The National Association of Home Builders reports a Q2 2011 Home Opportunity Index reading of 72.6. This means that nearly 3 of 4 homes sold last quarter were affordable to households earning the national median income of $64,200.

Q2 2011 marks the 10th straight quarter — dating back to 2009 — in which the index surpassed 70.

Prior to 2009, the index had never crossed 70 even one time.

However, we must remember that the Home Affordability Index is a national survey. From region-to-region, and town-to-town, home affordability varied.

In the Midwest, for example, affordability was highest. 14 of the 15 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. Only Syracuse (#9) cracked the list from other regions.

The top 5 most affordable cities in Q2 2011 were:

1. Kokomo, IN (95.8%)
2. Wheeling, WV (94.7%)
3. Lansing, MI; East Lansing, MI (94.4%)
4. Bay City, MI (94.3%)
5. Youngstown, OH; Warren, OH; Boardman, OH (93.7%)

By contrast, the Northeast Region and Southern California ranked as the least affordable markets. Led by the New York-White Plains, NY-Wayne, NJ area, 7 of the 10 least affordable areas were in New York, New Jersey, and California. For the 13th consecutive quarter the New York metro area was ranked “Least Affordable”.

Just 25.2 percent of homes were affordable to households earning the area median income there.

The rankings for all 225 metro areas are available for download on the NAHB website.

If you’re shopping for a mortgage rate, today may be a good day to lock one down. That’s because Friday morning, the Bureau of Labor Statistics will release its Non-Farm Payrolls report for August 2011.

The “jobs report” tends to have a big influence on mortgage bonds and mortgage rates in Leominster.

The jobs report is a monthly issuance, providing sector-by-sector analysis of the U.S. workforce. It also report the national Unemployment Rate.

Wall Street expects the August Non-Farm Payrolls data to show 75,000 jobs created in August, down from 117,000 in July; and it expects that the Unemployment Rate will remain unchanged at 9.1%.

The jobs report’s connection to mortgage markets is straight-forward — as jobs go, so goes the economy. This is because when the number of working Americans rises :

1. Consumer spending gets a boost
2. Government tax collection gets a boost
3. Household savings gets a boost

These are each good turns in a recovering economy.

For today’s rate shoppers and home buyers, though, it won’t be the actual number of jobs created that matter as much as how close that jobs figure is to Wall Street’s expectations. If the number of jobs created exceeds the 75,000 estimate, look for mortgage rates to rise.

Conversely, if job creation falls short of 75,000 in August, mortgage rates are expected to rise.

Home affordability remains at all-time lows and mortgage rates do, too. If you’ve been wondering whether now is the right time to lock a rate, you can remove some risk by locking ahead of Friday’s Non-Farm Payrolls release.

The report will be released at 8:30 AM ET.

The Fed publishes meeting minutes 8 times annually – three weeks after each scheduled Federal Open Market Committee get-together. The Fed Minutes summarizes the FOMC meeting.

The Federal Reserve released the minutes from its August 9, 2011 Federal Open Market Committee meeting Tuesday.

The Fed Minutes contained no surprises and, as a result, mortgage rates across Massachusetts and nationwide have idled.

Although it gets less press attention, the Fed Minutes is every bit as important as the more highly-publicized, post-meeting statement from the FOMC. With its detailed record of conversation, the Fed Minutes highlights the discussions and debates that shape our nation’s monetary policy.

For example, here is some of what was said at the Fed’s August 2011 meeting :

• On growth : Economic growth had been slower than the committee expected
• On housing : The market “remains depressed”. Underwriting standards are “tight”.
• On rates : The Fed Funds Rate will remain low until mid-2013

In addition, the Fed talked about whether a third round of asset purchases should be announced. Ultimately, that plan was rejected by consensus.

The FOMC’s next meeting is a 2-day meeting, scheduled for September 20-21. The meeting was originally scheduled for just one day, but Fed Chairman Ben Bernanke chose to extend it to two. Wall Street believes that the extension was made so Fed members could discuss new forms of economic stimulus.

Depending on the form of said stimulus — if it should even occur — mortgage rates may rise or fall. We can’t know for certain unti the size and scope of the Fed’s plan is known.

For now, mortgage rates remain rock-bottom. There’s more room for rates to rise than to fall. If you’re shopping for a loan and the rate looks right, therefore, consider locking on it.

Standard & Poors released its May 2011 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in select U.S. cities.

May’s Case-Shiller Index showed a 1 percent increase from April 2011. Home values rose in 16 of the Case-Shiller Index’s 20 tracked markets. Only Detroit, Las Vegas and Tampa fell. Phoenix was flat.

Don’t look too far into the findings, though. Like the FHFA’s Home Price Index, the Case-Shiller Index is rife with flaws.

The first flaw of the Case-Shiller Index is its limited geography. Despite being positioned as a national housing index, Case-Schiller Index is sourced from just 20 cities nationwide. There are more than 3,100 municipalities nationwide.

The Case Shiller Index’s second flaw is that it ignores all home types excepts for single-family, detached homes in its findings. Condominiums, multi-family homes, and new construction are not included in the Case-Shiller Index.

In some markets, these excluded home types outnumber the included ones.

Furthermore, the Case-Shiller Index is flawed in that it takes 60 days to release.

The Case-Schiller Index reports on a housing market from 2 months ago — hardly helpful for today’s buyers and sellers in Worcester , trying to make sense of today’s real estate market data. 

When you want real-time housing market data, therefore, look past the Case-Shiller Index and talk to a real estate professional instead. It’s where you’ll get your best, most relevant information.

In today’s Leominster homes, front-loading washing machines are a popular choices as compared to traditional, top-loading machines for 3 main reasons:

1. They wash more clothes per cycle, lowering household energy costs
2. They’re environmentally-friendly, using less water per cycle
3. They’re gentler on clothes, preserving colors and fabrics longer

They also require more care in the “cleaning” department.

Because of the way most front-loading washers are built, they tend to pool water in their drums, which can be a breeding ground bacteria and mildew.

Whether your front-loading washer smells “dirty” or not, you’ll want to follow proper procedures to keep it clean.

First, only use High Efficiency detergent. High Efficiency detergent is super-concentrated and creates fewer suds than traditional laundry detergent. Fewer suds means more soap is drained in the rinse cycle, leaving fewer chemicals and fragrances to sit in the drum.

High Efficiency detergent is also sold fragrance-free. This is the preferred variety for a long-term, stink-free washing machine.

Next, at least once weekly, take a dry cloth and wipe the inside rim of your front-loading washer. There, you will find a wide plastic tube in which water settles between loads of laundry. If you find stains or grime, remove it.

If your washer has a drain filter on its front-lower edge, remove the filter and allow the water to drain — preferably onto a towel or into a bucket.

Then, lastly, consider running an empty cycle with just bleach and water. This is optional, but can help remove lingering stench.  

Once your front-loading washing machine is cleaned, going forward, after each load runs, try leaving your washer’s front door open. This will allow fresh air to circulate through the washer and help drum-settled water to evaporate.

With less water and humidity in the drum, bacteria growth is slowed.

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Constant Contact looked at criteria including the following when selecting this year’s All Stars:

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“We work hard to listen to our customers, and we use that feedback to create products and services designed to help them better engage with their customers and prospects,” said Gail Goodman, chairman, president and CEO of Constant Contact. “The Constant Contact All Star Awards are our way of recognizing our customers that have successfully used Constant Contact to market their companies. We have some of the most committed, passionate customers out there and we’re proud we can be a part of their continued success.”

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Constant Contact and the Constant Contact Logo are registered trademarks of Constant Contact, Inc. All Constant Contact product names and other brand names mentioned herein are trademarks or registered trademarks of Constant Contact, Inc. All other company and product names may be trademarks or service marks of their respective owners.

In Massachusetts an estate of homestead protects a homeowner’s primary residence from the claims of certain creditors. Prior to the change in the law the declaration of homestead protected the equity in the home for up to $500,000 of its equity in the event the home owner is sued. That is, if a homeowner is successfully sued in court, $500,000 of the home’s equity could not be touched by an attachment and or execution of sale by the judgment creditor. To acquire the homestead a homeowner would need to file a written declaration and record it with the county Registry of Deeds.

The Massachusetts Legislature has recently passed long awaited revisions to the Massachusetts Homestead Act. The revised law now provides automatic protection up to $125,000 on a homeowner’s primary residence, and a written homestead can also be filed to increase the protection up to $500.000.  The act also provides homeowners additional protection:

• An automatic homestead exemption of $125,000 is now provided for all Massachusetts homeowners for protection against certain creditor claims on their primary residence.
• Homeowners are eligible for a $500,000 homestead exemption by filing a written declaration of homestead at the county registry of deeds.
• A written homestead declaration can now be signed by both husband and wife.
• Homeowners who already have a written homestead are still covered up to $500.000.
• Homes held in trust can be declared as a homestead by the trustee.
• If a single person who has a homestead gets married, the homestead automatically protects the new spouse!
• A homestead can now pass on to the surviving spouse and children who live in the home.
• You do not have to re-file a homestead after a refinance.
• In all mortgage transactions the closing attorneys must now provide the mortgagor with a written notice of availability of a homestead.

As a matter of practice our office had always provided new homeowner’s with a professionally prepared declaration of homestead for a nominal fee.  Now homeowners will automatically benefit from the automatic coverage.  We can assist any homeowner who would like to declare a written homestead to receive the full $500,000 of protection. Contact our office for more information.

HUD’s videos are easily accessible from HUD’s website as well as from HUD’s YouTube channel.Keeping up with the changing times and the push of social media the Department of Housing and Urban Development (HUD) has set up a YouTube Channel.  HUD has unveiled three how-to videos to assist potential homebuyers find an affordable home, shop for the right mortgage and what to expect at closing.

Shopping for your Home – The homebuying process starts with finding the right home. The video instructs viewers on how much of a home you can afford, working with a Realtor and what happens once you find the home you want to buy.

Shopping for your Loan – The next step in the home buying process is to shop for a mortgage loan. The video helps borrowers understand the good faith estimate (GFE).  The GFE is a form that spells out the terms of a potential loan, and should assist to shop for the best loan.  The video shows borrowers how to use the GFE to determine how long an interest rate is available for a particular loan and how to find key loan terms and costs of a particular loan.

Closing the Deal – This his video takes consumers through the actual closing process including how to make sure the loan they were offered closely matches what they encounter at the closing table. The video walks the viewer through the HUD-1 Settlement Statement and shows ways consumers can compare their actual costs with those reflected on their Good Faith Estimate.

HUD’s goal is to help make the process more transparent through educating consumers who in turn can make informed choices about their home purchase.  These videos go help in identifying key aspects of the homebuying process that a borrower should be aware of.   Overall this is a great site for first time homebuyers and a good reference tool for real estate agents and loan officers. 

HUD’s videos are easily accessible from HUD’s website as well as from HUD’s YouTube channel.

With all of the recent talk of improper foreclosures having taken place, and the issues with bank owned real estate title problems, the question of the need for title insurance has been a hot topic. I have always stressed the importance of purchasing an owner’s policy of title insurance. Regardless of who is selling the property, how long it has been in the family or how familiar you or the seller may be with the property you just never know when, where or how a defect in the chain of title may occur.

I have spoken with two home owners recently who purchased property t with a foreclosure in the chain of title. One was trying to refinance their home the other trying to sell. The titles to both properties were defective because of an improper foreclosure process. Neither of them had purchased an owner’s title insurance policy at closing. Now they are both in a position of having to hire legal counsel to try to resolve the matter, which will be very costly. If they had owner’s title insurance they would be able to resolve the matter simply with a claim to the insurer.

Many skeptics argue that title insurance is an overpriced farce, implemented only to create huge profit for large insurance companies and their agents. The truth is that relative cost of owner’s title insurance, a one-time premium paid at closing, is low, a fraction of the purchase price. For the value of the protection it may offer, I believe it is priceless. As for huge profits for insurance companies, there is no doubt that it is profitable for them. But with all of the substantial claims that have been paid out recently, profits have declined sharply. Title insurance business, like all insurance business, is the business of risk. Not buying an owner’s title insurance policy when purchasing real estate is a huge risk.

To learn more about the importance of title insurance read what the American Land Title Association (ALTA) says here.

I have had a few clients ask me recently about the difference between buying a property at a foreclosure auction and buying a property owned by a bank (REO/Real Estate Owned).

A property purchased at a foreclosure auction or foreclosure sale is purchased through a bidding process by individuals at the auction. The property is sold to the highest bidder. If the foreclosing lender is not satisfied with the amount of the bids they may also bid on the property to raise the selling price. In the end the lender often ends up as the highest bidder and takes ownership of the property. Property that is acquired by the lender in this process is called REO property or Real Estate Owned property. The lender will in turn, eventually, place this property on the market with a Realtor for resale to the public.

Although a buyer may be able to get a better price on a property at auction, they may not be able to do a thorough property inspection. The property may be occupied by the prior owner, who will need to be evicted.  There are many more risks associated with buying a property at a foreclosure auction then through an REO sale.

With an REO sale a prospective buyer submits a written offer just as they would with a conventional seller. There is usually an opportunity to conduct a home inspection with an REO property.  Although both properties bought at auction and properties bought from a lenders REO inventory are sold “as is” often the terms of an REO sale may be negotiable. REO properties are sold free of occupants and tenants.

For the average first time home buyer, I would recommend considering purchasing an REO property over a foreclosure auction property.