January 20, 2012 4:28 am
As federal regulators consider setting down-payment standards on new mortgages, a new study shows such rules could push 60 percent of creditworthy borrowers into high-cost loans or out of the market altogether.
A proposal by regulators to define a high-quality mortgage as one with at least a 20-percent down payment, or possibly 10 percent, would hobble a healthy segment of the housing market, says the study from the UNC Center for Community Capital and the Center for Responsible Lending. While higher down payments do result in fewer defaults, the payoff is small relative to the number of creditworthy households who could be shut out of the market, the study shows.
According to the study, the results are particularly striking for African American and Latino homebuyers. A mandatory 20-percent down-payment requirement would exclude about 75 percent of African American and 70 percent of Latino borrowers who could be successful homeowners from obtaining fairly priced mortgages.
The working paper, "Balancing Risk and Access: Underwriting Standards for Qualified Residential Mortgages," was produced by the UNC Center for Community Capital and the Center for Responsible Lending. Researchers look at mortgages originated from 2000 to 2008 and what would have happened if a 20-percent down payment and other underwriting criteria had been imposed beyond those already mandated by the Dodd-Frank financial reform law.
The study finds Dodd-Frank's ban on loans with the highest risk of default—for example, those with prepayment penalties or no income documentation—fixes the bad underwriting that caused the housing crisis. Adding a down-payment threshold set by the federal government would do little to reduce defaults relative to the large number of creditworthy homebuyers it would push from the market.
January 19, 2012 4:26 am
Connecticut-based DiversityBusiness.com recently announced the results of its online election designed to determine the 12th annual “Top 50 Organizations for Multicultural Business Opportunities.” Over 1,200,000 diversity business owners participated in the poll to determine the top 50 organizations for providing business opportunities to diverse business owners throughout the United States. AT&T, Wal-Mart, and Dell nabbed the first three spots.
The complete list of winners, known as the “Div50,” are recognized for truly differentiating themselves in the marketplace in a time when diversity is on the rise. The Div50 is a listing of the top 50 corporate and organizational buyers of diversity products and services throughout the U.S. It represents the voice of over 1,250,000 diversity-owned (women, African Americans, Hispanics, Asians, Native American, and other multicultural groups) businesses in the U.S., in sectors such as technology, manufacturing, food service and professional services. Other large companies at the top of the list include Coca Cola, Cisco, Apple, Toyota, Office Depot, Time Warner, United Parcel Service, State Farm and Northrop Grumman.
The Div50 is an indicator of which organizations provide the best and the most business for diversity-owned companies. As multicultural and female owned businesses gain more buying power and their lifestyles become more affluent, multicultural markets are growing in economic muscle. This in turn attracts more corporations, as they compete for market share. The Div50 list has, therefore, become the consumer guide for many women and minority consumers.
The complete list of Top 50 Organizations can be accessed at: http://www.diversitybusiness.com/Resources/DivLists/2012/DivTop50/2012Div50C.htm.
January 19, 2012 4:26 am
While you may have heard that selling your home as a short sale can be a long, frustrating, and sometimes futile process, the tide may be turning as lenders have become increasingly more amenable to short sales. Many lenders, says real estate professional and educator Gee Dunsten, are viewing short sales in a more favorable light after suffering through failed loan modifications and countless foreclosures.
Before embarking on the short sale process, however, talk to a REALTOR® who is experienced in the area of distressed properties. Dunsten asks all his clients to start by completing the following questionnaire. One of the top reasons short sales fail is because the home seller never actually qualified for one in the first place. Answering the following questions accurately and thoroughly will determine whether your home is eligible for a short sale:
- Is your property currently on the market? Is it listed with an agent?
- Is this your primary residence?
- When was the property purchased?
- What was the original purchase price?
- Who holds the mortgage?
- What kind of loan do you have? (FHA, VA, Conventional)
- Do you have any other liens against your property?
- Who is on the title (or deed) for the property?
- Who is on the mortgage?
- Do you have mortgage insurance?
- Are you current with your payments? If not, how far in arrears are you?
- How much do you owe?
- Why do you need/want to sell?
- What caused you or will be causing you to miss your mortgage payment obligation?
- Do you have funds in accounts that could be used to satisfy the deficiency?
- Are you currently living in the property? If not, where are you living and is the property being maintained?
- How soon do you need to move?
- Are you up to date on your condo or HOA payments (where applicable)?
- Do you owe any back taxes?
- Are you considering filing for bankruptcy protection?
- Are you currently pursuing a loan modification with your lender?
- Who is occupying the property?
- Do you hold or are you subject to any type of security clearance related to your job?
- What are your plans after you sell?
- Are you looking to receive any money from the sale of your home?
- How much income are you currently making from all sources?
- Do you anticipate any income change up or down in the not-too-distant future?
January 19, 2012 4:26 am
According to a recent survey of 3,000 Americans, 68 percent say their incomes have not grown, while 71 percent report their expenses have. When it comes to savings, only one in four (24 percent) were able to set aside enough money to go five or more months without a paycheck and still pay their bills, and one in three say they could not go any amount of time without a paycheck before resorting to skipping bill payments.
Conducted by independent research firm Rasmussen Reports, LLC on behalf of insurance firm Country Financial, the survey underscores that many Americans lack a financial reserve, explaining why nearly half of all respondents are worried about meeting fiscal obligations this year. Nearly one in three (30 percent) reported that their personal savings and investments suffered the most due to the economic downturn, with savings for retirement coming in as the second most-affected area (25 percent).
The survey also revealed, however, that Americans are now increasingly focused on saving for the future. According to a December 2011 Country Financial survey, they identified personal and retirement savings as financial priorities to work on in 2012.
Fiscal concerns vary somewhat from generation to generation, according to the survey:
- Gen Y: Only 40 percent are worried about meeting financial obligations. Still, 31 percent of 18-29 year olds say their personal savings and investments were the hardest hit.
- Gen X: Half (50 percent) of 30-39 year olds and 31 percent of 40-49 year olds say they could not go any amount of time between jobs and still pay their bills.
- Baby Boomers: Thirty-seven percent of those nearing retirement age (50-64) say their retirement savings have suffered most.
- Retirees: For those most likely in retirement (65 or older), 41 percent claim their personal savings and investments suffered most. However, they are the least worried about fulfilling their fiscal obligations (38 percent).
January 18, 2012 4:26 am
Homebuyers should pay close attention and avoid money pit houses as the rules of navigating local real estate continue to change. These rapidly changing rules are happening in every area of the home buying process. Some of these rules have to do with the condition of the homes themselves. Bank owned properties and short sale homes tend not to be in the best shape and could have hidden conditions. New requirements for homeowners insurance policies have made changes on roof and sinkhole coverage limitations. Changes to Federal government regulations for banks and lending requirements make navigating an FHA loan quite tricky.
According to REALTOR® Ginny Zukowski, the “money pit” can not only be a home that has hidden repair costs, but homeowners insurance policies may require the repairs to be made before they will write a policy. Also, banks are not accepting all appraisals and often require a second and sometimes third appraisal before they will provide a loan. This can lead to a lower price than the original appraised amount and less than the contract price.
To help potential homebuyers, Zukowski reveals the following tips:
Tip 1: Be prepared for the new changes and have open communication with the real estate agent and lender. Try to meet with them together and find out all of the upfront cash that will be needed to purchase the home. Buyers will need to pay for all inspections, appraisal, good faith money, and provide a down payment. With new private mortgage insurance, this could be several thousand dollars.
Tip 2: Once the buying process starts, be prepared for the closing to take some time. If it is a short sale, this could be four-to-five months. The loan process is also taking longer, around 45 days on the average, and additional delays often occur.
Tip 3: Be on the lookout for properties that will soon need a new roof or A/C. Home insurance policies can require new ones before they issue a policy and the mortgage lender requires homeowners insurance. This can cost the buyers more upfront dollars.
Tip 4: Before putting in an offer, ask the REALTOR® to explain all the possible things that could require more time and money at or before closing. As an example, the bank may require additional appraisals. A bank-approved appraiser may be required.
Tip 5: Be sure the REALTOR® goes over all of the fine print before an offer is submitted. Be aware of all the possible things that could go wrong and how it could impact the buying process up front.
With a real estate professional to help both buyers and sellers navigate the process, you can be know what to expect in the home buying process...and what to avoid.
January 18, 2012 4:26 am
For the fifth consecutive year, the Rockefeller Center Christmas Tree will be donated to Habitat for Humanity to help build a simple, decent and affordable home.
The 79th annual Christmas tree will be milled into lumber after the holiday season and will return to its home state of Pennsylvania to be used in the construction of a Habitat home in Philadelphia.
"We're thrilled to be receiving the Rockefeller Tree and grateful to Tishman Speyer for this donation," says Frank Monaghan, executive director of Habitat for Humanity Philadelphia. "We know the tree will bring as much joy to a Habitat family as it has to the visitors of Rockefeller Center."
"The beloved tradition of the Rockefeller Christmas Tree brings joy to people around the world," says Jonathan Reckford, CEO of Habitat for Humanity International. "We are so grateful that once again the lumber from the tree will help build a home, strengthen a community and offer a family a better future."
Habitat used the 2007 Rockefeller Center Christmas Tree lumber to help build a home in Pascagoula, Miss., in partnership with a Hurricane Katrina survivor. Lumber from the 2008 tree was used to help build shelving in a multi-unit building constructed by Habitat for Humanity – New York City. The 2009 Rockefeller Christmas tree lumber was used in the construction of a home in Stamford, Conn. Last year's tree was used for the framing of exterior walls of a home built by Habitat for Humanity of Greater Newburgh, located in the mid-Hudson Valley of New York.
For more information, visit www.habitat.org.
January 18, 2012 4:26 am
On average, an approximate one-quarter-million homes and offices have at least one room damaged by a frozen pipe per year. In order to ensure your home stays safe and your pipes don’t freeze, the Federal Alliance for Safe Homes (FLASH)® suggests three easy-to-remember steps: Foam, dome and drip.
Foam: Insulate pipes exposed to the elements or cold drafts. For as little as $1 per 6’ of insulation, you can stop pipes from freezing and save energy. By keeping your water warmer, you reduce the amount of energy needed to heat water in the cold, winter months.
Dome: Place an insulating dome or other coverings on outdoor faucets and spigots to reduce the likelihood of water pipes freezing, expanding and causing a costly leak.
Drip: Allow a slow drip from your faucets to reduce the buildup of pressure in the pipes. Even if the pipes freeze, the released pressure in the water system will reduce the likelihood of a rupture. If you are going out of town and suspect the temperature will drop, turn off the water and open all of the taps to drain the water system. This way pipes won’t freeze and you won’t return home to a mess.
Your local home improvement store will have all of the tools and expertise you will need to complete these steps. Foam, dome and drip your way to a safe winter season free of costly home repairs.
For more information, visit www.greatwinterweatherparty.org.
January 17, 2012 4:24 am
Saving money is often one of the most common New Year's resolutions. And since owning a home is easily one of the biggest expenses the average person will have in their lifetime, saving money around the home is crucial. Even for those who are able to pay off their mortgage, the cost of annual maintenance - plus the little luxuries we tack on - can really add up. In order to save some money this upcoming year on home-related expenditures, consider these steps:
Refinance. Interest rates are low right now, so take a look at your current mortgage and assess if it would be wise to refinance. Cutting even $100 from your monthly mortgage payment will mean huge savings over the life of your loan. Be sure to understand the terms of the refinance, as sometimes the cost to refinance does not outweigh the savings.
Shop your homeowners insurance. We often overlook the cost of homeowners insurance because it is escrowed and paid as part of our monthly mortgage payment. However, you could be greatly overpaying for homeowners insurance, which would increase your monthly mortgage payment unnecessarily. While you're at it, ask your home insurance agent to package in your car insurance policy to get additional discounts, typically up to 20%.
Reduce energy waste. Take a look at your monthly energy bills to see how much energy you are really using each month. Make efforts to reduce energy usage in the winter cold and summer heat by properly sealing windows and doors that could be susceptible to drafts. Set your thermostat a few degrees cooler during the day when no one is home to save on unnecessary heating and cooling.
Skim down your cable, phone and Internet. Oftentimes, when homeowners set up their television, Internet and home phone service they get talked into a bigger package than they need. Do you really need the fastest Internet speed? How many of those 245 television channels do you actually watch? See if you can save yourself a few hundred dollars a year by downgrading your service package.
Get smart at the grocery store. We often think of our food costs as a necessity- therefore, we justify the expense. However, a little bit of frugality can go a long way when you're working the aisles at your local market. Get in the habit of clipping coupons and checking the sale papers to make some smart food shopping choices.
For more information, visit HomeownersInsurance.com.
January 17, 2012 4:24 am
A recent national survey conducted by GfK Roper Custom Research finds that less than 50 percent of homeowners surveyed know that they are responsible for repairs to the water line on their property. Further, the report goes on to state that one-third of all homeowners responding actually assume that their local utility is responsible for the cost of a burst water line between their house and the street, when this is usually not the case.
"One of the challenges of homeownership is that the potential for expensive repairs is always out there," says Tom Rusin, chief executive officer of HomeServe USA. "The fact that homeowners don't know about their responsibilities in these situations serves to make unexpected and expensive repairs harder to handle."
To protect yourself in the case of an unexpected emergency, homeowners can be prepared with a service repair plan that helps cover the cost of expensive water service line repairs. Typically the homeowner is responsible for the water service line from the curb or well casing all the way to the home, connecting to the water heater, sinks, showers and more. Temperature changes, shifting soil or the age of the line can all cause the line to become damaged. Many times this results in a loss of water pressure or a loss of water altogether. In other instances, the effects will not be noticed until there is a spike in the water bill due to an underground leak. Repairing a water service line can cost more than $2,000.
A well-protecting plan provides consumers thousands of dollars in coverage for a low monthly fee and will dispatch a contractor to make any necessary repairs should a problem arise.
For more information, visit www.homeserveusa.com.
January 17, 2012 4:24 am
As the nation's unemployment rates slowly recover, the apartment industry continues to see strong demand for new employees in order to keep up with a growth rate that is expected to increase as people opt to rent apartments.
Approximately 35 percent of U.S. households are renter households, according to data from the U.S. Census Bureau. That number is up 4 percent from 2004. It is likely to climb even higher as the number of renter households increases anywhere from 360,000 to 470,000 annually over the next decade. Ultimately, that increase will translate into the creation of more well-paying jobs in the apartment management industry, which has come through the recent recession relatively unscathed by the layoffs and downsizing that have plagued other businesses.
"The reality is that at no point in time have we seen a significant reduction in the number of apartment units in the United States," says National Apartment Association Education Institute (NAAEI) President Maitri Johnson. "Every year we keep adding to the apartment stock, and we keep adding jobs. That has not been the case with many other industries during the past few years."
The multifamily housing industry employs more than 1 million people, not including the thousands of others working in industries that provide products and services to apartment communities. Large national apartment management companies may hire as many as 2,000 new employees in any given year. These employees often come from a variety of college backgrounds, including business, marketing, communications or facilities maintenance.
Managing apartment communities requires a team of employees performing a variety of functions such as management, customer service, accounting, business analysis and preventive maintenance. A recent search of job postings on ApartmentCareers.com highlighted open positions for an accountant, webmaster, maintenance technician, housekeeper and regional marketing director.
John Cullens, president and founder of ApartmentCareers.com, said few industries can provide a career that is not only portable – virtually every community has a few rental homes or an apartment community – but also provides a variety of career paths, good pay and good benefits. The apartment industry is particularly attractive to new college graduates who may lack the experience needed for well-paying jobs in other industries. Once exposed to the opportunity to manage a $3 million budget, a team of six employees and a real estate asset valued at over $20 million, most recent graduates realize that they have found their niche.
"The apartment industry has a constant need for new employees to not only keep pace with the growth we are seeing in the industry and the construction of new rental units, but also to fill those positions that open as a result of standard employee turnover and baby boomer retirements," says Johnson. "Multifamily housing is an industry that doesn't require all employees to have advanced degrees. Our workforce is very diverse, and people can find good jobs at all levels."
With more than 95 million (and growing) Americans living in rental housing, the industry's job opportunities are only expected to increase in the coming years.
For more information, visit www.apartmentcareerhq.org.