By Dave Robison
The Federal Housing Administration’s reserves are high, their defaults are low, and the average borrowers credit scores are 720. So why did FHA recently change premiums, etc.? Because of the annual audit.
FHA just had its annual audit that they reported to Congresss. Their worry was how the audit was going to turn out. They changed many guidelines recently in hopes it would help the audit. If it turned out well, they can show the market that government involvement in loans has been a good thing, as the private sector’s loans of no docs and stated income is what has caused the market to go down. Bad would mean that FHA’s reserve requirement was too low.
The reserve ended up decreasing by 0.5 percent.
FHA is striving to show that low down full docs are safe and they want to show the private market how to reduce risk and give more loans. We still have a ways to go during this downturn of the housing market. According to the audit FHA’s worst case scenario, they don’t expect to have their reserve requirement back up to 2 percent until 2014.
Right now there is another worry, though. Lenders making their own rules. Lenders aren’t loaning to individuals with scores lower than 700. FHA insures loans that lenders make as long as the loan package meets FHA’s guidelines. However, lenders have been setting their own guidelines even higher than FHA’s guidelines due to fear that they may be required to buy back bad loans. The big need in today’s market is to have lenders feel comfortable that they can give loans to individuals with lower credit scores. A big part of getting the market back is having these individuals with FICOS between 640 and 680 buy homes, including those individuals that are 1099.
To give an example, in 1999 the FHA only had 20 percent of market share and they gave more loans in 1999 to individuals under 700 FICO than all GSE’s combined (Government Sponsored Entities Freddie, Fannie, and FHA) this year.
NAR’s Federal Housing Policy Committee is continuing to work on keeping down payments at 3.5 and not increase to 5 percent. They also are working on keeping loan limits at current levels.
Dave Robison, known as “Utah Dave,” is a broker of Robison & Company Real Estate.
It’s no secret that YPN is on fire. Since the 2009 REALTORS® Conference & Expo, YPN has grown from 17 chapters to more than 130 chapters nationwide. Membership has skyrocketed from 2,000 registered YPNers to over 7,500.
With that burst of growth also came increased competition for the 2010 YPN Chapter of the Year. The number of applications this year increased five- fold and included chapters from large and small associations, state and local, new and established. A diverse panel of judges from REALTOR® Magazine and various departments of the National Association of REALTORS® were assembled to ensure unbiased decision.
In the end, the Houston Association’s NextGen REALTOR® Group (or NRG for short) was selected as the 2010 YPN Chapter of the Year.
A runner up for the 2009 Chapter of the Year Award, NRG is one of the largest local association chapters with an estimated 2,900 members. The chapter maintains its own Web site, Facebook page, and e-newsletter. They provide a consistent and diverse calendar of programs that includes a good mix of social, educational, and charitable events.
One thing that stood out to the judges was NRG’s creation of the “20 Under 40 Rising Stars in Real Estate,” which is mirrored after REALTOR® Magazine’s 30 Under 30 program. They realize the importance of giving incentive to be involved with the NRG Chapter, which was also proven this year when 70 NRG members applied to serve on the Advisory Group of only 25 positions. Continue reading »
More home buyers are being asked to pay a developer a fee—called a private transfer fee—at closing even if the home has transferred ownership several times since the developer initially sold it.
Help buyers understand—and possibly negotiate away—private transfer fees by sharing free information from “Private Transfer Fees Affect Home Pricing & Marketability” from the November “Home Ownership Matters” theme now available at the REALTOR® Content Resource. Here’s just some of the information:
The issue. A private transfer fee, also known as a reconveyance fee, is generally added as a covenant to the deed on each new home a developer sells. So every time the property is sold, often for as long a period as 99 years, new buyers have to pay the developer a fee equal to a set percentage of the sales price until the covenant runs out.
What opponents say. A home with private transfer fees may be harder to sell, or the owners may have to lower the sales price since their house will be more expensive than a comparable home when you factor in the price of the private transfer fee.
With new enhancements to the REALTOR® Content Resource, you can now share “Home Ownership Matters” and other articles with consumers via Facebook, Twitter, and email directly from the REALTOR® Content Resource. You can also search more easily for content by themes (formerly “Collections”) or keywords.
The REALTOR® Content Resource, brought to you by the NATIONAL ASSOCIATION OF REALTORS®, is a member resource that entitles you to download free home ownership content from HouseLogic to your marketing materials.
HouseLogic is the NATIONAL ASSOCIATION OF REALTORS’® comprehensive consumer website geared to helping home owners make smart decisions to enhance, maintain, and protect the value of their home.
By Kelly Reark
OK, I’m ready. Elections are over. The holidays are around the corner. Bring on the buyers.
Here in Florida, our season is just about to start. What are people expecting, and what are you going to do about it?
My advice is to study your market, and practice how you will handle objections from buyers and sellers. In our market, it’s not new news that some sellers still aren’t pricing realistically and that some buyers expect to get a million dollar listing for $200,000. You have to be able to stop them with black and white facts and statistics. Numbers are harder to argue with than your opinion of the market.
Let’s say someone asks you, “So, how’s the market right now?” You could answer, “Well, it is better than it was!” OR, you could answer, “MLS data shows that Neighborhood X has sold four times more properties than last year, so you tell me.”
There is a major bonus in showing data and asking the questioner to interpret it. With their own mouths, they will have to admit that the numbers show signs of positive market movement. Once they say it themselves, they will believe it!
The goal is to stop telling people what to expect and start asking them. They will persuade themselves if you learn to ask the right questions. Try it!
By Nobu Hata
Hi guys, I originally wrote this post for Conference Live last week, but it bears repeating on Veterans Day. It hits close to home for me with a brother who served two tours in Iraq, then bought a home via DVA loan last year. Thank a Vet. Help a Vet. It’s the least we can do.
There are, as of October 2010, over 39,000 disabled veterans of the Iraq War in the United States. Of those, 20 percent suffer from brain and spinal cord injuries, and 30percent from mental health disabilities. With those sobering statistics, the Equal Opportunity Forum at NARdiGras 2010, kicked off. Those veterans are not only part of the biggest Fair Housing protected segment in the country, but the fastest growing emerging market for REALTORS®. Every state is affected by the military and their veterans, guys, so it’s time we step it up!
Get acquainted with va.gov – and search “SAH” or “Specially Adapted Housing.” Grants are available for folks to build housing, plus retrofit and adapt current housing – even pay down mortgages. Get to know the DVA loan program while you’re there!
Part of NAR’s Game Changers Program is the Heroes Welcome Home program. As a member, this program is an incredible benefit; as an association, it’s a value-add. Free to use, it’s the hub for all things “Heroes” for us REALTORS®. Use it to your advantage!
These returning vets deserve the best that we can provide. Be mentors, not only in housing issues, but in credit, mortgage, and lifestyle issues as well. It’s the least we can do, for so many who gave so much.
Nobu Hata is a sales associate for Edina Realty in Minneapolis, and a founding member of the Minneapolis YPN group, the YoPros. Visit his Web site at www.nobuhata.com.
More than 500 career-driven real estate professionals from around the country came out to network, exchange business ideas, and party at the Young Professionals Network’s exclusive Fire & Ice NARdiGras Reception on Friday, Nov. 5 at The Foundry in the city’s colorful Warehouse District. The 2010 REALTORS® Conference & Expo event was sponsored by HouseLogic’s REALTOR® Content Resource, Better Homes and Gardens Real Estate, Kodak, and DocuSign.
One of the evening’s highlights was the announcement of YPN’s Chapter of the Year Award. The 2010 honor went to the Houston Association of REALTORS®’ NextGen group, recognized for it’s well-organized membership process and its success in getting young REALTORS® involved in leadership. The other bright spot of the night: The Center for REALTOR® Technology’s annual Spotlight Awards, which brings attention to four leaders in real estate technology. Those winners were: Brian Copeland of Village Real Estate Services Inc. in Nashville, Tenn.; Ben Martin of the Virginia Association of REALTORS® in Glen Allen, Va.; Mark Flavin of the Bay East Association of REALTORS® in Pleasanton, Calif.; and Brad Nix of MaxSell Real Estate in Woodstock, Ga. –Kelly Quigley, REALTOR® Magazine
Photos by Kevin Berne
By Nobu Hata
What can I say that already hasn’t been said. YPN Party, tweetups, committee meetings, and forums, all are at the ready. And while it’s not as “stuffy” as the MidYear meetings, there are things worth doing while you’re in the Big Easy, no matter your pleasure!
The Studious: ePRO is being relaunched and it’s pretty darn relevant and I, for one, am ecstatic I won’t have to talk about “listservs” any more. Even cooler: the folks who’ve developed it will be there in person for you to chat with! (Bill and Hal Lublin, Ginger Wilcox, Amy Chorew plus Todd Carpenter, Brian Copeland and yours truly, had a hand in it as well) ABR is being offered FOR FREE if you make it in by Wednesday morning. Whodat!
The Geek: Real Estate Bar Camp – New Orleans Thursday. Rain Camp Friday. Peer-to-Peer Skillshops Saturday. And they’re all FREE! Except for the Skillshops, those come with your full conference registration or a one-day Saturday pass.
The Foodie: I really can’t say enough about the southern cuisine and its tendency to be Crisco-based – I can’t wait! Beignets and coffee is a NOLA staple, prepare for the crowds. Cochon is sounding like an early NARdigras fav. And there are more crawfish and oyster spots in the French Quarter than you can shake a stick at. (Hint: suck out the stuff in the head, it’s really flavorful!)