Updates from February, 2011

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• America Needs an Affordable and Adequately Regulated Secondary Market, Says NAR

  MSC Marketing 8:23 am on February 16, 2011 | Comments:0
  Tags: Credit (22), Federal Goverment (4), mortgage (61), NAR (40)   Filed under: Consumer news and advice, Credit, Federal Goverment, mortgage, NAR, National Association of Realtors

  RISMEDIA, February 16, 2011—The National Association of REALTORS® welcomes the Obama Administration’s call for an orderly transition from the current form of the secondary mortgage market to a new structure that would enable Americans to achieve affordable, sustainable mortgages.

  “NAR believes that we cannot have a restoration of the former secondary mortgage market with entities that took private profits while pushing losses onto the taxpayer. The new system must involve some government presence, outside of FHA, USDA, and the Department of Veterans Affairs, to ensure a continued flow of capital to housing markets during economic downturns when large lenders flee the housing market,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., in response to the plan.

  “As the leading advocate for homeownership, NAR recognizes that the existing system failed and that changes are needed to protect taxpayers from an open-ended bailout. We believe there must be a certain level of government participation to provide middle-class families access to affordable mortgages at all times and in all markets,” Phipps said. (More …)

  
   
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• 3 Common Misconceptions That Needlessly Lower Credit Scores

  MSC Marketing 8:37 am on February 3, 2011 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22)   Filed under: Buyer Info, Consumer news and advice, Credit

  RISMEDIA, February 3, 2011—People are having to make tough financial choices today, but many don’t have to wreck their credit scores if they know how the system works, according to credit expert Eddie Johansson, president of Credit Security Group.

  “With the same amount of money, you can make decisions that kill your credit score or ones that keep your score—or at least give you the ability to rebuild your score quickly later,” he said. “Most people have wrong or little information about how the system works, and that’s a big reason scores go down when difficult decisions are made during a recession.” (More …)

  
   
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• Provision in Sweeping Bank Reform Law to Affect Mortgage Availability

  MSC Marketing 9:32 am on January 3, 2011 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22), mortgage (61)   Filed under: Buyer Info, Consumer news and advice, Credit, mortgage

  By Ronald D. Orol

  RISMEDIA, January 3, 2011—(MCT)—A behind-the-scenes battle is forming over a provision to the sweeping bank reform law that will affect mortgage availability. At issue is a provision in the sweeping Dodd-Frank Act that requires banks to have “skin in the game” by retaining some of the risk of loans they package and sell.

  The goal of the measure is to eliminate a problem leading to the financial crisis where lenders packaged and sold subprime mortgages they knew would fail. Lawmakers drafting the legislation also included a measure that would exempt certain mortgages from the risk retention rule if their loans met certain high underwriting standards.

  But reaching an agreement on what the criteria will be for these high-standard loans dubbed “qualified residential mortgages” (QRM) is expected to be difficult and, depending on how regulators rule, a huge slice of the mortgage market could be exempted from risk retention—or only a small piece of the market.

  That could have a major impact on what kinds of mortgages are available, and for what price. Mortgage rates have remained near historic lows but mortgage activity is near decade depths. (More …)

  
   
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• On the Chopping Block: How Mortgage Deduction Will Affect the Real Estate Industry

  MSC Marketing 8:46 am on December 1, 2010 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22), economy (72), income tax (2), mortgage (61), second home buyers (19), seller info (62)   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Income Tax, mortgage, Second Home Buyers, Seller Info

  By Alan J. Heavens

  RISMEDIA, December 1, 2010—(MCT)—Long considered a key ingredient of American homeownership, the income-tax deduction for mortgage interest is now on the menu of the commission looking for ways to trim the federal deficit. Among the $3.8 trillion in debt-cutting options being considered by National Commission on Fiscal Responsibility and Reform is a scaled-down tax deduction eliminating second homes, mortgages of more than $500,000, and home-equity loans.

  Reaction to even the hint of a change came quickly—and stridently.

  “For a battered housing industry, which is struggling with a 21 percent unemployment rate among construction workers, this is absolutely the worst time to be considering changes,” said National Association of Home Builders President Bob Jones.

  Diminishing or ending the deduction “would exert further downward pressure on home prices, leaving more homeowners with mortgages larger than the value of their property and fueling even more foreclosures,” he said. (More …)

  
   
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• Shedding Some Light on the Issue of Shadow Inventory

  MSC Marketing 12:04 pm on November 18, 2010 | Comments:0
  Tags: agent information (58), Credit (22), FHA (7), foreclosure (18), pricing (37)   Filed under: Agent information, Credit, FHA, Foreclosure, pricing

  by The KCM Crew on November 17, 2010 · 

  There appears to be some confusion regarding the amount of shadow inventory that currently exists and the impact it will continue to have on the real estate market. Today, we want to bring some clarity to both of these issues. First, let’s define shadow inventory because part of the confusion is in differing definitions.  Originally, the term ‘shadow inventory’ was used by some to define a supposed ‘secret’ inventory; mysteriously hidden by banks from their investors and the general public. This definition caused banks to come forward and announce that they were not holding a ‘secret’ stash of foreclosures.

  Those announcements were misinterpreted by some to mean there was no backlog of distressed properties. That is not what the banks said. There definitely are millions of distressed properties that have been and will continue to be placed on the market. The banks were just explaining that the number and process is totally transparent.

  What actually is ‘shadow inventory’?

  The most common definition of shadow inventory is given by Standard and Poor’s:

  Outstanding properties that are (or were recently) 90 days or more delinquent on mortgage payments, in foreclosure, or real estate owned (REO)—that haven’t yet hit the market. (More …)

  
   
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• Quantitative Easing: What It May Mean for the Economy and Financial Markets

  MSC Marketing 9:03 am on November 9, 2010 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22), economy (72), Interest Rates (39), the economy (18)   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Interest Rates, Seller Info, The Economy

  By Tom Petruno

  RISMEDIA, November 8, 2010—(MCT)—The Federal Reserve has announced a new “quantitative easing” plan aimed at bolstering the economy. So what’s quantitative easing? The term is a mouthful, but is simple in execution: The central bank plans to boost its purchases of U.S. Treasury bonds in the open market, hoping to push longer-term interest rates lower, or at least keep them from rising significantly.

  The Fed has already “eased” its monetary policy—tried to get more money into the economy—by slashing short-term interest rates. (Raising rates is known as tightening).

  But short-term rates are already near zero. So the Fed now is focused on longer-term rates.

  The “quantitative” refers to a specific quantity of money—in this case, $600 billion, which is the sum of Treasury debt the Fed said it would buy by next June, on top of about $300 billion of purchases already planned. (More …)

  
   
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• What the Federal Reserve Board’s Final Rule on Loan Originator Compensation Means to You

  MSC Marketing 9:27 am on November 4, 2010 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22), mortgage (61)   Filed under: Buyer Info, Consumer news and advice, Credit, mortgage

  By Brian Chappelle

  RISMEDIA, November 3, 2010—On August 16, 2010, the Federal Reserve Board (the Fed) published its final rule on loan originator compensation. The rule amends Regulation Z and is effective for applications taken on or after April 1, 2011. The cornerstone of this rule is to preclude loan originators (retail loan officers and mortgage brokers) from having any financial interest in the terms or conditions of the loan (e.g. interest rate or product type) or “a factor that is a proxy for a transaction’s terms or conditions.” (More …)

  
   
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• Obama Administration October Housing Scorecard Shows Continued Signs of Stabilization in House Prices and High Home Affordability

  MSC Marketing 9:05 am on November 2, 2010 | Comments:0
  Tags: Buyer info (72), Consumer news and advice (162), Credit (22), economy (72), Interest Rates (39), seller info (62), Statistics (63), The Housing Market (27)   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Interest Rates, Seller Info, Statistics, The Housing Market

  RISMEDIA, October 28, 2010—The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the October edition of the Obama Administration’s Housing Scorecard (http://www.hud.gov/scorecard). The latest housing figures show continued signs of stabilization in house prices and high home affordability due in part to record low interest rates. The housing scorecard is a comprehensive report on the nation’s housing market.

  “Over the last 21 months, the Obama Administration’s swift action in the housing market has kept millions of families in their homes and provided responsible borrowers with incentives to refinance or to become a homeowner,” said HUD Assistant Secretary Raphael Bostic. “But, with many unavoidable foreclosures still in the pipeline, it’s clear that we have a hard road ahead. That’s why we’re focused on successfully implementing the programs we’ve put in place—such as additional assistance on refinancing and helping unemployed homeowners stay in their homes—and ensuring that help is available to homeowners as soon as possible.” (More …)

  
   
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• Bernanke Ready to Spur More Growth

  MSC Marketing 2:21 pm on October 19, 2010 | Comments:0
  Tags: Consumer news and advice (162), Credit (22), economy (72), Interest Rates (39), the economy (18)   Filed under: Consumer news and advice, Credit, economy, Interest Rates, The Economy

  By Don Lee

  

  Federal Reserve Chariman Ben Bernanke

  RISMEDIA, October 19, 2010—(MCT)—Federal Reserve Chairman Ben S. Bernanke, citing the threat of prolonged high unemployment and an economy potentially falling into a dangerous deflationary spiral, Friday laid out a case for the central bank to buy more U.S. government bonds in a bid to bolster growth.

  But in a much-anticipated speech in Boston, Bernanke also made it clear that there were long-term risks—for the economy and the Fed’s credibility—in cranking up the electronic printing press and pumping hundreds of billions of dollars into the financial system. And his remarks seemed to plant seeds of doubt among some economists that the purchases would not be as big as many had hoped, raising the question of just how much another round of Treasury purchases will help the economy.

  “We have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public,” Bernanke said at a conference sponsored by the Federal Reserve Bank of Boston. (More …)

  
   
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• The New Foreclosure Mess: What It Means To You

  MSC Marketing 1:49 pm on October 12, 2010 | Comments:0
  Tags: agent information (58), Buyer info (72), Consumer news and advice (162), Credit (22), economy (72), foreclosure (18), Home owner information (10), Interest Rates (39), pricing (37), Seller information (41)   Filed under: Agent information, Buyer Info, Consumer news and advice, Credit, economy, Foreclosure, Home owner information, Interest Rates, pricing, Seller Info

  by The KCM Crew on October 12, 2010

  Last week, we reported on the beginnings of the mess the banks created by using ‘robo-signers’ to fast track foreclosure filings. We detailed the challenge and said that “the process of foreclosing may grind to a screeching halt”. And, it has. Bank of America has announced that it has halted foreclosures in all fifty states. Other major lenders have ceased foreclosures in 23 states and some politicians are calling for a total industry-wide moratorium.

  Today, we want to explain what is actually taking place and what impact the situation may have on you and your family over the next several months.

  Currently, many banks have ceased foreclosure procedures in all states which require a judicial process. You can find out whether your state requires such a process by visiting All Foreclosure.com which lists foreclosure procedures by state. It is our belief that all fifty states will eventually be impacted by the controversy. (More …)