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Home inventory rises sharply in April | Waccabuc NY Real Estate

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Housing inventory rose significantly in April, easing a supply shortage that some experts say has constrained home sales.

Meanwhile, existing-home sales edged upwards in April. Still, sales remain hampered due to limited supply and tight credit, according to NAR.

Housing inventory rose 11.9 percent to 2.16 million homes in April, representing a 5.2-month supply of homes at the current rate of home sales. That’s up from 4.7 months in March. But inventory still remained 13.6 percent below a year ago, when there was a 6.6-month stock.

Existing-home sales ticked up 0.6 percent to a seasonally adjusted annual rate of 4.97 million in April from an upwardly revised 4.94 million in March, according to NAR. That put sales at their highest level since November 2009, when a tax credit stimulated purchases, NAR said.

“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5-million-unit pace,” said NAR Chief Economist Lawrence Yun. “Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher.  It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new-home construction.” Source: realtor.org.

 

 

Home inventory rises sharply in April | Inman News.

Distressed Sales Declined to 21 Percent in March | Waccabuc NY Real Estate

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The share of distressed properties on the market continued to decline. About 21 percent of REALTORS® reporting on their last sale in March sold distressed properties, compared to approximately 40 percent in March 2011. This is based on data from the March REALTORS® Confidence Index Survey.

Distressed sales are mostly sold for cash. Distressed sales accounted for 35 percent of cash sales compared to 21 percent of mortgage sales.

 

 

 

http://economistsoutlook.blogs.realtor.org/2013/05/03

Widows Pushed Into Foreclosure by Mortgage Fine Print | Waccabuc Realtor

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Ms. Bates, 70, is caught in a foreclosure trap that is ensnaring widows across America: she cannot get help lowering her payments until her name is added to the mortgage note, but the lender says she must be current on payments before that can happen.

“I keep praying,” said Ms. Bates, who is fighting with the bank to stay in the four-bedroom house.

Just as the housing market is recovering, a growing group of homeowners — widows over the age of 50 whose husbands alone were holders of the mortgage — are losing their homes to foreclosure because of a paperwork flaw that keeps them from obtaining loan modifications.

In the latest chapter of the foreclosure crisis, homeowners over 50 are falling into foreclosure at the fastest pace of any age group, according to nationwide data, in part because women are outliving their spouses and are unable to cope with cuts in their pensions, ballooning medical costs — and the fine print on their mortgages.

While there are no exact measures of how many widows have entered foreclosure, figures compiled by AARP show the rate of foreclosures among people over 50 increased by 23 percent from 2007 to 2011, resulting in 1.5 million foreclosures.

A few lenders have tweaked their procedures to navigate the problem, and housing advocates are petitioning the Consumer Financial Protection Bureau to devise guidelines for lenders in situations that involve surviving relatives. Banks say that while the volume of delinquent mortgages means that they need a blanket policy to cover all homeowners who are behind on their payments, they are willing to work closely with widows.

Still, interviews with elder-care advocates, housing lawyers and borrowers suggest that the problem is spreading fast, propelled by an aging population. Legal aid offices in California, Florida, Ohio and New York say it is among the top complaints from clients. Billy Howard, a consumer lawyer in Tampa, Fla., said he had more than two dozen cases involving widows, up from virtually none before 2007.

“These women are essentially invisible,” said Gladys Gerson, a lawyer for Coast to Coast Legal Aid of South Florida.

At first glance, the issue seems little more than a logistical headache. To stay in the home, and play slot game to earn and pay bills, the surviving spouse needs to take over the mortgage. But to do that, most banks require that the borrower assuming the mortgage be up-to-date on payments. Housing advocates say that their clients, especially if one spouse experienced a prolonged illness, often find they are already thousands of dollars behind.

“Surviving spouses are trapped without a clear way to preserve their home,” said Arabelle Malinis, a lawyer at Housing and Economic Rights Advocates in California.

The conundrum is pushing some widows into foreclosure by choking off a lifeline that could save their homes. As of 2011, 6 percent of loans held by people over 50 were delinquent, up from about 1 percent in 2007, according to a July study by AARP, an advocacy group for Americans over 50. The study, which housing lawyers say accurately describes the tide of foreclosures on seniors’ homes, analyzed mortgage data over a five-year period.

Part of the problem, according to Debra Whitman, AARP’s executive vice president for policy, is that older Americans are saving less and borrowing more. Debt for Americans ages 65 to 74 is outpacing any other group, according to the Federal Reserve.

Some help is on the way. JPMorgan Chase, for example, allows surviving relatives to complete a loan modification and mortgage assumption simultaneously. And the consumer bureau is finishing rules to provide tighter oversight of mortgage servicing companies, which collect payments from homeowners.

Housing advocates say most of their widowed clients still remain in their foreclosed homes.

The trouble for Ms. Bates, of Jacksonville, Fla., began after her husband Robert, a World War II veteran, died last February. Mr. Bates had obtained a trial loan modification but died before he could make the first payment. Determined to make good on the hard-won plan, Ms. Bates said she notified HSBC, the servicer, of her husband’s death and sent in a check for $1,125.47.

Ms. Bates said she was devastated when the check was returned, with a letter explaining the money could not be accepted because she was not on the mortgage. Ms. Bates still owes roughly $131,000 on the original $140,000 mortgage. HSBC declined to comment on the case, but said in a statement, “HSBC has a strong commitment to home preservation and regards foreclosure as a last resort.”

Complaints from widows about botched forms, unanswered calls and the peculiar frustration of being asked repeatedly by servicers for the same documents echo the concerns that culminated in a $26 billion settlement in February over other mortgage flaws with the country’s five largest mortgage servicers.

via nytimes.com

7 steps to retexturing drywall | Waccabuc NY Real Estate

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It’s a pretty common scenario on the home improvement scene: You’ve removed some wallpaper or wainscoting, or you’ve relocated a door or a window, or maybe you’ve just repaired same drywall damage caused by one of life’s little mishaps. No matter the origin, you end up with some drywall that doesn’t have any texture on it. And now, you’re at a loss as to exactly how you’re going to get that flat, unadorned piece of drywall to blend in with the texture on the rest of the wall that’s surrounding it.

In truth, matching drywall texture is always a tricky process unless you’re experienced at it. Even the pros can have a tough time with it. You first have the issue of matching the existing texture for the main body of the patch, and then feathering the new texture out onto the old in ever-decreasing amounts so that the transition between new and old is seamless. It’s difficult to come up a perfect match, and the larger the area is and the more centered it is on the wall or ceiling, the more likely it is that you’re going to see it.

The other problem you’re likely to run into is what’s known as “flashing.” After the patch is done and painted, the new texture will tend to absorb paint differently than the old texture, due to differences in previous paint, materials and other factors. The result can be a difference in sheen that also contributes to the patched area standing out from the rest of the wall, even if the texture matches. And the more sheen the new paint has — satin or semigloss as opposed to flat, for example — the worse the problem can be.

Start fresh

For all those reasons, especially if you’re not an experienced drywall texture matcher, your best bet is to simply start over with a fresh, flat wall. That doesn’t mean that you need to tear off all the drywall and replace it. It just means that you want to get rid of the old texture.

Tarp the floor in front of the wall with plastic sheeting. Don’t use canvas painter’s tarps, as the dust is hard to get back out of them. Wear a respirator to prevent breathing in the dust from the sanding and scraping operations, and always wear eye protection.

Sand or scrape the old texture on the wall to remove the majority of it. You don’t need to get rid of all of it — in fact, you want to be careful not to sand too deep and cut into the paper cover on the drywall. What you’re looking to do is knock down all of the high spots. Brush the wall down with a dry paintbrush or soft broom to get the bulk of the dust off it. Roll up the plastic sheeting to contain all the dust and dispose of the plastic, then put down new sheeting for the next operation.

The next step is to apply a light skim coat of drywall joint compound over the entire wall. You can use all-purpose compound for this, but topping compound will go on smoother and sand easier. For best results, thin the joint compound with a little water first to give it a smoother, creamier consistency that will allow it to trowel on easier. Use a 12-inch or larger drywall knife, and spread it onto the wall in broad strokes. The goal is to apply a thin, uniform coat over the entire wall, with as few ridges from the trowel as possible. Some ridges are going to be inevitable, and don’t worry about them — they’ll sand off later. But the fewer the better, since that’ll save you some sanding labor.

Allow the compound to dry completely. It will become lighter as it dries — how long it takes depends on temperature, humidity, and the thickness of the coat — but be sure that the entire wall is completely dry before proceeding. Next, sand the wall again lightly to remove any ridges, and then check your work. Use additional compound to fill in any low spots or flaws, allow the additional compound to dry, then lightly sand again. Thoroughly brush the wall down again, and you now have a smooth, uniform surface to work with, eliminating the need to try to match textures.

You’ll now want to seal the wall, using a drywall sealer or other primer. This will help to prevent uneven absorption of the paint. After the primer is dry, apply the texture of your choice to the entire wall. When the texture is dry, prime everything a second time, which will seal the texture itself. This step is especially important if you’re using satin or semigloss paint. If you’ll be painting the wall with a dark color, have your paint store tint the primer for you, which will give you a more uniform finish color. Finally, paint the wall.

via inman.com

Right away, housing challenges for Obama | Waccabuc NY Real Estate

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President Barack Obama image via barackobama.com.President Barack Obama image via barackobama.com.

Now that President Barack Obama has won re-election, there are several housing-related challenges staring the federal government square in the face. These are some of the decisions that will have to be made in the coming weeks:

1. The “fiscal cliff”: The fiscal cliff is a series of tax increases and spending cuts that will go into effect unless U.S. lawmakers come up with an alternative plan to reduce the federal deficit by $1.2 trillion as required by the Budget Control Act of 2011. The spending cuts, known as “sequestrations,” would automatically go into effect on Jan. 2 and be split evenly between defense spending and domestic spending.

The credit rating agency Standard & Poor’s has said there’s a 20 to 25 percent chance the U.S. economy will go into a double-dip recession should Congress fail to reach an agreement avoiding the fiscal cliff. S&P’s deputy chief economist, Beth Ann Bovino, warned that such a scenario would cause home prices, currently at a bottom of 31 percent below their mid-2006 peak, to tumble to a record low of 40 percent below peak.

In a report released in September, the Obama administration called sequestration “bad policy” that “would be deeply destructive to national security, domestic investments, and core government functions.” The president has put forward two deficit reduction proposals that included both spending cuts and revenue increases, but has run into opposition from some members of Congress who oppose tax increases and want to reduce the deficit solely through spending cuts, the report said.

Given that Congress remains divided after the election — Republicans retained control of the U.S. House of Representatives and Democrats retained control of the U.S. Senate — whether lawmakers can come to an agreement over the coming weeks remains a question.

2. The mortgage interest deduction (MID): Revamping the mortgage interest deduction is one of the solutions proposed to head off the fiscal cliff and could be part of a broader plan to streamline the tax code by eliminating some loopholes and deductions. Some experts have said the MID, which costs the government about $90 billion a year, is unlikely to survive in its present form, though what would take its place, if anything, is unclear.

Two years ago, a bipartisan deficit reduction commission recommended scaling back the MID, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000. The deduction is available only to taxpayers who itemize.

The commission, often referred to as Simpson-Bowles, proposed turning the deduction into a 12 percent nonrefundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.

The National Association of Realtors, which has consistently defended the mortgage interest deduction in its current form, was highly critical of the recommendation, claiming any changes to the MID could depreciate home prices by up to 15 percent, and promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

3. Mortgage debt forgiveness: Another homeowner tax break may be on the table in fiscal negotiations: the Mortgage Debt Relief Act of 2007, which is set to expire at the end of this year. The law exempts up to $2 million in mortgage debt forgiven by a lender in a short sale, loan modification or foreclosure from federal taxation. The law applies only to mortgage debt incurred to fund the purchase or improvement of a principal residence.

Banks have relied heavily on short sales to meet their obligations under the terms of a $25 billion settlement with the nation’s five largest mortgage servicers over so-called “robo-signing” practices. If the debt relief law lapses, however, homeowners would have less of an incentive to pursue short sales because forgiven mortgage debt could be considered taxable income.

4. Qualified mortgages: Now that we know the Dodd-Frank Wall Street Reform and Consumer Protection Act is here to stay — presidential candidate Mitt Romney had vowed to repeal it — there are two controversial rules contained within the law that are waiting to be finalized: the qualified mortgage (QM) and the qualified residential mortgage (QRM).

QM would establish standards for borrowers’ “ability to pay” the mortgages they seek, while QRM would establish certain baseline standards for safe underwriting and require lenders to retain a 5 percent minimum ongoing stake in any loans they originate that don’t meet QRM requirements.

The regulations are under the aegis of the Consumer Financial Protection Bureau (CFPB), which postponed action on both rules in June after protests from Realtors, builders, banks, unions and consumer groups. Under Dodd-Frank, the CFPB is required to issue the qualified mortgage rule by Jan. 21, 2013.

via inman.com

Waccabuc NY Real Estate | Mortgage delinquencies spike in September, report says

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While the nation’s foreclosure inventory continues to shrink, new delinquencies spiked sharply during September 2012, new data released Monday afternoon showed.

According to Lender Processing Services ($28.51 0%), the total U.S. mortgage delinquency rate — loans 30-plus days past due, but not in foreclosure — surged upward by 7.72%, reaching 7.4% in September versus the 6.87% reported one month earlier.

Despite the spike, September 2012 delinquency totals still remain below levels seen last year, LPS said.

While new delinquencies spiked in September, the volume of properties in foreclosure continues to shrink as banks and other financial instutions continue to work through a backlog of distressed real estate that remains well above historical levels of half of a percent or so, according to most industry experts.

LPS said that the nation’s foreclosure pre-sale inventory rate fell to 3.87% during September, down 4.05% from one month earlier and down 7.37% less than one year ago.

Florida, Mississippi, New Jersey, Nevada, and Louisiana represented the states with the highest percentage of noncurrent loans, according to the data report; Lousiana replaced New York, which had been in the top five for most of this year.

Despite the drop in foreclosure inventory, the surge in new delinquencies has led to something not seen this year until now: an increase in the amount of distressed properties, defined as properties 30 or more days delinquent or in foreclosure.

According to LPS, there were 5.45 million properties in distress during August 2012; for September, thanks to increasing delinquencies, that number now equals 5.64 million.

via housingwire.com

10 Strategies To Increase Your Credit Score In 24 Hours | Waccabuc Realtor

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When you are in a hurry to increase your credit score there is 10 things that you can do with in 24 hours that help immensly. Here are the 10 things to increase your score:

1. Order your credit reports online for each of the top three credit reporting agencies individually. Even though it may be cheaper to order a three in one report offered by one of the Agencies, ordering individual credit reports will grant you the access to initiate a dispute online with each agency. You can’t improve your score in 24 hours unless you know what it is! Knowing where to start is important.

2. Call your credit card companies and request to increase your credit lines. Increasing credit lines will improve your outstanding debt to-available-credit ratio amounts on your revolving accounts, and can improve your credit by as much as 60 points.

3. Rearrange your debt so that every one of your credit cards have the lowest possible outstanding debt-to-available-credit ratio. A ratio of 25%-35% is ideal.

4. If you have the ability, pay down the cards until that ratio is recognized on your credit report.

5. Borrow money to pay down your debts referenced on your credit reports from a lender that doesn’t report, such as friends and family. Unreported debts will assist you to decrease those debt to available credit ratios and boost your score. Your private lenders may even want lesser interest than you are paying on the cards! While this business deal doesn’t appear on your credit report, it’s still debt, so use it wisely. You don’t want horrible Thanksgiving dinners after failure to pay on a loan made by a family relative.

6. If you have freshly paid down or paid off debts and they don’t show corrected on the report, fax that information to the credit agencies. Providing them with the verification of payoff is much faster then initiating a dispute of the account information. In many cases, the agency won’t verify the payoff with the lender, and accept your proof as correct.

7. Begin your dispute approach online with each service. The online dispute will suspend the negative derogatory items from your credit report for the short term, increasing your score. When the dispute is resolved your score will change accordingly, but for the period in-between you get a momentary reprieve from the effects of the negative derogatory information.

8. If you must choose one credit score to work on, spotlight your focus on the middle score. For most major purchases such as real estate or a vehicle, the lender will pull all three credit scores and use the middle score, (all three scores in one is called the tri-merge score) so this is the one that matters the most. If you improve your middle score over your highest score, the formerly top score is the one that now matters most.

9. Have a close friend or family member with a solid credit history add you to their card. You don’t even need to have the possession of an actual card, but by adding you to the account, you get the benefit of their long credit history. This doesn’t hurt their credit history at all. A Credit report is a compilation of accounts with your social security number attached to them. When your social security number was added to their account, you agreed to be responsible for it, and their years of good credit history now show up on your credit report. The individual person who lent you their excellent credit didn’t add their social security number to any of your accounts with the negative or derogatory history, so there is no way for the bad information to appear on their credit report.

10. If you have recent collection account reporting to your credit file that haven’t been paid? If so call the collection agency and ask, “do you delete?” About half of all collection agencies will take away the item from your credit report if you pay it in full, or a generous portion of the debt. Sometimes the collection agency can remove the debt from the credit bureaus instantaneously.

There are other things that can help you improve your credit score that will take much longer to implement. I think this list will suffice for now because these things can be done in 24 hours.

via articles.submityourarticle.com

‘Obamacare’ individual mandate has no teeth | Waccabuc NY Real Estate

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If, like most real estate professionals, you’re self-employed, you have to obtain your own health insurance unless you can obtain coverage through a spouse. Lots of self-employed people have no health coverage because they can’t afford it.

Starting in 2014, these people will run up against the most controversial portion of the Patient Protection and Affordable Care Act (“Obamacare”) — the individual health insurance mandate. This is the requirement that most legal residents of the United States obtain at least minimal health insurance coverage by 2014.

The word “mandate” sounds pretty serious. But what will actually happen if you don’t obtain health insurance by 2014? Surprisingly little.

The health care law says that individuals who can afford health insurance coverage and are not otherwise exempt must purchase minimum essential health coverage or pay a penalty to the IRS with their tax returns. The assessment of this penalty is the only consequence of not obeying the health insurance “mandate.”

How much is the penalty?

The exact amount of the tax penalty is based on household income above the level at which an uninsured individual is required to file a tax return — currently $9,500 per person and $19,000 per couple. This penalty is scheduled to be phased in over the next several years as follows:

  • for 2014, the penalty is the greater of $95 or 1 percent of income
  • for 2015, the greater of $325 or 2 percent of income
  • for 2016, the greater of $695 or 2.5 percent of income, and
  • the $695 amount is indexed for inflation after 2016.

The penalty for children is half the amount for adults, and an overall cap will apply to family payments. This cap will be three times the amount of the per-person penalty, regardless of how many people are in the family. Thus, the cap is $285 in 2014 but rises to $2,085 in 2016, after which point it is indexed to inflation. Moreover, the total penalty can never be more than the cost of a minimal “bronze” heath insurance plan that can be purchased through a state health insurance exchange. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016, with the costs rising thereafter.

All in all, for most people the penalty will be less than the cost of obtaining health insurance. Many people may choose to wait until they get sick to purchase health insurance. This is something they will be able to do because “Obamacare” does not allow health insurers to refuse to insure people with pre-existing conditions.

In addition, the penalty applies only to taxpayers who can afford insurance but do not purchase it. The Congressional Budget Offices says that of the 30 million non-elderly Americans it estimates will not have health insurance in 2016, only about 6 million will be subject to the tax. The remainder will be exempt because their income is too low or they qualify for another exemption.

How will the IRS collect?

Taxpayers subject to the penalty are supposed to report the amount due on their tax returns and pay it along with their income taxes. What happens if they don’t? Not nearly as much as when they don’t pay their regular taxes.

The law greatly limits how the IRS can collect the penalty. It cannot use liens or levies to collect it, and taxpayers are not subject to criminal prosecution or any additional penalty if they don’t pay. Moreover, the IRS says that its revenue agents will not be involved in enforcing the penalty — that is, they won’t ask you about it during an audit. All enforcement will be done through automatic assessments and computer-generated correspondence.

The only power the IRS will have to collect the penalty is to withhold it from an uninsured taxpayer’s tax refund. Currently, most taxpayers get refunds because they have too much tax withheld during the year. This year 77 percent of taxpayers received an average refund of $2,707.

However, self-employed taxpayers have no tax withheld from their pay. Instead, they pay estimated taxes to the IRS four times a year. Self-employed people can easily avoid qualifying for a tax refund by making sure they don’t pay too much in estimated tax. If you have no refund, the IRS will have no way of collecting the penalty.

As a result of all this, some experts predict that the IRS will be unable to effectively enforce the penalty tax. Only time will tell.

via inman.com

Mixed news for homeowners facing foreclosure | Waccabuc NY Homes

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So-called short-sales of homes are rising, according to HOPE NOW, a private-sector alliance of mortgage investors, servicers, insurers and non-profit counselors.

The number of short-sales — when banks accept less money for a home than is currently owed on the mortgage —  crept up in August from the previous month. In theory, that’s good news because an uptick in short-sales should fewer homes going into foreclosure.

But that’s not the case yet. August foreclosure sales increased 12 percent from July, and foreclosure starts grew 14 percent. Faith Schwartz, executive director of HOPE NOW, attributed the rise to lenders clearing their foreclosure backlog, noting that many of the foreclosures have been in process for at least a year.

“The incentives for short-sales continue to increase,” she said. “The $25 billion foreclosure settlement, and the fact that many servicers aren’t used to holding on to foreclosures or [real-estate owned properties] means incentive is increasing.”

The goal is to resolve foreclosures before homes end up sitting abandoned and blighting the surrounding community, Schwartz added.

The data also suggest that more homeowners are making mortgage payments on time. The number of homeowners delinquent 60 days or more on their mortgage fell 2 percent in August, down to 2.42 million. In July, 2.47 million homeowners were seriously delinquent on their mortgages. Fewer borrowers are falling behind at least 60 days on their mortgages, and there are fewer current (30 day) defaults.

“While this is almost 40 percent lower than the all-time high of 4 million homeowners seriously past-due on their mortgage, we cannot forget there are many more who remain at risk of foreclosure,” Schwartz said, noting that short-sales are an integral part of helping homeowners. Yet many borrowers don’t know a short-sale is an option.

While short-sales, foreclosure starts and foreclosure sales rose in August, the number of homeowners who got mortgage relief in the form of loan modifications fell. Roughly 76,000 homeowners got permanent loan modifications under both both lender programs and the federal government’s Home Affordable Modification Program (HAMP). That’s down from July, when more than 82,000 homeowners received modifications from both HAMP and private companies.

Most loan mods start as HAMP modifications. If the borrower does not meet HAMP standards, they may be considered for alternative, proprietary modifications.

In total, 5.75 million homeowners have received permanent loan modifications since 2007, with more than 543,000 of those modifications occurring since January. Most homeowners who have had loans modified since the beginning of the year have done so through a lender or loan servicer.

Only 143,420 homeowners have received loan mods this year under HAMP which has very rigid documentation and debt-to-income standards. Since 2007, most of the loan mods — nearly 4.7 million — have been completed via proprietary loan modifications. Comparatively, the government’s HAMP program has modified roughly 1.1 million loans since it began reporting in 2009.

via cbsnews.com