.”

Mortgage rates, which loosely follow U.S. bond yields, have moved lower this month amid volatility in the U.S. stock market as well as weakness in financial markets overseas and global growth concerns. The average rate on the 30-year fixed had been stuck around 4.5 percent for much of the past year, falling slightly during the summer. On a loan of $400,000, the savings since that higher level is not dramatic, about $150 a month, but that might be enough for today’s ultra-sensitive buyers.

“Rates dipping below 4 percent might increase the sense of urgency for some home buyers,” said Craig Strent, CEO of Rockville, Maryland-based Apex Home Loans. “That might be tempered, though, by low inventory in many areas, the result of which could increase competition for good homes, raising the sale price and potentially wiping out the benefit of the lower rate.”

For refinancers, however, especially doing a no-cost refinance, it could be worth the trouble.

“Lower interest rates will impact refinancing for people who bought late in 2013 and early 2014. They can get half a percent off their rate now,” noted Logan Mohtashami, a loan officer with AMC Lending Group in Irvine, California. “Some who are looking to take their private mortgage insurance off their home will take advantage of these rates with their higher home price.”

While the government has provided just over 3 million underwater borrowers the opportunity to refinance to lower rates through its Home Affordable Refinance Program (HARP), rising home prices have brought thousands of other borrowers, who did not qualify for that program, back into the black and therefore eligible to refinance. Then there are those who purchased their homes in just the past year, when rates were in the 4.75 percent range, who could also benefit, although that is a small population.

“As has always been the case, we need to spend more time at newly acquired lows for a significant portion of eligible and interested borrowers to be able to take advantage of them,” said Graham, who says rates could go even lower from here.

 

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https://homes.yahoo.com/news/mortgage-rates-dip-below-4-163300092.html

 

Clark Gable and Carole Lombard’s getaway home in Palm Springs selling for $2.2 million | Waccabuc Homes

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Frankly, my dear …

A Spanish Colonial estate well-known among Hollywood film followers has come on the real estate market in Palm Springs’ coveted Old Las Palmas neighborhood for nearly $2.2 million.

It was the home of Clark Gable, the heartthrob in “Gone With the Wind,” and the American film actress he married in 1939, Carole Lombard.

Restored to its glory days, the Gable-Lombard House near O’Donnell Golf Club is still in the hands of a Hollywood luminary: film producer Joel Douglas, the younger brother of actor Michael Douglas and son to mid-century movie idol Kirk Douglas.

The Douglas family calls the estate Casa Del Corazon.

“It’s a beautiful home with a rich history and a wonderful feel,” Realtor Gregg Fletcher said of the rose-colored gem at 222 W. Chino Drive.

Fletcher calls the home one of the finest historic properties he has represented in the Palm Springs market.

“It’s got provenance,” he said. “There’s real pride of ownership in this house.”

To Joel Douglas, a co-producer of the 1980s action-adventure rom-com “Romancing the Stone” and its sequel, “The Jewel of the Nile,” Casa Del Corazon lives up to its name: “It is the House of the Heart,” he said.

“It’s been a grand old home that’s worthy of attention,” Douglas said.

The half-acre estate, laden with banana plants, decades-old palm trees, rosebushes and flowering vines, looks like a set from a Hollywood movie in the Golden Age. The home has unique details, from its weather vane to the mission bell in a portico near an iron gate.

The four-bedroom home, filled with movie posters, pictures of celebrities and fine artwork, is open and bright and has been restored such that it retains its architectural design elements.

 

 

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http://www.pe.com/articles/douglas-751854-home-lombard.html

5 mortgage myths dispelled | Katonah Real Estate

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If the idea of buying a house both scares and excites you, that’s how it should be. If you’re only intimidated or only enthusiastic, you’re probably going into the mortgage-buying process ill-informed.

After all, in the years before the Great Recession, homebuyers weren’t intimidated at all. For quite a few years, many people purchased homes that were out of their price range and often on shaky credit, but since lenders didn’t seem concerned, homeowners weren’t either.

Now, the tide has turned, and prospective homeowners are understandably more leery about making what will likely be the largest purchase of their lives. But maybe they’re too leery. According to a survey of 2,017 adults released last month by Wells Fargo & Co., the country’s largest mortgage lender, many borrowers who can afford a home may be frightened off, believing that buying a house is something they simply can’t do.

If you’re on either end of the spectrum — squeamish about homebuying or ecstatic with no worries whatsoever — here are some misconceptions about mortgages that may bring you to the middle.

Your credit has to be perfect or near-perfect. Two-thirds of the Wells Fargo survey respondents believed you have to have a very good credit score to buy a house. While there’s no doubt that a high credit score will help you get a better loan, it isn’t a deal-breaker if your score is middling. If you have some credit blemishes and financial scrape-ups but for the most part pay your bills and make steady income, you probably don’t have much to worry about, experts say.

“While credit is scrutinized, some loan types will allow credit scores as low as 620,” says Gaye Rowland, senior vice president of SharePlus Bank, headquartered in Plano, Texas. “Other compensating factors such as larger down payments or low debt-to-income ratios can offset some negative credit information. Every situation is analyzed individually.”

You must have a down payment worth 20 percent of the purchase price. This, too, is a myth. More than 40 percent of Wells Fargo respondents believed the only way to buy a house was to give a lender at least 20 percent of the purchase price of a house.

Again, it helps to have a 20 percent down payment, particularly if you want to avoid paying monthly private mortgage insurance. But many banks and mortgage companies — especially now that the recession is several years in the rearview mirror — offer loans that don’t require a down payment anywhere close to 20 percent.

“We offer many programs that either have 100 percent financing or a 3.5 percent down payment,” says Alyssa Schwabe, a spokeswoman for GSF Mortgage, headquartered in Brookfield, Wisconsin.

 

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http://finance.yahoo.com/news/5-mortgage-myths-dispelled-132946834.html#