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Obama holds onto “revenue” caveat in averting “fiscal cliff” | Pound Ridge Realtor

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Repurposing their respective arguments from Friday’s round of press conferences, President Obama and House Speaker John Boehner, R-Ohio, in this week’s addresses made their cases for and against extending tax cuts for the wealthiest two percent of Americans, with a view to avoid the so-called “fiscal cliff” at year’s end.

For his part, the president pointed at his reelection victory Tuesday as a message “loud and clear” that Americans “won’t tolerate dysfunction, or politicians who see ‘compromise’ as a dirty word – not when so many of your families are struggling.”

On Friday, Mr. Obama said that while he’s “open to compromise,” he won’t allow a deal to go through that extends the Bush-era tax cuts – set to expire at the end of the year – for the top two percent of high-income families. Both parties are scrambling to arrange a bargain before a series of tax increases and spending cuts go into effect Jan. 1, potentially hurling the United States into another recession.

“At the end of this year, we face a series of deadlines that require us to make major decisions about how to pay down our deficit – decisions that will have a huge impact on the economy and the middle class, now and in the future,” the president said. “Last year, I worked with Democrats and Republicans to cut a trillion dollars’ worth of spending, and I intend to work with both parties to do more.

“But as I said over and over again on the campaign trail… if we’re serious about reducing the deficit, we have to combine spending cuts with revenue – and that means asking the wealthiest Americans to pay a little more in taxes,” he continued. “That’s how we did it when Bill Clinton was president. And that’s the only way we can afford to invest in education and job training and manufacturing – all the ingredients of a strong middle class and a strong economy.”

The same budget battle in 2011 that eventually led to $1 trillion in cuts also brought the government within minutes of shutting down. On Tuesday, voters elected the same legislative makeup – a split Congress and Democratic White House – that has struggled over the president’s term to break free of partisan gridlock and move budget legislation.

While insisting he’s “open to compromise and new ideas,” and said he’s invited leaders of both parties to the White House to discuss solutions next week, the president issued a caveat: “I refuse to accept any approach that isn’t balanced,” he said. “I will not ask students or seniors or middle-class families to pay down the entire deficit while people making over $250,000 aren’t asked to pay a dime more in taxes.

“This was a central question in the election,” he continued, “and on Tuesday, we found out that the majority of Americans agree with my approach – that includes Democrats, Independents, and Republicans.”

But delivering the Republicans’ weekly response, Boehner, too, recycled his gist from Friday’s press conferences, arguing that allowing the top two rates to rise would be letting “our nation’s economy go off part of the fiscal cliff in January.”

Democrats “believe that doing that will generate more revenue for the federal government – but here’s the problem with that,” the House Speaker said. “Raising those rates on January 1 would, according to the independent firm Ernst & Young, destroy 700,000 American jobs. That’s because many of those hit by this tax increase are small business owners – the very people who are the key to job creation in America. I used to be one of them.

“This week, I offered congratulations to President Obama, along with an alternative to sending our economy over any part of the fiscal cliff,” he continued. The pillars of his own framework, Boehner explained, include tax reform “that closes special interest loopholes and lowers tax rates,” entitlement reform, and a rejection of “arbitrary” national defense cuts.

“A stronger economy means more revenue – which is exactly what the president is seeking,” he said, adding that a brief conversation with Mr. Obama this week left him “hopeful that we can continue those talks and forge an agreement that can pass both chambers of Congress.”

via cbsnews.com

3 Steps When the Appraisal Comes in Low | Pound Ridge NY Real Estate

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Whether you are buying or selling, waiting for an appraisal to come back can be a nerve-racking process, especially in an economy where home values are not what they used to be, despite the perceived value of a home. Because there are great deals out there and prices are increasing, buyers and sellers need to make quick decisions when the appraisal doesn’t make the cut, and it’s important to be prepared in advance for this scenario.

With this in mind, here are the three main steps to take when the appraisal comes in low:

Read the report for accuracy

Appraisal reports can be long, complicated documents, but they can be very revealing if you take the time to read them thoroughly. Make a note of anything that looks off, and verify that the information is correct, not only for the property itself but also for the comparables. Confirm that ALL comps are accounted for — some may not be listed on the MLS, and your real estate agent will have to research. Your agent will work with the buyer’s mortgage professional to ensure the information is relayed to the appraiser.

While there is no guarantee that the report will change, it certainly helps to clarify any errors and understand why an appraisal came in low. Appraisals also point out if there are any secrets lurking within the property’s walls, such as unpermitted additions that add square footage but cannot contribute toward the property’s value. For this reason it’s important that sellers are honest and upfront from the beginning and that buyers do their research before making an offer.

Renegotiate

Just because the appraisal is low doesn’t mean the sale will not close. However, in a low-inventory market, sellers may not want to conduct a second appraisal, which means that buyers and sellers have to decide if they want to work together to seal the deal — whether the seller adjusts the price to the appraised value or the buyer and seller renegotiate a new price. You’ve worked together this far, and it may have taken you both some time to get to this point. Keep in mind that you both have something to lose by not moving forward after investing time and money in the purchase. If a compromise can be made, it most likely will be. On the flip side, if the property is in demand, the seller may opt out of negotiating down as they may want to take a chance on someone else paying the difference or having a cash buyer.

Show them the money

While adjusting the price up or down may not feel good for the buyer or the seller, it may be the smart move, depending on your situation. For buyers, if the long-term value is there and the home is the “love of your life,” it will truly benefit you in the end. For sellers, if you need to make the sale and are running out of time, a compromise may be essential. Buyers may also have to spend even more because a decrease in equity could cause you to fall below the lender’s required down-payment threshold, requiring the purchase of private mortgage insurance.

The main question to ask yourself … is it really worth it?

via zillow.com

Canada’s Hot Housing Market Chills in September as Prices Drop | Pound Ridge Realtor

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Canadian home prices in September fell the most in nearly two years, suggesting that recent changes to the country’s mortgage rules have reined in Canada’s once-hot housing market.

Canadian home prices cooled in September, according to the Teranet-National Bank Composite House Price Index.

The Teranet-National Bank Composite House Price Index, or HPI,  fell 0.35% in September from August, with price drops observed in six of the 11 major Canadian cities watched by the index, including British Columbia’s Vancouver and Victoria markets, as well as Montreal.

That’s the largest price decline seen by the HPI since November 2010, when the  index fell 0.39%. Since then, the HPI has only seen four monthly declines, as historically low interest rates have spurred spending in Canada’s housing sector.

On an annualized basis, the HPI gained 3.6% in September, a slight drop from the previous month.

The federal government’s new rules that reduced the maximum amortization period of new government-insured mortgages from 30 to 25 years has “undoubtedly” contributed to cool the market, said National Bank Financial senior economist Marc Pinsonneault.

Still, existing home sales in Canada jumped 2.5% in September from August, according to the Canadian Real Estate Association, igniting worries that the sector may be headed for a crash landing.

Those concerns should be tempered as prices are likely to steadily drop up to 5% by the end of next year, said Mr. Pinsonneault.

“It doesn’t mean a catastrophe, but it’s consistent with a soft landing in the sector,” he said.

The sector will continued to be closely monitored by the Bank of Canada, which is concerned that the state of household debt in Canada is worse than originially perceived, said Mazen Issa, Canada macro strategist at TD Securities. The ratio of household credit-market debt to disposable income hit a record high of 163.4% in the second quarter of 2012.

via blogs.wsj.com

Must I compensate my agent if I don’t buy? | Pound Ridge NY Homes

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DEAR BENNY: Could you advise me of the appropriate (and legal) way to compensate the buyer’s agent we used for our unsuccessful house hunt?

After a stressful summer spent engaged in multiple bidding wars and a short sale that fell through due to a surprise judgment, we’re taking a break. We are happy with our agent’s performance, and we plan to utilize her services in the future.

Should I offer a simple thank-you note and reassurance that we will recommend her to family and friends, or do we owe her cash for real estate services rendered? Does she or her brokerage keep the money we placed in escrow for the short sale? –Lisa

DEAR LISA: Yours is an interesting question. I know a lot of real estate agents and brokers read my column so I welcome input from out there.

Did you sign an agreement with the agent? Presumably you did, because to my knowledge most states require agents and brokers to enter into a written agreement with a potential client before any actual work is done. Read that agreement carefully; it may obligate you to pay, even if you did not buy a house.

I would ask the agent directly: “We are very pleased and will use your services when we resume our search. We would like to give you a little gift; do you have to share it with your brokerage firm?”

One suggestion: Give her a gift card for a dinner for two at a nice restaurant or at an upscale clothing store. I think such a gesture plus a nice thank-you card would be appreciated and appropriate.

Since the agent did actually do work on your behalf, I am not concerned about anyone claiming this will be a “kickback” in violation of the Real Estate Settlement Procedures Act (RESPA). It is only when money is given for no services that RESPA can kick in.

I welcome any and all suggestions on this question.

DEAR BENNY: I refinanced in January (3.85 percent) and a friend advised me to inquire about a “direct reduction loan schedule.” He tells me it is a method to pay down principal significantly faster than overpaying the monthly installment. I have asked my mortgage banker about this, but so far no response. Can you clarify if there is such a thing and explain how it works? –Jim

DEAR JIM: Many lenders (but apparently not all) have a biweekly payment arrangement, whereby you make two payments a month instead of just one. The net result is that your principal balance is reduced every two weeks, thereby requiring you to pay less mortgage interest in the long run as well as paying off the loan faster.

My understanding is that lenders have to create a new computer program payment schedule, and not all lenders are prepared, or even willing, to do this.

Of course, you could add a little extra to your monthly payment and basically pay off the loan early. If you do this, however, make sure that each check you send in (and the coupon that accompanies the payment) specifically states “extra principal in the amount of $XXX.” If you are making a direct, automatic bank payment, make sure your lender understands this and properly credits the additional payment to principal.

DEAR BENNY: My husband and I are separated, but we own a condo together. I live in the condo and have paid all the costs, mortgage, taxes, upkeep and homeowners association (HOA) fees. Our incomes are separate. I want to pay off the condo, thus owing only taxes and HOA fees. My income is very low and the lower I can keep my monthly costs the better.

I’m 65 and eligible for a tax break on the condo, but I will get only half the amount because it is jointly owned. I was unable to purchase on my own because of my small income. I want the full tax break, so do I pay off the condo, thus clearing the deed? At that point, how can the property be in my name only so I can have only my name on the relevant documents and then apply for the full tax break? –Sally

DEAR SALLY: You are facing a dilemma that many divorced couples encounter: how to take title in your name. Unfortunately, in my experience, the only way is to refinance the existing loan, but in your name only. That means that you will have to have sufficient credit to qualify for the new loan.

Do you have any relatives or friends who can assist you? Your ex can (should he decide to be agreeable) convey his interest in the property to you, but he will still be legally obligated on the existing mortgage.

There may be some state or local government programs in your area that will assist low-income homeowners obtain a mortgage. You should contact your local state representative or senator for additional information. They have been elected by you and should be responsive.

DEAR BENNY: I inherited a house from a friend who passed away six months ago. I have not yet taken title to the property and will not until the estate’s trustee finishes settling the estate, which will be in about a month. The mortgage is currently being paid from the interest generated in a CD account.

Once the trustee finishes her duties, the trust provides that the money remaining in this account be used to pay down the mortgage. Once the title is transferred to me, can I take over the home’s mortgage until I can get refinancing with a different lender?

I know that if I were a relative, I would have protection, but because I am not, I am worried that the mortgage company will call in the loan.

The loan has a prepayment penalty, which the mortgage company says it will waive for a short period of time (for the paydown), although it has not put this in writing. The prepayment penalty expires in six to seven months and would have been applicable, prior to expiration, even if the house was sold, although there were no stipulations regarding death of the borrower.

Ideally, I’d like to have the paydown and the refinancing happen at the same time; however, I have heard from a lender that my name must be on the title for six months before I can seek to refinance. Any suggestions on how to proceed? –Donna

DEAR DONNA: While state law will differ, my experience is that typically in probate situations, the personal representative is required to pay off all outstanding debts of the deceased, including the mortgage.

However, since you want the house, you will have to pay off the mortgage with your own funds over and above what is available from the trust.

I did not know the answer to your financing question so I discussed it with a friend who is in the mortgage business. He advised me that it is his understanding (perhaps misunderstanding) that the six months refers only to situations where a borrower wants cash out from the financing.

So I recommend that you consider shopping around for another lender who makes it clear that his bank really wants to lend money.

via inman.com

Credit Unions Move in on Mortgages | Pound Ridge NY Real Estate

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While full service banks and other traditional mortgage lenders have watched their mortgage businesses decline in recent years, credit unions have doubled their market share since 2009 and originated 8 percent of all mortgages in the second half of 2012.

Through the first half of the year, credit unions originated $56.3 billion in first mortgages and captured 7.6 percent of the market. They held 7.8 percent of those mortgages on their books and sold slightly more than half to secondary markets for asset-liability management purposes. Fixed-rate first mortgages comprised 14.6 percent of the asset base for credit unions, a slight increase from the 14.4 percent posted in the first quarter but down from the 14.7 percent posted during second quarter 2011, according to creditunions.com.

Credit unions also posted a 17 percent increase in consumer loan originations over 2011 levels, disbursing $85.5 billion in non-mortgage, non-business loans to members. The industry posted strong growth in used auto, new auto, and credit card loans, with new auto loans increasing 0.7 percent from June 2011 levels.

Industry sources cite service, speed and lower closing costs as advantages credit unions enjoy over other lenders.  Closings are generally 30 days faster and credit unions are exempt from state intangible taxes, which can save a borrower several hundred dollars at closing, though a New York Court of Appeals ruled recently that mortgages issued by federal credit unions are subject to the state’s mortgage recording tax.  Also, credit unions retain a larger percentage of the mortgages they originate, which means that members will only have one financial institution to make their mortgage payment and not have to worry about making a payment to another bank if the loan were sold.

From the mid-1990s until the mid-2000s, credit unions were a tiny fraction of the mortgage business, accounting for just 2 percent of the first-mortgage market, according to the Credit Union National Association, a trade group. But in 2008-09, that rose to 4.5 percent.  Before the first quarter of this year, 5 percent was the highest market share of mortgages credit unions had achieved during a three month period.

The growth in credit union mortgages surprises even industry leaders.  Back in 2006, the Credit Union Housing Roundtable, a group of strategists in credit union housing finance, set a goal of reaching the 10 percent share threshold by 2016. That goal now looks like it might be reached two or three years early and an industry consultant, Callahan and Associates, has upped it to 20 percent by 2020.

What makes the growth even more remarkable is that only about 17 percent of the nation’s 7300 credit unions write the vast majority of credit union mortgages.

To help smaller credit unions that may lack the expertise, personnel or capital to originate mortgages, several Credit Union Service Organizations have gone into business to pool resources and provide mortgage origination services  to help smaller credit unions make mortgage loans.

Industry leaders are also exploring ways to access additional capital for mortgage lending by developing investment vehicles to bring credit union issued mortgages to capital markets   Finding sources of funds in the capital markets that are an alternative to the GSEs will help them find new sources of housing finance in the face of continued uncertainty about the GSEs and provide them a way of financing mortgages that might not conform to GSE guidelines.

via realestateeconomywatch.com

Governor Cuomo: Fracking Will Support 1.7 Million Jobs, Study Shows | Pound Ridge Realtor

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Drilling for oil and natural gas in shale rock is supporting 1.7 million U.S. jobs this year, including workers outside the energy industry such as waiters and shop clerks, according to researcher IHS Global Insight.

Job tied to unconventional oil and gas production will reach 3.5 million by 2035, according to the report backed by the industry and released today. Because U.S. unemployment is high, many finding jobs related to drilling otherwise would be unemployed, said John Larson, a vice president at IHS and the study’s lead author.

The IHS report was funded by groups such as the American Petroleum Institute and the Natural Gas Supply Association. In January, President Barack Obama cited an earlier IHS study that predicted drilling for shale gas alone would create more than 600,000 jobs by the end of the decade.

“We look at this in the near term, and we believe that many of these jobs really are net new jobs because these individuals would not be able to find employment elsewhere,” Larson said on a conference call. “These jobs tend to be higher paying.”

Shale oil and gas is freed by hydraulic fracturing, or fracking, in which millions of gallons of chemically treated water and sand are forced underground to shatter rock and allow the fuel to flow. Critics have cited potential risks to ground water and air quality. The U.S. Environmental Protection Agency is conducting a study of the impacts of fracking on water.

Rigs, Pipes

About 80 percent of jobs will be on rigs or at companies supplying drillers, such as pipe manufacturers. The rest will be “induced” jobs in other businesses, such as restaurants, hotels and shops. This year, the drilling industry will support about 360,000 direct jobs, 537,000 jobs in supplying industries and more than 850,000 jobs outside the industry, according to the report.

The forecasts assume current regulations on fracking will remain unchanged, according to the report.

Job growth among oil producers reflects capital costs to tap into shale rock. From this year until 2035, more than $5.1 trillion will be invested to produce unconventional oil and gas, according to the report.

Federal, state and local taxes will increase more than $111 billion in 2020 from $62 billion this year.

“We’re talking about what we perceive as a game changer in energy production for the United States,” Larson said. “It’s a really rapid rise and a dramatic shift.”

Doubling Demand

Forecasts in the report are based on IHS projections of oil and gas production. The report assumes demand for natural gas to generate electricity will more than double from now through 2035, and that U.S. exports of natural gas will reach about 4.3 billion cubic feet a day by 2020.

“We have a very, very detailed, bottom-up, build on a play-by-play basis around all this activity,” Larson said. “What you’re seeing here does not represent all resources. It only represents those resources brought to market as a commercially viable productive frontier given the market prices that we see.”

In his January State of the Union address, Obama said fracking could support more than 600,000 jobs by the end of the decade. Larson said he was “comfortable with the accuracy” of that forecast based on state and national employment data.

via bloomberg.com

Coming Soon to a Store Near You: More Solar Energy Products | Pound Ridge Real Estate

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via motherearthnews.com

Pound Ridge NY Real Estate | Pending single-family sales shoot up 40% in Florida

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Florida earned its reputation as a recovered Sand State in September with pending home sales soaring 40.1% above year-ago levels.

While pending sales are contracts yet to be closed, Florida Realtors found that statistic compelling enough to declare Florida no longer in recovery mode, but stabilized and on solid footing.

Closed single-family sales also increased, rising 2% from last September to 15,643 sales last month, the Florida Realtors industry data and analysis department said.

The statewide median price for single-family homes also grew 7.4% from last year, with the actual median hitting $145,000. Half of the homes in the state sold above that price-point, while the remainder sold somewhere below it.

Inventory levels also lessened, making the market more competitive and situated for a stronger home-price recovery.

“[I]ncreased buyer demand in many local markets is creating inventory shortages — and that’s putting pressure on prices,” Florida Realtors said. “For sellers who may have been reluctant to enter the market, it’s now time to reconsider. Conditions are turning to a seller’s market.”

Single-family inventory alone reached a 5.2-month supply, the association said. Generally, a level of six months is symbolic of a balanced market for both buyers and sellers.

The state is now leaning in favor of sellers, suggesting now may be the time to move property, the association pointed out.

Townhome and condo properties saw total sales fall 2.9% from last year with only 7,329 units sold. Pending sales, on the other hand, increased 30.6% when compared to 2011 figures.

The statewide median for townhome-condo properties hit $105,736, up 18.8% from a year ago.

via housingwire.com