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Mortgage Delinquency and Foreclosure Rates Decreased During Third Quarter

November 16, 2012 5:20 am

The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 7.40 percent of all loans outstanding as of the end of the third quarter of 2012, a decrease of 18 basis points from the second quarter of 2012, and a decrease of 59 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 29 basis points to 7.64 percent this quarter from 7.35 percent last quarter. Delinquency rates typically increase between the second and third quarters of the year.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the third quarter was 0.90 percent, down six basis points from last quarter and down 18 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.07 percent, down 20 basis points from the second quarter and 36 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.03 percent, a decrease of 28 basis points from last quarter, and a decrease of 86 basis points from the third quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 11.71 percent on a non-seasonally adjusted basis, a nine basis point increase from last quarter, but a 92 basis points decrease from the same quarter one year ago.

“Mortgage delinquencies decreased compared to last quarter overall, driven mainly by a decline in loans that are 90 days or more delinquent,” observes Mike Fratantoni, MBA’s Vice President of Research and Economics. “The 90-day delinquency rate is at its lowest level since 2008, and together with the decline in the percentage of loans in foreclosure, this indicates a significant drop in the shadow inventory of distressed loans - a real positive for the housing market. The 30-day delinquency rate increased slightly, but remains close to the long-term average for this metric. Given the weak economic and job growth in third quarter, it is not surprising that this metric has not improved.”

“The improvement in total delinquency rates was accompanied by a further drop in the foreclosure starts rate, which hit its lowest level since 2007. Moreover, the foreclosure inventory rate decreased by 20 basis points over the quarter, the largest quarterly drop in the history of the survey. The level however, is still roughly four times the long-run average for this series as we continue to see back logs of loans in the foreclosure process in states with a judicial foreclosure system. The foreclosure rate for judicial states decreased slightly to 6.6 percent and the foreclosure rate for non-judicial states showed a steeper drop to 2.4 percent. The difference in the foreclosure rates of the two regimes is at its widest since we started tracking this metric in 2006.”

Source: Mortgage Bankers Association (MBA)

Published with permission from RISMedia.


Keep Holiday Cooking and Decorating Safe

November 15, 2012 4:34 am

Cooking and decorating, both long standing holiday traditions, help make the season merry and bright. However, these activities can also increase the chances of home fires. In fact, cooking remains the number one cause of home fires, with incidents increasing during the festive season ahead. According to the NFPA (National Fire Protection Agency), fires involving holiday lights and decor result in $25.5 million in property damage each year.

In an effort to help prevent home fires, UL (Underwriters Laboratories), a global science safety company, is encouraging families to follow a few important safety tips this holiday season.

"In the kitchen, even the most experienced chefs make mistakes," says UL Consumer Safety Director, John Drengenberg. "Trying to do too many things at once while cooking can potentially lead to accidental fires and related injuries. Protect your family by being a smart and safe chef."

UL offers the following safety guidelines to help prevent accidents in the kitchen.

Watch the Heat:
  • When simmering, baking, roasting or boiling food, check regularly
  • Never put metal in the microwave
  • Keep kids at least three feet from the stove and other areas where hot food is cooked
Clear Clutter:
  • Keep the cooking area clean and clear of anything that can catch fire, such as potholders, oven mitts, wooden utensils, paper or plastic bags, food packaging, towels or curtains.
  • Wear short, close-fitting or tightly rolled sleeves when cooking, as loose clothing can dangle onto stove burners and catch fire if it comes into contact with a gas flame or electric burner .
  • When cooking, it's also a good idea to turn the handles of pots inward, in case small kids enter the kid-free zone and reach for the handles.
Avoid Overloading Sockets & Check Cords:
  • Kitchens are particularly susceptible to overloaded outlets. Always pay attention to the recommended wattage for cords and power strips
  • Remember to remove the plug by reaching up and pulling it out of the socket rather than yanking on the cord. Cords should also not be placed underneath anything that is heavy nor should they be tacked to a wall to get them out of the way
Around the Home
According to the NFPA, holiday trees, lights and decor cause an average 390 fires resulting in 21 civilian deaths and 41 injuries per year. Fire research conducted by UL found that today's residential fires burn hotter and faster due to the combination of open floor plans and increased use of synthetic building materials, furnishings and decor.

Each year, UL engineers and scientists perform thousands of rigorous tests on products such as holiday lights and electric decorations and is offering the following safety guidelines to help families identify and prevent hazards that too often result in accidents or tragedy.

Check Your Lights, Check Them Twice:
  • Inspect all of your electric lights and decorations for damage or wear
  • Cracked sockets, frayed or bare wires and loose connections may pose a fire or shock hazard
Decorate with a Safe Eye:
  • Cords should not be run under carpets or tacked up with metal nails or staples
  • Small decorations can be a choking hazard for small children or pets and should be kept out of reach
  • Keep flammable materials "three feet from the heat" of lit candles or fireplaces
Indoor or Outdoor? Look for the UL mark:
  • Indoor-use-only light strings are marked with UL's green holographic label
  • Indoor- or outdoor-use light strings are marked with UL's red holographic label
  • Only use light strings and other electrical decorations that bear the UL mark. The UL mark indicates that samples of that product have been tested to UL's safety standards
Source: UL

Published with permission from RISMedia.


Green Building Accelerates through Economic Downturn, Says Study

November 15, 2012 4:34 am

Around the world, the green building marketplace is accelerating, according to a new study recently released by McGraw-Hill Construction in partnership with United Technologies at the Greenbuild International Conference and Expo in San Francisco.

The study indicates a shift in the global construction market, now viewing green as a business opportunity rather than a niche market. Overwhelmingly, firms report that their top reasons to do green work are client demand (35 percent) and market demand (33 percent) - two key business drivers of strategic planning. The next top reasons were also oriented toward the corporate bottom line - lower operating costs (30 percent) and branding advantage (30 percent). In contrast, the top reason in 2008 motivating the green building market was doing the right thing (42 percent) and market transformation (35 percent), followed by client and market demand.

In the next three years, the sectors with the largest opportunity for green building around the world include new construction and renovation projects. Sixty-three percent of firms have green work planned in new commercial projects and 45 percent in new institutional projects by 2015, and 50 percent have plans for green renovation work. In the United Kingdom and Singapore, green renovation projects were planned by the greatest number of firms at 65 and 69 percent respectively. In Brazil and UAE, new projects pose the largest opportunity. In Brazil, 83 percent of firms are planning to work on new green commercial projects over the next three years, and in the UAE, 73 percent have new green institutional projects planned.

Green buildings are also expected to garner business benefits for building owners. For new green building projects, firms report median operating cost savings of eight percent over one year and 15 percent over five years, as well as increased building values of seven percent (according to design and construction firms) and higher asset valuation of five percent (according to building owners).

Other significant findings include:
  • Human factor benefits are driving green building more today compared to three years ago - 55 percent cite greater health and well-being as the top social reason for green (tied with encouraging sustainable business practice), up from only 29 percent in 2008.
  • Energy use reduction tops the environmental reasons for green building - 72 percent say it is the important environmental reason to engage in green building.
  • Water use reduction is more important today - 25 percent of study respondents cite reduced water consumption as the top reason, up from only four percent in 2008. It is particularly important in the UAE (64 percent cite it as a top reason), Brazil (39 percent), and the U.S. (32 percent), ranking as the second most important environmental factor in these countries.
  • Improved indoor air quality is also more important today - 17 percent cite it as a top reason to engage in green building, up from only three percent in 2008.
  • For firms not currently doing any green project work, the primary driver that they think will motivate future green activity is the desire to do the right thing. This is in sharp contrast to those involved, suggesting this market is not as familiar with the business case for green building.
The study also revealed that approximately 48 percent of the work by U.S. respondents was green, with that share expected to increase to 58 percent by 2015. These results are consistent with McGraw-Hill Construction's 2013 Dodge Green Construction Outlook that sized the green building share of new construction starts in the U.S. to be 44 percent by value, and up to 55 percent by 2015.

The findings are drawn from a McGraw-Hill Construction survey of firms across 62 countries around the world. Firms include architects, engineers, contractors, consultants and building owners.

Source: McGraw-Hill Construction

Published with permission from RISMedia.


'Black Friday' a Good Time to Launch Remodeling Plans

November 15, 2012 4:34 am

With the holidays fast approaching, you probably aren’t putting much thought into home improvement—except, perhaps, to grumble about the fact that you’ll have to cook another Thanksgiving meal in your outdated kitchen, or steer guests toward your home’s only bathroom with its leaky faucet.

If those complaints sound annoyingly familiar, you may not want to put off thinking about a remodel until the spring. According to Dan Fritschen, a golden opportunity to get a head start on planning the house of your dreams is right around the corner, and it goes by the name “Black Friday.”

“When many people think about Black Friday, they have visions of sale-crazed hordes trampling each other in pursuit of merchandise, claustrophobia-causing crowds, and a shopping experience that’s so horrible it’s not worth the savings,” acknowledges Fritschen, founder of “But if you have a remodeling project in mind, you might want to conquer your fears and revise your post-Thanksgiving plans.”

Most remodeling projects aren’t cheap—even if you’re going the DIY route. And the super sales that are offered on Black Friday and Cyber Monday could realistically take your expenses from budget-busting to reasonable. If you aren’t convinced, consider the cost of a kitchen remodel in which appliances can easily account for 30 percent of the total. Saving just 10 percent on those purchases might bring down your expenditure by thousands of dollars.

“Plus, at this time of year, remodeling supplies aren’t as sought-after,” Fritschen shares. “So you’ll often find that home improvement retailers discount them that much more in order to get consumers’ attention.”

If you’re planning on remodeling your home in the foreseeable future, here’s what Fritschen says you should do now to get the most for your money:

Make a list and check it twice. According to Fritschen, most homeowners are shocked by how complicated remodeling actually is. For instance, if you’re redoing your kitchen, you might naively focus the majority of your planning on picking out appliances, cabinets, and countertops…and once work commences, be blindsided by the amount of details you’ve overlooked (think drawer knobs, paint colors, lighting, cabinet hinges, faucet types, disposals, etc.).

“Now’s the time to educate yourself on everything you’ll need for your remodel,” Fritschen says. “Try to formulate as complete a list as possible, including photos so that you won’t accidentally miss any discounts or sales. Years of experience have taught me that autumn and winter are some of the best times to buy, since remodeling ‘season’ usually takes place in the spring and summer.”

Go shopping with a strategy.
Most retailers publish the details of their post-Thanksgiving sales well in advance, so take a little time to map out where and when to get the best deals. Keep in mind that, thanks to modern technology, you might save the most money if you do your shopping from your trusty laptop.
Read up on return policies. If you aren’t planning on starting your remodel immediately, check and double-check return policies before buying materials. Especially on big-ticket items, you’ll want to make sure you’re not making an irreversible commitment.

“A thousand little things could change between now and next summer, for example,” Fritschen says. “You might need to change your plans because of budget issues. The product you bought might turn out to be defective. You might simply change your mind and decide that you’d like to go with a different style of light fixture. Make sure you don’t accidentally lock yourself into something you’ll later regret buying.”

Surf the ’Net—but be smart about it. As Fritschen has mentioned before, you may be able to find some of your remodeling supplies online—it’s called Cyber Monday for a reason! But before you whip out the credit card and click away, do a little preparation. If possible, Fritschen suggests scoping out big-ticket items in person. For instance, it’s well worth your time to measure the refrigerator you’ve been eyeing and look at it next to the paint and countertop samples you’re considering.

“Pay special attention to shipping fees and, again, return policies,” he adds. “If you have to send something large or heavy back and pay return shipping, it could eat up your savings and more.”
Remember that there’s an app for that! According to an holiday spending survey, 33 percent of consumers will use their smartphones to research products and compare prices in the coming month. And if you’re remodeling, you have a great incentive to join them.

“So, even if you usually stay home, watch football, and graze on leftover turkey on Black Friday, consider changing those plans if you have a remodel coming up,” concludes Fritschen. “Braving the crowds can save you a surprising amount of time, money and stress when it’s time to start tearing down walls and installing new appliances next year.”


Published with permission from RISMedia.


Earnest Money Deposits Can Play Pivotal Role in Real Estate Negotiation Strategy

November 14, 2012 4:56 pm

When getting ready to purchase a home, it’s crucial that homebuyers understand the amount of money involved in the process. While there are numerous financial obligations that need to be taken into account, prospective buyers must also ensure that they have liquid funds available for an earnest money deposit—money that gets deposited into an escrow account if your real estate offer is accepted, or gets ratified by both parties—when they make an offer on a home.

In its simplest terms, an earnest money deposit is a deposit that is handed over to the sellers (or their real estate agent) when a contract is signed and offered to purchase a home. This shows that the buyer is serious about the deal and is willing to “show you the money.”

While there’s no set amount that needs to be offered in an earnest money deposit, it’s important to talk to your agent before making a decision. Eventually, the money will get credited toward your down payment, so choosing an amount that will impress the seller should be taken into consideration.

When preparing an earnest money deposit, be mindful that a low amount may work against you by weakening your negotiating power. On the other hand, a higher earnest money deposit will show that you are ready to make the deal happen.

If you’re making an offer on a home that has multiple offers on the table, the amount you offer in an earnest money deposit becomes extremely important. While there are many factors that come into play in a real estate negotiation strategy, the size of the earnest money deposit can help demonstrate your sincerity and even influence the seller’s decision in choosing your offer over another.

If something goes awry early in the deal, the deposit is usually returned to the buyer without a fuss. Both parties are usually willing to negotiate a fair solution even when things go wrong later in the transaction. However, certain situations may arise when the buyer and seller find it difficult to agree.

To keep problems at bay throughout the transaction, make sure there’s something written about the earnest money deposit in case something huge comes up during the home inspection that would make you want to pull out of the deal. The last thing you want is to lose all the money because the house isn’t what you thought it was.

While there are consumer protection clauses in contracts, you can also lose the money through default. Default can happen when you have deliberately done something that prevents you from completing the transaction. One way to avoid this is to not buy anything too expensive when under contract to buy a home.

Work carefully with a real estate agent to make sure you understand all of the terms of the deal so that you can meet your end of the bargain.

For more information about earnest money deposits, contact our office today.

Published with permission from RISMedia.


The Final Walkthrough: Don't Mind the Little Things

November 14, 2012 4:56 pm

After you’ve found the perfect home, made an offer, negotiated the price, had an inspection and ensured your mortgage, it’s time to think about the final walkthrough. Normally done on the day of, or the day before the settlement, the final walkthrough is the last piece of the puzzle that needs to be completed before you sign the final contract.

When doing a final walkthrough inspection, you’re not so much looking for little things that are wrong, but instead making sure the house is in the same condition as when you agreed to buy it. It’s important that you don’t spend time nitpicking if you see nail holes in the wall or a slight de-colorization on the floor where a carpet was. These are small issues that you will deal with eventually and shouldn’t affect signing your name on the contract.

What could affect the contract being signed is if things that were agreed to stay are gone, such as a washing machine or curtains, or things that were supposed to be removed are still there, such as old paint cans in the basement or a heavy, broken fridge in the garage.

It’s also important to make sure that everything contracted to be done after the home inspection was actually done. For instance, if the sellers agreed to replace the old water heater, but didn’t, that’s grounds for some financial changes come settlement time. In many instances, the seller may have simply run out of time and thought taking the money off the price was worth the hassle putting a new one in would cost.

While you may be eager to complete the final walkthrough and get the contract signed, don’t rush the inspection. Take your time and make sure everything is how it should be. You may want to run the appliances through a full cycle to ensure that they work properly. Be sure to turn on all faucets and showers as well.

In certain cases, some contracts specify that the buyer do a walkthrough inspection a week or two prior to settlement, and then schedule a quick meeting prior to settlement to check off any items previously noted. If these items aren’t taken care of, things can still be changed in the final settlement regarding money.

As anyone purchasing a home knows, things can happen at the drop of a hat, however, the final walkthrough typically goes off without a hitch in the majority of real estate transactions. In the end, both parties are eager to get the deal done and you’ll find negotiating over any issues to be a much smother process than agreeing on a price.

To learn more about final walkthroughs, contact our office today.

Published with permission from RISMedia.


A Closer Look at Seniors and the Housing Market

November 14, 2012 4:56 pm

According to “Housing in America: The Baby Boomers Turn 65,” a new report released in October by The Urban Land Institute, the combination of aging baby boomers and those older has created a variety of new opportunities and challenges for the housing industry. The report highlights the Leading-Edge Boomers (born between 1943-1954), the Silent Generation (aged 67 to 85) and the Greatest Generation (aged 85 and older).

“The 65-plus age group is the fastest growing age group in the United States and will be for the rest of this decade as the rate of growth for that group is accelerating,” says John McIlwain, ULI’s senior resident fellow for housing and author of the report. “Over the last two decades, unprecedented change has occurred, and today three separate generations are over 65, each with its own outlook on life and distinct housing needs that are unlike those of past markets for people in their age group.”

The report shows that Leading-Edge Boomers are really the future of the 65-plus population and a majority of them want to age in their current homes, even when they need assistance.

More than half of Americans over 65 live in the suburbs, fueled by the fact that seniors often have trouble selling their homes in this market. The problem with this, McIlwain says, is that it’s creating NORC (naturally occurring retirement communities) that will need increasing levels of government-funded services in the years ahead.

Because many people prefer to remain in their own homes as long as possible, or may not be able to sell even if they wish to move, suburbs are expected to continue to see substantial growth in their over-65 populations.

For those that do decide to move, many are choosing urban locations—both cities and suburban town centers—where they can be close to their children, friends, work, public transportation and health care.

The 2010 census numbers reveal that during the last decade, those over 65 were moving from the cold northeast and older industrial metropolitan areas to warmer climates in the south, west and southwest. In addition, many are choosing to live alone.

“To be attractive to a wider age group, opportunities are there to make homes stylish and green and create them in walkable urban neighborhoods, not just the suburbs and to make them multigenerational,” McIlwain says. “They also need to be designed for people who are likely to remain actively engaged in the world, with state-of-the-art technology.”

Today, the Silent Generation and the Leading-Edge Boomers are already exploring a variety of differing living situations, such as cohousing, college towns and multigenerational living.

“Some of these formats will survive, whereas others may be shorter lived,” McIlwain says. “Given the large number of people in these two generations, however, each new way of living can present a real and viable market for a developer close enough to consumers to really understand their desires.”

For more information about seniors and the housing market, contact our office today.

Published with permission from RISMedia.


Looking to Sell Quickly? Sweeten the Deal to Attract Prospective Buyers

November 14, 2012 4:56 pm

The process of getting your home ready to be sold and eventually listing it and finding the right buyer is often a lengthy one. From making the decision to sell your home to spending a lot of time and money fixing it up before you even put it on the market, selling your home typically takes a lot of time. However, a job or lifestyle change can push the process into overdrive, causing the seller to have to get out of the house quickly.

When something necessitates the need to sell quickly, there are things that a homeowner can do to help speed up the process. The most important thing is to explain to your agent the time element involved and let them guide you through the process. Not only do real estate agents know the ins and outs of getting things accomplished quickly, they will also be able to keep you from making mistakes that can prolong the amount of time your home is on the market.

One strong piece of advice is to price your house correctly. In this case, choose a price that’s a little lower than what you’re seeing in the market, but not too low that it will send up red flags. Let your agent come up with a price that he or she feels will make your house the buzz of the neighborhood in order to attract the most house hunters.

Be ready to compromise. Sure, your price may be low already, but what’s the lowest you are willing to go? When time is on the line, negotiating is tough because you need to be more willing to give in. Prepare yourself beforehand and really ask what you can and can’t live without. Are there any items—such as the curtains in the living room—that you’d be willing to let go with the house?

Take incentives into consideration. If you’re looking to sell your home quickly, there are many popular incentives—such as offering to help with closing costs—that can help sweeten the deal. Additional incentives that you may want to take into consideration include leaving behind furniture, appliances or other fixtures that appeal to the buyer. Or you could also offer a higher commission to your agent for a fast sale, which may intrigue other agents into showing the house more.

If you find that there is interest in the house, but no one is willing to pull the trigger, strike a deal that allows the prospective buyer the chance to rent with the right to buy in six months or a year. This will give the potential buyer time to see what the neighborhood is like and allow you the flexibility of getting into your new home without having to worry about selling your house so quickly.

If the move is job related, you may be eligible for home sale help from your employer or a relocation company representing your employer. Not only would this enable you to buy some more time, you would also be able to put the details of the sale into the hands of someone else.

For more tips on selling your home quickly, contact our office today.

Published with permission from RISMedia.


Choosing the Mortgage That's Right for You Starts with Understanding the Options

November 14, 2012 4:56 pm

When it comes to choosing a mortgage, it’s more important than ever for prospective buyers—or current owners looking to refinance—to understand the wide range of mortgage loans available. Whether you’re in the market for a home mortgage, looking to refinance or jump on the green bandwagon with energy efficient upgrades, there are a number of different home mortgage loans available.

While the process can quickly become overwhelming, the following list of mortgage loans will satisfy anyone’s unique need or situation.

Fixed-rate mortgages are the most common mortgages since the rates are stable for the life of the loan, taking all the guesswork out of the equation. Not only will borrowers know their exact monthly payment throughout the life of the loan, they can also be sure that nothing will change. The most popular fixed-rate mortgages are 30- and 15-year terms.

Adjustable-rate mortgages (ARMs) start with low rates for a specified time and then fluctuate periodically based on the market conditions. While the initial rates are significantly lower than fixed-rate mortgages, borrowers need to be prepared for the possibility of increased mortgage payments later on. Because of the risk involved, ARMs are typically ideal for borrowers who plan to stay in their home only for a short time.

Two-step mortgages start out as an adjustable-rate mortgage that has the same interest rate for part of the mortgage and a different rate for the rest of the mortgage. The interest rate changes or adjusts in accordance to the rates of the current market. The borrower, on the other hand, might have the option of making the choice between a variable interest rate or a fixed-interest rate at the adjustment date. When going with a two-step mortgage, borrowers are taking the risk of the interest rate of the mortgage adjusting upward after the expiration of the fixed-interest rate period. Many borrowers who take advantage of the two-step mortgage plan on refinancing or moving out of the home before the period ends.

FHA mortgages are home loans insured by the Federal Housing Administration and are designed to help borrowers who might not otherwise be able to get a loan. FHA mortgages have become more popular among first-time homebuyers due to their lower down payments, flexible mortgage requirements and consistent rates throughout the entire term.

For those who need larger loans than the conforming loan limits set by Fannie Mae and Freddie Mac, jumbo mortgages are the way to go. For most of the country, the conforming loan limit is set to $417,000, while high cost areas have conforming loan limits up to $729,750. Jumbo loans are a higher risk to lenders and usually have higher mortgage rates and stricter mortgage criteria, including higher down payments and higher credit requirements.

There are also special mortgages for veterans, those in the military, first-time buyers and even doctors, so always check with your local and state mortgage programs. In addition, examine all community service and housing agency mortgages and mortgage assistance programs.

For more information about finding the mortgage that’s right for you, contact our office today.

Published with permission from RISMedia.


In this Edition: Earnest Money Deposits

November 14, 2012 4:56 pm

Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines the wide range of mortgage loans that prospective buyers—or current owners looking to refinance—can take advantage of. Other topics covered this month include how to get your home sold when time is not on your side and what shouldn’t be overlooked during a final walkthrough. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!

Published with permission from RISMedia.