Housing Affordability

Bolstered by affordable interest rates and low prices, nationwide housing affordability during the second quarter of 2009 continued to hover near its highest level since the series began 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today The HOI showed that 72.3 percent of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5 percent during the previous quarter and up from 55.0 percent during the second quarter of 2008.   “The increase in affordability — along with the $8,000 federal tax credit for home buyers — is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”   Robson noted that the tax credit, which expires on Nov. 30, is currently limited to just buyers purchasing their first home. NAHB

St George, Utah

Southern Utah is Utah's "Hotspot"..... warmer than anywhere in the state at almost any time of the year. Couple that with some of the most unique & beautiful scenery to be found anywhere in the world, and you've got a winning combination of weather and recreation.
Southern Utah is known for it's wide range of scenery and "things to do": Beautiful Red Rock sandstone hills surround the cities, heavy pine forests within a short drive, Water skiing at Lake Mead or Lake Powell, and snow skiing at Brianhead Ski Resort; all on the same day, if you'd like.... Golfing at any of our 10 courses such as the Troon World-Class Entrada Course or one of our fantastic City Courses. And don't forget.... Las Vegas is just 110 miles to the South.

Housing and Economic Recovery Act

The mortgage industry is certainly undergoing many changes to help provide homebuyers better information when it comes to financing a home. New government regulations may impact your closing dates. The following information will help you to understand some of the new regulations and investor requirements that are taking effect—especially those that impact timelines.
There are four key elements that you will need to know:
1. If the homebuyer is financing the property, these new regulatory and investor guidelines will impact—and could even—dictate—the closing date. Historically, homebuyers and sellers would agree on a closing date, and then service providers, including lenders, would work as best they could toward meeting that date. Going forward, purchase contracts can still be written with a specific closing date in mind, but all parties need to take into account that the earliest any home purchase transaction can close is 7 business days after the homebuyer is issued his or her initial mortgage disclosures from the lender.
2. Upfront fees cannot be collected by the lender (except for a credit report fee) until the initial disclosures are received. If the disclosures are overnighted, they are considered “received” the next business day—(excluding Saturdays) allowing the fees to be collected on the following business day. Historically, upfront fees could be collected immediately at the time of application for both in person and phone applications. Moving forward, the homebuyer must receive his or her initial disclosures before upfront fees can be collected. The only exception is the credit report fee which can be collect at application.
3. The homebuyer must be provided with a copy of his or her appraisal a minimum of 3 business days prior to closing. This means that the homebuyer may receive his or her appraisal before or simultaneous to the lender receiving their copy. If the homebuyer believes the 3-business-day required period is not necessary for whatever reason, he or she has the right to waive that requirement.
4. An increase of more than .125% in the Annual percentage Rate (APR) from the initial Truth in Lending Disclosure (TIL) requires the TIL disclosure to be revised and reissued to the homebuyer. The homebuyer must receive a revised TIL disclosure at least 3 business days before closing, providing the homebuyer with the time required to determine if the homebuyer is comfortable with his or her loan choice. If mailed, The TIL disclosure is considered “received” 3 business days after mailing. A more typical contract date may be 30-45 days—or possibly longer (such as with a new construction loan).
Considering that many things occur and may be changed or finalized throughout the course of the transaction, there are a number of things that can impact the homebuyer’s APR. Therefore it is critical on the front end to ensure that estimated fees are as accurate as possible. It is essential to work together to ensure timely closings—everyone plays a key role. Set realistic expectations upfront and throughout the transaction with the listing agent, the seller and the homebuyer in regards to potential closing dates. It is wise to plan for at least a 30-day close.

Guidelines For Appraising Distressed Properties

Using foreclosed and distressed sales as comparables with appraisals on single-family homes without adequately reflecting the differences in the condition of the respective properties is needlessly driving down home values, according to the National Association of Home Builders (NAHB).
 “Any home buyer can recognize the difference between a well-kept home and a distressed property that is damaged or not properly maintained. So it only makes sense that an appraiser should be required to consider the overall condition of a property and the specific factors related to a foreclosure or distressed property sale when selecting and adjusting the value of comparables,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla.
 Appraisers are often only required to conduct exterior inspections of properties that are being used as comparables because they are normally unable to enter these homes and examine their interiors. Too often, properties that have been subject to foreclosure or distressed sales have issues related to deferred maintenance or internal damage that an external inspection simply cannot reveal.
 “While most appraisers do a fine job, there needs to be proper regulatory guidelines for those who use distressed or foreclosed properties as comparables when determining home values,” said Robson. “It is essential that appraisers have the proper experience and guidance to accurately assess values in distressed markets.”
 In neighborhoods where comps include a large number of short sales or foreclosures, appraisers should have the option of expanding the geographic area or extending the time frame for eligible sales to get a more representative basket of the value of homes sold in the area, Robson added.
 Currently, improper or insufficient adjustments to the comparable values of foreclosed and/or distressed homes often results in the undervaluation of new sales transactions.
 This practice must be corrected because it contributes to the continuing downward spiral in home prices, forestalling the economic recovery,” said Robson. - NAHB

St. George, Utah Down Payment Assistance Program

Introduction
This Program is established to provide eligible homebuyers with a recoverable no-interest loan for down payment/closing costs. Funding for this program is from a HUD Grant and sponsored by the City of St. George. The Five County Association of Governments, a voluntary association of local governments from the five southwestern counties of the State of Utah, has partnered with the city to administer this loan.
What Is It?
The City Of St. George Down Payment Assistance Program is a federally funded program with a goal to assist eligible buyers with down payment and or/ or loan closing costs by providing up to $10,000 in the form of a non-interest bearing loan payable due when the home is sold or refinanced. The Program is open to owner-occupied housing units within St. George city limits. The maximum home price allowed is $281,537 for detached home and $177,510 for attached townhome/condo.
How Do I Qualify For Assistance?
You must be a first time home buyer (have not owned a home in the past three years.
You must meet household income limits. Have a gross annual income which does not exceed 80% of median income adjusted for a household size. (Income verification will be matched with your prior year income tax return and current paystub for final determination of eligibility.)
The loan will only be available for owner-occupied housing units within St. George City limits, and the home must be the only home owned by the applicants.
You must be at least 18 years of age and a U.S. citizen or a resident, FCAOG will need to make a copy of your Drivers License or Identification Card and your Social Security Card.

Short Sales Knowing When to Fold Them

Short sales are becoming fairly common practice in the real estate market these days and anyone who has completed one knows that you had better be prepared for rough riding when you get the seller to sign a listing contract when they are upside down.

If the term “short sale” is unfamiliar to you, it refers to a situation when the sale of a home will not net enough to cover the mortgage and closing expenses. It is a problem which occurs frequently in today’s market place.

Whether the consumer is upside down because of refinancing, new construction “trickeration,” the economy in general, or having used an exotic loan product which resulted in owing more than the home is worth - the end result is they are stuck and want you to help them get out.
This is not the kind of listing timid real estate sales people, brand new agents or folks who want to close “just one more before Christmas” should take on. Short sales are fast becoming both an integral and significant part of the market, so the rest of you agents should read this article very carefully, turn the page back and keep it handy as a ready reference as you go off into “short sale land.”
You’re out there, wading in the water and doing an admirable job of trying to get the lender to agree to a short pay-off on a transaction which is rapidly headed toward foreclosure. You’re making headway (you think) but you “gotta know when to fold em” and walk away. The risk to your brokerage firm as well as yourself is significant if you do not recognize when you are no longer able to help and need to withdraw the listing and move on.
WARNINGS: There are a number of opportunities for you to remove yourself from a short sale transaction. Your broker and your errors and omissions insurance company would both appreciate it if you:

1. Understand when these opportunities present themselves

2. Act prudently by not only removing yourself but by also documenting that by the use of a mutual release or similar document.
When any of the following occur, you should remove yourself from the listing as quickly as possible:
Bankruptcy
Judicial Foreclosure
Notice of Sheriff’s Action
I know you heard differently someplace else, but I am prepared to explain to you why removing yourself is the right option.
BANKRUPTCY: The borrower files bankruptcy, either 7 or 13. The filing of bankruptcy is a legal action, in fact a lawsuit, against all creditors. Their lender is one of those creditors. The house is not available for sale while it is under the protection of the trustee of the bankruptcy court. It can not be sold, gifted or otherwise transferred. Release the listing immediately once you are informed. It should not be re-listed unless, or until, you have written authorization from the trustee to do so. It would be a mistake to hold the listing hoping that the trustee will let you sell it after the bankruptcy has been completed. One of the trustee’s possible options is to instruct the borrower to sign a deed-in-lieu of foreclosure in favor of the lender. This means there will not be an opportunity to sell the property at all unless you later get the listing from the lender who has become entitled.
JUDICIAL FORECLOSURE: The borrower’s court date for judicial foreclosure has arrived and you do NOT have a signed letter authorizing a short sale with a closing date prior to the foreclosure date. The lender will become entitled on the date of foreclosure; the borrower who might still be legally entitled to possession does not have the legal right to transfer title. It is mutual release time.
NOTICE OF SHERIFF’S SALE: The borrower informs you, or you become aware, that a sheriff’s sale has been scheduled on the It does not matter that the lender is suddenly anxious to work with you to facilitate a short sale. State law states that the home is to be offered at sheriff’s auction, so you need to remove yourself from this transaction until such time as it has gone to the auction and the redemption period (which ends on the day of confirmation of a sheriff’s sale) has expired. The borrower’s right to redemption is a strong consumer right.
I am very aware that many short sales are being completed during this window of time. Nonetheless, state law says that they should not be, and as a licensee it would be in your best interest to refrain from any sale between judicial foreclosure and the end of the confirmation period.

Do not participate in circumventing that right by working with an investor or other buyer and the lender at this juncture. The foreclosure is still on the borrower’s record. A short sale does not save their credit. The foreclosure (when judicial) has already occurred and is documented.

A lender assuring you that they will not report it does not UNDO the fact that it is recorded as a foreclosure in local court records and that the borrower needs to answer honestly when they apply for a new mortgage, that “YES” they had a foreclosure in 2006. You may offer them hope, but no real substance, and the risk that you might later be accused of facilitating the signing over of their redemption rights is a risk you need to avoid. Keep it ethical. You might approach the lender later about representing them once the redemption period has ended; but for now, utilize the mutual release.

It’s always better to be SAFE professionally than to be sorry. You should be as diligent in the completion of files as you are in opening them. Your success rate (in life as well as in real estate) is tied to how well you recognize the age old principle of knowing when to fold.
By Mildred Wilkins, Founder and President of Home Ownership Matters, LLC.

Tax Credit Can Be Used for Down Payment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.