August 1, 2012

Service~Who Services Whom?

I am currently working on a deal. The deal’s origination date was June 18. Settlement deadline WAS Monday. That is 7 weeks.
We, the buyers, did not make our Settlement Deadline because the underwriters didn’t get their review of the conditions done in time.

I’ve seen this happen on occasion in my almost 10 years in the industry but it is the exception, not the rule. When the economy took a turn for the worse and the real estate market “crashed” (as some call it), it seemed to happen a little more often because mortgage lenders grew quite skiddish about taking on any new potentially bad loans and wanted more time to make sure every “t” was crossed…
But, we agents adjusted and started allowing extra time in our contracts for this.

Now, the market seems to be getting back to a more normal pace and all this year, lenders have been promising me that they can do a loan now in just 2 weeks. I am still contractually giving my buying clients at least 6 weeks which seems to be a safe time frame but, over the last few months, the loans on my deals have been coming in sooner than the time allowed and we have been closing early. (Closing means funded and recorded with the county records)

I guess I am writing this because of my frustration. We had to extend our Settlement Deadline because, while they had plenty of time, the underwriters just didn’t get to us and potentially caused my clients to default on their contract. Luckily for us, the sellers agreed to the extension.

Wednesday, 5 days before our deadline, they promised to have it in 48 hours. Friday, they promised to get to it over the weekend. Monday, the day of our deadline, we had to extend becaue they promised to have it the next day. Tuesday, 1 day into the extension, they wouldn’t even answer their phone. The loan officer and title company were both trying to call to get a status update. No way!

Now, we extended a whole week because we just don’t know what to do or when it will be finalized and the sellers are saying it better go by then because they will not extend again.

I called the loan officer working with the company that will be servicing the loan, and while he is frustrated also, I grew increasingly displeased with the words coming out of his mouth. Ha ha~ kind of.

I was asking him if he ever mentioned to them that they were making their client default on their contract. I believe he started to sound a little huffy as he said he hadn’t mentioned that because,

       “they don’t care about that. We are asking them to give us their money so we are at their mercy. We want their money
so we have to just jump through their hoops because they don’t have to give us their money.” (I am paraphrasing because, maybe,
I was listening more to his tone and getting frustrated with the gist of his words possibly more than his actual words, (–in his defense).

Ok, here is my problem with this. Yes, it is their money and yes, they don’t have to give it to us, —they have the right to examine and consider their risk. But, we didn’t come up to some random person in the street and start begging for him to give us some money.

The second they put the sign in the window, “Money to Lend” they became a solicitor/servicer. They aren’t deciding to give us money for this mortgage out of the goodness of their hearts. This is a business transaction and they will make a profit on the transaction. Buyers are the consumers and because of that, lenders automatically put themselves in a position to owe their clients some fidiciary responsibility! They have compromised my —thier client‘s position which could potentially cause these people to lose, not only their dream home, but their Earnest Money, inspection costs, AND loan origination fees– yes, they actually paid to be subjected to this type of treatment.

These particular clients are more than a good risk. Great, stable income, excellent credit scores, 20% down payment, and a substantial savings account balance. This loan is a no-brainer and there is no reason for hesitation on this decison.

I recently closed a client that was a marginal risk. His/her (to protect the identity) credit score was barely in the acceptable bracket, no down payment, salary barely able to qualify for the house payment. He/she applied for the loan and we were sitting at settlement in 9 days!!!!

I’m frustrated. I feel bad for my clients. I know mortgage lending is tricky right now as all the lending institutions are sitting on too many foreclosures and dealing with too many short sales. I understand there needs to be a higher level of care taken when deciding who to lend money to.

But, this is a “TIME IS OF THE ESSENSE” industry. That’s all I’m trying to say in spite of my rant.

Everyone– REALTORS®, inspectors, title companies, etc., AND lenders, need to work together to make sure the consumer does not have their position weakened or compromised. Lenders should not have the right to disregard the contractual obligations of their consumer/client.

Please pay attention to the deadlines in the contract!

Filed under: Blogroll,Buying,Credit & Finances,Real Estate,Selling — Susan @ 9:11 am




July 11, 2012

What are you waiting for?

 

Yesterday, our in-house lender was telling us that too many people lately have told him they are still waiting to buy a home. The reason?

They are waiting for the interest rates to go down some more. The interest rates are at an all-time low. They have been hovering around 3 and 4 percent. Any lower, and it will be like believing the banks are going to pay you for the priviledge of lending you money. (I’m kidding)

Back when rates dropped to 7%, I thought that was as low as they would go, then they went to 6%, then 5%…, so, I was wrong.

Yes, it was advantageous to wait during those times because house prices were dropping as well. No one was buying homes so the rates kept going down to entice people to get out and buy, something that wasn’t happening.

I have information for you– homes are selling again and prices are starting to go up in Utah County.

The number of homes listed right now is down, bordering on a Seller’s market level. Each of the last 3 clients I have been working with have lost, not one home, but at least 2 and even 3 of the homes they wanted, because –they lost the bidding wars. There have been multiple offers on every home we finally found for them and we were not the winning bid.

One of my clients lost a home even after offering $20,000 over the asking price. Another client finally won her home by offering $5,000 over the asking price and the other got his at asking price with no seller-paid concessions.

Times are changing. I think buyers are tired of waiting and sellers are still afraid to list so the demand for good homes is growing. Even in spite of all the short sales out there, the opportunity to make that killer deal is getting rare. If you are waiting, you are running out of time and may just wait yourself out entirely.

Back to my friend’s point. Interest rates are down, yes, you may wait and get a percentage of a percentage better but in the meantime, prices are going up. So, if while waiting for that percentage of a percentage on the rate to go down but the price of the type of home you want goes up, it will cost you more in the long run.

 





April 9, 2011

Short Sales… not worth it?

As agents, we have been given 3 new addendum/disclosures to show our short sale clients. This has prompted my thoughts on this post:

Home value is a relative thing. The definition is, “What a buyer is willing to pay.” That isn’t really true because the lenders have so much to say about that, …for good reason. They don’t want to give someone a load of money on a house that isn’t worth what they lent. If the buyer defaults, they are stuck holding a house they lose money on. They aren’t going to be in business long if they do that too often.

Many people need to sell their homes but the current market is making it impossible to get a good price. That forces them to offer their homes at less than they owe. That is called a “Short Sale”.  Agents advertise a home at a great price, (too often, too good to be true), wait for an offer, then submit it to the lender/mortgage holder for approval. It often takes a long time and a lot of paperwork if the agent knows what he/she is doing to get an approval on a short sale. Choose your agent wisely. Too many short sales fail for no other reason than the agent didn’t know what they were doing.

Too often the advertised price is so ridiculous, a lot of buyers get sucked into the idea of getting something for nothing and get caught in the black hole of short sales blues.

Hopefully, the offer is finally reviewed, in the lender’s due time, and if the agent has done his/her job well enough,, the lender will most likely come back with a more realistic price or offer they ARE willing in accept, and the buyer has the option of accepting it or moving on to the next “too good to be true” listed home for sale.

If the original buyer moves on , which is most likely the case, the agent then can list the home at the price the lender has said they will accept and hope a buyer will be willing to pay that price. If the price has already been approved, it can make the short sale process go a lot smoother at that point.

Up till now, the biggest problem with short sales is the seller loses twice. Not only do they lose their home at less than they owe, but the lender will file a 1099 on the loss. The difference in the price they lent the owner and lower sales price to the new buyer is a loss for them so they claim it as a loss on their taxes. The IRS then comes knocking on the seller’s door and wants them to pay on that “gain”. It is like getting slapped in the face twice. It is sad.

Now, because of these new addendum/disclosures, I have come to understand the lender can come back to the seller and sue them for the difference. They did sign contract, after all. I am not sure how many years (it is significant), they have to come after the seller for breaching the original contract but it is surprising they can still do this after all the seller has to go through to complete a short sale.

So, they lose their home, at a price less than they paid. They are responsible for the taxes on that difference and now, I’ve learned, they are liable to pay that difference back to the lender anyway. 3 slaps in the face so far, and counting. (Not counting the ding in your credit score for year to come)

It seems short sales are not a very good thing for a seller. I highly recommend you look into other options. The consequences seem to catch up to you and are much too harsh.

IMPORTANT NOTICE:

Susan Jackson and/or CENTURY 21 Bushnell is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

The Federal Trade Commission has issued a rule that requires real estate agents to provide certain disclosures when representing sellers in a short sale transaction.





August 18, 2009

Are The Rich Paying Their Fair Share?

The top 1 % of taxpayers paid 40.4 % of the total income taxes collected by the federal government in 2007.  That is still the most recent data we have on this subject.

The share of the tax burden borne by the top 1 % exceeds the share paid by the bottom 95 % of taxpayers combined.

That means that 1.4 million taxpayers pay a larger share of the income tax burden than the bottom 134 million taxpayers.

This data means the United States relies more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any other nation.

 

 

 

 

 

 

Read more…    and    more…





June 12, 2009

Interesting Letter

destinations

 

 

Taylor Oldroyd, the CEO of Utah County Association of REALTORS®
 recently sent this letter. I thought it was interesting enough to pass on.

 

Message from UCAR CEO, Taylor Oldroyd
 
 
Thank you for meeting with us to discuss the loan limit situation in Utah County during the National Association of REALTOR® conference in May.
 
As we mentioned and as the data below demonstrates, the housing market between the counties along the Wasatch Front is historically similar; the loan rates should also be similar. The Wasatch Front, as the area west of the mountains is called, runs north and south, not east and west like the Metropolitan Statistical Area (MSA) boundary. The map we left you is remarkable in demonstrating the fact that whether you’re analyzing population, economics, transportation needs, or housing, you would factor the Wasatch Front and the Wasatch Back as two separate markets.
 
The use of the MSA is not a wise boundary to establish loan limits because it reflects commuting patterns and is not good for housing price comparables. Therefore, we seek immediate relief from the negative unintended consequences from the use of the MSA boundary. The huge loan limit disparity between Utah and Salt Lake Counties is placing down-ward pressure on our market and neutralizing the simulative benefit intended by recent Congressional action.
 
Given that the Federal Housing Finance Authority has the administrative ability to adjust the loan limits, please adjust our limit to match that of Salt Lake County. We are prepared to demonstrate that without immediate relief, our market will continue to suffer. We have real-life gathered examples of lost deals and other negative impacts on our market. Our Congressional delegation is also prepared to provide whatever political support you might need.
 
I recognize the administrative challenges to making these adjustments. However, please consider the real-life challenges and negative market impacts that will continue if you fail to act.
 
Thank you for your prompt attention and please let us know if you have an questions or concerns.
 
Sincerely,

 

 

 

Utah Co.

Salt Lake Co.

Davis Co.

Weber Co.

Tooele Co.

Summit Co.

2005

 

$165,000

 

$175,000

 

$168,000

 

$127,500

 

$134,500

$728,892

2006

 

 196,000  

  208,400 

 

192,900 

 

139,900 

   159,900

952,170

2007

 

222,000  

 230,000 

 

220,000  

156,479

 

190,000

1,105,824

2008

 

  216,500  

   229,000

 

215,000 

 

160,500

 

$183,750

972,127

2009

 

207,300

  

224,000

 

209,500

 

160,000

 

174,950

1,223,644

 

Taylor Oldroyd, CEO Utah County Association of REALTORS®





March 7, 2009

Mandates on Mortgages

There is a lot of talk about forcing mortgage companies to give homeowners a break with one proposed solution or other. I know the intentions are well-meaning and we all sympathize with the problem so many are facing right now with ARMs, foreclosures, etc.

While I am hopeful, or wishful that we can find a suitable solution to get our economy, including the housing market,  on a healthier road, I think some of the suggestions are pretty short sighted.  

If at any point, we decide to tell the lenders that they will be forced to stop charging interest, or they must not be allowed to expect to get their investment back, even if for a set amount of time, I am afraid the housing market will be thrown into an unrecoverable spin.  

The housing market depends on people who have money and are willing to invest that money by making it available to home buyers. I’ve heard a lot of disparaging talk about the “greedy” mortgage lenders, but the truth is, only a very small percentage of the population would own their own homes if it weren’t for these investors.

Their sole goal for making their money available is to make a profit. You can detest them all you want for their “greed” just because they want to invest their money wisely and watch it grow. Not everyone is content to watch their income stay exactly the same their entire lives, or spend every penny they earn on frivolity, or run every credit card to the max.

If the government suddenly says, “Sorry, even though you thought you were going to get your investment back with interest, Too Bad!”  Who will ever want to invest their money in mortgages again? I fear it could kill the whole housing industry.

Homeownership would become a thing of the past.

Maybe the government will start providing our housing for us?

Chicago Housing Authority”s Ida B. Wells Housing Project at Pershing and King Drive, Chicago.

Filed under: Buying,Community,Credit & Finances,Real Estate,Renting,Selling — Susan @ 1:27 pm




February 28, 2009

Homes that Sold in Provo

 

Here is the same report for Provo. It is a little different format. The List price is the 2nd number to the right of the picture and the Sold price is the second number from the end of the right side.