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Sellers Getting Ahead of Spring Rush

DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 11, 2014

The spring selling rush may already be under way, as some home owners are already throwing their properties on the market to take advantage of rebounding home prices and improved equity.

Paul Reid, a real estate agent with Redfin in Temecula, Calif., says some sellers are listing properties earlier than usual in anticipation of the spring season.

Sellers are “nervous about what the spring is going to bring,” says Reid. “They don’t know if everybody will list this spring — then you’ll have a big counterbalance toward too much inventory — or if there’ll be a crunch again. They figure they’ll get out ahead of the market, list, sell, and be done with it.”

Inventory shortages persisted last year, when supply was at a 12-year low leading into the spring. The shortages helped boost home prices, but gave home buyers limited choices and sparked bidding wars in many markets. New-home construction is now at a third of its 2006 peak, which likely will keep inventories tight this spring. But, economists say, improved home prices will likely convince more sellers to sell this year, and that should relieve the inventory crunch in many markets. 

In the last four months of 2013, year-over-year inventory levels of homes for sale began to climb after 30 straight months of declines, according to the National Association of REALTORS®.

Inventories increased in some of the states with the tightest markets, such as Arizona, California, Georgia, and Florida. In Sacramento, Calif., asking prices rose 11 percent last year, and listings soared 58 percent in December, according to realtor.com®’s housing report. Inventories also rose by 20 percent or more in Minneapolis; Orlando, Fla.; Atlanta; Dayton, Ohio; Oakland, Calif.; and Phoenix.

“Rising inventory is the primary reason that we expect the pace of price gains to drop back,” says Paul Diggle, property economist for Capital Economics Ltd. Prices are expected to rise only 4 percent nationally this year, compared to an 11 percent gain in 2013.

Source: “U.S. Home Sellers Return for Spring as Buyers Get Relief,” Bloomberg (Feb. 7, 2014)

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Robert De La Rosa An Expert In Your Court 909.271.5640 CALL NOW!!!!

CFPB Debuts New Online Mortgage Tool

DAILY REAL ESTATE NEWS | MONDAY, FEBRUARY 10, 2014

The Consumer Financial Protection Bureau has released a new online mortgage tool sifting through Home Mortgage Disclosure Act data, allowing the public to learn more about residential mortgage trends with certain loan products and gather a better understanding of borrowers’ access to credit. But CFPB views this tool as only the first step in requiring lenders to disclose even more information that could be helpful to consumers and housing agencies under the HMDA.

“Better public HMDA data would help us improve upon an important resource that already allows regulators, government agencies, housing groups, and consumer rights groups to study and monitor the single most important consumer financial product in the United States: the mortgage loan,” says Richard Cordray, director of the CFPB.

HMDA, enacted in 1975, requires lenders to disclose information about home mortgage loans. The information is used by financial regulators to monitor whether lenders are serving the housing needs of the public, and to help determine the level of access to residential mortgage credit. The information that lenders currently report includes:

• name of the lender
• type and general location of the property
• race, ethnicity, and sex of the applicant
• loan amount
• whether the loan is for purchasing a home, refinancing an existing mortgage, or home improvement

But CFPB wants to expand what lenders must report under the law, and it’s seeking feedback to determine new data points to create for future reporting.

"We are considering asking financial institutions to include more underwriting and pricing information, such as an applicant's debt-to-income ratio, the interest rate, the total origination charges, and the total discount points of the loan," says Cordray. "This will help regulators spot troublesome trends in mortgage markets around the country."

The agency is also weighing having lenders report the borrower’s age and credit score, the term of the loan, and whether the loan meets the qualified mortgage standard.

Source: “Consumer Bureau Introduces New Mortgage Tool,” Credit.com (Feb. 7, 2014) and “CFPBUnveils New Consumer-Friendly HMDA Tool,” National Mortgage Professional Magazine (Feb. 7, 2014)

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CFPB Talks QM in Blog Post

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Wells Fargo Lowers Credit Requirements for FHA Loans

DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 06, 2014

Wells Fargo has announced that it will accept lower credit scores for loans backed by the Federal Housing Administration.

“We have dropped our FICO minimum for FHA from 640 to 600,” says Wells Fargo Executive Vice President Franklin Codel, adding that the move is a way for the bank to start “opening up our credit box more.”

Codel says the bank is looking to expand mortgage-credit availability now that it has significantly reduced its repurchase risk. Wells Fargo was among several banks that had to pay millions to Fannie Mae and Freddie Mac to resolve repurchase claims from loans that were bought by the GSEs and then went sour during the housing bust.

Codel says that Wells Fargo also implemented the qualified mortgage underwriting requirements a month before the Jan. 10 deadline.

Codel says Wells Fargo was “monitoring the production flows” to determine which loans would be rejected under the new QM rules. “We found very, very few,” he adds.

Source: “Wells Fargo Lowers Credit Scores for FHA Loans,” National Mortgage News (Feb. 6, 2014)

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Learn More About Qualified Mortgages

New Mortgage Rules Roll Out: What Will Be the Impact?

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Foreclosure Contractors Face Greater Scrutiny... Robert De La Rosa An Expert In Your Court 909.271.5640 CALL NOW!!!!

Foreclosure Contractors Face Greater Scrutiny

DAILY REAL ESTATE NEWS | MONDAY, FEBRUARY 03, 2014

Banks are calling for more thorough background checks of workers who are hired to watch over homes in default or foreclosure, following hundreds of consumer lawsuits and thousands of complaints over alleged break-ins.

Complaints and lawsuits accuse some handymen and home inspectors who are hired by banks to look after the properties of breaking into still-occupied homes and stealing valuables. Many of the homes involved are in some stage of default, but the home owners are still in possession of the home.

In the cases reported, contractors have been accused of ignoring “obvious signs of habitation, kicking down doors and crawling through basement windows in order to gain access, then changing the locks,” Huffington Post reports. “In some cases, they are also accused of helping themselves to valuables found inside.”

A new screening system that banks are planning to implement is aimed at checking contractors for past criminal convictions, such as theft or fraud. In several of the consumer lawsuits, a background search of the contractors who were accused of the alleged break-ins and thefts revealed lengthy criminal pasts.

"The intent is to give communities a high level of confidence that the people walking around in homes are not going to cause problems," says Eric Miller, the executive director of the National Association of Mortgage Field Services, the trade association that is helping to create the new standards. Miller says the purpose of the new guidelines will be to prevent contractors with recent criminal convictions from entering such properties. The same guideline would apply to all foreclosure contractors, even those who are hired to mow the lawn.

Source: “Foreclosure Industry Says It’ll Do a Better Job of Screening Its Workers After Widespread Break-Ins,” Huffington Post (Jan. 30, 2014)

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Foreclosure 'Break-in' Lawyer Is Back in Trouble

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Robert De La Rosa

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