Real Estate Blockchain News

12-14-2018:

Real estate blockchain set to go live in early ’19. New York-based ShelterZoom plans to launch a real estate application that will lets buyers and sellers transact deals over a blockchain-based network, which could make purchasing a house as easy as pressing a button on a smartphone or tablet.

How Real Estate Is Breaking The Blockchain Mold… its primary purpose was to act as a digital time stamp.

10-19-2018: (Word for today is…BLOCKCHAIN)

Post #1: Is it safe to buy and sell real estate on the blockchain? The most important value of the blockchain is that it gives traders the opportunity to directly share the database. With blockchain, power is decentralized and there is no central administrator or set of administrators.

Post #2: Is Blockchain In The Future Of Real Estate? .

Post #3: Real Estate and the Blockchain: A Transactional Perspective.

Post #4: PayPal Alum: How Blockchain Will Change Investing and Why Real Estate Will Be First.

Post #5: Nine Things To Keep In Mind About Blockchain In Real Estate.

1. Technology Will Enhance Security And Transparency
2. Blockchain Will Disrupt The Real Estate Title Industry
3. Relevant Information Is Available On Specific Sites
4. Education And State Approval Will Help Adoption
5. Blockchain Will Form A Secondary Market
6. Blockchain Should Be Integrated Into Entire Value Chain
7. Adoption Starts With Learning, Adaptability And Application
8. Blockchain Will Reshape How Data Is Exchanged
9. Blockchain Is Not Cryptocurrency

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Reverse Mortgage News

12-13-2018: Reverse Mortgage Market Sees Sharp Uptick in Jumbo Interest… interest is strong and rising, with some seeing volume increase from single digits to as much as almost 20 percent this year. In lieu of federal regulations concerning counseling requirements on proprietary reverse mortgages, the firms offering them as an option often have their own rules concerning a prospective borrower undergoing counseling before they can proceed to close a proprietary reverse mortgage loan.

11-23-2018: Real estate trouble: Reverse mortgages deplete FHA insurance reserves. The Federal Housing Administration’s 2018 audits revealed that losses from real estate reverse mortgages destroyed about a third of the taxpayer-guaranteed insurance reserves…FHA offers reverse mortgage program for seniors, called Home Equity Conversion Mortgage (HECM) that represents only 6 percent of FHA guarantees, disclosed its economic net worth plunged to a negative -$13.6 billion

4-15-2016: More than 60% of borrowers used their reverse mortgage proceeds to pay off a mortgage…About 12% of federally insured Home Equity Conversion Mortgage (HECM) program were in default of paying property taxes or homeowner’s insurance…Also, income from a reverse mortgage isn’t taxed unlike a withdrawal from an IRA and avoids higher income levels that increase Medicare Part B & D Premiums…There has to be at least 40% equity in the home to approve a Reverse Mortgage…The Reverse Mortgage Stabilization Act of 2013 prohibited the withdrawal of about 40% of the remaining eligible equity in the first 12 months…Most reverse mortgages today are insured by the Federal Housing Administration (FHA), as part of its HECM program…Single-purpose reverse mortgages are also offered by some state and local governments and non-profit organizations. Source: CFPB & WSJ, 3-321-2016, R4.

3-23-2016: Home Equity Conversion Mortgages (HECMs) are being used to open lines of credit under reverse mortgages instead of lump sum withdrawals (about 60% of reverse mortgages are created using lump sum payments on 2nd homes) of a home’s equity. One benefit of a line of credit is that during stock market down cycles, withdrawals against the home’s equity can be less damaging over time than withdrawing income producing assets after dropping in value. Also, unused portion of a line of credit tends to grow over time and income from a reverse mortgage isn’t taxed (like a withdrawal from a IRA or other investment vehicle, there’s no income tax. And this fact could help some avoid jumping into a higher tax bracket increasing their Medicare Part B and Part D premiums. WSJ, 3-21-2016, R4.

6-5-2015: Beware those Celebrity Studded Reverse Mortgage Ads – CFPB

3-16-2015: California Senior homeowners at risk of losing home to foreclosure could qualify for as much as $25,000 in assistance. The Reverse Mortgage Assistance Pilot Program is intended to help financially distressed California homeowners 62 years or older who have a FHA Home Equity Conversion Mortgage (HECM).

2-11-2015: Some complaints (about 1,200 complaints out of about 630,000 loans) filed about reverse mortgages include the misunderstanding that:

  • Borrower has the responsibility to pay property taxes and homeowners insurance – if they go unpaid, it triggers loan defaults;
  • If only one borrower, then upon death – surviving spouse gets booted from house – loan must be repaid upon the borrower’s death or else bank takes the home under foreclosure;
  • Loan terms may prohibit adding additional borrowers to the loan in order to extend its term or allowing children to assume the loan for an aging or deceased parent; or
  • Either loan servicers or lenders do not provide an understandable and streamlined process for paying off the loan

Source: http://www.mortgagenewsdaily.com/02102015_cfpb_hecm_complaints.asp

Reverse mortgages are FHA insured lines of credit (i.e., loans) available to those homeowners age 62 or older allowing them to borrow a portion of the current equity in their own personal residence. It is primarily used to help supplement their retirement income. The loan is due upon the death of the homeowner (borrower). If the proceeds from the property sale (normally required to pay the reverse loan) is less than the loan balance, the heirs/estate isn’t liable for the difference since the FHA insures the excess amount. Note: A recent poll indicated almost 2/3 of US citizens between 50-65 are worried they won’t have enough money in retirement.

10-7-2014: First half of 2014, about 28,000 reverse mortgages were issued worth >$7 billion, according to FHA data….Reverse Market Insight (analyzed the data) expected total 2014 value to exceed $12.7 billion.

9-16-2014: FHA insured reverse mortgages are on the rise and expected to continue to help the approximately 80 million baby boomers approaching the age of 70 (typically the age where most reverse mortgages are generated).

2-26-2014: Reverse mortgage foreclosures: Reverse mortgages are loans against the equity in a home which are eligible by and allow elderly homeowners to convert the equity in their homes to income, or a line of credit (see definition of reverse mortgages). Since these mortgages can involve lines of credit, they can become delinquent and result in a loss of the home through foreclosure. So please take care to advise your loved ones appropriately.

10-24-2013: New Home Equity Conversion Reverse Mortgage (HECM) rules are more complicated and prohibit borrower from drawing out cash too fast and must wait 12 months before drawing the majority of funds. Source: http://www.bnd.com/2013/10/24/2866005/the-mortgage-professor-reverse.html

9-14-2013: Watch out for possible scams increasing with the release of the revised reverse mortgage guidelines and choose a revere mortgage lender carefully. Source: http://realestatemarbles.com/emortgagesnews/2013/09/10/read-this-before-signing-your-reverse-mortgage/

9-9-2013: A new Financial Assessment and Property Charge Guide – see Mortgagee Letter 13-28 was released by FHA that outlines guidelines for a borrower’s credit history, cash flow, credit and income analysis, and other factors. It also outlines requirements to determine limits of loan proceeds withdrawn and/or dedicate to pay escrow property taxes and homeowners insurance. The guidelines become effective for loans assigned an FHA case number starting on January 13, 2014. Source: Mortgage News Daily article “New Restrictions on Reverse Mortgages Aimed at Sustainability” on 9-4-2013.

9-4-2013: Almost 600,000 reverse mortgages exist and may rise. Some retirees use it as a back-up line of credit in case their existing home equity line gets cancelled (which is possible) or as a cash flow strategy to pay off their traditional mortgage and not withdraw their 401K or other retirement funds that may be taxed. Source: WSJ, 8-17-18, 2013 B8

8-15-2013: Question of whether HECMs should be supported by the US Government? http://www.macon.com/2013/08/15/2609214/the-mortgage-professor-should.html

5-13-2013: Reverse mortgages for people with home equity up to $625,000 might use an FHA reverse home equity conversion mortgage (HECM) to get up to 50% of their equity and those over that amount may use a jumbo revere mortgage to pull out up to 25% of the equity. Source: http://online.wsj.com/article/SB10001424127887324266904578459170357590616.html

2-4-2013: Does your lender suggest to leave your spouse off the reverse mortgage? Think again – It may mean the surviving spouse will lose the house! Think about having both names on mortgage. Source: http://www.pantagraph.com/business/real-estate-q-a-don-t-leave-spouse-off-reverse/article_4c4f7fbe-6780-11e2-9581-001a4bcf887a.html?comment_form=true

12-26-2012: FHA said it would tighten mortgage standards for some reverse mortgage borrowers (including the elimination of Reverse Mortgage and replace with the Home Equity Conversion Mortgage Saver which restricts the total amount borrowers an borrow) by January 31, 2013. Source: WSJ, 12-19-12, Page A2

12-21-2012: Be careful to include your spouse on reverse mortgages or else they may be squeezed out since mot require payment of loan after borrower dies. Source: http://www.sun-sentinel.com/business/realestate/house-keys-blog/sfl-singer-housing-questions-link-20121221,0,5719342.story

Update 11-5-2012: Traditional v. Reverse mortgages – is there a comparison or are they different animals? It all depends, but here’s some info to chew on regarding pros and cons: http://www.mortgagenewsdaily.com/03092011_reverse_mortgages.asp

Recently, Bank of America has stated their intent to get out of reverse mortgage loans because they are not profitable. (Especially under the current market of declining real estate values.)

Some advocates recommend reverse mortgages as a final option since it would make the individual’s government assistance (including Medicare and harder time funding long term medical care.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

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A Creative Loan Option Best For First-Time Buyers?

If you’re in the market to buy a home and, especially, if it’s your first home, you’ve probably heard about conventional and FHA loans. But there may other options out there to meet your needs to discuss with your mortgage lender. This may be especially true if you’re having a hard time coming up with a down payment, have a lower credit score, still paying off student loans, or are continually getting priced out of your desired neighborhoods.

Employer loan assistance

This program could spell the difference between perma-renting and being able to buy your own place, and all it takes is a forward-thinking employer. “A new program allows employers to help workers’ down payment on a home, similar to how companies contribute to a 401(k),” said REALTOR Mag. “HomeFundMe, a Fannie Mae and Freddie Mac-approved down payment crowdfunding platform, allows borrowers to crowdfund their down payment from several sources, including their employer. CMG Financial, a mortgage banking firm, created the HomeFundMe program.”

FHA 203(k) loan

This loan allows you to buy a home and fix it up. This is a loan for a renovation project with their first home or are willing to do so because they can’t find a move-in ready home in their budget and/or area. The minimum credit score is 580 to qualify for a down payment as low as 3.5%, but can go as low as 500 for a down payment of 10%.

The standard 203(k) covers most types of improvements or repairs, and the amount of money borrowed for the loan can exceed its current value; you can borrow up to 110% of what an appraiser estimates will be the “after” value of the home.

Fannie Mae HomeStyle Renovation mortgage

The Fannie Mae HomeStyle Renovation mortgage is similar to the 203(k) and requires only a 5% down payment. It has one big advantage over the 203(k): It is also open to investors or homeowners in the process of flipping the property with little funds. “With a down payment of less than 25%, you’ll need a credit score of at least 680,” said Interest.com. “If your debt-to-income ratio is higher than 36% but less than or equal to 45%, your credit score needs to be 700 or higher.”

The funds can be used for repairs, renovations or energy improvements. “The only restriction is that the changes must be permanently affixed to the property and add value.”

Energy-efficient mortgage (EEM)

This is another loan geared toward making home improvements and focused on energy efficiency. These loans are guaranteed by the FHA, or the VA for military buyers.

“One of the best tools for making your dream home more affordable while saving on the cost of power, heating and cooling is the energy-efficient, or ‘green,’ mortgage,” said Bankrate. “Most energy-efficient mortgage, or EEM, programs let you qualify for bigger loans than you would otherwise by folding in the additional cost of making improvements for energy efficiency or of purchasing an already energy-efficient home. Another version of the green mortgage provides discounts on loan fees or interest rates for homes that are certified as energy-efficient.”

USDA loan

Zero down payment loans are “issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture,” said Nerdwallet. Eligible homes are generally in rural areas, but may also cover suburban locales. You can use their map to look up individual addresses.

The USDA also “guarantees a mortgage issued by a participating local lender – similar to an FHA loan and VA-backed loans – allowing you to get low mortgage interest rates, even without a down payment” and offers home improvement loans and grants, as well.

Good Neighbor Next Door

If you’re a police officer, firefighter, EMT, or teacher (K–12), you may be able to take advantage of the Good Neighbor Next Door program. Sponsored by HUD, this program slashes the price of eligible homes in “revitalization areas” by 50%. “Buying a home through HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing an opportunity for law enforcement officers, firefighters, emergency medical technicians and teachers to purchase homes in these communities,” said HUD. You can search eligible homes by state on the HUD website.

Eagle Home Mortgage

A loan intended to help millennials become homebuyers, this mortgage option from Eagle Home Mortgage, a subsidiary of Lennar, helps homebuyers pay off their student loan debt.

“Eagle Home Mortgage’s Student Loan Debt Mortgage Program offers borrowers as much as $13,000 that can be used to pay off student loan debt,” said Housingwire. “But the program isn’t without its conditions. Borrowers who used Eagle Home Mortgage’s Student Loan Debt Mortgage Program can direct up to 3% of the purchase price to pay their student loans, but only if they buy a new home from Lennar. Lennar contributes the 3%, which, according to the company, does not increase the price of the home or add to the mortgage balance. The program’s maximum loan amount is $424,100, but Lennar said that in addition to the 3% contribution to student loan balances, buyers may also be eligible for other incentives — such as credits toward closing costs.”

National Homebuyers Fund

The National Homebuyers Fund is not a loan – it’s a grant for up to 5% of your loan amount that provides down payment assistance with no need to ever pay it back. “You read that right—you don’t have to pay back anything,” said Realtor.com. “The NHF offers two down payment assistance programs with different sets of requirements, but both are meant for low- to moderate-income earners. The NHF Sapphire program is available in multiple states and has generous FICO score requirements (which is a good thing if you have a subpar credit score).”

Source: Creative loan options for first time homebuyers.

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Spray foam insulation or crawl space encapsulation may void your termite insurance in Georgia

Georgia Agriculture Commissioner Gary Black recently stated that spray foam insulation in the crawl space of your home or business may void your current (or prevent future) termite protection coverage. But let me add this caveat….many homeowners are adding spray foam to their attics under their roofs and some are encapsulating their crawl spaces and conditioning that space to prevent mold, but are they covering up hidden active termite infestation?

If you currently (or are planning to) have termite protection from a Georgia licensed pest control company, be sure to:

(a) determine if and where you have any spray foam insulation,
(b) read your termite protection policy for its effect on coverage, and
(c) contact the pest control company to discuss effect on termite protection coverage of those areas covered (or to be covered) by the spray foam insulation.

It may result in termination or voiding your termite protection in its entirety.

Spray Foam Insulation Could Impact Ability to Protect from Termites.

SPRAY FOAM INSULATION WARNING.

If you need more information, you may contact your local county extension office at 1-800-ASK-UGA1, or the Georgia Department of Agriculture’s Structural Pest Control Division at 404-656-3641.

Source: Farmers and Consumers Market Bulletin, September 26, 2018, Page 1.

References to articles, sources, products, or services are not a specific endorsement and not guaranteed to be true or accurate, but the user must perform their due diligence and investigate whether the information provided is valid, or the product or service is right for them. I welcome any or all comments that would help others……Be careful – if it sounds too good, it probably is!

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Are you being duped into replacing your HVAC system instead of just changing refrigerant?

Do you have a choice of replacement for the R-22 Refrigerant in your HVAC system?

First, I am not an HVAC expert and I didn’t sleep at a Holiday Inn last night, but are we being duped into replacing out HVAC systems in our homes instead of simply replacing the existing R-22 in our systems?

Second, aren’t HVAC systems supposed to be “closed systems”? This means that there “SHOULD NOT BE ANY LEAKS” in the refrigerant lines….so why are there…
LEAKS IN HVAC REFRIGERANT lines? They are normally copper lines which really shouldn’t leak…

I was told by an HVAC technician years ago that HVAC systems use different metals to connect the circulation system and over time, those metals interact to develop leaks. I can’t verify that statement, but several older systems, designed as “closed systems”, mysteriously develop leaks in copper tubing or at connection points within the system.

Watch this video: What is RS-44b ( R453a ) Refrigerant and Should You Use It?

RS-44b Refrigerant is an R22 Replacement.

Also, After many years of testing and investigation, R407C is recognized as a suitable alternative refrigerant for R22 in medium and high temperature applications such as residential and light commercial air conditioning.

RS-44b Refrigerant: RS-44b is a non-flammable HFC blend. It is compatible with both traditional mineral and synthetic lubricants so that a retrofit to a different refrigerant oil is not required. The small amount of hydrocarbons in RS-44b improve the oil return to the compressor to extend the life of the compressor. (Source: rs-44b-refrigerant-r22-replacement)

407C Refrigerant: R-407c is a mixture of hydrofluorocarbons used as a refrigerant. It is a zeotropic blend of difluoromethane, pentafluoroethane, and 1,1,1,2-tetrafluoroethane. Difluoromethane serves to provide the heat capacity, pentafluoroethane decreases flammability, tetrafluoroethane reduces pressure. R-407c cylinders are colored burnt orange. (Source: Wikipedia)

R422D, Another R22 Replacement.

So, are there alternatives to HVAC companies “scaring you” into selecting new HVAC systems and changing out your older system to a newer one? It appears so, but if you want a more efficient HVAC system in the future, you may need to replace your current system to achieve those benefits.

References to articles, sources, products, or services are not a specific endorsement and not guaranteed to be true or accurate, but the user must perform their due diligence and investigate whether the information provided is valid, or the product or service is right for them. I welcome any or all comments that would help others……Be careful – if it sounds too good, it probably is!

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What is a bedroom?

Does a bedroom consist of a room of any size upstairs? On main level? In basement?

Does a bedroom need a door, window, and closet only?

What “DOES qualify as a bedroom?

I think this description from the April 2018 Georgia Real Estate Commission – The Appraisers Page of their monthly newsletter will BLOW REALTORS’ or REAL ESTATE AGENTS’ (yes, they are different…but not what you think) MINDS and property descriptions:

Confused? I bet most real estate agents are as well….

Let me repeat that…

Let’s define a bedroom before we go any further. A bedroom is a room of “adequate size” – which is defined as no less than 100 square feet. It must have a closet, a window, and a door; it must be heat/cooled and finished to the same quality as the rest of the house. It must be ABOVE GRADE to be counted as a bedroom. And the most forgotten or unknown factor in defining a bedroom is that it must have ready access to a FULL bathroom. A full bathroom is one that has a shower or a tub as well as sink and toilet. Think about it: if you have a bonus room finished up over a garage, it may have a closet, window, door, heating/cooling, and is finished to the same quality as the rest of the house. If you have to go down the stairs and across the house to use the bathroom, though, the room cannot function on a long-term basis as a bedroom. Another common scenario is that you might have four “bedrooms” on the second floor of a house. Three of the bedrooms have private baths. How is someone in the fourth bedroom supposed to get to the bathroom? If you answered “by going through one of the other bedrooms”, you are incorrect. You aren’t incorrect. It just doesn’t count as a bedroom. That does not function on a long -term basis as a bedroom. We would instead call it a den or office. Probably the most common scenario is as follows: let’s take a traditional two-story house. On the first floor, you have a living room, dining room, kitchen, one half bathroom, laundry and a “bedroom”. The problem here is that the “bedroom” is only serviced by a half bath. Again, this does not function on a long-term basis as a bedroom. Here is where it is valuable to have an appraiser as a consultant during or prior to the construction process of a new house.

References to articles, sources, products, or services are not a specific endorsement and not guaranteed to be true or accurate, but the user must perform their due diligence and investigate whether the information provided is valid, or the product or service is right for them. I welcome any or all comments that would help others……Be careful – if it sounds too good, it probably is!

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Home Equity Loan Tax Deductions Under 2017 Tax Law

Major question: How will “when the proceeds are used to substantially improve their residence” is defined in IRS guidelines?

One of the most misunderstood provisions in the new tax law expires in 2026 and prohibits the deduction of interest paid on home equity lines of credit and home equity loans except when the funds are used to substantially improve the taxpayer’s home. The IRS recently issued a statement clarifying that the deduction has not been removed, but is instead available under new home improvement restrictions:

“…despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled,” according to an IRS release.

Source: IRS Clarifies Home Equity Loan Tax Deductions Under New Law

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Escalation Clause…no..not a Mortgage Clause…A Real Estate Contract Clause

For home buyers locked in a heated bidding war, there is one weapon that may help ensure victory:

an escalation clause.

Simply put, the prospective Buyer places a clause in the offer that if any other Buyer places a bid for the property, this Buyer will pay $XXXX higher than the highest offer.

Source: WSJ February 14, 2018.

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Fee and Documentation of Donation Drop Boxes

The Cobb County Code for Donation Drop Boxes.

Before this code (Official Code of Cobb County 134-287 (1)-(4).) was enacted, I was reviewing a listing of “draft” Building Code changes issued in Cobb County and saw the attached change on last page 32 that instittutes a fee on the box itself…I’m not sure what problem this solves, other than raising county revenue to pay for Braves contract issues, or some sort of control of the proliferation of clothing, newspaper, recyclables, etc., drop boxes sprouting up all over the place (usually on private commercial properties)…Now at least we can “document” donation drop boxes and not other things or other people in this country. 😉

Source:

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Millennials are “literally” full of crap!

Yes..they are..but no wonder…the crap that fills their brains is the direct result of too many real estate articles, blogs, and advertisements designed to make them feel bad about not buying a home…

Sometimes I hate the real estate industry, and I’m in it. Every day I see 2-3 articles warning Millennials that it’s…

Too late to buy…!

Home prices are rising so you better buy now…!

Hey, you’re strapped with student loan debt but there’s still a way to buy a house!

Interest rates are expected to rise so get off the fence…!

The Dirty Secret #1: The sole purpose of all these headlines and stories (i.e., hype) is designed to “push people off the fence” to buy a house and enable someone else make money…realtors…attorneys…insurance companies….warranty companies…sellers…Home Depot and Lowes (apppliances, sales of product to home improvement remodelers and contractors, and your home improvement projects) and other housing related contractors (painters, plumbers, electricians, HVAC services) etc,.

The Dirty Secret #2: Housing related spending (whether buying houses, fixing them up, or all the related household services supporting housing) drives anywhere from 15-20% of the US Gross Domestic Product (GDP).

Yes, they/we all want your money…

So my advice to millennials is to “release the crap and wipe away the leftover hype” before you make a mess. And make sure that when “you” are ready to buy a home, you’ve done the basic research of home values compared to what you get…and do the math, if it doesn’t pay YOU to buy a home – Don’t!

Oh, and I use the term “literally”, figuratively in this case….

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