Chance Gates' Blog

RISMEDIA, March 10, 2010—Golden Gateway Financial, a financial resource for seniors and retirees, recently released new usage data from its online Reverse Mortgage Calculator that showed average home values for older Americans have halted their slide after remaining flat or declining for seven consecutive quarters. The national average self-reported home value of older Americans rose from $369,762 in the third quarter of 2009 to $381,895 in the fourth quarter of 2009.

Older Americans were one of the last segments of the population to see home prices rebound, but overall home values for seniors remain significantly lower than 2008 levels. Despite this rise in the national average, the report also showed significant decline in many large states, including Florida, Texas and New York.

This mixed recovery in terms of senior home values will likely continue as individual markets reduce inventory and regain their footing. Data from the most recent S&P/Case-Shiller Home Price Indices shows that many markets within these states continue to show improvement, and this should eventually contribute to an increase in home values for older Americans as well.

“Even a minimal gain in home value is a reassuring sign for older Americans because many of these individuals live on a fixed income and rely on their home to support their retirement lifestyle,” said Eric Bachman, founder and CEO of Golden Gateway Financial. “This is especially true for those considering a reverse mortgage because as their home increases in value, so does their potential for greater reverse mortgage proceeds.”

Additional observations from the data include:
-The average age of users remained roughly consistent
-Self-reported senior home values rose by a little more than 3%between the third and fourth quarter of 2009
-The average existing forward mortgage debt dropped slightly to $143,360
-Reverse mortgage average max up front proceeds available rose by roughly 3% while the average max monthly proceeds available dropped by 13%

For more information, visit www.goldengateway.com.

Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.

Send all questions to chance@ballard-company.com

Where as national new home sales may be suffering the local Reno-Sparks Association of Realtors reports that 346 home sales closed in Washoe County.  This is a 49% increase in real estate transaction from the same month a year earlier.    http://chancegates.com/2010/02/27/new-ho… This completely contradicts the national new home sales entry   This is a great reason why when searching for answer on real estate that a person should watch the local markets not the national ones.

RISMEDIA, February 10, 2010—Home values across the country declined again in the fourth quarter of 2009, as the Zillow Home Value Index fell 5% year-over-year, and -0.5% quarter-over-quarter, to $186,200. That marked the 12th consecutive quarter of year-over-year declines, according to the fourth quarter Zillow Real Estate Market Reports. Despite home value declines seen across most of the country throughout 2009, some markets experienced what appeared to be a bottom in home value declines, or even increases in home values during the year. However, the fourth quarter of the year brought signs that the fledgling recovery of home values in many of these markets is slowing again. If the declines are sustained, the result will be a “double dip” in home values, defined as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

One in five, or 29 of the 143 markets tracked by Zillow, showed at least five consecutive month-over-month increases in home values during 2009 before beginning to flatten or fall again in the second part of the year. These markets include the Boston metropolitan statistical area (MSA), the Atlanta MSA and the San Diego MSA.

Home values in an additional 29 markets, including the Los Angeles and New York MSAs, increased on a month-over-month basis each month throughout the fourth quarter. However, the rate of increase slowed from November 2009 to December 2009 in 21 of those markets, and several appear likely to experience several months of sustained decline in early 2010.

The percent of single family homes with mortgages in negative equity was essentially flat from the third to the fourth quarter, changing from 21% in Q3 to 21.4% in Q4. This comes after a decrease in negative equity from the second quarter’s 23%.

The number of homeowners losing their homes to foreclosure across the country reached a peak in December, with more than one in every thousand homes being foreclosed–a number not reached since Zillow began recording national foreclosure data in 2000.

“While we have seen strong stabilization in home values during 2009, there are clear signs that they will turn more negative in the near-term,” said Zillow Chief Economist Stan Humphries. “What we saw in mid-2009 was a brief respite from a larger market correction that has not yet run its course. The good news is that, for those markets that will see a double dip in home values before reaching a definitive bottom, this second dip will not be a return to the magnitude of depreciation seen earlier, but rather will look more like a modest aftershock of the earlier downturn.

“The recent stabilization owed a lot to policy support in the form of tax credits, lower interest rates and increased Federal Housing Administration lending. The remaining correction in home values we’ll see in the first half of this year is a function of market fundamentals, such as the increasing flow of foreclosures, high levels of inventory in the market and a probable decrease in demand as the impact of the tax credit wanes and mortgage rates rise. While the next few months are likely to bring further home value declines in most markets, we do expect to see a national bottom in home prices by the middle of this year. Thereafter, home values are likely to bounce along the bottom with real appreciation remaining negligible for some time.”

Foreclosure re-sales across the country remained high, making up more than one-fifth (20.3%) of all U.S. home sales in December. Foreclosure re-sales also made up the majority of sales in several MSAs, including the Merced, Calif. MSA (68.3%), the Las Vegas MSA (64%) and the Modesto, Calif. MSA (62%). Additionally, 28.5% of home sales nationwide sold for less than what the seller originally paid.

Several markets across the country showed positive longer-term appreciation. Home values increased year-over-year in 27 of 143 markets and remained flat in 15.

The Boston MSA was the largest area with year-over-year appreciation, despite its more recent downturn in home values. The area’s Zillow Home Value Index rose 1.9% in 2009. Home values in the Boston area rose for eight months in 2009, which outweighed the recent declines.

The annual burning man tickets went on sale today at 10:00 this morning.  Tickets are sold in a tiered fashion with a limited number of the cheapest first. Each of the first three levels will have 9000 tickets.

First Level:  $210.00

Second Level $240.00

Third Level  $280.00

With the final level costing $300 while supplies last.

Tickets available at http://tickets.burningman.com/

When applying for a home mortgage it is a requirement that a borrower has at least  3 different forms of  “non-traditional” credit over a minimum of 12 months.

According to the Federal Housing Administration “non-traditional” credit is the credit extended  by a landlord, utility company or a cell phone company.

A mortgage lender will either ask for a “Verification of Rent” from a landlord or need 12 months of canceled checks to prove that rent has been paid on time.  Some lender will request proof beyond the 12 months,  so be prepared.  By the way cash receipts will not work.

The utility companies have a “12-month letter of credit”.  Which is basically a list of payment history including the date and payment amount.  If a homebuyer is obtaining these via the internet it is vital that the name, address and company name are on the statement.

There are other forms on non-traditional credit that are harder to prove.  Please remember that all mortgage lenders sets and terms vary.

With the start of  2010 , what will you be looking forward to in the New Year? Buying your first home in the Reno/ Sparks area? Sending your last kid off to college? Or obsessing over your own personal mountain of debt, even more worrisome in this uncertain economy? It may feel like “Resolution Impossible,” but if you follow Eric Tyson’s advice, you’ll remember ‘10 as the year you finally took control of your financial future.

“While the situation is improving, Americans carry too much consumer debt,” says Tyson, author of Personal Finance for Dummies, 6th Edition.. “If you have credit card debt or auto loans, take some solace in the fact that you’re far from alone and that many others have overcome these hurdles. Consumer debt is not okay, particularly in a slow economy such as this one. It can damage your personal relationships and mental well-being, not to mention the stability of your financial future.”

Here are a few tips from Tyson that will help you improve your financial health in 2010:

Partake in a little self-reflection. A misaligned mindset toward spending and shopping—compulsive or otherwise—can severely affect your financial and personal well-being. If you think you might have a problem with shopping or spending, there are several questions you should ask yourself:

-Do I feel guilty about shopping?
-Is my shopping causing financial trouble?
-Is my shopping, spending, and accumulated debt leading to feelings of helplessness, anger, confusion, fear, or depression?

Make a plan and stick to it. The reason so many New Year’s resolutions fail is that we simply state the thing we want to improve and then never create a plan for helping us get from point A to point B. Most people don’t like to plan unless we’re talking about something fun, like a vacation. But actually, planning for your financial future is a little like planning a vacation. You’re organizing your money and time so that you get to do all the great things you want when you get there. Look at it that way, and you might actually enjoy the process.

Get rid of your four-wheeled debt. Too many people define necessities by what those around them have. A brand new car is not a necessity, although some people try to make it one by saying, “I need a way to get to work.” Guess what? There are plenty of far less expensive used cars out there that will also make it to your office. If you take out an auto loan to buy a car that you really can’t afford and you take a similar approach with other consumer items you don’t truly need, you’re going to have great difficulty saving money and accomplishing your goals. Moreover, you’ll probably feel stressed all the time—which is a poor trade-off for the (short-lived) “new car smell.”

Start making your purchases based on need, not emotion. It can be easy to give in to all of those advertisements telling us how much we “need” that new car, expensive gym membership, or trendy outfit. Marketers play on insecurities, fears, and guilt and suggest that you can feel better about yourself by buying their products. You won’t be able to overcome spending and consumer debt until you recognize these pressures and how they corrupt your buying decisions.

Research before you enter the store. Prior to going shopping for necessities that aren’t everyday purchases—say, a new refrigerator—do some research first. Your research will help you identify brands, models, and so on that are good values. You don’t want to make an expensive mistake.

Watch your food budget. Dine out less and keep stock of the groceries you already have. Learn to cook if you don’t know how. Try to keep a healthy inventory of groceries at home. This will minimize trips to the store and the need to impulsively dine out because your cupboard is bare. Try to do most of your shopping through discount warehouse-type stores, which offer low prices for buying in bulk, or grocery stores that offer bulk purchases. Saving on the amount you spend on food will help you put more money toward paying off your debt and eventually setting money aside for investments.

Become more energy efficient. Check out opportunities to make your home more energy efficient. Adding insulation and weather-stripping, installing water-saving devices, and reducing use of electrical appliances can pay for themselves in short order. Many utility companies will even do a free energy review or audit of your home and suggest money-saving ideas.

Watch what you are paying for insurance. Many people overspend on insurance by carrying coverage that’s unnecessary or that covers small potential losses. Coverage of small losses, such as $100 or $200, is not useful for most people since such a loss wouldn’t be a financial catastrophe.

“It won’t be easy getting out of debt, and it’s certainly not something you will be able to achieve overnight,” says Tyson. “Like losing weight, it’s something that takes constant dedication but has a great payoff in the end. Whenever you lose focus or feel like giving in, think about the wonderful benefits of financial well-being. Once you’re out of debt, the money you are able to invest will mushroom into substantial savings that will allow you to get more for your money,” concludes Tyson.

About the Author
Eric Tyson is one of the nation’s best-selling personal finance book authors and has penned five national bestsellers. His work has been featured and quoted in hundreds of local and national publications and media outlets. He was also a featured speaker at a White House conference on retirement planning. A dynamic and provocative speaker, he has spoken at many corporations and nonprofits.

For more information, visit www.erictyson.com.

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RESPA Reform

The Objectives:

1.)  Help consumers shop for the best loan, through competition bring lower prices.

2.)  Disclose to consumer, the loan information quickly in an easy to understand format.

3.)  Facilitate comparison of Good Faith Estimate (GFE) and HUD-1 or HUD-1A Settlement Statement.

THE GOOD FAITH ESTIMATE (GFE):

1.)  The lender has 3 days after receiving a complete loan application to provide the buyer with a GFE.

2.)  The buyer has 10 business days to review the GFE.

3.)  Page 3 of the GFE must have a “Shopping Cart” to allow the borrower the ability to compare terms and conditions.

THREE TYPES OF GOOD FAITH ESTIMATE FEES

1.)  Zero Tolerance are fees on the GFE that may not be exceeded at closing.

2.)  10% Increase Permitted are fees that the total aggregate of all charges are subject to a 10% tolerance.

3.)  Unlimited Change Permitted are fee that HUD does not limit the amount of increase

Other terms and conditions may apply please contact a Nevada real estate professional to answer any questions  that you might have.

Once again it is  time to take a break from Reno/Sparks Real Estate and talk some football.  I’m going out on the limb this week.  I like the St. Louis Rams and the points.    The Arizona Cardinals have clinched a playoff birth and are one of the most streaky teams I’ve ever seen.  Plus the fact that the Cardinals usually play down to their opponents level, there is a small chance the Rams win this game outright.

To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property and the loan proceeds (other than rehabilitation funds) must be available before the rehabilitation begins.

To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, loan proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation

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