Dec 17, 2009 | Buying Real Estate, Mortgage Lenders, News, Realtors
As the industry approaches the deadline for applying the new Good Faith Estimate and HUD-1 Settlement Statement forms, HUD has made good on its promise to provide a revised Settlement Cost Booklet that lenders and brokers will be required to provide to consumers within three days of applying for a real estate mortgage loan. The new 49-page booklet has 13 sections, including careful explanations to the borrower for what each one of the line item represents on the new HUD-1 and GFE forms. Click here to see the HUD’s new Settlement Cost Booklet.
Nov 30, 2009 | Buying Real Estate, Mortgage Lenders, Realtors
National Association of Realtors® reports a big gain in existing-home sales for October and attributes the gain to the first-time buyer credit. Single-family, townhouses and condos accounted for nearly 6.10 million units sold.
The first-time buyer credit program was due to expire on November 30, 2009 and many home buyers pushed to find suitable properties and close in time to take advantage of the credit. This push likely skewed the numbers for October and will certainly impact the numbers for November. The heavily anticipated extension of the first-time home buyer credit came in mid November, by that time many of the real estate closings being pushed had been scheduled to meet the deadline.
With the push over for now I expect a measurable decline through December and early next year. That may be the bad news, but the good news that we are due to experience another push as the extended deadline draws closer in early spring 2010. As always, I am guardedly optimistic.
Nov 24, 2009 | Realtors
NCMAR Members to Present: “DANCING WITH THE REALTORS® Season 3” to Benefit Habitat for Humanity
The North Central Massachusetts Association of REALTORS® (NCMAR) has gone Hollywood. For the third year, NCMAR will be producing a fund raising event titled “Dancing With the REALTORS®” to benefit Habitat for Humanity, North Central Massachusetts on January 16th at the Four Points by Sheraton in Leominster. The event will duplicate the format of the popular television show “Dancing with the Stars” and feature REALTOR® and business partner members of NCMAR paired with professional dancers from area dance studios. All proceeds from the event will benefit the North Central Massachusetts Chapter of Habitat for Humanity. Cable Television personality, Barbara Foster, will be Master of Ceremonies and the event will include a live auction, including a judge’s seat for the evening, and many other fascinating items.
Over 20 NCMAR REALTORS® and Business Partners signed on to compete and have been taking dance lessons. They are having a wonderful time but admit it takes a lot of physical stamina to dance. “All dancers have committed their own time and money to dance to raise money for a wonderful cause, and I commend them for that,” stated NCMAR President, Judith Murphy.
There will be 500 tickets going on sale in November. There are still sponsorship opportunities available to corporations and other businesses that wish to get involved in this great fund raiser to assist Habitat for Humanity, North Central Massachusetts. For more information on the event or the sponsorships, contact the committee chair Laura Shifrin at 978-597-8884.
The North Central Massachusetts Association of REALTORS® is a professional trade organization consisting of over 550 members and covers twenty-three communities in the heart of Massachusetts. Members are united in purpose to build their local communities and provide knowledgeable and ethical real estate services to consumers and fellow members. For more information on NCMAR, visit www.ncmar.com.
Nov 18, 2009 | Buying Real Estate, Legislation, Mortgage Lenders, News, Realtors
After December 31, 2009 you will see a new Settlement Statement at the closing table. The US Department of Housing and Development (HUD) has for sometime been working to revise the Real Estate Settlement Procedures Act (RESPA). The new revisions were just recently finalized. Part of the revision requires that mortgage originators (lenders) provide potential borrowers with a new form Good Faith Estimate (GFE) and that final settlement figures be provided on a new form Settlement Statement (Form HUD-1).
Loan charges and settlement fees will be clearer on revised version of the GFE form that is now required to be provided to borrowers within three days of their mortgage application. Charges on the form will fall into three categories:
- Fees that cannot increase from the initial estimates to final closing.
- Fee estimates that may increase by as much as 10 percent in total from the initial estimates.
- Fees that can increase without limit, mainly because the lender has no control over them or because they are difficult to predict weeks in advance.
Charges in the zero-increase category include lender and broker mortgage origination, processing and underwriting fees and costs. Also in this category are lender or broker loan discount charges or “points” based on the interest rate quoted to the borrower.
Charges in the 10 percent category include services required by the lender but where the lender chooses the service provider, such as appraisals, lender’s title insurance and settlement services where the borrower chooses a provider on a list approved by the lender, owner’s title insurance when the borrower chooses a insurer on the lender’s approved list, and state and local recording fees.
Though any one of these items can increase more than 10 percent from the initial estimate to closing, the combined total of all the fees in this category cannot increase by more than 10 percent.
Charges that can increase without limit include lender-required services when the borrower chooses a title insurance agent, escrow or other settlement company that is not on the lender’s list, the cost of homeowners insurance, per diem interest charges on the loan, and the amount of the initial deposit by the borrower into a pre-paid escrow account.
If any of the fees in the zero-increase change or in the 10% category change by more than 10% the lender is obligated to re-disclose those changes to the borrower and the closing cannot occur before 3 days of that re-disclosure.
The intent of the new good-faith estimate is to encourage borrowers to shop for a lender to work with. The form includes space for comparing up to four competing lender estimates on interest rates, rate locks, prepayment penalties or mortgage insurance, and other terms.
The cost estimates from each competitor are required to remain available for 10 business days. Interest rates can change unless locked by the lender and borrower.
The new standard settlement statement, the HUD-1 is unlike the settlement statements in use today, the revised HUD-1 refers directly to the final GFE to allow borrowers to compare what they were quoted by the lender with their figures at closing. The final page of the new HUD-1 itemizes the three categories of fees from the GFE and compares them line-by-line with the actual fees at closing. The new HUD-1 also requires disclosure of the fee splits of title insurance premiums between the title insurance underwriter and the title insurance agent, who is often the settlement agent.
The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. The Act covers loans secured with a mortgage placed on a one-to-four family residential property. This includes most every congenital residential real estate mortgage. The purposes of the act is to help consumers become better shoppers for settlement services and to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services.
If you have questions about the new GFE, HUD-1 or revised RESA requirements please contact me.
Nov 10, 2009 | Realtors, Selling Real Estate, Short Sales
I was asked recently what the practical alternatives to doing a real estate short sale were. Although evey individual situation is unique and some other alternative may be available here are some of the more common alternatives:
Loan modification – If you want to keep you home but cannot afford the current mortgage terms, you may be able get the lender to work with you to modify the loan terms. This is not an easy process either. You will need to provide much of the same financial information that you provide for a short sale. The lender must be convinced that the modification will be a long term benefit to them and an option that will also work for you. If the lender determines that modifying the loan will only postpone a short sale or foreclosure, they will not likely work with you.
Foreclosure – Foreclosure is the judicial process that the lender will pursue to take ownership of the property in order to sell to cover the amount due on the promissory note. A foreclosure will also dramatically effect your credit and your future ability to borrow, especial for the purchase of another home. If you do nothing about your current situation foreclosure is the inevitable conclusion. If the lender does foreclose and is able to sell the real estate for more than what you owed to them they are required to return the difference to you (after the payment of all of their costs and expenses).
Depending on the circumstances, you may be subject to pay tax on the amount of the deficiency between the foreclosure sale price and the amount owed on the note.
Deed in lieu of foreclosure – This is the process where you would deed all of your interest in the real estate to the lender. This process may also have financial ramifications, and you lose all legal interest in the property. However, this may be one of the simplest alternatives if the lender agrees to accept the deed. In any event be certain that you know all of the facts and how signing a deed in lieu of foreclosure could effect you.
Bankruptcy – This is often the last resort if you cannot sell the real estate and foreclosure is not an option for you. It is possible file bankruptcy and retain ownership of owning your home, but bankruptcy will severely damage your credit for at least seven years and you will not have control of your finances.
Get Professional Assistance –Even if you think a short sale is the right answer for you, and you think you can negotiate the terms and process on your own, consult with you professional advisers beforehand. Speak with a Certified Public Accountant, a REALTOR, a Real Estate Attorney and a Bankruptcy Attorney. Having the right advice can is key to a successful outcome.
Nov 9, 2009 | Buying Real Estate, Realtors, Selling Real Estate
The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 6.1% to 110.1 in September, following a 6.4% increase in August. It was the eighth consecutive monthly increase and the highest reading since December 2006.
