Tag Archives: Pound Ridge NY
Canada’s Hot Housing Market Chills in September as Prices Drop | Pound Ridge Realtor
Canadian home prices in September fell the most in nearly two years, suggesting that recent changes to the country’s mortgage rules have reined in Canada’s once-hot housing market.
- Canadian home prices cooled in September, according to the Teranet-National Bank Composite House Price Index.
The Teranet-National Bank Composite House Price Index, or HPI, fell 0.35% in September from August, with price drops observed in six of the 11 major Canadian cities watched by the index, including British Columbia’s Vancouver and Victoria markets, as well as Montreal.
That’s the largest price decline seen by the HPI since November 2010, when the index fell 0.39%. Since then, the HPI has only seen four monthly declines, as historically low interest rates have spurred spending in Canada’s housing sector.
On an annualized basis, the HPI gained 3.6% in September, a slight drop from the previous month.
The federal government’s new rules that reduced the maximum amortization period of new government-insured mortgages from 30 to 25 years has “undoubtedly” contributed to cool the market, said National Bank Financial senior economist Marc Pinsonneault.
Still, existing home sales in Canada jumped 2.5% in September from August, according to the Canadian Real Estate Association, igniting worries that the sector may be headed for a crash landing.
Those concerns should be tempered as prices are likely to steadily drop up to 5% by the end of next year, said Mr. Pinsonneault.
“It doesn’t mean a catastrophe, but it’s consistent with a soft landing in the sector,” he said.
The sector will continued to be closely monitored by the Bank of Canada, which is concerned that the state of household debt in Canada is worse than originially perceived, said Mazen Issa, Canada macro strategist at TD Securities. The ratio of household credit-market debt to disposable income hit a record high of 163.4% in the second quarter of 2012.
Who Will Get Future Housing Wealth? | Pound Ridge NY Real Estate
Must I compensate my agent if I don’t buy? | Pound Ridge NY Homes
DEAR BENNY: Could you advise me of the appropriate (and legal) way to compensate the buyer’s agent we used for our unsuccessful house hunt?
After a stressful summer spent engaged in multiple bidding wars and a short sale that fell through due to a surprise judgment, we’re taking a break. We are happy with our agent’s performance, and we plan to utilize her services in the future.
Should I offer a simple thank-you note and reassurance that we will recommend her to family and friends, or do we owe her cash for real estate services rendered? Does she or her brokerage keep the money we placed in escrow for the short sale? –Lisa
DEAR LISA: Yours is an interesting question. I know a lot of real estate agents and brokers read my column so I welcome input from out there.
Did you sign an agreement with the agent? Presumably you did, because to my knowledge most states require agents and brokers to enter into a written agreement with a potential client before any actual work is done. Read that agreement carefully; it may obligate you to pay, even if you did not buy a house.
I would ask the agent directly: “We are very pleased and will use your services when we resume our search. We would like to give you a little gift; do you have to share it with your brokerage firm?”
One suggestion: Give her a gift card for a dinner for two at a nice restaurant or at an upscale clothing store. I think such a gesture plus a nice thank-you card would be appreciated and appropriate.
Since the agent did actually do work on your behalf, I am not concerned about anyone claiming this will be a “kickback” in violation of the Real Estate Settlement Procedures Act (RESPA). It is only when money is given for no services that RESPA can kick in.
I welcome any and all suggestions on this question.
DEAR BENNY: I refinanced in January (3.85 percent) and a friend advised me to inquire about a “direct reduction loan schedule.” He tells me it is a method to pay down principal significantly faster than overpaying the monthly installment. I have asked my mortgage banker about this, but so far no response. Can you clarify if there is such a thing and explain how it works? –Jim
DEAR JIM: Many lenders (but apparently not all) have a biweekly payment arrangement, whereby you make two payments a month instead of just one. The net result is that your principal balance is reduced every two weeks, thereby requiring you to pay less mortgage interest in the long run as well as paying off the loan faster.
My understanding is that lenders have to create a new computer program payment schedule, and not all lenders are prepared, or even willing, to do this.
Of course, you could add a little extra to your monthly payment and basically pay off the loan early. If you do this, however, make sure that each check you send in (and the coupon that accompanies the payment) specifically states “extra principal in the amount of $XXX.” If you are making a direct, automatic bank payment, make sure your lender understands this and properly credits the additional payment to principal.
DEAR BENNY: My husband and I are separated, but we own a condo together. I live in the condo and have paid all the costs, mortgage, taxes, upkeep and homeowners association (HOA) fees. Our incomes are separate. I want to pay off the condo, thus owing only taxes and HOA fees. My income is very low and the lower I can keep my monthly costs the better.
I’m 65 and eligible for a tax break on the condo, but I will get only half the amount because it is jointly owned. I was unable to purchase on my own because of my small income. I want the full tax break, so do I pay off the condo, thus clearing the deed? At that point, how can the property be in my name only so I can have only my name on the relevant documents and then apply for the full tax break? –Sally
DEAR SALLY: You are facing a dilemma that many divorced couples encounter: how to take title in your name. Unfortunately, in my experience, the only way is to refinance the existing loan, but in your name only. That means that you will have to have sufficient credit to qualify for the new loan.
Do you have any relatives or friends who can assist you? Your ex can (should he decide to be agreeable) convey his interest in the property to you, but he will still be legally obligated on the existing mortgage.
There may be some state or local government programs in your area that will assist low-income homeowners obtain a mortgage. You should contact your local state representative or senator for additional information. They have been elected by you and should be responsive.
DEAR BENNY: I inherited a house from a friend who passed away six months ago. I have not yet taken title to the property and will not until the estate’s trustee finishes settling the estate, which will be in about a month. The mortgage is currently being paid from the interest generated in a CD account.
Once the trustee finishes her duties, the trust provides that the money remaining in this account be used to pay down the mortgage. Once the title is transferred to me, can I take over the home’s mortgage until I can get refinancing with a different lender?
I know that if I were a relative, I would have protection, but because I am not, I am worried that the mortgage company will call in the loan.
The loan has a prepayment penalty, which the mortgage company says it will waive for a short period of time (for the paydown), although it has not put this in writing. The prepayment penalty expires in six to seven months and would have been applicable, prior to expiration, even if the house was sold, although there were no stipulations regarding death of the borrower.
Ideally, I’d like to have the paydown and the refinancing happen at the same time; however, I have heard from a lender that my name must be on the title for six months before I can seek to refinance. Any suggestions on how to proceed? –Donna
DEAR DONNA: While state law will differ, my experience is that typically in probate situations, the personal representative is required to pay off all outstanding debts of the deceased, including the mortgage.
However, since you want the house, you will have to pay off the mortgage with your own funds over and above what is available from the trust.
I did not know the answer to your financing question so I discussed it with a friend who is in the mortgage business. He advised me that it is his understanding (perhaps misunderstanding) that the six months refers only to situations where a borrower wants cash out from the financing.
So I recommend that you consider shopping around for another lender who makes it clear that his bank really wants to lend money.
Credit Unions Move in on Mortgages | Pound Ridge NY Real Estate
While full service banks and other traditional mortgage lenders have watched their mortgage businesses decline in recent years, credit unions have doubled their market share since 2009 and originated 8 percent of all mortgages in the second half of 2012.
Through the first half of the year, credit unions originated $56.3 billion in first mortgages and captured 7.6 percent of the market. They held 7.8 percent of those mortgages on their books and sold slightly more than half to secondary markets for asset-liability management purposes. Fixed-rate first mortgages comprised 14.6 percent of the asset base for credit unions, a slight increase from the 14.4 percent posted in the first quarter but down from the 14.7 percent posted during second quarter 2011, according to creditunions.com.
Credit unions also posted a 17 percent increase in consumer loan originations over 2011 levels, disbursing $85.5 billion in non-mortgage, non-business loans to members. The industry posted strong growth in used auto, new auto, and credit card loans, with new auto loans increasing 0.7 percent from June 2011 levels.
Industry sources cite service, speed and lower closing costs as advantages credit unions enjoy over other lenders. Closings are generally 30 days faster and credit unions are exempt from state intangible taxes, which can save a borrower several hundred dollars at closing, though a New York Court of Appeals ruled recently that mortgages issued by federal credit unions are subject to the state’s mortgage recording tax. Also, credit unions retain a larger percentage of the mortgages they originate, which means that members will only have one financial institution to make their mortgage payment and not have to worry about making a payment to another bank if the loan were sold.
From the mid-1990s until the mid-2000s, credit unions were a tiny fraction of the mortgage business, accounting for just 2 percent of the first-mortgage market, according to the Credit Union National Association, a trade group. But in 2008-09, that rose to 4.5 percent. Before the first quarter of this year, 5 percent was the highest market share of mortgages credit unions had achieved during a three month period.
The growth in credit union mortgages surprises even industry leaders. Back in 2006, the Credit Union Housing Roundtable, a group of strategists in credit union housing finance, set a goal of reaching the 10 percent share threshold by 2016. That goal now looks like it might be reached two or three years early and an industry consultant, Callahan and Associates, has upped it to 20 percent by 2020.
What makes the growth even more remarkable is that only about 17 percent of the nation’s 7300 credit unions write the vast majority of credit union mortgages.
To help smaller credit unions that may lack the expertise, personnel or capital to originate mortgages, several Credit Union Service Organizations have gone into business to pool resources and provide mortgage origination services to help smaller credit unions make mortgage loans.
Industry leaders are also exploring ways to access additional capital for mortgage lending by developing investment vehicles to bring credit union issued mortgages to capital markets Finding sources of funds in the capital markets that are an alternative to the GSEs will help them find new sources of housing finance in the face of continued uncertainty about the GSEs and provide them a way of financing mortgages that might not conform to GSE guidelines.
Governor Cuomo: Fracking Will Support 1.7 Million Jobs, Study Shows | Pound Ridge Realtor
Drilling for oil and natural gas in shale rock is supporting 1.7 million U.S. jobs this year, including workers outside the energy industry such as waiters and shop clerks, according to researcher IHS Global Insight.
Job tied to unconventional oil and gas production will reach 3.5 million by 2035, according to the report backed by the industry and released today. Because U.S. unemployment is high, many finding jobs related to drilling otherwise would be unemployed, said John Larson, a vice president at IHS and the study’s lead author.
The IHS report was funded by groups such as the American Petroleum Institute and the Natural Gas Supply Association. In January, President Barack Obama cited an earlier IHS study that predicted drilling for shale gas alone would create more than 600,000 jobs by the end of the decade.
“We look at this in the near term, and we believe that many of these jobs really are net new jobs because these individuals would not be able to find employment elsewhere,” Larson said on a conference call. “These jobs tend to be higher paying.”
Shale oil and gas is freed by hydraulic fracturing, or fracking, in which millions of gallons of chemically treated water and sand are forced underground to shatter rock and allow the fuel to flow. Critics have cited potential risks to ground water and air quality. The U.S. Environmental Protection Agency is conducting a study of the impacts of fracking on water.
Rigs, Pipes
About 80 percent of jobs will be on rigs or at companies supplying drillers, such as pipe manufacturers. The rest will be “induced” jobs in other businesses, such as restaurants, hotels and shops. This year, the drilling industry will support about 360,000 direct jobs, 537,000 jobs in supplying industries and more than 850,000 jobs outside the industry, according to the report.
The forecasts assume current regulations on fracking will remain unchanged, according to the report.
Job growth among oil producers reflects capital costs to tap into shale rock. From this year until 2035, more than $5.1 trillion will be invested to produce unconventional oil and gas, according to the report.
Federal, state and local taxes will increase more than $111 billion in 2020 from $62 billion this year.
“We’re talking about what we perceive as a game changer in energy production for the United States,” Larson said. “It’s a really rapid rise and a dramatic shift.”
Doubling Demand
Forecasts in the report are based on IHS projections of oil and gas production. The report assumes demand for natural gas to generate electricity will more than double from now through 2035, and that U.S. exports of natural gas will reach about 4.3 billion cubic feet a day by 2020.
“We have a very, very detailed, bottom-up, build on a play-by-play basis around all this activity,” Larson said. “What you’re seeing here does not represent all resources. It only represents those resources brought to market as a commercially viable productive frontier given the market prices that we see.”
In his January State of the Union address, Obama said fracking could support more than 600,000 jobs by the end of the decade. Larson said he was “comfortable with the accuracy” of that forecast based on state and national employment data.
Coming Soon to a Store Near You: More Solar Energy Products | Pound Ridge Real Estate
Survey: Younger generation not fazed by housing crisis | Pound Ridge Realtor
A survey of 18- to 35-year-old Americans shows that the housing downturn hasn’t deterred most from aspiring to buy a home, and most feel that the crisis made them more knowledgeable about homeownership.
Commissioned by Better Homes and Gardens Real Estate, the online survey of 1,001 members of “Gen X” and “Gen Y” was conducted by Wakefield Research between July 18 and 26.
For 69 percent of respondents, a key “readiness indicator” that someone is ready to buy a home is whether they can also maintain their lifestyle. For 61 percent of respondents, the indicator is that they’ve landed a secure job.
The top areas to research before buying were home prices in a desired neighborhood (59 percent), interest rates (58 percent), and the ability to secure a loan (51 percent).
Many said they were willing to adjust their lifestyle to save for a home by eating out less (62 percent), working a second job (40 percent) or moving back home with their parents (23 percent).
Sherry Chris, president and CEO of Better Homes and Gardens Real Estate LLC, said in a statement that the survey shows that just as the 1970s oil crisis influenced the thinking of baby boomers, the housing downturn has helped members of Gen X and Gen Y come to “believe that the details, risks and rewards of homebuying are integral to their planning.”
Better Homes and Gardens Real Estate, Chris said, “recognizes this shared generational experience and its effects on young homebuyers. We realize how important it is for real estate professionals to understand generational differences and be able to adapt their business to best serve these two generations that will drive the economy for the next 30 years.”
Fannie Mae sees housing improving despite economic uncertainty | Pound Ridge NY Real Estate
Fannie Mae economists see somewhat of a bifurcated economy with the GSE’s forecast for 2013 divided between predictions of a gradually improving housing market and headwinds posed by tax and federal policies that will create economic drag.
Fannie Mae’s Economic & Strategic Research Group says economic activity picked up in the third quarter, but will remain sluggish with sub-2% GDP growth projected for this year.
Yet, the housing market is improving despite all of the uncertainty that Fannie economists see in the broader marketplace.
“The U.S. fiscal cliff and debt ceiling debate as well as the weakened global economic environment are likely to create the strongest headwinds facing any real improvement this year,” said Fannie Mae chief economist Doug Duncan. “With these issues hanging in the balance, we believe risks remain tilted to the downside.”
Housing, on the other hand, is showing signs of what Duncan’s team calls a “sustainable, long-term recovery.” Duncan’s comments fall in line with those of Wells Fargo ($34.34 0%) senior economist Mark Vitner, who also thinks the housing recovery is sustainable through economic troubles.
Home prices are moving towards positive territory when compared to year ago levels, Fannie noted in its October economic update.
The GSE’s research team believes it’s likely prices hit bottom earlier this year, a necessary development that generally precedes a recovery.
Fannie suggested with record low mortgage rates and the Fed’s mortgage-backed securities purchases, consumers will begin turning towards the housing market to nab low interest rates. The GSE expects home sales overall will rise 9% for 2012 when compared to last year.
Fannie also anticipates more refinancings considering today’s record low mortgage rates. The GSE expects total refinance originations to hit $1.8 trillion in 2012, up 20% from a year ago.
via housingwire.com
Popular Refinance Programs for Owners With Equity | Pound Ridge NY Homes
Interest rates have been hovering near all-time lows for weeks now, and many people are watching reports on both how low rates are as well as “new” refinancing programs such as the HARP refinance for underwater borrowers.
But what if you don’t currently owe more on your mortgage than your house is worth? Can you still refinance?
Of course.
In fact, in many circumstances it will actually be easier to refinance if you have equity in your home.
When considering refinancing, the first step is to identify your goal. Do you just want a lower monthly payment? Do you want to get cash in exchange for some of the equity you have built up in your home?
Once you have identified your goal, the second step is to learn more about the refinance program that will best match your needs.
Conventional refinance
If your loan is backed by Fannie Mae or Freddie Mac, it is considered a “conventional” loan. Refinancing a conventional loan is the most common refinance option. Highlights of conventional refinance programs include:
- Appraisal required
- Full employment and income verification
- Employment history of two years
- 620 credit score
- Popular to go from 30-year term to 15-year term
- 95 percent loan-to-value with mortgage insurance, 80 percent without
- Lender credit allowed to cover closing costs
FHA streamline refinance
The FHA streamline refinance program is designed for people who currently have a Federal Housing Administration (FHA) loan and just want to lower their monthly payments. If you have done an FHA streamline refinance in the past, you may still be eligible to do another FHA streamline as long as it benefits you financially. Highlights of the FHA streamline program include:
- No appraisal required
- No income verification
- No credit score verification required by HUD, but payment history will be considered
- Low fixed rates
- Lender credit allowed to cover closing costs
VA streamline refinance
The VA streamline refinance is a popular program for veterans or active-duty military personnel who have a Veterans Affairs loan. Similar to the FHA streamline, the VA streamline is designed for people who want to lower their monthly mortgage payment without getting cash out. Highlights of the VA streamline program include:
- No appraisal required
- No income verification
- No credit score verification required by HUD, but some lenders may set minimum score requirements
- Low fixed rates
- Reduced funding fee requirement (0.5 percent)
- Lender credit allowed to cover closing costs
Cash-out refinance
In the event that you want to convert part of your home’s equity to cash, there are programs called “cash-out” refinance programs. FHA, VA and conventional loans all have different cash-out refinance requirements, but generally speaking, here are some highlights of what to expect:
- Appraisal required
- Full income and employment verification
- 620 credit score
- 85 percent loan-to-value for FHA; 80 percent for conventional; 100 percent for VA
- Lender credit allowed to cover closing costs
While rates are low, it will often make sense to refinance — whether you want to get cash out of the equity of your home or just lower your monthly mortgage payment. In each of the above scenarios, one thing sticks out regardless of which program you’re interested in …
Lender credit allowed to cover closing costs”
Let your lender pick up the tab for you!






