Archive for April, 2011

Comments Off on Pending Home Sales Point To Seller’s Market This Summer

Pending Home Sales Point To Seller’s Market This Summer


2011
04.29

Pending Home Sales (2010-2011)The National Association of REALTORS® Pending Home Sales Index rose for the third straight month last month.

A “pending home sale” is a home under contract to sell, but not yet closed.

The Pending Home Sales Index rose 5 percent in March, posting its second-highest reading since April 2010. Not coincidentally, that month marked the expiration of last year’s federal home buyer tax credit.

Home buyers and sellers in Mesa would do well to watch the Pending Home Sales Index each month. This is because — unlike most government and private data — the Pending Home Sales Index is a “forward-looking” indicator.

Because 80% of “pending” homes close within 2 months, and a significant share of the rest close within months 3 and 4, the Pending Home Sales Index tends to correlate to future strength (or weakness) in housing.

The Pending Home Sales Index, in other words, is an excellent precursor to the Existing Home Sales report, issued monthly.

By region, the Pending Home Sales Index varied last month.

  • Northeast : -3.2% from February
  • Southeast : +10.3% from February
  • Midwest : +3.0% from February
  • West : +3.1% from February

All 4 regions were worse from a year ago.

As with everything in housing, however, we must remember that real estate is neither national, nor regional. It’s local. Sales volume may be higher in areas like the Midwest, but that doesn’t mean that all Midwest markets are experiencing similar gains, if any gains at all.

To get local real estate data , talk to a real estate agent that specializes in that area. It’s the best way to know what’s happening on the street level.

Comments Off on A Simple Explanation Of The Federal Reserve Statement (April 27, 2011 Edition)

A Simple Explanation Of The Federal Reserve Statement (April 27, 2011 Edition)


2011
04.27

Putting the FOMC statement in plain EnglishEarlier today, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 10-0 — the third straight meeting after which the FOMC vote was unanimous.

In its press release, the FOMC noted that since its March 2011 meeting, the economic recovery is proceeding “at a moderate pace” and that labor markets conditions are “improving gradually”. Household spending and business investment “continue[s] to expand” but the housing sector remains “depressed”.

Furthermore, the FOMC’s statement discussed the Federal Reserve’s dual mandate of (1) Managing inflation levels, and (2) Fostering maximum employment. The statement acknowledged recent inflation pressures on the economy, but it expects those pressures — because they’re related to oil and food prices — to be “transitory”. Unemployment remains “elevated”.

The FOMC statement also re-affirms the group’s plan to keep the Fed Funds Rate near zero percent “for an extended period” of time, and to keep its $600 billion bond market support package — more commonly called “QE2” — intact.

The statement’s verbiage suggests that a third support package may be created after QE2 ends in June 2011, depending on the needs of the economy.

Mortgage market reaction to the FOMC statement has been positive thus far. Mortgage rates in Phoenix are unchanged, but leaning lower. And, as always, market sentiment could shift quickly. If you like today’s mortgage rates, consider locking in.

The FOMC’s next scheduled meeting is a 2-day event, June 20-21 2011.

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New Home Supply Falls To 16-Year Low


2011
04.27

New Home Supply March 2010-March 2011After posting an all-time low in February, New Home Sales rebounded strongly last month.

Based on joint research from the Census Bureau and HUD, 300,000 new, single-family homes were sold on a seasonally-adjusted, annualized basis in March. It’s an 11 percent improvement from February, and right in-line with the 6-month average.

The supply of available new homes improved, too, in March, falling by close to a full month.

At the current pace of sales, the entire new home housing stock would be sold in 7.3 months. This is the second-best reading in a year, a statistic partially-supported by the relatively small number of new homes on the market.

There are now just 183,000 new homes available for sale across Mesa and the country. That’s the smallest reading since the Census Bureau started to keep New Home Sales records beginning in 1995.

However, it should be noted that the March New Home Sales data is suspect. The reading’s margin of error exceeds it actual measurement by almost double. It’s possible that sales volume fell in March instead of rising, therefore. The Census Bureau says as much in its footnotes:

The change [in new home sales] is not statistically significant; that is, it is uncertain whether there was an increase or decrease [in March 2011].

We won’t know for certain until future data revisions are made.

If you’re a home buyer , though, and want to stay ahead of the market, you won’t want to take chances. If the Census Bureau finds its data to be accurate after revisions are made, new home prices will already have started to rise.

You may get your best home value by buying sooner rather than later.

Comments Off on Mortgage Rates — And Home Affordability — At The Whim Of The Federal Reserve

Mortgage Rates — And Home Affordability — At The Whim Of The Federal Reserve


2011
04.26

Fed Funds Rate and Mortgage Rates 1990-2011

The Federal Open Market Committee starts a two-day meeting today, the third of its 8 scheduled meetings this year.

The FOMC is a special, 12-person committee within the Federal Reserve. It’s led by Fed Chairman Ben Bernanke and the group is responsible for voting on our nation’s monetary policy. This includes setting the Fed Funds Rate, the rate at which banks borrow money from each other overnight.

The general public tends to confuse the Fed Funds Rate for “mortgage rates” but, as shown in the chart at top, the two interest rates are very different. There is no direct correlation between the Fed Funds Rate and everyday mortgage rates in Mesa.

Since 1990, the two benchmark rates have been separated by as much as 5.29 percent, and have been as close as 0.52 percent.

Today, the separation between the Fed Funds Rate and the national average for a standard, 30-year fixed rate mortgage is 4.625 percent. This spread will widen — or shrink — beginning 12:30 PM ET Wednesday. That’s when the FOMC adjourns and releases its public statement to the markets.

According to Wall Street, there’s a 100% chance that the FOMC leaves the Fed Funds Rate in its current “target range” of 0.000-0.250 percent, the same range in which it’s been since December 2008. Depending on the verbiage in the press release, plus the comments of Fed Chairman Ben Bernanke in his scheduled, 2:15 PM ET press briefing, mortgage rates aren’t expected to steady as well.

If the Fed projects higher growth in late-2011/early-2012, or hints at new market stimuli, expect mortgage rates to rise on concerns about inflation. Inflation is bad for mortgage rates, in general.

On the other hand, if the Fed indicates that the economy is slowing down, or that it plans to withdraw its existing, $600 billion bond market stimulus, look for mortgage rates to fall.

It’s hard to be a home buyer when the Federal Open Market Committee meets. There’s just so much that can change mortgage rates and rising mortgage rates can affect purchasing power in a flash.

In the 6 months since November 2010, home affordability is off 9%.

So, if you’re shopping for mortgages, or just floating a rate, consider getting locked in before the FOMC issues its press release Wednesday. Once the statement hits, mortgage rates could soar.

Comments Off on What’s Ahead For Mortgage Rates This Week : April 25, 2011

What’s Ahead For Mortgage Rates This Week : April 25, 2011


2011
04.25

Federal Reserve 2-day meeting this weekMortgage markets improved slightly through last week’s holiday-shortened trading sessions. Better-than-expected housing data led mortgage rates higher Tuesday and Wednesday, but rates retreated Thursday morning in advance of Good Friday.

Markets were closed Thursday afternoon and Friday. They re-open this morning.

Conforming mortgage rates in AZ ended last week unchanged overall. It’s a strange outcome considering that Standard & Poor’s issued a downgrade on U.S. debt Monday.

In most instances, a debt downgrade would lead investors away from a particular group of securities — in this case, a group that includes mortgage-backed bonds. However, Wall Street reacted in the opposite.

When S&P issued its opinion, however, mortgage bonds rallied.

Some say this is because the downgrade will force Congress to address a rising debt-load; others think a downgrade slows growth which, in turn, slows down inflation. Both scenarios are considered a positive for mortgage bonds. Hence, mortgage rates fell.

This week, momentum could reverse. In addition to a slew of housing and economic data including New Home Sales, Pending Home Sales, and Consumer Confidence data, the Federal Open Market Committee is meeting for the third time this year. And this month, the FOMC is meeting a little differently.

Usually, when the FOMC gets together, it adjourns and releases a press statement to the markets at 2:15 PM ET. This month, though, the FOMC will release its statement at 12:30 PM ET, and then Fed Chairman Ben Bernanke will hold a press briefing at 2:15 PM ET to address the aforementioned statement. He’s expected to add growth forecasts to the official FOMC release, among other items.

Whenever the FOMC meets, mortgage rates can be volatile. This week, with the new press briefing format, that volatility is even more likely.

If you’re floating a mortgage rate or wondering whether to lock, mortgage rates will be at their “calmest” levels of the week Monday and Tuesday. Once Wednesday hits, and the FOMC statements begin, expect for rates to change.

 

Comments Off on Demand Is Rising, Supplies Are Falling : Home Prices Set To Rise?

Demand Is Rising, Supplies Are Falling : Home Prices Set To Rise?


2011
04.21

Existing Home Sales Mar 2010-Mar 2011Home resales rose 4 percent last month, according to the March Existing Home Sales report. A total of 5.1 million homes were sold on an annualized, seasonally-adjusted basis.

The strong results re-establish the national, long-term trend toward rising home resales.

March marked the 6th month out of eight in which sales volume has increased and sales are up 32 percent from July 2010 lows.

Home supply has resumed its downward trajectory, too.

At the current pace of sales, the entire home resale inventory would be depleted in 8.4 months. This is 0.1 months faster as compared to February, and a full month faster than the 12-month average.

The Existing Home Sales report also included a breakdown by buyer-type.

  • First-time buyers bought 33% of homes, down from 34% in February
  • Repeat buyers bought 45% of homes, down from 47% in February
  • Investors bought 22% of homes, up from 19% in February

35 percent of buyers paid in cash.

And, perhaps most noteworthy, according to the National Association of REALTORS®, 40 percent of March home resales were “distressed properties”. Distressed homes include foreclosures, short sales, and REO and typically sell at discounts “in the vicinity” of 20 percent.

Home prices in Phoenix are based on the basic economic theory of Supply and Demand. So, with home supplies dropping and demand for homes rising, it’s reasonable to expect home values to rise later this year.

If you’re in the market for a home, play the recent trends to your advantage. Today, homes are affordable and mortgage rates are low. This may not be the case later this year. The best “deals” of the year may be what you buy now.

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Building Permits Rise In All 4 Regions


2011
04.20

Housing Starts (Apr 2009 - Mar 2011)According to the Census Bureau, seasonally-adjusted, single-family Housing Starts rebounded in March, increasing 8 percent over February’s 2-year low.

We can’t put too much faith in the data, however, because for the second straight month, the government reports that the data’s margin of error — 15 percent — exceeds its actual measurement.

As written in the footnotes, there’s no “statistical evidence to conclude that the actual change [in Housing Starts] is different from zero.”

In other words, single-family Housing Starts may have dropped up to 7 percent last month, or may have increased by as much as 22 percent. We won’t know for certain until several months from now. As the Census Bureau gathers more data, it will revise its initial monthly findings.

Such adjustments are common. February’s starts were revised higher by 4.5%, for example.

Also included in the Census Bureau’s report is the March 2011 Building Permits tally. As compared to February, permits were higher by 6 percent nationwide. This is a noteworthy development because permits-issued is an excellent forward-predictor for housing.

When permits are issued, 86 percent of them will start construction within 60 days. This means that new home sales and housing stock should follow the Building Permits report trend, but on a 2-month delay.

Permits were strong in all 4 regions last month:

  • Northeast : +2.6 percent from February
  • Midwest : +10.0 percent from February
  • South : +5.3 percent from February
  • West : +5.3 percent from February

With Building Permits rising, we can infer that the housing market is improving.

Therefore, if you’re currently looking for new construction, consider that the market may be less favorable for buyers 4-6 months from now than it is today. Especially because homebuilders are already projecting higher sales volume.

The better time to buy new construction — relative — may be now.

Comments Off on VA Loans Demystified

VA Loans Demystified


2011
04.19

Pre-Loan Frequently Asked Questions General questions about VA loans that may arise BEFORE you get one

Q: What is a VA Guaranteed Home Loan?

A: VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.


Q: What is pre-purchase counseling and why is it helpful?

A: Pre-purchase counseling gives a person information on (1) the process of buying a home, (2) the key players in the home buying process, and (3) debt management. The goal is to create a more well informed homebuyer. While VA does not require such counseling, we strongly recommend it. There is usually no charge for the housing counseling. An excellent online source of information for first time homebuyers is provided by Ginnie Mae. To locate a housing counseling office call (800) 569-4287. or visit HUDs website. The Department of Housing and Urban Development (HUD) maintains both the phone number and website.


Q: Does my entitlement guarantee that I will get a home loan?

A: No, VA cannot compel a lender to make a loan that would violate their lender policies. Lenders must also comply with VA income and credit standards. If a lender is unwilling to make a loan to you, we can only suggest that you try other lenders.


Q: How much is my entitlement?

A: Your basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the Freddie Mac conforming loan limit for a single family home may be available. This loan limit can change yearly. The conforming loan limit for 2008 is $417,000 ($625,500 for Hawaii, Alaska, Guam and U.S. Virgin Islands). This means that qualified veterans could get a no down payment purchase loan for those amounts.


Q: How do I get a Certificate of Eligibility?

A: ACE (automated certificate of eligibility): It may be possible to obtain a Certificate of Eligibility from your lender. Most lenders have access to the ACE system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through ACE – only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate. You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility , to the Winston-Salem Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it’s best to provide such evidence.


Q: How do I obtain a VA Home Loan?

A: Here are the steps:

  • Select a home and discuss the purchase with the seller or selling agent. Sign a purchase contract conditioned on approval of your VA home loan.
  • Select a lender, present them with your Certificate of Eligibility and complete a loan application.
  • The lender will develop all credit and income information. They will also request VA to assign a licensed appraiser to determine the reasonable value for the property. A Certificate of Reasonable Value will be issued. Note: You may be required to pay for the credit report and appraisal unless the seller agrees to pay.
  • The lender will let you know the decision on the loan. You should be approved if the established value and your credit and income are acceptable.
  • You (and spouse) attend the loan closing. The lender or closing attorney will explain the loan terms and requirements as well as where and how to make the monthly payments.
  • Sign the note, mortgage, and other related papers.
  • The loan is sent to VA for guaranty. Your Certificate of Eligibility is annotated to reflect the use of entitlement and returned to you.

Q: What are the benefits of a VA home loan?

A: There are many benefits of a VA Home loan:

  • Equal opportunity.
  • No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
  • Buyer informed of reasonable value.
  • Negotiable interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
  • Closing costs are comparable with other financing types (and may be lower).
  • No mortgage insurance premiums.
  • An assumable mortgage.
  • Right to prepay without penalty.
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.

Q: What can VA not do?

A: Guarantee that a home is free of defects. VA guarantees only the loan. It is your responsibility to assure that you are satisfied with the property being purchased. The VA appraisal is not intended to be an “inspection” of the property. You should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement. If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the home loan program. VA cannot guarantee that you are making a good investment. VA cannot provide you with legal services.


Q: Is a guaranteed loan a gift?

A: No, it must be repaid, just as you must repay any money you borrow. If you fail to make the payments you agreed to make, you may lose your home through foreclosure.


Q: Can I get a loan for a home outside of the United States?

A: Unfortunately, the law only allows VA to guarantee loans on property in the United States, its territories, or possessions.


Q: Can I get a VA loan if I have had a bankruptcy in the last few years?

A: The fact you and/or your spouse have been adjudicated bankrupt does not in itself disqualify you for a VA home loan.

The following rules apply:

  • If the bankruptcy was discharged more than 2 years ago, it may be disregarded
  • If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that you and/or your spouse are a satisfactory credit risk unless both of the following requirements are met:
    • you and/or your spouse have reestablished satisfactory credit, and
    • the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.)
  • If the bankruptcy was discharged within the past 12 months, it will not generally be possible to determine that you and/or your spouse are satisfactory credit risks.

Q: Why do I have to pay a fee for a VA home loan? Since I paid a fee for my first loan, why is there a larger fee for my second loan?

A: The VA funding fee is required by law. The fee is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a down payment is slightly higher. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a down payment. Second time users who make a down payment of at least 5 percent pay a reduced funding fee of 1.5 percent, the same as first time users making the same down payment. For a 10 percent down payment, the fee drops to 1.25 percent. The effect of the funding fee on a veteran’s financial situation is minimized since the fee may be financed in the loan. National Guard and Reservist veterans pay a slightly higher funding fee percentage. To determine the exact funding fee percentage, please review the funding fee table.


Q: I want to buy a house with a VA loan. Do I need to occupy the property?

A: The law requires that you certify that you intend to occupy the property as your home. This requirement is considered satisfied if you actually intend to occupy the property as your home and in fact so occupy it when the loan is closed or within a reasonable time afterward.


Q: I am a single veteran stationed overseas and want to buy a home in my home town. My friends who are married can do this with their spouses occupying the property in their place, but VA says I can’t do this with my parents or other relatives occupying on my behalf. Isn’t this discrimination against single veterans?

A: The law specifically provides that occupancy by the veteran’s spouse satisfies the personal occupancy requirement. The law makes no provision for occupancy by any other relatives as a substitute for personal occupancy by the veteran.


Q: May a veteran join with a non veteran who is not his or her spouse in obtaining a VA loan?

A: Yes, but the guaranty is based only on the veteran’s portion of the loan. The guaranty cannot cover the nonveteran’s part of the loan. Consult lenders to determine whether they would be willing to accept applications for joint loans of this type. Lenders that are willing to make these types of loans will likely require a down payment to cover risk on the unguaranteed, nonveteran’s portion of the loan. Unlike other loans, the lender must submit joint loans to VA for approval before they are made. Both incomes can be used to qualify for the loan. However, the veteran’s income must be sufficient to repay at least that portion of the loan related to the veteran’s interest in (portion of) the property and the nonveteran’s income must be adequate to cover the rest.


Q: If a veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?

A: No. The surviving spouse or other co-borrower must continue to make the payments. If there is no CO-borrower, the loan becomes the obligation of the veteran’s estate. Mortgage life insurance is available but must be purchased from private insurance sources. Eligibility Frequently Asked Questions Questions about who is eligible for a VA loan and reuse of eligibility for another VA loan.


Q: How do I apply for a VA guaranteed loan?

A: You can apply for a VA loan with any mortgage lender that participates in the VA home loan program. At some point, you will need to get a Certificate of Eligibility from VA to prove to the lender that you are eligible for a VA loan.


Q: How do I get a Certificate of Eligibility?

A: Complete a VA Form 26-1880, Request for a Certificate of Eligibility: You can apply for a Certificate of Eligibility by submitting a completed VA Form 26-1880, Request For A Certificate of Eligibility For Home Loan Benefits, to the Winston-Salem Eligibility Center, along with proof of military service. In some cases it may be possible for VA to establish eligibility without your proof of service. However, to avoid any possible delays, it’s best to provide such evidence.


Q: Can my lender get my Certificate of Eligibility for me?

A: Yes, it’s called ACE (automated certificate of eligibility). Most lenders have access to the ACE (automated certificate of eligibility) system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through ACE – only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate.


Q: What is acceptable proof of military service? A: If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which identifies you and your social security number, and provides your date of entry on your current active duty period and the duration of any time lost. If you were discharged from regular active duty after January 1, 1950, a copy of DD Form 214, Certificate of Release or Discharge From Active Duty should be included with your VA Form 26-1880. If you were discharged after October 1, 1979, DD Form 214 copy 4 should be included. A PHOTOCOPY OF DD214 WILL SUFFICE…..DO NOT SUBMIT AN ORIGINAL DOCUMENT. If you are still serving on regular active duty, you must include an original statement of service signed by, or by direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters which shows your date of entry on your current active duty period and the duration of any time lost. If you were discharged from the Selected Reserves or the National Guard, you must include copies of adequate documentation of at least 6 years of honorable service. If you were discharged from the Army or Air Force National Guard, you may submit NGB Form 22, Report of Separation and Record of Service, or NGB Form 23, Retirement Points Accounting, or it’s equivalent. If you were discharged from the Selected Reserve, you may submit a copy of your latest annual points statement and evidence of honorable service. Unfortunately, there is no single form used by the Reserves or National Guard similar to the DD Form 214. It is your responsibility to furnish adequate documentation of at least 6 years of honorable service. If you are still serving in the Selected Reserves or the National Guard, you must include an original statement of service signed by, or by the direction of, the adjutant, personnel officer, or commander of your unit or higher headquarters showing the length of time that you have been a member of the Selected Reserves. Again, at least 6 years of honorable service must be documented.


Q: How can I obtain proof of military service?

A: Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA. Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.


Q: I have already obtained one VA loan. Can I get another one?

A: Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property. In either case, to obtain restoration of eligibility, the veteran must send VA a completed VA Form 26-1880 to our Winston-Salem Eligibility Center. To prevent delays in processing, it is also advisable to include evidence that the prior loan has been paid in full and, if applicable, the property disposed of. This evidence can be in the form of a paid-in-full statement from the former lender, or a copy of the HUD-1 settlement statement completed in connection with a sale of the property or refinance of the prior loan.


Q: I sold the property I obtained with my prior VA loan on an assumption. Can I get my eligibility restored to use for a new loan?

A: In this case the veteran’s eligibility can be restored only if the qualified assumer is also an eligible veteran who is willing to substitute his or her available eligibility for that of the original veteran. Otherwise, the original veteran cannot have eligibility restored until the assumer has paid off the VA loan.


Q: My prior VA loan was assumed, the assumer defaulted on the loan, and VA paid a claim to the lender. VA said it wasn’t my fault and waived the debt. Now I need a new VA loan but I am told that my used eligibility can not be restored. Why?

Or,

Q: My prior loan was foreclosed on, or I gave a deed in lieu of foreclosure, or the VA paid a compromise (partial) claim. Although I was released from liability on the loan and/or the debt was waived, I am told that I cannot have my used eligibility restored. Why?

A: In either case, although the veteran’s debt was waived by VA, the Government still suffered a loss on the loan. The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.


Q: Only a portion of my eligibility is available at this time because my prior loan has not been paid in full even though I don’t own the property anymore. Can I still obtain a VA guaranteed home loan?

A: Yes, depending on the circumstances. If a veteran has already used a portion of his or her eligibility and the used portion cannot yet be restored, any partial remaining eligibility would be available for use. The veteran would have to discuss with a lender whether the remaining balance would be sufficient for the loan amount sought and whether any down payment would be required.


Q: Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

A: The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. If you wish to make application for the home loan benefit as a surviving spouse, contact our Winston-Salem Eligibility Center. In addition, a surviving spouse who obtained a VA home loan with the veteran prior to his or her death (regardless of the cause of death), may obtain a VA guaranteed interest rate reduction refinance loan. For more information, contact our Winston-Salem Eligibility Center. [NOTE: Also, a surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible for the home loan benefit. However, a surviving spouse who remarried before December 16, 2003, and on or after attaining age 57, must apply no later than December 15, 2004, to establish home loan eligibility. VA must deny applications from surviving spouses who remarried before December 16, 2003 that are received after December 15, 2004.] Q: Are the children of a living or deceased veteran eligible for the home loan benefit? A: No, the children of an eligible veteran are not eligible for the home loan benefit.

Comments Off on What’s Ahead For Mortgage Rates This Week : April 18, 2011

What’s Ahead For Mortgage Rates This Week : April 18, 2011


2011
04.18

Gas prices rising, mortgage rates rising, tooMortgage markets improved last week, buoyed by two days of out-sized gains. Mortgage rates bounced off their 8-week highs on much weaker-than-expected inflation data, and debt concerns abroad.

It’s an abrupt change in mortgage rate momentum.

Since the Federal Reserve’s March 2011 meeting, in which the Fed said rising energy costs are “putting upward pressure on inflation“, inflation chatter has figured big for Mesa  mortgage rates. With each tick higher in gas prices; in every conversation on U.S. debt load; as fruits and vegetables get more expensive at the supermarket, Wall Street’s fears of inflation have grown, and rate shoppers have suffered.

The connection between inflation and mortgage rates is straight-forward. Inflation is the devaluation of the U.S. dollar — the currency in which mortgage bonds are denominated. As the dollar loses values, so do mortgage bonds, therefore, leading mortgage rates to rise, inevitably.

Leading up to last week, concerns peaked and rates did, too. And then, a strange thing happened. The government’s March inflation report showed inflation well under control.

The results surprised Wall Street and the trades that had previously served to pump rate up, last week, ran in reverse.

The biggest gains were made Friday.

This week, inflation takes back-seat to housing data. There’s a lot of it coming.

  • Monday : Homebuilder Confidence Index
  • Tuesday : Housing Starts and Building Permits
  • Wednesday : Existing Home Sales
  • Thursday : Housing Market Index

There’s no data due Friday with markets closed for Good Friday.

This is a holiday-shortened week so expect low trading volume to render rates more erratic than typical. If you’re not yet locked in to a mortgage rate with your lender, consider doing it this week.

Comments Off on Foreclosures Drop 35 Percent Year-Over-Year

Foreclosures Drop 35 Percent Year-Over-Year


2011
04.15

Foreclosure concentration by stateForeclosure activity is much slower this year than last.

According to foreclosure-tracking firm RealtyTrac, the number of national foreclosure filings plunged 35 percent in March 2011 as compared to March 2010, a statistic that reflects a more healthy housing market and more robust outlook for 2011.

A “Foreclosure filing” is defined as any of the following : a default notice, a scheduled auction, or a bank repossessions. Foreclosures filings were down in all but 8 states last month.

Activity remains concentrated, too. More than half of all bank repossessions can be tied to just a handful of states.

In March, 6 states accounted for 51% of activity.

  1. California : 15% of all repossessions
  2. Florida : 9% of all repossessions
  3. Arizona : 7% of all repossessions
  4. Michigan : 7% of all repossessions
  5. Texas : 6% of all repossessions
  6. Nevada : 5% of all repossessions

At the other end of the spectrum is Vermont. With just 5 repossessions for all of March, Vermont accounted for 0.008% of repossessions nationwide.

Distressed homes remain in high demand among today’s home buyers, accounting for almost 40% of all home resales. It’s no wonder, either. Distresses home typically sell at a steep, 15 percent discount as compared to non-distressed properties.

Buying foreclosures can be a great “deal”. However, make sure you’ve done your homework.

Buying homes from banks is different from buying a homes from “people”. Contracts and negotiations are different, and homes are often sold with defects.

If you plan to buy a Phoenix foreclosure, therefore, make you you speak with a licensed real estate professional before submitting a bid. You can research a home online and learn a lot of the process, but when it’s time to purchase, put an experienced agent on your side.