Wednesday, October 2, 2013

Jumbo Jungle: New, Tighter Lending Rules Coming

New rules coming in January will require borrowers to provide ample documentation before lenders will supply a mortgage.

Some buyers shopping for a luxury home are hoping to close the deal before Jan. 10. That is when new rules are scheduled to take effect that will tighten lending standards.
Issued by the Consumer Financial Protection Bureau (CFPB), the changes are designed to curb loose practices that triggered the real-estate meltdown. Under them, lenders are encouraged to underwrite only "qualified mortgages" that meet the tougher standards. Those that don't could face a lawsuit from borrowers if they default on the loan down the road.
Essentially, borrowers in 2014 will receive little leniency when digging out tax returns and documenting assets and potential earnings, says Tom Wind, executive vice president of residential and commercial lending at national lender EverBank EVER -0.95% . "From an industry perspective, most lenders are going to say, 'If I'm going to take on additional risk, I need to be even more careful who I lend to,' " he says.
The rules apply even to high-net-worth borrowers who have a long-standing relationship with a bank—borrowers who have enjoyed more lending leeway, says Guy Cecala, publisher of Inside Mortgage Finance, an industry publication.
The CFPB doesn't itemize exactly what information lenders must collect, but rules are specific about the borrower's debt-to-income ratio, which looks at monthly debts as a percentage of gross monthly income. Starting in January, borrowers can't have a debt-to-income ratio above 43%. This requirement may affect self-employed entrepreneurs who may show wide income fluctuations on tax returns, says Mathew Carson, a mortgage broker at San Francisco-based First Capital Group.
Mr. Carson has started discussing the impact of tighter documentation with his preapproved customers should they not be under contract for a new home before year's end, he says. The changes will pose challenges mostly for people at the low end of the jumbo spectrum—above $417,000 in most markets and $625,000 in high-price areas.
Many banks—especially those that hold customers' jumbo loans on their books—already have tight standards. Jumbo borrowers are typically required to put at least 20% down, which isn't mandatory for borrowers of conventional loans. Jumbo borrowers also face a higher bar for credit scores and loan-to-value ratios than conventional borrowers.
The higher standards are attractive to investors who buy mortgage-backed securities, which are loans that have been bundled and sold to other institutions or the public. Before 2008, the majority of jumbos were securitized; now, just 7% of the entire $220 billion volume of 2013 jumbo mortgages is expected to be securitized, according to Inside Mortgage Finance. Lenders that do securitize loans will be required to hold 5% of their mortgage values on their books for the term of the loan under the new rules.
Lenders will be allowed to issue non-qualified mortgages after the rules kick in. But investors may be reluctant to buy them on the secondary market, Mr. Cecala says.
Initially, some thought tighter rules would prompt lenders to completely abandon interest-only jumbos, which can be higher risk because the borrower doesn't repay any principal for a set period. However, the disappearance of interest-only jumbos now seems unlikely because "they are very popular with well-heeled borrowers looking at big jumbo loans," Mr. Cecala says. About 15% to 20% of current jumbo originations are interest-only loans, he adds.
TD Bank sees the changes as an opportunity to increase its market share, says Michael Copley, retail-lending director at TD, which operates from Maine to Florida. The bank offers interest-only products only to its high-net-worth customers who can prove financial stability. "Some institutions may walk away from interest-only mortgages, but we are quite bullish that we think it's going to be a differentiator for us," Mr. Copley says.
A few more considerations for jumbo borrowers in 2014:
• Shop features, not just rates. Rates may become a less-important determining factor than other terms of the loan, Mr. Cecala says.
• Don't inflate. Legal consequences for a bad loan will run both ways, and a borrower who misstates income or the home's condition will risk being charged of mortgage fraud.
• More regulations down the road. The CFPB is also overhauling good-faith estimate and truth-in-lending disclosure documents with an aim to merge them into one consumer-friendly document. These forms spell out the terms of the loan and actual costs incurred at closing. "That's something else lenders will have to wrestle with in the middle or end of 2014," Mr. Cecala says.

Full Article

Wednesday, April 17, 2013

57 Reasons To Live, Work & Play in West Michigan

Love for West Michigan!

Every community has its own vocabulary -- the names and places that make it feel like home. Here's an insider's look at the history, culture, and special character of a place called West Michigan. By the time you're done reading, you should be able to find us on The Mitten, name some of our beautiful beaches and local celebrities, describe the function of the Fish Ladder, and identify why dentists have a special place in their hearts for Grand Rapids. For extra credit: what world-famous architect designed our downtown amphitheatre?

Click here to view all the reason why West Michigan is a great please to live!

Ask the Andrea Crossman Group about Lake Michigan Waterfront homes for sale. We can help you frind your dream home.

Tuesday, March 19, 2013

Americans Expect Home Prices and Mortgage Rates to Increase

Consumer attitudes toward the economy and housing continue to diverge this winter, according to Fannie Mae’s February 2013 National Housing Survey results. On the one hand, consumers continue to express strong positive attitudes toward housing. On the other hand, sentiment about the economy and household finances is stalled. Average 12-month home price expectations and the share of consumers who believe home prices will go up over the next year both rose to record highs, and the percentage of Americans who say mortgage rates will rise reached its highest level since August 2011. At same time, Americans’ views on their personal financial situation, household income, and the direction of the economy fell or remained flat.
“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell."
“Since reaching its trough last September, the share of consumers expecting mortgage rates to rise has trended up,” said Duncan. “However, despite historically low mortgage rates, nearly half of borrowers have never refinanced their mortgage. Combined with the scheduled year-end HARP deadline, rising rate expectations should prompt some borrowers to refinance soon to take advantage of more favorable mortgage terms and add to their disposable income, helping to offset ongoing fiscal drag.”

►The percentage who think mortgage rates will go up increased by 4 percentage points to 45 percent, the highest level since August 2011, while those who think they will go down held steady at seven percent.
►Twenty-five percent of respondents say it is a good time to sell a house, the highest level since the survey’s inception in June 2010.
►Fifty percent of those surveyed say home prices will go up in the next 12 months, holding steady from January at the highest level since the survey’s inception.
►The share of respondents who said they would buy if they were going to move increased by two percentage points to 67 percent.

Fannie Mae's National Housing Survey polled 1,008 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, home ownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

For full article click here

Wednesday, March 13, 2013

Housing: It’s Becoming a Seller’s Market

The National Association of Realtors said on Thursday what home buyers in many parts of the United States have known for months: it’s becoming a seller’s market.

The number of homes listed for sale in January fell by 4.9%, leaving 1.74 million properties on the market. That’s the lowest since December of 1999, when there were 1.71 million homes on the market. By contrast, there were 2.91 million homes on the market two years ago at this time.

After adjusting for seasonal factors, home sales rose by just 0.4% in January, to an annual rate of 4.92 million units. Still, that’s up from 9.1% one year ago.

The upshot is that there’s a growing pool of buyers chasing a shrinking supply of homes. If the trend holds, prices will keep going up. At the current pace of sales, it would take just 4.2 months to sell the current supply of homes available for sale, down from a 6.2 months’ supply one year ago.

While inventories typically increase in the spring, the Realtors’ group has expressed growing concerns that sales volumes are being held back by the lack of choice. This is good news for homeowners who have watched home prices drop over the last six years, but it’s bad news for buyers—and for anyone that makes their living selling real estate.

Inventory declines have been the most dramatic in California, Arizona, and other markets that witnessed some of the largest home price declines. Those cities have large numbers of underwater borrowers—people who owe more than their homes are worth—while many others may have equity but aren’t willing to sell because prices have fallen so far.

Investors have also been aggressive in buying up properties that are selling for less than their replacement cost.
Home sales could rise to 5.2 million units this year, an increase of nearly 12% from last year, according to economists at Goldman Sachs GS -4.36%. They base their forecast on household formation and demographics, which both suggest rising demand for housing in the coming years, and affordability measures such as mortgage rates and home prices.

But the economists note that there’s a considerable amount of uncertainty that could make those targets hard to hit, particularly if there’s nothing for would-be buyers to purchase.

If you are interested in selling your home please contact the Andrea Crossman Group for more information 616-355-6387

To read full article click here

Tuesday, March 5, 2013

Home Prices Post Biggest Gain in Six Years

Home prices rose 8.3% in December from a year earlier, the biggest gain since May 2006, according to CoreLogic.

All but four states -- Pennsylvania, New Jersey, Illinois and Delaware -- posted increases.

Prices rose 0.4% in December from November, the 10th consecutive monthly advance.

Excluding foreclosures and short sales, which sell at deep discounts to the market price, home prices were up 7.5% on a year-on-year basis and 0.9% month-on-month. 

The states with the highest home-price appreciation in December were Arizona (20%), Nevada (15.3%), Idaho (14.6%), California (12.6%) and Hawaii (12.5%). 

"We are heading into 2013 with home prices on the rebound," said Anand Nallathambi, president and CEO of CoreLogic. "All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery."

 Housing appears to have some momentum, with prices expected to rise 7.9% in January from a year earlier, according to Core Logic's Pending Home Sales Index. Month over month, prices are likely to decline by 1%, reflecting the seasonal winter slowdown.

Excluding foreclosures and short sales, which sell at deep discounts to market prices, home prices are likely to rise 8.6% on a year-on-year basis and 0.7% on a month-on-month basis in January.

 -- Written by Shanthi Bharatwaj in New York  TheStreet

Tuesday, February 26, 2013

Is It Safe to Sell Your House Now?

It might finally be time to come out of the basement.

Seven years after the housing market began to collapse, rising prices and thinner inventories are presenting new opportunities for home sellers. Some hot markets are even seeing multiple offers for the same property—a phenomenon rarely seen since the boom years—as buyers become more confident and seek to take advantage of today's near-record-low mortgage rates.

Home prices nationally climbed 8.3% in December from the same period a year earlier, according to CoreLogic, CLGX -1.09%a real-estate analytics company. The increase was the largest since May 2006 and the 10th consecutive monthly gain. The CoreLogic figures include foreclosures and other distressed sales.

The gains are good news for would-be sellers who have been stranded on the sidelines since home prices peaked in 2006. Nearly one in four homeowners and renters say now is a good time to sell a home, according to a survey released this month by Fannie Mae.

Thinking about selling? You are likely to find a buyer more quickly and at a better price if you factor in local market conditions and recent sales before setting an asking price, burnish your home's Internet profile and plan ahead for a home appraisal.

Acting soon may pay off as well. While trends vary by region, buyer search activity generally peaks in March and April, while seller listings peak in July, says Jed Kolko, chief economist at real-estate website Trulia. "Most sellers would be better off if they pushed the process up a couple of months," he says.

Sellers could face headwinds if mortgage rates jump or the economy weakens, while the supply of homes for sale is likely to increase over the next few months, creating more competition, say real-estate agents.

Don't expect to make a killing. Even after the recent gains, home prices remain about 27% below their 2006 highs, according to CoreLogic.

Still, in many markets, sellers have more of an edge than they have had in years. One big reason: The number of existing homes on the market dropped to 1.74 million in January, down 25% from a year earlier and the lowest level since December 1999, according to the National Association of Realtors.

Houses are also selling faster. The median number of days on the market for homes in January was 71, according to the Realtors group, meaning half of all homes sold within that time. That's down from 99 days one year ago.

If you are thinking of making a move, start by assessing conditions in your local market. Lanny Baker, chief executive of ZipRealty, an online real-estate brokerage based in Emeryville, Calif., suggests focusing on five measures: price changes, the inventory of homes for sale, competition from foreclosures, the average time it takes a home to sell and the gap between selling prices and list prices.

But sellers shouldn't be complacent. Here are some steps to consider.

Interview agents. Some people prefer to handle the selling process themselves. But if you plan to use a real-estate agent, start by interviewing several contenders.

Mr. Baker of ZipRealty suggests narrowing your search to agents who have handled many sales in your neighborhood. They are likely to have the best view of local market conditions and can better assess what your home may sell for and how it should be marketed, he says.

Adjust your sights to today's market. Set aside what your home might have fetched in 2006 and focus instead on what homes are selling for today.

Dan Elsea, president of Real Estate One in Detroit, uses recent sales as his guide, paying particular attention to properties that have received multiple offers. He prefers the homes he sells to be among the five lowest-priced properties among similar homes. "Typically, a buyer will see and remember five homes at a time," he explains.

Pay attention to how long competing homes have been on the market. These days, well-priced homes often sell in a week or two, while homes that languish for months are typically priced at unrealistic levels.

Don't overreach. Given today's thin inventories, it is tempting to reach for the stars. But if you get greedy and set the price too high, you are likely to wind up in a downward spiral.

"You are going to have your largest viewing audience in your first days on the market, when the house is the newest product on the shelf," says Lloyd Fox, a broker at Long Realty in Scottsdale, Ariz. If the price is too high, buyers and agents are likely to relegate your listing to the sidelines.

Properly priced homes are likely to get eight to 10 showings their first week on the market and an offer soon after, Mr. Fox says. If not, "you have missed the market" and it's likely a price cut is in order, he adds.

Make the Internet work for you. Most home buyers and agents are now starting the search process online, which means it is important to make the Internet a key part of your marketing strategy. Begin by carefully selecting the photos you will post online.

Factor in Internet searches when setting your listing price. Because most buyers tend to search in $25,000 or $50,000 increments, you can maximize your exposure by pricing your home at a round number, such as $400,000. That way the house will show up when buyers search for homes in the $350,000 to $400,000 range and for those priced at $400,000 to $450,000.

Weigh multiple offers carefully. In cases of multiple bidders, you should focus not just on price, but also on terms.

Clean up your act. Even in a market where inventories are thin, a home isn't likely to sell if it looks shabby or crowded. At a minimum, you'll need to touch up the paint, clean the carpet and pare your possessions.

Suzanne Peltier, who lives in Farmington Hills, Mich., hired a handyman to patch loose bricks and touch up the paint on her four-bedroom Colonial before putting it on the market. She also removed some of her furniture so the home looks bigger.

Julie Kaczor, a broker at Baird & Warner Real Estate in Chicago's western suburbs, advises clients to get rid of magazine racks, statues, fireplace tools and anything else that can clutter up the edges of a room. She looks for inexpensive fixes with good payoffs, such as a fresh coat of paint, removing outdated window treatments or a carpet cleaning.

Plan ahead for the appraisal. About 30% of real-estate agents reported that low appraisals had resulted in the cancellation, delay or renegotiation of a purchase, according to a January survey by the National Association of Realtors.

If you are interested in selling your home please contact the Andrea Crossman Group for more information 616-355-6387

To read full article click here

Thursday, February 7, 2013

Low Lake Levels on Lake Michigan

This Week on The Environment Report...
The U.S. Army Corps of Engineers has been recording water levels for almost 100 years. In January, the levels in the Lake Michigan and Huron system dipped to their lowest level ever recorded. That's causing problems for commercial shipping and recreational boaters. Governor Rick Snyder is calling for emergency dredging of harbors, and some Michigan lawmakers want to tap into the Natural Resources Trust Fund to pay for it. We'll hear why that's controversial.

Listen to The Environment Report on Michigan Radio, Tuesday and Thursday at 8:50 a.m. and 5:45 p.m. Online at Credit: Clare Brush)

Wednesday, January 30, 2013

New Construction Homes on the Rise

The report seemed to follow what the Holland-based Lakeshore Home Builders Association is seeing locally, said executive officer Heidi Archer.
“The home building industry in the Lakeshore area is seeing a positive, steady increase in the new home construction,” Archer said. “The real-estate market is seeing a shortage in inventory, therefore the demand for new homes is increasing. Consumers are struggling to find the home they want with the available inventory, so they are seeking out one of our many talented custom residential builders to build new for them.”
Robert Filka, CEO of HBA Michigan, said the group’s outlook was the most positive it’s been in a decade. HBA Michigan attributes its positive forecast to a stronger Michigan economy and state legislation aimed at stimulating the housing industry.
The number of single-family home permits recorded year-to-date in Michigan was up 36 percent through the end of October. Those are the latest numbers available from the U.S. Census Bureau. Current projections are for some 10,000 single-family home permits to be issued in Michigan for all of 2012.
For single-family home permits in 2013, HBA Michigan forecasts 13,928 permits to be issued in the coming year.
Filka said, the housing industry also will be assisted this year by a new law adopted by the state legislature and recently signed by Gov. Rick Snyder. Public Act 494 of 2012 reduces the tax on new inventory homes that are constructed by homebuilders.
Archer was hired in October to help the Holland-based association reach out to builders and offer new services to its members.
“We are seeing an increase in membership at the association, and I believe this is a reflection of the positive forecast we are seeing in our industry,” she said.

Click here for full article

For more information on purchasing a lot to build your dream home please contact the Andrea Crossman Group 616-355-6387

Wednesday, January 23, 2013

Holland Michigan Real Estate Statistics for past 10 Years

The graph above depicts the past 10 years of the Holland area real estate statistics. Showing the average days on the market, number of homes sold and the average selling price. The graph separates homes, condos, and vacant land. As you can see in 2012 the single family homes and condos in Holland, MI have not only increased in the average selling price but also increased in the number sold as well as homes have been on the market for less days. So with 2012 showing obvious signs of improvement 2013 hopes to continue this trend. We have already noticed a decrease in inventory for 2013. 

For more information on Holland, MI homes for sale contact the Andrea Crossman Group at 616-355-6387