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HARP Changes to Reach More Borrowers

November 7, 2011 9:18 pm

The Federal Housing Finance Agency, with Fannie Mae and Freddie Mac (the Enterprises), recently announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. The program enhancements were developed at FHFA’s direction with input from lenders, mortgage insurers and other industry participants.

“Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises," says FHFA Acting Director Edward J. DeMarco. "Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

Fannie Mae and Freddie Mac have helped approximately 9 million families refinance into a lower cost or more sustainable mortgage product, approximately 10% of those via HARP. HARP is unique in that it is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. This program will continue to be available to borrowers with loans sold to the Enterprises on or before May 31, 2009 with current loan-to-value (LTV) ratios above 80%.

The new program enhancements address several other key aspects of HARP including:

* Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
* Removing the current 125% LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
* Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
* Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
* Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

An important element of these changes is the encouragement, through elimination of certain risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages. Borrowers who owe more on their house than the house is worth will be able to reduce the balance owed much faster if they take advantage of today’s low interest rates by shortening the term of their mortgage.

For more information, visit


Thanksgiving Decorating Made Simple

November 4, 2011 9:14 pm

By Nick Caruso

Thanksgiving is a relaxing holiday based solely around food and gratitude. A nice decorative atmosphere would enhance the dining experience as you and your guests are enjoying mouthfuls of turkey, yams and stuffing. Decorating for Thanksgiving doesn't have to be difficult or expensive. With these simple and affordable tips, you can give your home a festive, fall look that everyone will enjoy.

Bold fall colors should be used as much as possible when making any decision regarding décor. Use many of the same colors as some of the traditional food you'll be serving. Yellows, oranges, browns and reds set the perfect tone for any fall-themed meal. Try incorporating them any way you can, including placemats, serving utensils and dishes. A colorful centerpiece would also work nicely for your holiday table.

Go outside and get inspired. The autumn season is all around us, so go outside and look around. Brightly colored leaves, berries and pinecones are just a few examples of items that could be garnered for decoration. Fill a large vase with some of these natural beauties for a decorative centerpiece. Things like pumpkins and hay bales also make great indoor and outdoor decorations. Use them sporadically for that extra fall feel.

For those with eager children, a fall garland can be a fun project to get them involved. Use red and orange leaves, or even use construction paper for cut-out turkeys or pumpkins. This will not only decorate your home, but keep the children occupied while you get some cooking and cleaning accomplished.

Thanksgiving-themed towels, pot holders and candles are also great ideas. Hand towels in bathrooms can carry the theme outside of the kitchen, while sweet smelling candles can do the same for dining or living rooms. A few bottles of red wine can also add to any autumn-colored display or centerpiece.

With all of that cooking to do, you may not have time for complicated and time-consuming decorating. With a little creativity and these fun and festive tips, you can create a wonderful atmosphere for you and your family.


National Housing Survey Shows Correlation between Consumer Attitudes and Personal Experience

November 4, 2011 9:14 pm

Fannie Mae's third quarter National Housing Survey provides in-depth findings on attitudes of consumers who know of people in their area or neighborhood who have defaulted on their mortgage. This latest survey shows that those exposed to default have similar attitudes about buying a home as those who do not know people that have defaulted. However, the survey also finds greater pessimism about the economy and personal finances among consumers who know defaulters.

"Knowing someone who has defaulted on their mortgage appears to be correlated with consumers being slightly more pessimistic about the direction of the economy, their finances, and their ability to obtain a mortgage, but does not materially correlate with their desire to own a home or their view of housing as a safe investment," says Doug Duncan, vice president and chief economist of Fannie Mae.

"At the macro level, we see that economic activity picked up in the third quarter, thanks to a sizable rebound in consumer spending on services. However, the hike appears to have come out of consumers' savings, as disposable income fell during the quarter," continues Duncan. "The improvement in consumer spending has not spilled over into big-ticket items such as housing, as consumers' concerns over their finances and dissatisfaction about the direction of the economy remains elevated."

Owners and renters who know defaulters are as likely to say owning makes more sense than renting, say buying a home is a safe investment and display roughly the same intention to buy a home as those who do not know a defaulter.

• Ninety-two percent of owners who know defaulters say owning makes more sense than renting, compared to 89% of owners who do not know defaulters.
• Sixty-seven percent of owners and 52% of renters who know defaulters say buying a home is a safe investment, compared to 70% of owners and 52% of renters who do not know defaulters.
• Seventy-eight percent of owners and 39% of renters who know defaulters say they are likely to buy their next home, compared to 73% of owners and 35% of renters who do not know defaulters.

The third-quarter survey also provides comprehensive data based on more than 3,000 interviews among homeowners and renters to assess their attitudes toward owning and renting a home, confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

For full survey findings, visit


Survey Finds 87 Percent of Consumers Won't Buy on Facebook

November 4, 2011 9:14 pm

A recent survey conducted found that 87% of tech-savvy consumers would not buy anything through Facebook.

The panel, consisting of 50 men and 50 women, all of whom are professionals in technology oriented disciplines, was surveyed in regards to their attitudes toward Social CRM, the practice among companies of using Facebook, or other social networks, to offer customer care, provide support and sell products. The survey asked whether panelists would interact with their communications service providers through Facebook to buy something; pay a bill; resolve a problem; complain publicly; recommend their services; or none of the above. Respondents were invited to select any and all responses that applied. Only 13% of all respondents, 12% of men, and 14% of women responded that they would “buy something” through Facebook. Eighty-seven percent of all respondents did not select this option.

“This study suggests that Facebook has work to do to convince consumers that it will protect their personal financial information and transactions,” says Ed Finegold, producer and editor of BillingViews. “We set out to find attitudes on the use of Social CRM by communications providers, but were met with this consistent sentiment of distrust toward Facebook when it comes to money.”

Panelists were invited to provide additional comments on any aspect of the survey they wished. Of the 28 who commented, 13 – or 42% – stated specifically that they would not make any sort of purchases through Facebook because they do not trust it or do not believe it has sufficient security to protect transactions or personal financial information.

Additional findings from the survey include:

• 60% of those surveyed would recommend a communications provider’s services on Facebook, though women were more likely to do so than men.
• 58% of respondents, and an equal number of men and women, said they would use Facebook to complain publicly about their communications providers.
• 45% of respondents said they would use Facebook as a means to interact with their communications providers to solve a problem, though women were more likely to do so.
• 27% of respondents, a majority of which were men, said they would not use Facebook to interact with their communications providers.

The full results of the survey, part of BillingViews’ ongoing series on Social CRM in Communications, are available at


Area Rugs Provide a Quick and Inexpensive Way to Spruce Up Your Home

November 4, 2011 3:02 pm

Selling your home in today’s market can be a challenge, but sprucing up your home is one quick and relatively inexpensive way to gain an edge in today’s competitive market. If you’re looking to set your home apart and not break the bank in the process, area rugs are a great option.

Not only can area rugs add color to a dreary room, they can also tone down a room that already has strong and bright colored furniture, define an area in a large room or add texture to a neutral colored space.

In addition to the design elements that area rugs add to a space, they also provide physical warmth, comfort and can help absorb sound.

The area rug should take up 2/3 to 3/4 of the floor space of an area with no furniture on the rug, or else you risk having the rug look lost.

“When you are dealing with a very large room, you can even use multiple area rugs, but make sure they complement and coordinate with each other,” said Deborah Hall of Pittsburgh Home Staging Experts. “They should never be identical.”

In addition, the shape of the rug should mirror the furniture or the room size. For example, a rectangular dining table should have a rectangular rug underneath. But a round dining table should have a round rug under it.

Most designers agree that you should never cover the entire floor with an area rug; it’s important to leave 9-12 inches of the floor around the edges of the rug exposed. However, a small rug right in front of the entry door is acceptable.

One thing that can be problematic is that in rooms with direct sunlight and hardwood floors, the area rug will create an outline on the floor when the color of the wood changes as a result of the sunlight. Also, keep in mind that sunlight can fade a rug, particularly oriental rugs.

It’s also important to make sure that the rug isn’t covering a floor vent and be sure it isn’t too thick that it prevents a door from opening and closing properly.

“You should avoid placing the rug so that the traffic pattern would have people walking with one foot on the rug and the other foot on the bare floor and keep from placing the corner of a rug in front of a door as people may trip,” Hall said. “If the rug is in a dining room, you need to be sure that it’s large enough so that when a person is backing out of their chair, the back legs of the chair will remain on the rug. You can use 24 inches from the edge of the table to the edge of the rug as a guide.”

Some people like the look of area rugs on a carpet while others think it should never be done. There’s also a debate among designers on whether or not furniture should be resting both on and off the rug.

If you anticipate lots of traffic and wear and tear, a patterned rug is your best bet since it will hide stains better than a solid rug. Also, wool rugs are easier to clean than non-wool rugs.

For more tips on incorporating area rugs into your home design scheme, contact our office today.


Mortgage Shopping 101: Compare Rates and Companies before Choosing the Mortgage That's Right for You

November 4, 2011 3:02 pm

While buying a home is an exciting adventure, shopping for a mortgage to help pay for that home shouldn’t be taken lightly. Before choosing a mortgage, it’s crucial that you take the time to shop around and compare rates and companies before making a final decision.

Obtaining a mortgage shouldn’t just be done by walking into your bank and accepting the first mortgage that’s offered to you. Nor should you settle for the first mortgage that you’re offered over the phone. In order to get a mortgage that works best for you, and gives you the best value, you need to shop around and do your homework.

Before applying for a mortgage, take the time to inspect your credit report to make sure it is correct and doesn’t send up any red flags. While mistakes and outstanding debt can be fixed, it will require time and effort to be sure you have the necessary proof of any fixes to your report.

Once your credit report is accurate and it’s time to look for a mortgage, prospective buyers should compare mortgage brokers, mortgage lenders, banks and credit unions.

Remember, there are special mortgages for veterans, those in the military, first-time buyers and even doctors, so be sure to check for any local and state mortgage programs as well as examine all community service and housing agency mortgages and mortgage assistance programs.

When you have narrowed down your options to the mortgages that you feel are best, it’s time to look at the numbers more closely. Not only should the monthly mortgage payment and annual percentage rate be taken into consideration, you also need to pay attention to any and all the information associated with the cost of the loan. Be sure to check the cost of points in dollar amounts, broker fees, origination fees, underwriting fees, administrative costs, mortgage insurance, yield spread premiums, commissions, escrow and closing costs. Without these numbers, you won’t be able to make a fair comparison.

After you have gathered all the necessary information and compared the available options, decide on the best loan for you. There are pros and cons to 15- vs. 30-year and fixed vs. adjustable rate mortgages. If you’re thinking about an adjustable rate mortgage (ARM), it’s important to understand not just the beginning rate of the ARM, but the rules regarding when and how often adjustments can occur, limits on what they could cost, as well as its ceiling rate.

If you find a better price somewhere but prefer a certain lender or company, don’t be afraid to negotiate the terms, especially if you have a solid credit history. You may be able to lower the points, reduce some fees, eliminate some broker fees or even bring the rate down a small percentage.

Once you find the terms you are comfortable with, lock it in, in writing, so that nothing changes. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, the number of points to be paid and a lock on as many other costs and terms as possible.

Most importantly, obtain a loan commitment letter that your agent can show sellers to prove that you can buy the home. If there are several bids on a property, having this piece of paper can be the thing that wins it for you.

Mortgage rates are changing all the time and there are a myriad of options for you to choose from. By being smart and savvy, you may save yourself money in the long run.

For more information about finding the best mortgage for you, contact our office today.


A Point of Differentiation: Designations Help Real Estate Agents Stand Out in Today's Market

November 4, 2011 3:02 pm

Choosing a real estate agent to represent you throughout the home-buying or -selling process can often be time-consuming and challenging, especially for first-timers who may not know where to begin. With so many real estate agents and companies to choose from, it’s crucial that you pay attention to factors such as designations and certifications that help real estate professionals stand out amongst the competition.

The following list offers seven of the more popular designations and certifications that agents hold in order to help better serve today’s consumer.

Accredited Buyer Representative (ABR): Agents with this designation have met specific educational and practical experience criteria, including the completion of a two-day Real Estate Buyer’s Agents Council core course, the REBAC Web course, satellite television education programming, and one elective course. Agents must have also passed a written exam on the legal and practical aspects of agency representation, have proven through five documented sources that they have met the practical experience requirements, and are a member in good standing with both REBAC and The National Association of REALTORS® (NAR).

Certified Residential Specialist (CRS): This is the highest designation awarded to sales associates, with less than 5% of REALTORS® holding this certification. The CRS has been awarded since 1977 and recognizes agents who meet stringent requirements, including 75 transactions within five years or $25,000,000 in sales in five years.

e-PRO Internet Professional: To help REALTORS® navigate the Internet waters, NAR developed the e-PRO® certification about a decade ago. The curriculum was updated last year to include taking advantage of social media platforms and helping agents create an online presence vital to reaching today’s hyper-connected consumers. An agent who has this designation has gone through a series of courses that cover topics such as how to effectively use social media technologies such as Facebook and Twitter to create an online presence, and how to take advantage of rich media and e-office strategies to run their businesses more efficiently.

Certified Property Manager (CPM): For an agent to receive this accreditation, they must have passed 10 courses given by the Institute of Real Estate Management on topics including marketing, human resources, asset management and ethics. Agents must also have done work on a management plan for a subject building and provided three professorial references.

NAR’s Green Designations: As more home buyers have become concerned with energy efficiency and the environment as a whole, this is perhaps the most popular designation in the past few years. REALTORS® with this designation have completed 12 core course hours and six elective hours in either residential, commercial, or property management. These agents are considered community leaders and resources for sustainability issues and understand how to seek out and market properties with green features.

Seniors Real Estate Specialist (SRES): Agents who hold the SRES designation are trained to address the needs of those ages 50 and above. These REALTORS® have been educated on topics such as housing, finance, and retirement income considerations, as well as the differences in housing options from age-restricted communities to age-in-place to assisted living. They know about reverse mortgages, pensions, 401k accounts, and IRAs. They can also tell you how real estate decisions can be made by Medicare, Medicaid, and Social Security.

Counselor of Real Estate (CRE): The Counselor of Real Estate is an international group of recognized professionals who provide seasoned, objective advice on real property and land-related matters. Membership in the organization is invitation-only and is awarded through peer, employer and client reviews. To be considered for membership, applicants must demonstrate that they provide valuable and meaningful real estate counseling services to their clients or employer; they hold a senior position in a firm; are recognized for their excellence, knowledge, integrity, and judgment; plus have at least 10 years of experience in real estate and three in counseling.

For more information regarding real estate designations, contact our office today.


Home Theaters to Make a Comeback in 2012

November 4, 2011 3:02 pm

While today’s economy has caused homeowners to re-prioritize their spending habits, game rooms, complete with billiard tables and video games have been toned down and revamped in the past few years. These new media or “leisure” rooms, however, are an area that can’t be overlooked when it comes time to put your home on the market.

If you’re in the process of preparing your home for sale, be sure to take the time to update your home’s leisure room with eye-catching furniture, top-of-the-line gadgets and accessories that stand out.

“I continue to see electronics driving home-leisure activities,” said David Start, vice president of California House, a 58-year-old furniture manufacturer based in Sacramento, Calif. “Whether it is Apple TV, Roku, Netflix, the re-invented Blockbuster or Amazon, there are tremendous companies out there gobbling up a lot of dollars.”

Start believes that home theaters will attract buyers as more people yearn to own a fully-integrated media room.

“At California House, we continue to do well with our Home Entertainment program,” he said. “It taps into the electronic lifestyle a little bit and allows the homeowner to wrap their technology in a beautiful piece of furniture.”

When people hear “home theater room,” they immediately think of something big and elaborate and expensive, but it doesn’t necessarily have to be that way.

“With the technology available today, you can have a fantastic, world class video and sound system for about $6,000,” Start said. “Add $3,000 to $4,000 worth of cabinetry to tie it all in, and families can enjoy a cinema experience right in their own home, every night.”

In fact, Audio Visions has recently been advocating a room where you can sit at the bar, play pool and watch the game—all in the same room.

Paul Darafeev of Darafeev Resort Furniture expects home theater/billiard multi-purpose rooms to gain popularity again in 2012.

“The new Darafeev concept in theater seating is revolutionary, in that it accommodates all of that, and allows for true theater type seating, for 12 to 20 people, in a space that would barely fit three or four overstuffed Lay-Z-Boy type recliners,” he said. “It’s also about style. The mid-century-modern look is a throwback to the ‘Good old days’ of watching “The Jetsons” cartoon on Saturday morning, then going to your buddy’s home to play pool. In fact, we are working with an artist who is coming up with fabrics inspired by “The Jetsons” in bright, up-to-date colors.”

Arash Amini, CEO of Amini’s Galleria, Inc. in Chesterfield, Mo., expects one product to be a huge hit in 2012.

“The MegaSofa by American Treasures will be on everyone’s wish list,” he said. “It seats so many people, is the most comfortable sofa you will ever sit on and it angles towards the TV. It’s a complete winner.”

When staging your home for sale, be sure to complement the theater room with movie accessories to create something people will want to come home to.

“Framed movie posters are popular for the entry into the room and vintage popcorn makers are great as well,” said Eileen Wheeler, a designer with The Asheville Home Staging Company. “You want to create an experience.”

For additional staging tips, contact our office today.


HARP Overhaul to Address the Needs of Struggling Homeowners

November 4, 2011 3:02 pm

President Barack Obama’s administration recently launched a new plan designed to help struggling homeowners refinance underwater mortgage loans at today’s historically low interest rates.

On October 24, President Obama announced that the government’s Home Affordable Refinance Program (HARP) was being modified to make refinancing at these current low interest rates easier for borrowers, in hopes of saving Americans thousands of dollars a year.

The real estate industry has had mixed reaction to the plan, with some praising the initiative while others say it doesn't go far enough.

“Over the past two years, we’ve already taken some steps to help folks refinance their mortgages,” Obama announced, listing a series of measures his administration had enacted. “But we can do more.”

Obama’s new plan calls for a sweeping overhaul of the 2-and-a-half-year-old HARP program, easing rules and reducing fees. The revisions include lifting a ceiling that barred participation by borrowers who owed more than 125% of the value of their homes, and using a controversial modeling method to replace costly appraisals that are among the fees that have kept some homeowners from refinancing.

The HARP program cuts red tape, gives banks an incentive to participate and lowers the usual fees paid for refinancing. It also encourages borrowers to switch from 30-year mortgages to those of shorter durations, which would reduce the overall risk for Fannie Mae and Freddie Mac loans.

Currently, Americans hold about 11 million underwater mortgages, where the loan amount exceeds the home value. However, only a fraction of those will qualify for refinancing under the new plan.

Those eligible include homeowners who have kept up their loan payments for at least six months, have loans guaranteed by the housing agencies and owe more than 125% of their home’s value.

Many analysts are uncertain as to whether this will solve the problem since the program won’t help the 3.5 million borrowers who are seriously delinquent on their loans or are already in default.

“It’s a step forward, but what we need is a leap forward,” said John Taylor, president of the National Community Reinvestment Coalition, an association of organizations that promote access to affordable housing.

Terry Green, a broker with Allied Mortgage Corporation in Annandale, Va., and the President of the National Lenders Alliance is critical of the changes.

“The housing market should seek its own bottom and it will repair itself,” he said. “Every time the government gets involved and intervenes, all it does is delay the ultimate repair of the housing market. I think it’s a bad move.”

Still, the plan could help one to two million people get significantly lower monthly payments in hopes of stabilizing the real estate market.

The President himself acknowledged that this latest proposal will not do all that’s needed to get the housing market back on its feet, but he believes it will help.

“These are important steps that will help more homeowners refinance at lower rates, enable consumers to save money and help get folks spending again,” Obama said.

For more information about HARP, contact our office today.


In this Edition: HARP Overhaul, Designations, Mortgages

November 4, 2011 3:02 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 how struggling homeowners will be affected by the planned overhaul of the Home Affordable Refinance Program (HARP). Other topics covered this month include the importance of designations, the resurgence of home theaters, how to spruce up your home with area rugs, and more. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!