Daily Archives: November 1, 2012

5 reasons you shouldn’t rely on building department inspection | Katonah NY Real Estate

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DEAR BARRY: Your articles often recommend that home inspectors be hired to inspect brand-new homes. If a home has just been inspected and approved by the building department, what’s the point of hiring a private home inspector? –John

DEAR JOHN: The answer to your question is worth repeating. Here are the five essential differences between a building department inspection and a professional home inspection:

1. A building inspection is strictly for building code compliance, but it is possible for a home to be poorly built and still comply with code. Home inspections deal with all kinds of substandard conditions, including those that do not involve code, such as poorly fitted doors, poorly mitered trim, missing tile grout, missing shelves in cabinets, sloped floors, loose toilets and faucets, etc.

2. A building inspection usually lasts about 15 to 30 minutes, while a home inspection lasts from 2 1/2 to four hours. This is because many more things are inspected and tested in the course of a home inspection.

3. Building inspectors simply look at the completed construction. They do not test the operational condition of fixtures and appliances. Faucets are not turned on; drains are not tested for leaks; appliances are not operated; smoke and carbon monoxide detectors are not tested; and so on.

4. Gas and electrical services to a home are not turned on until the final inspection is completed and the home is signed off. The building inspector can approve the appearance of the wiring and gas piping, but nothing is tested as part of the final inspection because you cannot test fixtures without gas or electricity.

Home inspectors arrive when utilities have been turned on. They plug testers into outlets to ensure grounding, correct polarity, and ground fault protection. They operate built-in fixtures and appliances such as dishwashers, garbage disposals, lights, ceiling fans, exhaust fans, electric ovens, garage door openers, and more. They also test the gas-burning fixtures such as forced-air furnaces, water heaters, gas-log fireplaces, and cooking appliances.

5. Building inspectors perform a walk-through inspection only. They do not crawl through subareas or attics, and they do not walk on roofs. Home inspectors do all of these things, enabling them to identify construction defects that routinely go unnoticed during a municipal inspection.

Veteran home inspectors know that all brand-new homes have defects of various kinds, usually minor but sometimes major. Examples include broken roof tiles; missing roof flashing; attics without insulation; furnaces improperly installed in attics; congested drainpipes; drains that leak; nontempered glass next to bathtubs and showers; inoperative GFCI outlets; ungrounded outlets; drain vents that terminate in attics; chimneys in contact with combustible materials in attics; loose safety rails; disconnected air ducts under the house; PVC discharge pipes on water heater relief valves; and this list could go on and on.

These are the reasons why people who buy brand-new homes should hire an independent home inspector. A home inspection gives homebuyers the best opportunity to take advantage of the builder’s warranty. Bypassing an inspection leaves undisclosed defects to be discovered at a later date, after the builder’s warranty has expired.

via inman.com

Number of homes lost to foreclosure continues to fall | Bedford Hills NY Real Estate

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The number of U.S. homes lost to foreclosure dropped for the fifth month in September, with real estate data aggregator CoreLogic counting 57,000 completed foreclosures in a monthly foreclosure report released today.

That’s a 31.3 percent decrease from a year ago, and 3.4 percent less than August’s upwardly-revised total of 59,000. By comparison, for a span of six years before the housing crisis, from 2000 to 2006, completed foreclosures averaged 21,000 per month, the report noted.

“Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year,” said Mark Fleming, chief economist for CoreLogic.

As of the end of September, CoreLogic counted 1.4 million homes — 3.3 percent of all U.S. homes with a mortgage — that were in some stage of the foreclosure process, a 6.7 percent drop from the same time a year ago.

Not all homes that enter the foreclosure process are lost by their owners. Some are able to get current on their loans or negotiate a loan modification or short sale.

The 57,000 foreclosures completed in September brings the number of homes that have gone all the way through the foreclosure process since September 2008 to 3.9 million, CoreLogic said.

“The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market,” said Anand Nallathambi, president and CEO of CoreLogic.

The report shows that nearly half (47.7 percent) of the 763,589 foreclosures completed in the 12 months through September occurred in just five states: California (108,000), Florida (92,000), Texas (59,000), Georgia (55,000), and Michigan (51,000).

States with most foreclosures in the last 12 months, September 2012

StateNumber of foreclosures
California108,000
Florida92,000
Texas59,000
Georgia55,000
Michigan51,000

Source: CoreLogic

Florida leads all U.S. states with 11.5 percent of its mortgaged homes in some stage of foreclosure, according to the report. Other states topping the list, in order, are: New Jersey (7.3 percent), New York (5.3 percent), Illinois (5.2 percent) and Nevada (4.9 percent). All but Nevada are judicial foreclosure states, where loan servicers have had difficulty pushing homes through the foreclosure process because of “robo-signing” issues.

States with highest percentage of mortgaged homes in some stage of foreclosure, September 2012

StatePercentage of mortgaged homes in foreclosure
Florida11.5%
New Jersey7.3%
New York5.3%
Illinois5.2%
Nevada4.9%

Source: CoreLogic

via inman.com

Mortgage insurers won’t stand in the way of Fannie and Freddie short sales | Bedford NY Real Estate

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Starting tomorrow, mortgage giants Fannie Mae and Freddie Mac have a green light from nine private mortgage insurers to approve short sales for distressed borrowers without a separate review.

Fannie and Freddie require that borrowers take out mortgage insurance if they are making down payments of less than 20 percent of the value of the home they are financing. Letting loan servicers working for Fannie and Freddie approve short sales and deeds in lieu of foreclosure without a separate review by mortgage insurers has the potential to reduce costs, delays and uncertainty, Freddie Mac said in announcing the move.

The nine mortgage insurers that have agreed to expedite short sales are CMG Mortgage Insurance Co., Essent Guaranty Inc., Genworth Mortgage Insurance Corp., Mortgage Guaranty Insurance Corp., PMI Mortgage Insurance Co., Radian Guaranty Inc., Republic Mortgage Insurance Co., Triad Guaranty Insurance Corp., and United Guaranty Corp.

In announcing the new agreement, Fannie Mae said it previously had individual delegation agreements with the “majority of its top mortgage insurers.” Having a standard delegation agreement in place all nine mortgage insurers makes the approval process “more consistent and efficient for servicers and borrowers.”

The new delegation agreement allows loan servicers to approve any short sale or deed-in-lieu that meets Fannie and Freddie’s requirements without individual mortgage insurance approval.

“We applaud the nation’s mortgage insurers for committing to work with us and our servicers to help more borrowers obtain short sales and other foreclosure alternatives,” said Tracy Mooney, senior vice president for loan servicing and REO at Freddie Mac, in a statement. “By paving the way for more borrowers to avoid foreclosure, today’s announcement will support the housing recovery and help reduce taxpayer losses.”

Fannie and Freddie’s new streamlined short sale approval process also goes into effect tomorrow. The mortgage giants will offer up to $6,000 to second-lien holders to expedite a short sale, and reduce or eliminate paperwork requirements for borrowers who have missed several loan payments, have low credit scores, or have serious financial hardship.

via inman.com

Mortgage applications fall on declining refinance activity | Bedford Corners NY Real Estate

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Mortgage applications filed by U.S. consumers fell 4.8% for the week ending Oct. 26 as fewer homeowners refinanced their existing mortgages, an industry trade group said.

The Mortgage Bankers Association also noted that its refinance index fell 6% from the previous week, the lowest level reached since August. Home purchases, on the other hand, edged up 1% from the previous week on a seasonally adjusted basis.

Refinance activity represented 80% of all applications, down from 81% a week earlier, suggesting a slow down at a time when interest rates edged up a bit.

The average 30-year, fixed-rate mortgage with a conforming loan limit increased to 3.65% from 3.63%, while the 30-year, fixed hit its highest level since mid-September.

The average 30-year, FRM with a jumbo loan balance increased to 3.94% from 3.85% a week earlier.  Meanwhile, the 30-year, fixed backed by the Federal Housing Administration remained unchanged at 3.41%.

The 15-year, FRM declined to 2.95% from 2.96%, and the average 5/1 ARM declined to 2.66% from 2.72%.

kpanchuk@housingwire.com

 

via housingwire.com

The Real Estate Book updates marketing products website | Chappaqua Real Estate

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Real estate marketing platform The Real Estate Book has updated its online marketing tool, trebstore.com, to allow agents and brokers to target the brochures, postcards and flyers they create on the site to their contacts’ demographic characteristics and locations.

The three-year-old marketing hub, powered by communications company R.R. Donnelley and Sons Inc., allows users to access their listing photos and data from RealEstateBook.com, which has 1.5 million listings in the U.S., Canada and the Caribbean, and create marketing materials from them.

The service then charges users to have them printed and delivered or to download the digital file. Costs range from $0.61 per 6-by-9-inch mailed postcard to $2.05 per 11-by-17-inch mailed brochure. Users can download and print the pieces themselves at a subscription rate starting at $0.99 per download.

The service’s new targeting capabilities make it easy for real estate pros to maximize their marketing efforts, said Scott Dixon, CEO of NewPoint Media Group, parent company of The Real Estate Book.

Advertisers “can choose a specific area down to the subdivision level and then filter their list by household income, the amount of time the consumer has owned the home, for example,” Dixon said in a statement.

Sample design template on The Real Estate Book’s trebstore.com.

Trebstore.com also offers a broker product that allows brokers to create consistent branding for all of the pieces their agents send out using the site.

Last year, The Real Estate Book updated its website to make it mobile-optimized and released an iPhone app.

via inman.com

Strategies for coping with disaster | Armonk NY Real Estate

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Our hearts and prayers go out to all those who have been impacted by Hurricane Sandy.

In many areas, it may be years before things return to normal. What steps can you take to recuperate from Sandy — or from any other difficult event such as a death or illness that rips your life apart?

In February, I wrotea column entitled, “When disaster strikes: Have a plan.” If you live in a part of the country where Sandy passed you by, read the suggestions in that article and take the time now to prepare for the unexpected event that can turn your entire world upside down.

Sadly, many individuals may never completely recover from the psychological scars an event of this magnitude can create.

Article continues below

After the 1994 Northridge earthquake, it was almost a year before the slightest rumble or shake would not cause me to bolt up awake thinking we were having another aftershock.

Here are some strategies to cope:

1. Expect emotional reactions

Each individual responds differently to stress. A common response is a sense of disbelief or numbness. This results when your body releases a flood of endorphins to cope with the traumatic event. When this wears off, the grief and despair can be overwhelming. Other emotions you may experience include insomnia, anger, irritability, grief, self-doubt, and fear of being alone. While these reactions may be temporary, they can sometimes last for months and days.

2. Turn down the stress

Your first goal is to do whatever it takes to get to a place where you are as calm and relaxed as possible. Spend time with those you love doing the things that make you feel relaxed and happy. If you’re not exercising, consider doing some activity that releases stress whether it’s pounding on a pillow, swinging at a baseball, or merely taking a walk. Physical activity burns off ACTH, the damaging substance our bodies release when under stress. In addition, yoga, massage, and even acupuncture are great ways to not only reduce your stress, but to increase your well-being as well.

3. Be the calm in the storm

Don’t be surprised when your clients or love ones lose it over something trivial. In psychological terms, this is known as the “kick the cat” syndrome. When we are frustrated and have no way to vent our anger on the source of frustration, many people take it out on the people around them. The key in coping with unjustified outbursts or misdirected anger is to realize it’s not about you. Instead, it is probably displaced fear and/or aggression. Rather than responding in kind, lower your voice, take notes (if appropriate) so the person knows your truly hearing what they are saying, and then repeat what you have written back to them in a quiet, calm voice. Listening and repeating back in a calm voice usually defuses the other person’s anger. 

4. Take small steps

Start by completing whatever small tasks you can get off your plate. Small, seemingly inconsequential things can drain far more energy than you imagine. Set aside part of each day to handle these small items. Completing these tasks will give you a sense of regaining control of your life.

5. It’s OK to cry

Don’t try to bottle up the feelings you are experiencing. It’s better to talk about them and if you tear up, don’t fight it. Crying releases pent up energy and stress.

6. Smile and laugh

Smiling changes your physiological state. When you were crying and one of your parents said, “Smile — you’ll feel better,” it really was true. Look for opportunities to smile and laugh, even at some of the most difficult situations. For example, I remember seeing a 200-unit apartment building that had been almost completely demolished by the 1994 Northridge ‘quake. Someone had posted a big sign that said, “The fat lady has sung.”

7. Express gratitude often

If you have been without power or water for several days, there’s nothing like the day when you can turn your electronics back on and take a hot shower. Also, remember to tell your friends and loved ones how much they mean to you. They’re under stress as well and small expressions of gratitude and love can help each of you cope more effectively.

8. Focus on what you can control

A disaster of this magnitude is a strong reminder of all the things that you cannot control. Rather than focusing on what you can’t do anything about, make choices that support action. For example, rather watching coverage of the disaster, volunteer at your child’s school, give blood, or donate your time to a charitable organization. These are places where your efforts make a difference.

Getting back to normal takes time. To speed up the process, be supportive and take as many opportunities to care for yourself as possible.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com. You can contact her at Bernice@RealEstateCoach.com or @BRoss on Twitter.

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Copyright 2012 RealEstateCoach.com

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

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New Credit Risk Scoring Promises to Qualify More Borrowers | Armonk Homes

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Evidence is growing that more borrowers will be approved for a mortgage without increasing risk to lenders through more sophisticated credit risk scoring that uses alternative data, such as unsecured credit and property history in consumer credit report analysis, according to a new report by the CEB TowerGroup.

“Traditional credit data and analytics continue to be relevant, but are not sufficient to satisfy the consumer credit reformation of today,” said the CEB TowerGroup’s senior research director, Craig Focardi. “As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders and investors.”

CEB TowerGroup evaluated data from a joint analysis conducted by CoreLogic and FICO that compares the FICO® Score used by most lenders today with a new score launched in July that evaluates the traditional credit data from national credit data repositories and the unique alternative credit data contained in the recently launched CoreScoreTM credit report. The analysis of 300,000 mortgage applications found that 3,100 more applicants would receive a qualifying credit score of 700 and approximately 70 percent of a sample population saw their credit score improve.

The report included a joint analysis by CoreLogic and FICO that found that report shows that enhancing the process of determining risk with new alternative data and analytics would allow lenders to approve loan applications that might otherwise be denied, or deny problem loans that might otherwise be approved. Both outcomes would help consumers and the market itself,” said Tim Grace, senior vice president of Product Management at CoreLogic.

The report, titled “Enhanced Credit Data and Scoring: Deeper Insight into Mortgage Applicants,” notes that consumers used to pay mortgage debts first, but because of the recent financial crisis some consumers now treat paying other debts, such as credit card bills and car payments, as a higher priority to maintain personal financial liquidity.

Key findings in the CEB TowerGroup report include:

  • Alternative credit information can support loan applicants with newly established credit files with good credit, those with minimal information in their traditional credit files but with good alternative credit payment histories, and long-time renters with no serious payment issues.
  • More complete loan applicant, property and related information will bring greater transparency and efficiency to the mortgage lending markets and help reduce risk.
  • The new FICO/Corelogic score is more accurate than the prior FICO® Score in identifying the riskiest loans improving lenders ability to discern consumer credit risk at origination. For applicants identified as the riskiest 10 percent of the lending population (those most likely to become past due on their mortgage loan), it identified 10 percent more seriously delinquent mortgage loans – loans 90 days or more past due.
via realestateeconomywatch.com