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Tuesday, September 28, 2010
General Elections on November 2nd
General Elections are on November 2nd. Voting will be for Governor, Lieutenant Governor, U.S Senate, House of Representatives, Judicial Retention, and State School Board.
Things Happening in Our Area
1.Huntsman World Senior Games Starts October 4th runs till October 16th
2.What Women Want Expo October 22nd and 23rd
3.Sons of Utah Pioneers October 21st-23rd .
4.General Elections November 2nd.
5.Thriller will play at Tuacahn on October 22nd through October 30th
2.What Women Want Expo October 22nd and 23rd
3.Sons of Utah Pioneers October 21st-23rd .
4.General Elections November 2nd.
5.Thriller will play at Tuacahn on October 22nd through October 30th
Tuesday, September 21, 2010
The average interest rate for a 30-year loan was 5 percent over the last 12 months. The average over the last 10 years was 6.13 percent. The highest rate since January 1964 was 18.45 percent in October 1981. The lowest rate since January 1964 was 4.71 last December. That is some history lesson. No matter how you slice it, today’s home prices and mortgage rates represent an HISTORIC OPPORTUNITY that cannot be ignored. Whether you are seeking to purchase a home or refinance, now is your chance. Information courtesy of Jeanne Wall/WJ Bradley Mortgage Capital Corp.
REHAB A HOME WITH HUD’S 203(k) PROGRAM
Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made.
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage.
The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established.
The Section 203(k) program is HUD’s primary program for the rehabilitation and repair of single family properties (to be eligible, the property must be a one to four family dwelling that has been completed for at least one year). Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.
Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203 (k) with other financial resources, such as HUD’s HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers.
The Section 203(k) program is an excellent means for lenders to demonstrate their commitment to lending in lower income communities. HUD is committed to increasing homeownership opportunities for families in these communities. www.hud.gov
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage.
The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established.
The Section 203(k) program is HUD’s primary program for the rehabilitation and repair of single family properties (to be eligible, the property must be a one to four family dwelling that has been completed for at least one year). Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.
Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203 (k) with other financial resources, such as HUD’s HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers.
The Section 203(k) program is an excellent means for lenders to demonstrate their commitment to lending in lower income communities. HUD is committed to increasing homeownership opportunities for families in these communities. www.hud.gov
Thursday, September 9, 2010
Homeowners Current on payments but Negative Equity get help
The Obama Administration on Tuesday unveiled a new plan to help homeowners who are underwater on their mortgages, according to a story in the Wall Street Journal.
The program targets between 500,000 to 1.5 million negative equity mortgages, where the homeowner owes more than his or her home is worth.
The first initiative of the program is for homeowners who are current on their mortgages but at risk of default because of sinking home values, the Journal said.
Under the program, banks and lenders will write off the home's value to less than the value of the property and then hand off the reduced loan to the government. The program essentially refinances underwater homeowners into loans backed by the Federal Housing Administration.
About 11 million mortgages or 23 percent of U.S. households with a mortgage are in a negative equity position, according to CoreLogic.
The program targets between 500,000 to 1.5 million negative equity mortgages, where the homeowner owes more than his or her home is worth.
The first initiative of the program is for homeowners who are current on their mortgages but at risk of default because of sinking home values, the Journal said.
Under the program, banks and lenders will write off the home's value to less than the value of the property and then hand off the reduced loan to the government. The program essentially refinances underwater homeowners into loans backed by the Federal Housing Administration.
About 11 million mortgages or 23 percent of U.S. households with a mortgage are in a negative equity position, according to CoreLogic.
Thursday, August 26, 2010
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/
Monday, August 23, 2010
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
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
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