The following are short statements of miscellaneous real estate news or other topics/issues that I find interesting:
Disclaimer: 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.
4-13-2016: Appeals Court questions constitutionality of CFPB, attacks Director Cordray. Big question: How far does CFPB authority reach. More specifically in this case: “Does the CFPB have authority to assess huge $109 million fine when another law judge already assessed a $6+ million judgment?”
4-10-2016: The US Treasury 10 year note (that is used to parallel movement in mortgage interest rates), settled at 1,77% on 4-8-2016. Core consumer price index was 2.3%. This means that the effective rate of growth of the 10 year note is negative.
4-9-2016: About 246 million desktop & laptop computers were sold in 2015, but that was down 11% from previous year. (Not real estate related, but very interesting.) Source: WSJ,4-6-2016,C12
4-8-2016: 1st time homebuyers can be…Landlords?. Not so fast there oh wise one…there’s alot to consider on this one before you jump on this train. Consider the pros and cons first…
4-8-2016: Tight home inventory levels are helping to drive up prices. Typically, there is a 6 month inventory of homes, but currently running about 4 months. Source: WSJ, 3-21-2016, C1
4-7-2016: Why Home Buyers Really Need to Hurry.
4-6-2016:HOA must accommodate religious beliefs.
4-5-2016: Cancer Risk From Lumber Liquidators Laminate Wood Flooring Was Underestimated: Report. This is related to the safety of products manufactured in China. It was questioned by the California Air Resources Board (CARB)and a $2.5 million out of court settlement resulted. WSJ, 3-23-16, B3.
4-3-2016: 5 Tax Benefits of Owning a Second Home.
3-30-2016:Three median price home levels are defined as: those national prices of $154,156 (bottom 3rd); $267,845(middle 3rd); and $542,805 (upper 3rd). Movement between these tiers depends on many factors, including adequate inventory levels in each tier and the old demand-supply rules apply and will affect each tier’s price. The inventory levels of all three have decreased riving prices up and making it harder for people to trade up. WSJ,3-21-2016, A3
3-29-2016:Cancer Risk From Lumber Liquidators Laminate Wood Flooring Was Underestimated: Report. This is related to the safety of products manufactured in China. (China again…do we see a pattern developing or continuing here?) It was questioned by the California Air Resources Board (CARB)and a $2.5 million out of court settlement resulted. WSJ, 3-23-16, B3.
3-26-2016: Phoenix company faces lawsuit for alleged real estate scam targeting Spanish-speaking families. Shakespeare, if alive today, would pen “A scam, in any other language, smells as bitter!”
3-25-2016: Happy Easter holiday – may you be blessed this weekend with the joy of Jesus Christ and His offer to you of salvation!
3-24-2016: New Twist on the Sex-Offender Registry: Financial Crime Registry posting people who have committed financial crimes against people. This is interesting to publicly acknowledge a criminal’s past actions to warn people from falling for their schemes.
3-23-2016: The US Supreme Court may agree to hear a case (#15-610) of a debt collection attempt that was denied because the effective state laws prohibited certain terms and conditions of the debt, namely interest rate. If the Court doesn’t hear the case (and allows the decision to stand), it will effectively empower states to establish their own consumer protection laws. If the court hears the case and reverses the decision, it sets precedence for other debt collectors and debt buyers that they can ignore state laws in collection practices. To hedge against tougher state laws regarding debt collections, some firms are buying portions of debt and leaving them in banks who are exempted from some laws. Source: WSJ, 3-21-2016, C6.
3-22-2015: Thousands (<50,000) of (underwater) homeowners will be eligible to have their mortgage balances cut under a plan approved by the federal regulator (Federal Housing Finance Agency – FHFA) of mortgage-finance companies Fannie Mae and Freddie Mac…(Just call 1-800-UNCLE-BARRY, pledge eternal allegiance, and get free money, y’all – good use of your taxes?)
3-17-2016: Too little, too late? Feds aim to ID buyers of real estate hiding behind shell companies>. A new rule took effect this month aimed at ending the secrecy of people who buy real estate via anonymous shell companies. Finally, it seems to have dawned on U.S. Treasury Department officials that this type of property transaction — in which the buyer is listed merely as a “Fill in the Blank LLC” — might be an effective way to invest ill-gotten gains and launder money without having to identify the purchasers.
“We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium U.S. real estate to secretly invest millions in dirty money.” That’s what Jennifer Shasky Calvery, the Treasury’s director of the financial crimes enforcement network (known as FinCEN) said when announcing the new rule.
3-16-2016: The main three financial ratings companies (Standard & Poor’s, Moody’s, and Fitch) are still in business after their ratings anomalies (inaccurate financial instrument risk valuation and assessment) that were partially responsible for the 2007-2008 financial market meltdown. The financial risk rating model was supposed to have been modified to prevent poor ratings in the future, but apparently it hasn’t. These three firms are still in operation and even though competitors have since come and go, they are still assessing risk. Source: WSJ, 3-11-2016, C1,C3
My Comment: Although the amount of revenue from mortgage backed securities is much lower now (about 10% rather than 50% in 2007-2008), who really knows what other financial instrument has now taken the place of the MBS or CDO and about to terrorize the financial market….once more?
3-15-2016: SHOULD YOUR HOA BE RUN AS A FAMILY BUSINESS?. It all depends…Ozzie & Harriet…or the Sopranos?
3-14-2016: The Essentials Checklist for Newly Married Homeowners…besides the weekend maintenance.
3-12-2016: California thug convicted of kidnapping to commit robbery, kidnapping to commit rape, assault with the intent to rape, false imprisonment, making criminal threats and robbery. He was also convicted of being a felon in possession of a firearm and faces life in prison. You know, an upstanding citizen carrying a set of values….especially those you don’t normally cherish.
3-11-2016: The housing market’s growing schism
3-10-2016: Big Banks Paid $110 Billion in Mortgage-Related Fines. Where Did the Money Go? Some went for horses and a stable in New York and other non-housing related reasons…tens of billions go unaccounted for, financial institutions are going to earn that money back from bank deposits, commissions, and investment schemes…and nobody was jailed….priceless!
3-9-2016:Brand-New Homes Get More Affordable for Buyers Wow, is this a misleading headline – it depends on what is defined as “affordable” – at $278,000 who can afford it? Even at current rates around 4%…about $1,200 P&I with 10% down…and don’t forget PMI, Taxes and Insurance on top of it.
3-8-2016: Diversity sought in Commercial Real Estate.
3-7-2016: What’s Causing the Pest Problem in Your Home?….besides your significant other….
3-5-2-16: 7 crucial facts about FHA loans
3-4-2016:Why May Is a Magic Month for Home Sellers. Now remember, as the number of homes on the market increases, the number of potential Buyers increase…so there are more Buyers and more choices…so overall effect could still be your house stays on market longer if it’s not priced correctly or shows well.
3-3-2016: Home-Hunting Tips in a Seller’s Market
2-26-2016: HOA’s Board Code of Conduct
2-22-2016: Tips for the Millennial homebuyer.
2-19-2016: Ask The HOA Expert: Changing The Management Company. Please be sure to think about this seriously, don’t let it become an emotional decision, and evaluate existing and other HOA management alternatives carefully – including self management.
2-18-2016: Crescent Communities (apartment and office building developer) who owns several residential lots, is starting a home building business. They’re banking on the millennials to come back in droves to buy new, low cost single family housing starting in the mid $300Ks (which is pretty cheap considering most new homes are high $400Ks and above). Their main secret – they already own a number of lots from sunk costs, so why not build and sell homes on them for a profit? WSJ, 2-17-2016, C8.
2-16-2016: Georgia Zoning and Land Use Laws. The Georgia Constitution is the source of law for land development and use.
2-11-2016:Overall, anticipation of these hikes (prices and interest rates) – in conjunction with the persistently sluggish wage gains over the last few years and the stock volatility and economic softness that have weighed on Americans in the first month of the new year – could make 2016 a tough year for housing.
2-10-2016: The CFPB’s mortgage initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table. Does it accomplish those objectives?
2-10-2016: Housing factoids: Average size of new homes built in 2015 was up 60 feet to 2,720/house – almost half had 4 or more bedrooms (almost 10-15% of the total market has 4 or more bedrooms) – average price of a new home rose to $351,000 since 2009 – only 32% of home buyers in 2015 were first-time home buyers (all time low). Source: WSJ – 1-25-2016-A3.
2-8-2016:Some online financial Lenders are eliminating FICO scores from their data to determine loan eligibility…and hoping their new criteria does a better job at predicting reliability. About 8% (19 million) of the us population doesn’t have a FICO score. Source: WSJ, 1-12-16, p.C1.
2-7-2016:Terminology lesson #313 (ask your financial institution what their terms are, but here’s a rough guideline):
HELOCs (home equity Lines Of Credit): normally loans of a certain amount and typically have an adjustable rate tied to US Federal Reserve Short Terms Interest rates (that vary within the period) to be used as many times as you deplete and replenish the amount within a specified period of time with home used as collateral. Probably could be used by folks with sporadic income where a employment bonuses/income varies over the year can help pay off HELOC later.
Home Equity Loan: One lump sum loan (i.e., 2nd mortgage) at a fixed (not adjustable) rate using the equity against your personal residence. Normally, lenders/banks don’t make a home equity loan lend if your home’s loan-to-value (LTV) ratio (plus) the amount of the extra loan is more than 85% and uses a minimum 640 FICO credit score.
Note: Typically an ADJUSTABLE mortgage interest rate is tied to US Federal Reserve Short Terms Interest rates as opposed to conventional FIXED mortgage interest rates normally pegged to the 10 year US Treasury note interest rate.
2-4-2016: Call it a sellout or back tracking by Federal Housing Finance Agency…they just agreed to allow lenders to take FHFA penalties for some defaulted loans to an arbiter, as opposed to strictly requiring the lender to “buy back” the faulty loan (WSJ, 2-3-2016, C6)…I guess once the arbitration backlog builds up far enough, the FHFA and lenders will negotiate another “buyout” settlement…with a little more Federal taxpayer (borrowed) money???
2-4-2016: They’re baaaaccckkkk…In a different form…just like evil spirits…Fannie Mae & Freddie Mac are using synthetic collateralized debt obligations (CDOs) to shift risk from Fannie & Freddie to investors…sound familiar? They are selling these NEW “unsecured & unguaranteed” debt instruments (called “Structured Agency Credit Risk”) to investors who are taking MORE of the risk (and in return a HIGHER return if successful) of default. So far, it is reported that about $800 Billion of the existing $4 Trillion (or about 20% of mortgages Fannie and Freddie are holding) are involved with these instruments. WSJ, 12-31-2015, A12.
2-1-2016: When the outside temperature has not been above 60 degree Fahrenheit continuously for twenty four hours, the compressor in the condensing unit could be damaged if operated, because the oil in the system will not properly lubricate the moving motor
parts when cold. When the outside temperature is as noted, your inspector will not operate the system(s), and the client should inquire of the seller about any past or present problems with the compressor(s).
1-29-2016: 4 ways to improve loan officer and real estate agent relationships besides begging for better communication from lenders.
1-27-2016: The CFPB’s mortgage initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table. Does it accomplish those objectives?
1-26-2016: Relatively good news about some sub prime mortgages…oh yes, they DO still exist ….angel oak mortgage solutions issued $135 million in December 2015 alone…but had average down payments of over 25%, average credit scores of over 680, and an interest rate of >7%….not like the typical ones that defaulted and helped push us into the 2008 financial system crisis…Source: WSJ, January 19, 2016, C6.
1-15-2016: Several large hedge funds and investors are suing for hundreds of millions in losses due to the handling of credit derivatives and swaps after the financial crisis. Last year (2015) >10 large Wall Street banks settled out of court (for about a total of $2 Billion – a mere pittance of all losses) on accusations that they conspired to prevent competition in credit derivatives market – but nobody was hanged…and exact amounts and terms of the payout to each “claimant” has been settled yet…but one belief is that some will get up to $150 million. Just not enough justice in the world now is there? Source: WSJ – 1-11-2016, C3.
12-31-2015: HAPPY NEW YEAR! 2016 Real Estate Predictions
12-29-2015: Fannie Mae and Freddie Mac are hopelessly lost to the Federal Government tentacles (regardless of any threats of Federal lawsuits from shareholders) and being an easy cash-cow for the US Treasury, why give up the cow and give away the free milk too?
12-28-2015: What to Expect in a Real Estate Closing
12-22-2015:Defense Spending by State in FY2014
12-16-2015: Are Neighborhood Watch Signs Killing Home Sales?
12-15-2015: http://www.builderonline.com/newsletter/sundown-on-relief-for-distressed-homeowners_c”>Relief for Distressed Homeowners? Personally, I’m willing to bet ‘neither’ party, with the pending Presidential election year, will ‘NOT’ vote to extend this allowance to avoid paying Federal income taxes on a Short Sale or Foreclosure…
12-9-2015: Home prices are rising but there still is a lack of inventory. September 30, 2015 marked the 44th consecutive month in which home prices rose year-over-year. WSJ, 11-24-2015, A2.
12-8-2015: Service animals allowed in no-pets complex
12-7-2015: Most common real estate problems new agents face.
12-3-2015: Something you should know about real-estate agents on Zillow – A high percentage of those agents advertising on Zillow enjoyed more dual-agency (represented both Buyers and Sellers in same transaction) commissions, according to a recent report from Morgan Stanley. Specifically, it found that 60% of those real-estate agents who advertised as a “premier agent” on Zillow received a 30% increase in these dual-side deals.
11-30-2015: Although Fannie Mae and Freddie Mac have recently reported losses, under current arrangements with the US Treasury Department, both Fannie Mae and Freddie Mac are to send almost all their profits to the government unless they have a loss. Needless to say,shareholders and civil rights groups are calling for them to be dissolved or released from government control Source: WSJ, 11-4-2015, C8.
11-26-2015: The FHA (Federal Housing Administration) reported a surplus of almost $24 Billion in its mortgage insurance reserve fund (up from about $5 Billion a year ago). This surge in reserves was primarily due to three factors: (1) the rise in and permanence of FHA mortgage insurance premiums, (2) the explosion in popularity of 97.5% FHA loans (in other words, requires only 3.5% down and a FICO credit score as low as 580), and (3) the value of the reverse mortgage volume grew $8 Billion more than was forecast.
11-25-2015: “Tax Inversion” is the process of acquisition or merger with a foreign corporation and moving the taxing authority outside the former corporate country. This happens for one major reason: the taxation system to where they are moving is far more advantageous. This also means money and jobs get sent out of the former country. That hurts the economy of the country whom is left, which these days happens to be the US based on their burdensome, overly excessive corporate tax structure. The latest rules allow inversion if <60% of US stockholders end up owning the entire new company, which basically ensures alot more inversions in the future (including the currently proposed Pfizer-Allergan merger). So why does this impact real estate? Simple – money flows out of the US economy along with jobs to foreign countries hurts real estate values and purchasing power. 11-23-2015:Georgia Zoning and Land Use Laws including alternatives and appeals processes.
11-20-2015:Breaking Down Real Estate Terms
11-17-2015: According to a Wall Street Journal article (Sound and Fury over New routes – 11-12-2015, p.D1), the Federal Aviation Administration (FAA) is redrawing air traffic routes and causing some residential communities grief who now have air traffic over their homes. This means lower relative values for their real estate and further proof that nothing is permanent and your local real estate environment can change pretty quick.
11-16-2015: IRS Audits (WSJ, 11-4-2015): Revenue from audits declined by >40% to about $7 billion given the IRS had about 20% fewer agents than 5 years ago. The IRS seems to now concentrate in areas of belief of non-compliance. The reduction in staff could also be explained by the IRS scrutiny on some applications for tax exempt status from groups with assumed Republican relationships.
11-10-2015: 4 Things to Know About Real Estate Investments
10-21-2015:What to know about the new mortgage forms
10-20-2015:Builder Confidence Back to Pre-Crash Levels
10-19-2015: Labor Shortage Pinches Home Builders
10-19-2015: 7 Essential Things Every New Homeowner Needs
10-13-2015: California Creates ‘Transfer Upon Death’ Deed . (Will this conflict with any requests in wills? Will it open possible fraud charges forging homowner’s name revoking the TOD at any time? Will this really be necessary or should it be handled in the will or just handle with Joint Tenancy? Or is this law strictly for LGBT couples to avoid probate and allow transfer of property even though a will can do the same after probate?)
10-8-2015: Questions to ask when buying a condo
10-7-2015: Some reasong to buy and not to buy condominiums.
10-2-2015: Buyers need to do their homework
9-30-2015 Real Estate Settlement Procedures
9-28-2015: Understanding closing costs
9-22-2015: Questions to ask when buying a condo.
9-16-2015: Step-by-step CFPB guide to mortgages
9-2-2015: These may be scary number for real estate: Home ownership may run 20 years! Bad news for house hunters, industry pros…but it’s good news based on home appliance, HVAC, and water heater manufacturers – now their intentional shortened lifespan design shift will be revealed.
8-5-2015: Let your Senators and Representatives know that an extension of the 2011 g-fee increase used to fund a portion of any long-term highway bill agreement will effectively prolong a tax on prospective homeowners and curtail consumers looking to refinance their mortgages.
8-4-2015: Your home loan toolkit or step-by-step guide to understanding mortgages (compliments of Cionsumer Financial Protection Bureau).
7-21-2015: 25 Cleaver Cleaning Tips – Vinegar is your new cleaning buddy!.
7-20-2015: The 2014 rise in home sales last year didn’t create a financial killing for real estate agents. The National Association of Realtors (NAR) reported that the typical agent earned $45,800 ($1,100 less than the previous year) mainly due to a 6% surge min licensees taking share from the whole pot of commisdions.
7-3-2015: Home buyer’s checklist
6-25-2015: Timing The Real Estate Cycle
6-24-2015: <“http://realtytimes.com/consumeradvice/buyersadvice1/item/32036-20141219-the-three-most-important-responsibilities-buyers-have”>The Three Most Important Responsibilities Buyers Have.
6-22-2015: Don’t be misled by reverse mortgage advertising.
6-19-2015: 5 Big Changes in the Past 10 Years in U.S. Real Estate
6-17-2015: Foreign investors pose threat to residential real estate. More than $90 Billion in foreign investment of US real estate last year and China alone spent more than $2.7 Trillion of non-Chinese real estate.
6-4-2015: Did you know Zillow, Trulia (NYSE: TRLA), Realtor.com — report upward of 80 million visits a month? That’s alot of traffic and reliance on those websites for information.
6-1-2015: Watching out for real estate scams.
5-28-2015: 50 Ways to Derail Real Estate Industry
5-5-2015: The complete remodeling history of Destin is available online…are other local areas to follow soon?
5-4-2015: In Peter Hendee Brown’s new book “How Real Estate Developers Believe”, the author believes that if people understood more of what developers basically do, they may be a little much more inclined to go along with a developer’s strategy.
4-29-2015: The do’s and don’ts of posting content online – The first warning – Don’t: Publicize other people’s stories…like this one?
4-27-2015: Mistakes people make when selling a home
Smart Moves: Tips for selling a common condo
4-16-2015: Home-sale mistakes that cost you money
4-15-2015: Here’s where the local housing recovery stands.
4-7-2015: What modern homebuyers want
4-2-2015: A new FICO score will include changes usch as payment history with their utility & cell phone providers; how often they change addresses; and place less emphasis on unpaid medical bills and missed payments on paid off debts.
3-31-2015: Top 5 ways to raise your home’s value — now. And not just wait for the hot real estate market timing.
3-27-2015: Biogen’s promising Alzheimer’s drug advances to Phase 3 trial. I would prefer a more natural way to prevent this disease…some reports say Coconut Oil can also retard some of the symptoms of Alzheimer’s.
3-26-2015: Understanding a comparable market analysis
3-23-2015: Many Cities (>40% of largest US cities reviewed) See Rise in Underwater Homeowners.
3-19-2015: Crowdfunding picks up for real estate investments. Crowdfunding has been growing – estimated $2.1 billion in 2012.. about $5 billion in 2013…and about $10 billion in 2014…and 2015…expected to double.
3-18-2015: 8 tips for first-time homebuyers – besides running a rent or buy analysis
3-17-2015: What Sellers Should Know About CMAs
3-13-2015: Exclusive: Industry experts discuss readiness for TRID: The new regulation requires the Loan Estimate (LE) (formerly the Good Faith Estimate and Early TILA Disclosures) and Closing Disclosure (CD) (formerly the HUD-1 Settlement Statement) documents to be based on the unique features and attributes specific to each individual loan. This will require a rewrite of the software used and is taking the most time and just might squeeze lender to implement changes by August 1, 2015 start date.
3-4-2015: Source: http://www.realtor.org/field-guides/field-guide-to-millennial-home-buyers
19% of Millennials agreed with this: “most people can be trusted”
83% of Millennials agreed with this: “there is too much power concentrated in the hands of a few big companies”
3-3-2015: Some comments about slab foundations
3-2-2015: Credit scores are explained but they are mostly results of an algorithm or mathematical formula that attempts to predict the stability (or lack thereof) of human behavior.
y level and first time home buyers dropped to 16% from a 25-28% rate in healthier years…housing starts were up 16% last month…applications for building permits rose >8%.
Fannie Mae and Freddie Mac forever paying the US Government
Regardless of whatever happens as the outcome of recent investment banking lawsuits to eliminate the US Government’s preferred stock in both companies, Fannie and Freddie are probably on the hook to pay 10% dividends – forever!