Housing Outlook for 2016: Expect Change

DAILY REAL ESTATE NEWS | MONDAY, DECEMBER 28, 2015

While change is coming to the mortgage market, Freddie Mac says in its 2016 housing forecast that it's too soon to tell whether marketplace lending is the next Uber or just another flash in the pan.

“The current generation of marketplace lenders all may fail in the next economic downturn,” says Sean Becketti, Freddie Mac’s chief economist. “Regulators may impose higher standards on marketplace lenders. The cost advantages of marketplace lending may not extend to mortgage lending."

But Becketti says the new year will undoubtedly bring changes: "Innovation is difficult to stop. New startups will look for ways to improve upon current marketplace lending business models. Large bank lenders may incorporate the most successful of the marketplace lending innovations. It's difficult to say where all this will lead, but one prediction is indisputable. Expect change."

Here are five more predictions for 2016 from the mortgage giant: 

1. The 30-year fixed-rate mortgage will likely average below 4.5 percent for 2016 on an annualized basis.

2. Mortgage rates will gradually move higher posing an affordability challenge. But expect a strengthening labor market and pent-up demand to carry momentum into 2016.

3. Home prices will likely moderate slightly to 4.4 percent in 2016, driven in part by the reduction in home buyer affordability and reduced demand as a result of Fed tightening.

4. But industry activity will grow in 2016 despite monetary tightening. Expect tota l housing starts to increase 16 percent year-over-year and total home sales to increase 3 percent.

Life After Foreclosure: When Can You Buy?

#RealEstate #Home #Owners #Buyers #Sellers 

Life After Foreclosure: When Can You Buy?

Image via freedigitalphotos.net

ANAHEIM HILLS, CA, Dec. 10, 2013—For those consumers who have a foreclosure on their record, it may feel like they will never repair their credit enough to become a homeowner again. It can happen, notes Sid Fowler,REALTOR® at CENTURY 21 Award, but it will depend on a variety of variables.
“Bouncing back after a foreclosure will depend greatly on your individual circumstances, as well as the mortgage interest rate you are willing to pay,” says Fowler. Foreclosures can remain on your credit record for seven to 10 years. Most lenders will consider your request for a home loan two to four years after your foreclosure, although your interest rates will be higher.
“Keep an eye out for predatory lenders that will issue a home mortgage in less time than average, but will charge you obscenely high mortgage interest rates, fees, and penalties,” warns Fowler.
A quality lender will expect you to show that you have cleaned up your credit. In this light, a borrower who has worked hard to reestablish good credit may also be shown some leniency by the lender. 
Repairing your credit is possible, although it can be a slow-moving process. Act as quickly as you can to take care of any outstanding delinquencies, tackling a little at a time until you get back on the right track. “Make an effort, if at all possible, to repay your debt in full and on time for six months to a year to prove you are working hard to repair any damage,” says Fowler.
“It will also be helpful to provide a reasonable explanation about the circumstances that led to the foreclosure, such as exuberant medical expenses or lifestyle changes beyond your control,” notes Fowler. If you declared bankruptcy because you were laid off from your job, the lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, it is unlikely the lender will readily give you a break.
If you've waited several years after your foreclosure and you're still having trouble obtaining a traditional mortgage, consider other options, such as subprime mortgages, which are made to borrowers who do not meet traditional credit criteria at a higher interest rate.

#Seller #Owner #Property #RealEstate

Downsizing Boomers to Fuel Apartment Market

Downsizing Boomers to Fuel Apartment Market

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 24, 2015

Millennials may be a big driver of multifamily housing now, but baby boomers looking to downsize are expected to drive apartment growth over the next few years, according to a study by the Kansas City Federal Reserve. They found that older Americans are “increasingly downsizing” to apartments.
In general, the downsizing activity usually occurs around the age of 70 and becoming increasingly prominent by age 75, writes Kansas City Fed senior economist Jordan Rappaport. By next year, the oldest baby boomers will turn 70. The number of Americans aged 70 and older will increase by more than 20 million in the next 15 years, according to Census Bureau estimates.

The Most Common Delays Toward Closing

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 09, 2015

The majority of contracts – 64 percent -- are settled on time with no delays to closing, but some REALTORS® acknowledge facing delays or even having contracts terminated for numerous reasons, according to the latest REALTORS® Confidence Index Survey, a survey of more than 1,500 REALTORS®. Twenty-six percent of REALTORS® surveyed identified a delay to settlement, while 10 percent said they have even had a contract terminated prior to closing.

"It is surprising that in a 'tight' and 'difficult' credit environment, only 12 percent of contracts that were reported to have settled or terminated had financing issues," economists at the National Association of REALTORS® report. "One explanation may be that potential home buyers are deciding to sit on the sidelines for now, so these buyers were not captured in the data."About 60 percent of REALTORS® reported some type of issue on their contract in April. For example, 12 percent of REALTORS® identified a financing issue; 8 percent had home inspection problems surface; and 7 percent had an appraisal issue. Three percent of REALTORS® also identified issues buying/selling distressed property; titling and deed issues; or with contingencies stated in the contract.

Source:"64 Percent of Contracts Are Settled on Time," National Association of REALTORS® Economists' Outlook Blog (June 8, 2015)

Home Sales Cooled Off This Spring

Home Sales Cooled Off This Spring

DAILY REAL ESTATE NEWS | FRIDAY, MAY 22, 2015

Existing-home sales slowed in April, with all major regions of the country – except the Midwest – experiencing declines as buyer demand continues to far exceed the number of homes for-sale, according to the National Association of REALTORS® latest housing report.Total existing-home sales – reflecting completed transactions for single-family homes, townhomes, condos, and co-ops – fell 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April, NAR reports. Despite the dip, sales are about 6 percent above year ago levels.
April sales failed to keep the robust gain seen in March, says Lawrence Yun, NAR’s chief economist
"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," Yun says. "However, the overall data and feedback we're hearing from REALTORS® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."
Regional BreakdownHere's a closer look at how existing-home sales fared across the country in April:

• Northeast: sales declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. Median price: $253,200, up 3.6 percent compared to April 2014.

• Midwest: sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13 percent above April 2014. Median price: $173,700, up 11.4 percent from a year ago.

• South: sales decreased 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. Median price: $189,400, up 8.5 percent from a year ago.

• West: decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. Median price: $318,700, which is 10 percent above April 2014.

But the limited for-sale inventories may continue to hold back sales.
"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012."
Market Snapshot for AprilInventories: For-sale inventories rose 10 percent at the end of April to 2.21 million existing homes for-sale. Inventories are still 0.9 below year ago levels and are at a 5.3-month supply at the current sales pace.
Home prices: The median existing-home price for all housing types was $219,400 in April – 8.9 percent above last year. This marks the largest percentage gain in home prices since January 2014.
Days on the market: Properties sold faster in April, averaging 39 days. That is the fastest since July 2013 (which was 42 days) and the second shortest time (37 days in June 2013) since NAR began tracking such data in May 2011. What’s more, nearly half of the homes on the market sold for less than a month in April. Broken out, short sales were on the market the longest at a median of 180 days; foreclosures sold in 50 days; and non-distressed homes took 38 days.
Distressed sales: Foreclosures and short sales made up 10 percent of home sales in April, below the 15 percent share a year ago. In April, 7 percent of sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value, while short sales were discounted on average 14 percent.
Source: National Association of REALTORS®

All-cash sales: The number of transactions that involved all-cash were 24 percent in April, unchanged from March but down significantly from a year ago when all-cash sales comprised 32 percent of transactions. Individual investors who account for the bulk of cash sales purchased 14 percent of homes in April, down from 18 percent a year ago. Seventy-one percent of investors paid cash in April, according to NAR.

Which is Worse for California: Pools or Lawns?

Which is Worse for California: Pools or Lawns?

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 03, 2015

Residential swimming pools are coming under attack in drought ravaged California. The state has mandated a reduction in water consumption by 25 percent due to a severe four-year drought, and some cities are pointing the finger at pools as big water wasters.  
About 1.18 million residential pools exist in California, according to data from Metrostudy. Several cities and water districts across the state—such as in Orange County and San Jose—have passed bans on new pool permits, filling new pools, and draining and refilling existing pools in response to the drought mandate. But industry representatives insist pools are better for the environment than traditional lawns.
“We’re not saying, ‘Solve the drought, put in a pool,’ but the bottom line is people who put in a pool are making a decision to do something more water efficient with their backyard. They’re saving water,” says John Norwood, the California Pool and Spa Association’s president. “Pools are landscaping.”The California Pool and Spa Association is lobbying water districts to attempt to end proposed bans on filling pools and spas. The industry says its in-house study shows that a standard-sized pool uses one-third the amount of water as an irrigated lawn after an initial fill. 
Water-conservation experts disagree, arguing that residential pools and lawns use about the same amount of water. Peter Gleick, president of the Pacific Institute in Oakland, a nonprofit research institute focused on the environment, agrees with this assessment. 
“These are luxuries, and we’re in a really bad drought and everybody needs to step up instead of pointing the finger at the other guy,” Gleick says.
Source: “Pool Peddlers Tout Water Savings in California Drought,” The Seattle Times (June 2, 2015)

Home Sales Cooled Off This Spring

Home Sales Cooled Off This Spring
DAILY REAL ESTATE NEWS | FRIDAY, MAY 22, 2015
Existing-home sales slowed in April, with all major regions of the country – except the Midwest – experiencing declines as buyer demand continues to far exceed the number of homes for-sale, according to the National Association of REALTORS® latest housing report.Total existing-home sales – reflecting completed transactions for single-family homes, townhomes, condos, and co-ops – fell 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April, NAR reports. Despite the dip, sales are about 6 percent above year ago levels.
April sales failed to keep the robust gain seen in March, says Lawrence Yun, NAR’s chief economist
"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," Yun says. "However, the overall data and feedback we're hearing from REALTORS® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."
Regional BreakdownHere's a closer look at how existing-home sales fared across the country in April:

• Northeast: sales declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. Median price: $253,200, up 3.6 percent compared to April 2014.

• Midwest: sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13 percent above April 2014. Median price: $173,700, up 11.4 percent from a year ago.

• South: sales decreased 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. Median price: $189,400, up 8.5 percent from a year ago.

• West: decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. Median price: $318,700, which is 10 percent above April 2014.

But the limited for-sale inventories may continue to hold back sales.
"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012."
Market Snapshot for AprilInventories: For-sale inventories rose 10 percent at the end of April to 2.21 million existing homes for-sale. Inventories are still 0.9 below year ago levels and are at a 5.3-month supply at the current sales pace.
Home prices: The median existing-home price for all housing types was $219,400 in April – 8.9 percent above last year. This marks the largest percentage gain in home prices since January 2014.
Days on the market: Properties sold faster in April, averaging 39 days. That is the fastest since July 2013 (which was 42 days) and the second shortest time (37 days in June 2013) since NAR began tracking such data in May 2011. What’s more, nearly half of the homes on the market sold for less than a month in April. Broken out, short sales were on the market the longest at a median of 180 days; foreclosures sold in 50 days; and non-distressed homes took 38 days.
Distressed sales: Foreclosures and short sales made up 10 percent of home sales in April, below the 15 percent share a year ago. In April, 7 percent of sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value, while short sales were discounted on average 14 percent.
All-cash sales: The number of transactions that involved all-cash were 24 percent in April, unchanged from March but down significantly from a year ago when all-cash sales comprised 32 percent of transactions. Individual investors who account for the bulk of cash sales purchased 14 percent of homes in April, down from 18 percent a year ago. Seventy-one percent of investors paid cash in April, according to NAR.
Source: National Association of REALTORS®

Existing-Home Sales Spike in March

Existing-Home Sales Spike in March

WASHINGTON (April 22, 2015)—Existing-home sales jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the National Association of Realtors®. Led by the Midwest, all major regions experienced strong sales gains in March and are above their year-over-year sales pace.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 6.1 percent to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February—the highest annual rate since September 2013 (also 5.19 million). Sales have increased year-over-year for six consecutive months and are now 10.4 percent above a year ago, the highest annual increase since August 2013 (10.7 percent). March's sales increase was the largest monthly increase since December 2010 (6.2 percent).

Lawrence Yun, NAR chief economist, says the housing market appears to be off to an encouraging start this spring. "After a quiet start to the year, sales activity picked up greatly throughout the country in March," he said. "The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."

Total housing inventory at the end of March climbed 5.3 percent to 2.00 million existing homes available for sale, and is now 2.0 percent above a year ago (1.96 million). Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7 months in February.

The median existing-home price for all housing types in March was $212,100, which is 7.8 percent above March 2014. This marks the 37th consecutive month of year-over-year price gains and the largest since February 2014 (8.8 percent).

"The modest rise in housing supply at the end of the month despite the strong growth in sales is a welcoming sign," adds Yun. "For sales to build upon their current pace, homeowners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market."

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San Diego CA 91942

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Century 21 Award
5640 Baltimore Drive
San Diego CA 91942 

Streamline Refinance – FHA Streamline Refinance Guidelines & Rates

Streamline Refinance – FHA Streamline Refinance Guidelines & Rates

NOTE : 
FHA Streamline Refinance information is accurate as of today, April 13, 2015. If you get your FHA Streamline Refinance information elsewhere online, it may be inaccurate or out-of-date. FHA mortgage guidelines change often.

WHAT IS AN FHA STREAMLINE REFINANCE?
The FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages. FHA Streamline Refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages.
The FHA Streamline Refinance program's defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your home's current value, regardless of what your home is actually worth today.
In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty.
The "appraisal waiver" has been a huge hit with U.S. homeowners, allowing unlimited loan-to-value (LTV) home loans via the FHA Streamline Refinance program. Homeowners in places like Florida, California, Arizona and Georgia have benefitted greatly, as have homeowners in other states and cities affected by last decade's housing market downturn.
Beyond this "no appraisal" feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It's available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there's no FHA prepayment penalty to worry about.
Another big plus is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a "regular" FHA loans. There's no penalty for being underwater, or for having very little equity.
FHA STREAMLINE : NO VERIFICATION OF JOB, INCOME, CREDIT
Another big plus is that the FHA Streamline Refinance is fairly easy for which to qualify.

Earlier this decade, in an effort to help U.S. homeowners, the FHA abolished most of the typical verifications required to get a mortgage. So, today, as it's written in the FHA's official mortgage guidelines :

1. Employment verification is not required with an FHA Streamline Refinance

1. Income verification is not required with an FHA Streamline Refinance

1. Credit score verification is not required with an FHA Streamline Refinance

There's no need for a home appraisal, either, so when you put it all together, you can be (1) out-of-work, (2) without income, (3) carry a terrible credit rating and (4) have no home equity. Yet, you can still be approved for an FHA Streamline Refinance.

That's not as crazy as it sounds, by the way.
To understand why the FHA Streamline Refinance is a smart program for the FHA, we have to remember that the FHA's chief role is to insure mortgages -- not "make" them.
It's in the FHA's best interest to help as many people as possible qualify for today's low mortgage rates. Lower mortgage rates means lower monthly payments which, in theory, leads to fewer loan defaults.
This is good for homeowners that want lower mortgage rates and for the FHA -- but mostly for the FHA.
.
ARE YOU FHA STREAMLINE REFINANCE ELIGIBLE?
Although the FHA Streamline Refinance eschews the "traditional" mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official FHA Streamline Refinance guidelines are below. Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration.
Note that participants in the FHA's MIP-reducing HAWK program are permitted to refinance using the FHA Streamline Refinance, too.
Perfect, 3-Month Payment History Is Required
The FHA's main goal is to reduce its overall loan pool risk. Therefore, it's number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 3 months. 30-day, 60-day, and 90-day lates are not allowed. One mortgage late payment is allowed in the last 12 months. Loans must be current at the time of closing.
.
210-Day "Waiting Period" Between Refinances
The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.
Employment And Income Are Not Verified
The FHA does not require verification of a borrower's employment or annual income as part of the FHA Streamline process. There is no Verification of Employment, nor are there paystubs, W-2s or tax returns required for approval. You can be unemployed and get approved for a FHA Streamline Refinance so long as you still meet the other program requirements.
Credit Scores Are Not Verified
The FHA does not verify credit scores as part of the FHA Streamline Refinance program. Instead, it uses payment history as a gauge for future loan performance. This means that FICO scores below 640, below 620, below 580, and below 500 are eligible for Streamline Refis.
The Refinance Must Have "Purpose"
Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking "cash out" to pay bills is not an allowable Net Tangible Benefit.
Loan Balances May Not Increase To Cover Loan Costs
The FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs -- origination charges, title charges, escrow population -- must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a "zero-cost FHA Streamline".
Appraisals Not Required
The FHA isn't concerned about home value -- it's insuring your loan regardless. Therefore, the FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still FHA Streamline-eligible.
FHA STREAMLINE REFINANCE MORTGAGE INSURANCE REQUIREMENTS
The FHA Streamline Refinance is an FHA-insured mortgage, and FHA borrowers are required to make two types of mortgage insurance payments -- an upfront mortgage insurance payment paid at closing, plus an annual payment split into 12 installments, paid with your mortgage payment each month.
With respect to mortgage insurance premiums, homeowners using the FHA Streamline Refinance program are split into two classes :

1. Homeowners whose new loan replaces an FHA-backed mortgage endorsed prior to June 1, 2009

1. Homeowners whose new loan replaces an FHA-backed mortgage endorsed on/after June 1, 2009.

Homeowners in the first class -- those with "old" FHA mortgages -- pay markedly lower mortgage insurance than "new" FHA homeowners.

FHA STREAMLINE REFINANCE MIP (FOR LOANS ENDORSED BEFORE JUNE 1, 2009)
If your existing FHA mortgage was endorsed prior to June 1, 2009, your mortgage insurance premiums have been "grandfathered". You can refinance via the FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and your annual mortgage insurance premium.
Upfront Mortgage Insurance Premiums (UFMIP)
For an FHA Streamline Refinance that replaces a loan endorsed prior to June 1, 2009, the new FHA mortgage's upfront mortgage insurance is equal to 0.01 percent of the loan size, or 1 basis point.
For example, if your new FHA Streamline Refinance is for $100,000 mortgage, the FHA will assess a $10 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically adds the $10 payment to your new loan balance.
Annual Mortgage Insurance Premiums (MIP)
Annual MIP is similarly cheap for "old" FHA loans. For an FHA Streamline Refinance replacing an FHA loan endorsed prior to June 1, 2009, the annual MIP is 0.55% annually, or 55 basis points.
The complete annual MIP schedule is as follows :

• 15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP

• 15-year loan terms with loan-to-value under 90% : 0.55 percent annual MIP

• 30-year loan terms with loan-to-value over 95% : 0.55 percent annual MIP

• 30-year loan terms with loan-to-value under 95% : 0.55 percent annual MIP

15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.
For an FHA Streamline Refinance which replaces a FHA loan endorsed prior to June 1, 2009 and for which the mortgage is a jumbo FHA mortgage (i.e. loan size exceeds $625,500), no additional mortgage insurance premiums are due.
Note : FHA jumbo loans over $625,500 are permitted in "high-cost" metropolitan areas only. This includes Montgomery County, Maryland; New York City, New York; and Fairfax County, Virginia.
Most of California, Hawaii and Alaska are FHA jumbo loan-eligible, too.

FHA STREAMLINE MIP FOR LOANS ENDORSED ON/AFTER JUNE 1, 2009
If you are refinancing an FHA mortgage via the FHA Streamline Refinance program and your existing FHA mortgage was endorsed on, or after, June 1, 2009, your mortgage insurance premium schedule on the new loan is as follows.
Upfront Mortgage Insurance Premiums (UFMIP)
For an FHA Streamline Refinance replacing a loan endorsed on, or after, June 1, 2009, the FHA upfront mortgage insurance premium is equal to 1.75 percent of your loan size, or 175 basis points.
This is $1,750 for every $100,000 borrowed. The FHA automatically adds the $1,750 premium to your loan balance for you -- it's not paid as cash. Furthermore, not all refinancing households will pay the full amount.
For FHA-backed homeowners refinancing within the 3 years of their existing loan's start date, the FHA provides a refund on previously-paid upfront MIP. The size of the refund diminishes as the 3-year window elapses.
For example, a homeowner who refinances an FHA mortgages after 11 months is granted a 60% refund on his initial FHA UFMIP. 30 days later, the refund drops to 58%. After another 30 days, it drops to 56%, and so on.
This is why is rarely a good idea to "wait to refinance" with the FHA. With the FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size. This lowers the monthly payment and preserves the home equity -- two huge positives.
You can review your own FHA mortgage insurance refund chart at top.
Annual Mortgage Insurance Premiums (MIP)
The annual MIP schedule for an FHA Streamline Refinance which replaces a loan from on, or after, June 1, 2009 is as follows :

• 15-year loan terms with loan-to-value over 90% : 0.70 percent annual MIP

• 15-year loan terms with loan-to-value under 90% : 0.45 percent annual MIP

• 30-year loan terms with loan-to-value over 95% : 0.85 percent annual MIP

• 30-year loan terms with loan-to-value under 95% : 0.80 percent annual MIP

Note, though, that jumbo FHA mortgages are subject to an additional MIP fee.
30-year mortgages over $625,500 pay an additional 20 basis points (0.20%) annually. 15-year fixed rate mortgages over $625,500 pay an additional 25 basis points (0.25%).
A Los Angeles, California homeowner, therefore, borrowing at the $729,750 local loan limit with a 30-year fixed rate mortgage will pay annual mortgage insurance premiums of 1.05% to the FHA, or $639 per month.
FHA MIP Cancelation Policy
For some FHA-backed homeowners, annual mortgage insurance premiums are temporary. The FHA makes this determination based on the amount of home equity at the time of closing.
For homeowners using the FHA Streamline Refinance to replaces a loan from on, or after, June 1, 2009, the FHA MIP cancelation schedule is as follows :

• Loan-to-value of 90% or less at the time of closing : MIP required for 11 years

• Loan-to-value greater than 90% at the time of closing : MIP required for life of loan

The FHA MIP cancelation policy is the same for 15-year loan terms as for 30-year loan terms.
Refinancing homeowners are welcome to reduce their loan balance at the time of closing to avoid paying MIP for the loan's life. In many cases, this will require an up-to-date appraisal of your home.
This FHA MIP cancelation policy applies to FHA loans made after June 2013. Note that FHA MIP will also be canceled when you refinance to cancel FHA MIP using a conventional loan, or upon sale of the home.
Homeowners planning to move or refinance within 11 years may not be affected by the FHA's "Life Of The Loan" rule.
GET A COMPLIMENTARY FHA RATE QUOTE NOW
The FHA Streamline Refinance is among the easiest and best-valued mortgage products available. Plus, mortgage rates have dropped.
If you have an existing FHA mortgage, get yourself a FHA Streamline Refinance rate quote. FHA mortgage rates are low and closings can occur in as few as 20 days. And, the faster you close, the bigger your FHA upfront mortgage insurance premium refund.

NOTE : FHA Streamline Refinance information is accurate as of today, April 13, 2015. If you get your FHA Streamline Refinance information elsewhere online, it may be inaccurate or out-of-date. FHA mortgage guidelines change often.The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Buyers Offer More For a Staged Home
Helping Potential Buyer View a House as a home is key when selling. staging a home is one way to that And may just earn the homeowener some extra money.

Mortgage Rates Drop Even Lower This Week

Mortgage Rates Drop Even Lower This Week

DAILY REAL ESTATE NEWS | FRIDAY, MARCH 27, 2015

"Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability," says Len Kiefer, deputy chief economist at Freddie Mac. 
Freddie Mac reports the following national averages with mortgage rates for the week ending March 26:

• 30-year fixed-rate mortgages: averaged 3.69 percent, with an average 0.6 point, dropping from last week’s 3.78 percent average. Last year at this time, 30-year fixed-rates averaged 4.40 percent.

• 15-year fixed-rate mortgages: averaged 2.97 percent, with an average 0.6 point, dropping from last week’s 3.06 percent average. A year ago, 15-rates averaged 3.42 percent.

• 5-year hybrid adjustable-rate mortgages: averaged 2.92 percent, with an average 0.4 point, dropping from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.10 percent.

• 1-year ARMs: averaged 2.46 percent, with an average 0.4 point, holding the same as last week. A year ago, 1-year ARMs averaged 2.44 percent.

For the second consecutive week, mortgage rates continued to fall, with the 30-year fixed-rate mortgage still well below 4 percent and 15-year rates dipping below 3 percent, Freddie Mac reports in its weekly mortgage market survey.

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Most Millennials Unaware of Closing Costs

Most Millennials Unaware of Closing Costs

DAILY REAL ESTATE NEWS | WEDNESDAY, MARCH 25, 2015

What’s more, more than one-third of potential home owners – across all age brackets – say they’re “not very” or “not at all” aware of closing costs. Closing costs can come as a big surprise, which can often amount to 2 to 5 percent of the total purchase price of a home.

"This study emphasizes the need to better educate millennials, and really all consumers in general, on the real estate closing process,” says Brian Benson, CEO of ClosingCorp. “While interest rates are often the driving force in initiating a real estate transaction, the [real estate agent], lender, title and other settlement fees also have a significant impact on the down payment and cash outflow from the borrower perspective. Not understanding how everything is related can be a real impediment for first-time home buyers who want to get into the market."

Most of the adults surveyed say they end up learning about closing costs first from their real estate agent or by doing their own research. Indeed, millennial home owners said they were more likely to learn about closing costs from a real estate agent than a lender by a ratio of nearly 2-to-1, according to the survey.

"We as an industry should be stepping up our proactive education efforts to ensure home buyers are fully prepared to make the most significant financial transaction of their lives,” Benson says.

The Consumer Financial Protection Bureau is implementing several changes to the disclosure process by August that are intended to make buyers more educated about closing costs. In August, the CFPB will require lenders to provide buyers with new closing disclosures at least three business days prior to closing. The disclosures are intended to be easier for borrowers to understand by providing them more time to ask questions and compare costs.

— REALTOR® Magazine Daily NewsClosing costs might come as a surprise to many buyers, especially young adults. Two-thirds of millennials – those between the ages of 18-34 – who plan to buy a home say they were unaware of closing costs, finds a new survey of more than 1,000 adults conducted by ClosingCorp, a provider of residential real estate closing cost data and technology for the mortgage and real estate industries.

More Than Half of Listings Are ‘Affordable

More Than Half of Listings Are ‘Affordable’

DAILY REAL ESTATE NEWS | FRIDAY, MARCH 20, 2015

Fifty-four percent of for-sale listings of existing homes are within reach for a median-income household in the U.S., according to a new analysis by realtor.com®. Their analysts used the national median income of $51,801 to determine how many of the site's 1.6 million listings would be affordable to an average family, while also assuming a 20 percent down payment and 30-year fixed-rate mortgage. The monthly payment couldn’t exceed 28 percent of the family’s income.

Affordable homes were mostly centered in inland areas of the U.S., such as Illinois, Michigan, Indiana, as well as other Midwestern states. Affordability was also found to be highest in parts of Nevada, Utah, and Wyoming.

On the other hand, home buyers likely will find homes less affordable in places like the San Luis-Obispo-Paso Robles area -- California's Central Coast wine territory -- where less than 4 percent of February's listings were affordable, according to realtor.com®'s analysis.

Realtor.com® analysts also found that existing homes tended to be much more affordable than new homes. In February, realtor.com® had more than 7,700 actively selling new-home communities listed, with an inventory of nearly 57,000 homes available for sale. Only 21 percent of those new homes, however, were deemed affordable.

Source:

 "Where America’s Affordable Homes Are – and Aren’t – in 2015," realtor.com® (March 19, 2015)

Millennials Striking Out on Their Own DAILY REAL ESTATE NEWS

Millennials Striking Out on Their Own
DAILY REAL ESTATE NEWS | MONDAY, MARCH 16, 2015
Household formation is about to turn a promising corner. The share of young adults living with their parents is projected to decline, according to a client note from Capital Economics.

In 2013, 31 percent of 18- to 34-year-olds still lived with their parents. Prior to the housing crisis, however, that percentage stood at 27 percent. If the number of 18- to 34-year-olds who live with their parents returns to pre-recession levels over the next five years that could mean an extra 400,000 young adults leaving home each year.Household growth has been abnormally low at about a half a million since 2008. But growth is estimated to have risen to 1.7 million in 2014, according to the Census Bureau’s latest Homeownership & Vacancy Survey.

"[A] normalization in the share of young adults living with their parents looks set to provide a boost to household formation, underpinning the recovery in housing starts," says Ed Stansfield, chief property economist for Capital Economics. "But unless it is also accompanied by a marked loosening in lending criteria it is unlikely to trigger a new house price boom, as house price growth will be constrained by income growth."

"The U.S. economy is now growing strongly, with real incomes rising rapidly and mortgage credit conditions loosening," says Stansfield. "That means more young adults will have the means to strike out on their own."
Source: "Is Household Formation Set for a Rebound?" HousingWire (March 12, 2015)  

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Credit Conditions Still Difficult But Slowly Easing

Credit Conditions Still Difficult But Slowly Easing

Posted in Economist Commentaries, by Jed Smith, Managing Director, Quantitative Research on March 13, 2015
Qualifying for a mortgage is still generally difficult, although becoming easier, according to the January 2015 REALTORS® Confidence Index Survey.  Some respondents in states such as TX, CA, and NY reported that more people are qualifying for credit.  About 4 percent of REALTOR® respondents reported a purchase by a buyer with credit score of less than 620, up from about 1-2 percent in 2012-2014. In a normal market, the share of credit scores below 620 would be closer to 5 percent. Almost half of  REALTORS® providing transaction credit score information reported FICO credit scores of  740 and above; in 2013, the share was hovering at about 60 percent.Potential buyers facing credit limitations might want to consider a mortgage origination by community banks and credit unions.

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2015: A Big Year for Buyers

Tuesday, December 23, 2014

2015: A Big Year for Buyers

For a host of reasons, 2015 is shaping up to be a good year for homebuyers—particularly younger and first-time buyers.

More inventory, rising rents and changing demographics will all contribute to more balance in the market between buyers and sellers next year, after years in which sellers were largely in the driver’s seat. Below are Zillow’s official predictions for real estate in 2015:

Growth in U.S. rents will outpace growth in home values by the end of the year.

Millennials will overtake Generation X as the largest group of homebuyers.

Builders will begin constructing more, less expensive homes.

Homebuyers will have more negotiating power in 2015.

How will all of this play out? Each prediction ties into the next. Read on for more.

Growth in Rents Will Outpace Home Values

After peaking at an annual pace of 8.3 percent in April, home value growth has slowed in every month since, falling to 6.4 percent by October. This pace is expected to continue to fall, to about 2.5 percent by the end of 2015, much more in line with historical growth rates in home values and a sign the for-sale market is continuing its march back to normal.

But at the same time growth in home values has been slowing, growth in rents has been accelerating. After dipping to a 2014-low of 2.3 percent annual growth in May, the pace of annual rental growth has risen or stayed flat in every month since, up to 3.5 percent in October. We expect rents to continue growing at that pace through 2015.

Rental demand is skyrocketing, thanks to a combination of younger workers staying in rental housing longer and families turning to the rental market after losing their homes to foreclosure during the recession. Builders are doing what they can to keep up, but it can take a while to get large multi-family projects off the ground, and demand is very hot right now.

So what does this mean for buyers? In a word, affordability. In the second-quarter, for-sale homes in the United States were roughly 30 percent less expensive (in terms of the share of income needed to afford the mortgage on a typical home) than they were in the pre-bubble years between 1985 and 2000. But rental homes were almost 20 percent more expensive. Continued growth in rents, combined with a slowdown in home value appreciation, will mean this trend will only continue into 2015.

For current renters that can afford a down payment and can find a home they can afford, buying will look increasingly attractive next year.

Millennials Will Overtake Gen X as the Largest Homebuying Age Group

Contrary to popular opinion, millennials (buyers aged 23 to 34) actually do want to buy homes. And current millennial renters are more optimistic than other generations that they will eventually be able to afford a home. So a lack of desire or confidence is not why these younger potential buyers have not been buying homes. Instead, the answer has much more to do with demographics: Millennials have been delaying getting married and having children, the two main drivers for first-time home purchases.

But life catches up to everyone, and as this group ages, they will begin to settle down and start buying homes en masse. Being the largest generation in the country, millennials also have numbers on their side.

Finally, the rising rents mentioned above will force current young renters—no matter how content they are renting—to consider buying a home, if only to keep their monthly payments fixed. Given lifestyle preferences, it’s possible and maybe even likely that these home purchases could lean more toward condos or townhomes located closer to city centers, and away from suburban subdivisions and single-family cul-de-sac communities.

Whatever the type of home purchased, there will be a shift among this group toward homeownership, and away from renting. In many areas, the gap between the homeownership rate of millennials and older Baby Boomers is already quite narrow relative to other places, including large markets like Las Vegas and Fresno, California.

Builders Will Build More, Less Expensive Homes

In general, home builders appear to have made a tradeoff in recent years: To sell fewer, more expensive homes instead of selling more, less expensive homes.

Currently, newly constructed homes command a roughly $75,000 premium over existing homes, putting a new home out of reach for many would-be first-time buyers. Additionally, even though inventory of for-sale homes is up overall, in many markets inventory at the lower end of the market is far more constrained than at the higher end.

Take Denver, for example. In October, there were almost four times as many homes available for sale in the Denver metro in the upper price tier (priced at $357,900 or more) than there were homes priced in the lowest price tier (less than $219,000). The same pattern held true in many other markets, as well. Dallas, Atlanta, Phoenix and Nashville all had at least two times more homes for sale in the top tier than the bottom tier in October.

But we expect more bottom-tier inventory to come on line over the next year, and a lot of that will come from builders turning their attention away from the upper part of the market and toward the lower end, particularly as more millennials enter the market, as noted above. New home sales volume has been stuck around the 450,000 per year mark. In order to break out and get that number above 500,000, builders are going to have to start to build cheaper homes, which will help to narrow the price gap between new and existing homes and contribute to more rapid inventory gains both overall and at the lower end of the market.

And as a Result, Homebuyers Will Have More Leverage Overall in the Market

For all of the reasons outlined above, buyers in general will have more negotiating power in the market.

In many ways, conditions have been ripe for buyers for several years: Home affordability is very high, thanks to home values that remain almost 10 percent off their pre-recession peaks and mortgage interest rates that remain near all-time lows. What’s been missing has been inventory of for-sale homes, both from a lack of sellers and because investors and all-cash buyers scooped up thousands of properties in the wake of the foreclosure crisis, and have not begun selling them off yet at a sufficient pace to keep up with demand.

But inventory is coming back, and will gather even more momentum as builders ramp back up. As a result, instead of buyers feeling the competitive heat and engaging in bidding wars to the benefit of sellers, that pressure will instead shift to sellers competing with the home down the block for offers and attention. This will lead to price cuts, which will help keep homes affordable for more buyers.

We’re already seeing this occur. Roughly 37.4 percent of all U.S. listings on Zillow had at least one price cut in October, up from 34 percent at the same time last year. The median price cut nationwide was about 5.4 percent in October, or more than $9,500 based on the October median home value of $177,500.

More selection, better deals and continued low mortgage rates, coupled with an increasingly difficult rental environment, will help bring balance to 2015 and result in smoother sailing for everyone as they enter the housing market.

Stan Humphries

Stan is Zillow's Chief Economist.

#Mortgage Challenge Many home buyers- both first-time and experienced -work with loan officers. However, first-time home buyers are more likely to report challenges with understanding the mortgage process and the options available to them.

Many home buyers- both first-time and experienced -work with loan officers. However, first-time home buyers are more likely to report challenges with understanding the mortgage process and the options available to them.

FHFA Improves Note Sale Program

 FHFA Improves Note Sale Program

BY CHARLES DAWSON, VIJAY YADLAPATI

On March 2, 2015, The Federal Housing Finance Agency enhanced requirements for sales of non-performing loans by Freddie Mac and Fannie Mae (the GSEs).  In a letter last year to Director Mel Watt NAR raised concerns that this disposition strategy gives investors an advantage over potential owner occupant buyers.  NAR requested more information on the sale of the notes and asked FHFA to study the cost and impact of bulk note sales to institutional investors.  In January, NAR met with FHFA officials who indicated that coming changes would improve the note sale process.

As part of the changes, borrowers whose loans are sold as part of the program must be considered for other relief such as a short sale. Additionally, if the home should go through the foreclosure process, for the first 20 days after a an REO property is marketed, the property may be sold only to buyers who intend to occupy the property as their primary residence or to non-profits

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Townhome Market Shows Signs of a Comeback
DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 24, 2015

Townhouse construction was back on the rise in 2014, as home buyers show an increasing appetite for this type of housing once again. 

Single-family attached starts totaled 19,000 in the fourth quarter of 2014 – 12 percent higher than a year prior, according to Census data. For all of 2014, townhouse construction starts totaled 72,000, up from 68,000 starts in 2013.

The market share of townhouses comprises 12 percent of all single-family starts. The peak for townhouse construction was during the first quarter of 2008 when it reached 14.6 percent.

During the recent recession, the townhome market plunged, particularly as the number of first-time home buyers fled the market. But as the number of first-time home buyers rebounds, construction of town homes is expected to rise again too.

“The prospects for townhouse construction over the long run are positive given large numbers of home buyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities,” writes Robert Dietz, an economist for the National Association of Home Builders, on NAHB’s Eye on Housing blog.

REALTORS® are upbeat about townhome prospects in the District of Columbia, North Dakota, Colorado, Texas, California, Florida, Hawaii, and Alaska, according to the December 2014 REALTORS® Confidence Index Survey.

However, REALTORS® continue to be concerned about the condo market overall, reporting that obtaining Federal Housing Administration financing for condos remains a big hurdle for home buyers because many condos continue to not meet FHA eligibility criteria. Existing condo and co-op sales fell 3.5 percent on a seasonally adjusted annual rate in January; they remain 1.8 percent below year ago levels, the National Association of REALTORS® reported in its latest housing report.  

Read more: Only 30% of Condo Buildings Are FHA Approved

“Condominiums offer an affordable option and are the first step to home ownership for many home buyers,” NAR President Chris Polychron said in a recent statement. “NAR has urged FHA to develop policies that will give buyers access to more flexible and affordable financing opportunities and a wider choice of approved condo developments.”

Source: “Townhouse Market Expanded in 2014,” National Association of Home Builders’ Eye on Housing blog (Feb. 23, 2015) and “States with Strong Townhouses and Condos Market,” National Association of REALTORS® Economists’ Outlook blog (Feb. 10, 2015)

3 Reasons Housing is Looking Up in 2015

3 Reasons Housing is Looking Up in 2015Posted on Jan 7 2015 - 11:57am by Zoe Eisenber

As 2015 rolls forward, there are several indicators that the housing market may have a break-out year. Let's review the top three.