Little Valley Area Building Plans for High Density Housing

Bonneville Builders of Salt Lake City has plans to build high-density housing in the Little Valley area. It has been rejected twice by the city. However, Bonneville Builders wants to be heard before the City Council. No date has been set for the meeting, but after speaking with Bonneville Builders they plan on continuing to try and get approval. The area they want to build the high density housing is next to Little Valley Elementary and Sunrise Ridge Intermediate. You might be wondering, "What is high density housing?"
High Density Housing definitions from the web
* An apartment, or flat, is a self-contained housing unit that occupies only part of a building. Such a building may be called an apartment building, especially if it consists of many apartments for rent. Apartments may be owned by an owner/occupier or rented by tenants.
* Over 60 dwellings per hectare and generally five stories or more high, for example apartment buildings.
What is the reasoning for the high density housing? To build more affordable housing.

More questions to consider?
How will this affect our market values?
What type of housing will this be? Apartments? Townhomes? SFD?
What will the price range be?

I am very curious about how this will play out in the future and I will keep you up to date on this process. If you should have any further questions please call me at (435) 313-6708.

The two pictures are of homes in the Salt Lake City area, in the subdivision Daybreak. Bonneville Builders said, the homes would be similar to the homes in this subdivision
If you are interested in Real Estate in St.George, Utah please call me at 435-313-6708 or visit my website at: http://www.paulsellsdixie.com/

FANNIE & FREDDIE

The government’s twin housing behemoths—Fannie Mae and Freddie Mac—cannot simply be cut lose from government support. Like animals kept too long in captivity, Fannie and Freddie will not be able to survive in the wild. This is something that supporters of Fannie and Freddie have right - government support is absolutely necessary for their existence. But that doesn’t mean we should continue the government life-support.
In fact, there is good reason to end government support for the agencies and let them wither away. The truth is that there is nothing that Fannie and Freddie do that private companies couldn’t do better—except provide an illusory subsidy for homebuyers. And there are far better ways to subsidize housing than propping up Fannie and Freddie.
Fannie and Freddie are supposed to make housing more affordable by buying up mortgages and providing guarantees for mortgages that conform to the guidelines developed by bureaucrats. Mortgage lenders are willing to make loans at cheaper rates when part of the risk of default is absorbed by someone else.
That’s it. That’s really the only way that Fannie and Freddie save homebuyers money—by taking on the risks of making mortgages that would otherwise sit with the lenders. The lenders then pass on the savings to homebuyers by providing mortgages at slightly lower rates.
But if Fannie and Freddie are just big insurance companies for mortgage lenders, there’s no reason that this couldn’t be done by private markets. Insurance is a huge business in the United States. And mortgage insurance is, in fact, available from private companies.
The main advantage Fannie and Freddie have is access to cheap capital. Even before they were put into government conservatorship, Fannie and Freddie could borrow money from debt investors at rates far cheaper than private competitors because they enjoyed the implicit guarantee of the United States government. Debt investors assumed—correctly, it turns out—that if these companies got in trouble, the U.S. taxpayer would assure that they could pay off their debts.
Now that they have access to government bailout capital, the advantage is even larger. Last quarter, Fannie owed $1.9 billion in dividends to the Treasury. It couldn’t make the payments, so it requested $1.5 billion from the Treasury to pay back the Treasury. For real. That’s what happened.
Access to cheap, government guaranteed debt and equity means that Fannie and Freddie can provide guarantees to mortgage lenders far cheaper than any private company can. And that’s the source of the subsidy for homebuyers: Fannie and Freddie undercut competition by providing mortgage insurance far cheaper than the market allows for private companies.
Absent the government guarantee and attendant cheap funding, there would be no reason for Fannie and Freddie to exist. They’d no longer be able to undercut private competition. In all likelihood, the leaner, more efficient private competitors would clean their clocks.
Fannie and Freddie would die—or be transformed into ordinary companies with no special role to play in the housing market.
Unfortunately, we do not know how to cut Fannie and Freddie off from the government guarantee. Prior to the crisis, government officials often insisted there was no guarantee of Fannie and Freddie—but no one believed them and the officials turned out to be either mistaken or lying.
Now—after the bailout—the government lacks all credibility on Fannie and Freddie. As long as they exist, Fannie and Freddie will enjoy a competition killing advantage that will undermine any attempt to create a healthy mortgage market not dependent on government subsidies. By John Carney, Senior Editor, CNBC.com
To read more of this article go to .www.cnbc.com

FORECLOSURES EXPECTED TO RISE

St. George—While Washington County real estate experts are citing a temporary decline in foreclosure activity this summer, banks are expected to claim distressed properties with renewed focus in the fall, with 3,000 additional residential foreclosures anticipated during the next 12 months.
Amid widespread economic and financial instability, some lenders have reduced their foreclosure activity in Washington County, said Allan Carter, director of Developer Services for Southern Utah Title.
“The foreclosing lenders are baffled on how to solve the problem,” Carter said, with many residents unable to make their mortgage payments. “They’ve taken a little bit of a reprieve in Washington County.”
County property records support Carter’s theory, with approximately 192 notices of default, the first step in the foreclosure process, recorded in Washington County from July 1 to July 29 among all property types, representing a significant drop from the 293 default notices documented during the same period last year.
From July 1 to July 29, Washington County recorded 118 foreclosures among all property types, essentially remaining flat with last year’s figure of 121.
Although the decline in default notices offers a welcome breather from the inflated level of activity experienced in recent months, Carter said the decline is little more than a temporary respite, expecting lenders to return in full force this fall in an effort to claim their assets.
“We expect that the aggressive nature of foreclosures will pick up steam as we get into the fall and winter,” he said. “Lenders are back off vacation, the unemployment picture isn’t changing significantly and they have to capitalize their banks by getting rid of this inventory.”
Carter said Washington County’s foreclosure rate is likely to reach its peak in 2011, with another 3,000 residential foreclosures anticipated in the next 12 months.
“It will be one of the largest years for foreclosures,” he said of 2011.
Kathy Nielsen, President of the Washington County Board of Realtors, said she also anticipates continued foreclosure activity in the coming months.
Jeremy Larkin, a local Realtor with Keller Williams Realty, said the recent decline in foreclosure activity is an encouraging sign for the market, although he does not expect the region’s continued difficulties with bank-owned properties to subside anytime soon. “I hope that this thing gets under control in the next 12 to 18 months,” he said.
Although activity has temporarily subsided this summer, Washington County is on pace to surpass 2009 foreclosure figures, according to county records.
The county recorded 882 foreclosures among all property types this year, from January 1 to July 29, a noticeable increase from the 716 recorded during the same time frame in 2009.
In only 7 months, Washington County has surpassed the total number of foreclosures recorded in 2008.
This year’s foreclosure total is destined to grow this fall when lenders resume aggressive foreclosure activity with a renewed sense of focus, Carter said.
“We really expect to see foreclosures run unimpeded,” he said.
By Scott Kerbs/The Spectrum

MORE CHANGE IS COMING

They say the only constant is change... And more change is coming, as the sweeping Financial Regulation Bill was passed by the Senate last week and will be signed by President Obama in short order to become law. So what does this change mean... and how will it impact home loan rates? Here's what you need to know.
The Bill calls for a new consumer protection agency and prohibits Banks from taking risky bets. While those things are important, it's also important to realize that this legislation... over 2,000 pages worth... amazingly does nothing to address the core reasons for the financial collapse. Fannie Mae and Freddie Mac are completely left out of this legislation. The credit rating agencies, who may have played the largest role in the financial collapse, also go unmentioned.
In fact, when former Fed Chairman Alan Greenspan was asked about the Financial Regulation Bill, he noted that this was the first time the Fed was not asked to write a regulation of this kind. He also said that there are "unintended consequences" in every page of this bill.
What all this will mean for our economy and home loan rates remains to be seen... which is why now is the perfect time to act, while home loan rates continue to be some of the best they have ever been!
Banks seem to be creating two classes of troubled homeowners. Those who are falling behind in their payments are being allowed to stay in their homes longer because lenders are reluctant to ad to the glut of foreclosed homes on the market. At the same time, lenders are stepping up repossessions to clear out the backlog of bad loans.
On average, it takes about 15 months for a home loan to go from being 30 days late to the property being or foreclosed and sold, according to Lender Possessing Services Inc., which tracks mortgages.
The number of homeowners that received a legal warning that they could lose their homes in the first half of the year climbed 8 percent from the same period last year. But the rate dropped 5 percent from the last six months of 2009, according to RealtyTrac, which tracks notices for defaults, scheduled home auctions and home repossessions.
About 1.7 million homeowners received a foreclosure-related warning, between January and June. That translates to one in 78 U.S. homes.
Nevada posted the highest foreclosure rate in the first half of the year. Arizona, Florida, California and Utah were among the other foreclosure hotbeds.

REAL ESTATE TRENDS & FORECASTS

At a recent luncheon of the St. George Chapter of the Women’s Council of Realtors, Vardell Curtis, Chief Executive Officer of the Washington County Board of Realtors, talked about real estate trends and forecasts. The following are some of the highlights of Vardell’s presentation:
Pending home sales have risen for three consecutive months, reflecting the broad impact of the home buyer tax credit and favorable housing affordability conditions. The forward-looking indicator rose 6 percent to a level of 110.9 based on contracts signed in April, from an upwardly revised 104.6 in March, and is 22.4 percent higher than the same month last year. The tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to the surging sales. The housing market has to get back on it’s own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs.
“The economy grew at a slower rate than originally reported in the first three months of the year, according to the Bureau of Economic Analysis, which suggest inflation will remain tame in the near term,” stated Frank Nothaft, chief economist for Freddie Mac. He continued by saying, “As a result, mortgage rates held at historic levels this week. In fact, rates on 15-year fixed-rate mortgages set another record low for the third week in a row.”
It remains a very attractive time to refinance a mortgage or buy a new home or foreclosed property, while recognizing that one in four U.S. homeowners is “underwater” on their mortgages...owing more than the home is worth. Mortgage rates could move higher later this year if global investor anxiety declines.
The Utah market is rebounding slowly. While some sectors of Utah’s economy are slowing heading toward the rebound track, real estate is still not there yet. And some local analysts predict it may be a while before it finally finds its way back onto the road to stability. The commercial real estate market may not even begin to recover until next year.
On the residential side, declining home values have pushed housing prices back to much more affordable levels. The lower end of the market (under $300,000) is recovering. We’ve probably seen a bottom or very close to a bottom in that part of the market. The middle part of the market is “a little bumpy” with the higher end “going to remain in a mess for some time to come.” There is just too much high-end real estate in the state….and we just don’t have people with the incomes and fundamentals that can support those higher payments.
Prices on the more expensive unsold inventory are falling more dramatically – on a percentage basis—than any other segment of the housing market. Eventually, the market could see more foreclosures or sort sales as those properties are no longer financially viable for their owners.
According to newly released data from CoreLogic on foreclosures for the St. George area, the rate of foreclosures among outstanding mortgage loans is 4.24 percent for the month of April, an increase of 1.04 percentage points compared to April 2009 when the rate was 3.2 percent. Foreclosure activity in St George is higher than the national foreclosure rate which was 3.20 percent for April 2010, representing a 1.04 percentage point difference.
Perhaps the best news for Washington County is progress in the residential housing market. Sales are booming as the market continues to adjust to more realistic prices. In addition, preliminary data for the first two months of 2010 shows approved home permits almost doubled the number permitted for the same months in 2009. Information courtesy of Vardell Curtis, CEO, WCBR

TAX CREDIT GONE, BUT RECOVERY WILL STAY

Now that the federal Home Buyer’s Tax Credit has expired, many thought home-buying activities would dry up. Unlike last winter, the credit has neither been expanded nor extended, and industry watchers have worried that home prices might see a “double dip” without the stimulative effect of the money.
There’s no denying the program has been successful. But the free lunch has ended and reality is staring us right in the face. Where will the housing market head from here?
I predict a continued slow recovery in prices and activity, and I have three reasons for believing it:
● The overall economy is improving. Slowly but surely, people are feeling a little better about their own financial situation, and that translates directly into spending. The more spending that occurs, the better the economy. The better the economy, the more jobs that are created. The more jobs that are out there, the more houses that sell.
That’s an oversimplification of an extremely complex situation, and we still have a long way to go, but things are definitely better than they were a year ago, and most believe better times are ahead.
Interest rates are still extremely attractive. And I’m not talking about some weird adjustable rate instrument that is tied to an offering of inter-bank rates in London. I’m referring to the all-American 30-year, fixed-rate loan that our parents had on the house in which we grew up.
Most Americans are firmly convinced that a single-family house in a good neighborhood in a growing community is a solid investment, and they are right. And if you can lock in a good price with a low fixed interest rate, you add strength to your financial position by being able to predict your housing expense into the future.
● And what about the loss of the tax credit? I don’t think it will matter.
The housing market is still soft enough to absorb the financial hit. By that I mean a savvy shopper who isn’t afraid to negotiate can expect to buy a house in this market at enough of a discount to offset the lost tax credit.
Sellers are painfully aware that price sells houses, and I expect builders to offer their own version of a “home buyer’s discount” as a way to incentivize the home-buying public. Owners of resale homes will follow suit.
Is that a cheap and crass marketing gimmick designed to fool the public into thinking they are getting a benefit that they truly are not receiving? Yes.
Will it work? Yes.
John Adams is an author, broadcaster and investor. He answers real estate questions on radio station WGKA (920 AM) Iin Atlanta. For more real estate information or to make a comment, visit www.money99.com.

Buy and Bail

FHA and Fannie Mae “Buy and Bail” rules have been in effect for several months and this is old news to many. This information comes as a reminder.
Because values have declined in most areas making it difficult to refinance, many home owners have decided to purchase another home while their credit is still good claiming they will rent their existing home. Once their new home closes, they then allow their existing home to go into foreclosure and a new term has emerged, “Buy and Bail”.
How Does Buy and Bail Work? Buy and Bail involves lying. It typically involves drawing up a phony rental agreement and presenting this false documentation to the lender. That is mortgage fraud. The FBI defines mortgage fraud as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.”
Here are the steps that a home owner would follow:
First, the home owner decides that (for whatever reason), his home no longer suits his purposes.
Since the home owner cannot obtain a new mortgage loan after a short sale or foreclosure, he sets out to find a home to buy before going into default on the existing mortgage.
A purchase offer is written on the new home and the home owner/buyer submits a loan application.
The lender requests a rental agreement to show that a tenant will move into the home owners old home and make rental payments.
Home owner gets a friend to sign a rental agreement, even though the friend has not intention of moving into or renting the home owner’s old home.
The lender approves home owners new mortgage and funds the loan
The home owner never makes a payment on his old home. A Notice of Default is filed and the home goes into foreclosure, subsequently going back to the bank.
The home owner’s credit is ruined, but he doesn’t care because he has already bought a new home and has no intentions of moving for a long time.
As a result of buy and bail practices, Fannie Mae guidelines now require buyers to qualify for mortgages on both homes at loan inception, unless the existing home has plenty of equity. That’s because a home owner with plenty of equity would be foolish to walk away from it.
Fannie Mae’s Guidelines for converting a principal residence to a second home or investment property is as follows:
If a customer is purchasing a new home prior to selling their existing home they must qualify with both payments (PITI, interest, taxes and insurance). If the equity is less than 30% (market value less than amount owed) 6 months reserves are required. If equity position is 30% or greater 2 months reserves are required. Note: Only 75% of the rental income can be used, even then, for qualifying purposes. An executed 12 months lease and proof that a security deposit in the customers’ account is required.
If a customer is renting out their existing residence the borrower must also qualify with both payments. Rental income can only be used if the equity position is equal to or greater than 30%.
If a client’s pending sale for the existing home blows up before the closing of their new purchase, or will not occur prior to the new home closing the rules are a little different but similar to the first explanation. The payments for the existing home are not required for qualifying purposes if reserves can be documented along with a copy of an executed sales contract and confirmation of all financing contingencies are provided.
FHA’s Guidelines now require buyers who are legitimately purchasing a home and converting their existing home to a rental either qualify for both loans or have 25% equity in their present home. Exception—Relocation:s: The home-buyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year’s duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month’s rent was paid to the homeowner.
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