FHA insurance premiums are increasing on April 9, 2012

Just a reminder that the FHA insurance premiums are increasing on April 9, 2012. Postponed from April 1, 2012. FHA loans over $417K will be hit the hardest. I have attached the matrix to explain the changes. At the bottom of the FHA attachment it explains the reduced MIP for FHA to FHA refinances. This is a good thing.  I have also attached the latest mortgage rates. The roller coaster ride continues!

FHA Mortgage Insurance set to increase April 2012

HUD announced they are going to increase the annual (paid monthly) and upfront mortgage insurance premium on FHA insured mortgages effective on new case numbers obtained April 1, 2012 April 9, 2012 and later.

As of today, the upfront mortgage insurance premium for FHA insured mortgages is 1% of the loan amount. Most borrowers elect to finance this into their FHA loan although it can be paid for as a closing cost instead of including it in the loan amount. HUD will be increasing the upfront mortgage insurance premium from 1% to 1.75% on April 1, 2012 April 9, 2012.

FHA’s annual mortgage insurance (paid monthly) is set to increase by 0.10% for standard FHA loan amounts and will increase an additional 0.35% for “FHA Jumbos will take place on June 1. The additional 0.10% increase is due to “The Temporary Payroll Tax Cut Continuation Act of 2011. HUD has elected to tack the additional 0.25% on the larger loan amounts

FOR IMMEDIATE R…

FOR IMMEDIATE RELEASE:

Contact: Kirill Gorbounov Company
Name: RE/MAX Allegiance 
Telephone Number: 571 276 0986
Email Address: KirillYSC@gmail.com 
Web site address: www.YourSkylineConnection.com

Kirill Gorbounov Earns NAR Broker Price Opinion Resource Certification
Sellers and Lenders Benefit from REALTOR® Expertise in Broker Price Opinions

Falls Church, VA, 3/5/2012 — Kirill Gorbounov with RE/MAX Allegiance has earned the nationally recognized Broker Price Opinion Resource certification. The National Association of REALTORS® offers the BPOR certification to REALTORS® as evaluating properties depends more than ever on professional expertise and competence, the best use of technology, and a commitment to approach the valuation assignment from all pertinent perspectives.  “As the real estate market evolves we are seeing more demand for broker price opinions, and it’s imperative that REALTORS® are knowledgeable and educated about how BPOs work, as well as the risks involved,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “The BPO Resource certification not only adds value to the services provided by REALTORS®, but also it helps practitioners grow their business.”

“BPOs: The Agent’s Role in the Valuation Process” is the required one-day course that provides REALTORS® with knowledge and skills to reduce risk and increase opportunities to create professional and accurate BPOs. In addition to completing the course, participants are required to take a Webinar. Once awarded the certification, REALTORS® will be eligible to receive BPO orders as a preferred provider.

In addition to providing members with the opportunity for BPO business, BPO Resource will explore the multiple uses of BPOs, how they can and cannot be used, and how to filter and select comparables to create expert and precise BPOs. The certification also assists member in creating more comprehensive comparative market analyses for their customers’ listings.  For more information about the BPOR certification, visit www.BPOR.org.

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Short Sales Get Shorter

Short Sales Get Shorter: New Deadlines to go into Effect

As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

– Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request. – Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request. – Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale. – Servicers are also required to form an internal group to review all short sale requests.

Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests. Violations can carry fines of up to $1 million and $5 million for repeat offenses.

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”

Source: “AG Settlement Starts the Clock on Short Sales,” HousingWire (March 14, 2012) via realtor.org.

Home Prices UP!

For the first time in 18 months, home prices increased year-over-year in February, a turnaround that RE/MAX said signifies a “very active selling season.”

A RE/MAX housing survey released Wednesday shows national home prices in February rose 1.1% from a year earlier and 1.4% from January to $171,881.

Of the 53 metro areas included in the survey, 24 experienced price increases from February 2011, including: Miami (20.5%), Orlando, Fla. (15.8%), Phoenix (12.5%), Tampa, Fla. (11.1%), St. Louis (9.8%) and Detroit (8.9%).

Home sales in February rose 8.7% from a year earlier, continuing a trend of eight straight months above the previous year’s total. February home sales climbed 8.1% above sales in January.

Of the metros, 45 saw increases over February 2011, with 26 jumping double digits, including: Albuquerque, N.M. (46.6%), Providence, R.I. (36.7%), Raleigh, N.C. (33.8%), Boston (30.5%) and Chicago (27.5%).

“All the data is pointing to a very active spring and summer selling season this year, which is great news for a recovering housing market,” RE/MAX Chief Executive Margaret Kelly said. “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting.”

Analysts at Barclays Capital on Monday said the homebuilder spring selling season has “arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005.”

Properties sold in February stood on the market for an average of 103 days, the same as in January and a year earlier, according to RE/MAX findings. In the last 12 months, the average fell below 90 in only two months — 88 in both July and September.

Time To Buy Housing – says Fortune Magazine

“After four years of plunging home prices, the most attractive asset class in America is housing,” proclaims Fortune magazine, one of the world’s premier business publications, in its April cover story. The article, headlined “The Return of Real Estate,” explains that several market forces have created a more promising outlook for the industry. An excerpt: So let’s state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction. The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year. The author, Senior Editor-at-Large Shawn Tully, acknowledges that demand has been extremely weak in recent years, but notes that a “remarkable shift in home affordability” and the cost of owning vs. renting bode well for housing’s immediate future. The second measure, the cost of owning compared with renting, should also inspire potential buyers. In 28 out of 54 major markets, it’s now cheaper to pay a mortgage and other major costs than to rent the same house. What’s most compelling is that in all of the distressed markets, owning now wins by a wide margin — a stunning reversal from four years ago. It now costs 34% less than renting in Atlanta. In Miami the average rent is now $1,031 a month, vs. the $856 it costs to carry a ranch house or stucco cottage as an owner. Some cities, especially those not immersed in foreclosures, will rebound sooner than others, Tully writes, but even the hardest-hit markets have reason for some level of optimism. One big reason: Investors. “People always want to live in those sunny locales, and their job markets are starting to recover, albeit slowly. In foreclosure markets, the inventory problem is far greater because it includes not just traditional resale homes but millions of distressed properties. Fortunately those houses are now such a screaming deal that investors, including lots of mom-and-pop buyers, are purchasing them at a rapid pace.” The bottom line, Tully concludes, is that it’s a great time to buy. His article’s final advice for those on the fence: Beat the crowd. © 2011 RE/MAX, LLC. RE/MAX Affiliates may share this article, provided they do not charge for it and this notice is included. All other rights reserved.

Market Update Northern Virginia

Half of the jurisdictions in the region saw a year-over-year increase in median sales price: Arlington (17.2%), Falls Church (16.6%), Alexandria (2.1%) and Fairfax County (2.1%).

Ratio avg sold / avg list price                      92%

5 year average new listings coming on the market – 20%

Active listings compared to 5 years ago – 35% less inventory.

Compared to 5 years ago pending home sales are 22% higher properties under contract.

Foreclosed inventory is down sharply year-over-year with 67.2% fewer foreclosed properties for sale at month’s end compared to January 2011.

Market Update – Northern Virginia

Inventory levels continue to decline with the 9,823 active listings to end the month representing the lowest supply of homes since August 2005. With 368 active foreclosures representing only 3.7% of the active market (the lowest level since July 2008) and the fewest new foreclosures entering the market since March 2008, pricing continues to stabilize with median sales price up 6.0% over February 2011 levels.

Update on Market

The number of homes available for sale nationwide in January was 20.6 percent lower than in January of 2011.  The inventory level of existing homes was at 6.1 months remaining, while the new home inventory level was the lowest since January 2006, with 5.6 months remaining.       (The “months of inventory remaining” measures how long it would take to liquidate all currently available inventory at the present rate of sales.  Between 3 and 6 months of inventory is generally considered to be a balanced market.) one-third of U.S. homes are owned free and clear.

Warren Buffett made headlines at the end of February when he stated on CNBC’s Squawk Box that if he had a way to manage them efficiently, he would buy “a couple hundred thousand single family homes.”

According to Buffett, buying a home with a 30-year mortgage to live in for the next 5 to 10 years, or purchasing several to use as rentals, was “as attractive an investment as you can make now.”

Donald Trump made news the next day by telling CNBC that “Housing is one of the great investments right now.  I tell people all the time when they come up to me, they say, “What should I do, Mr. Trump?” I say go buy a house.”

 

—————————— ~Kirill Gorbounov, MBA, REALTOR®, DPP, CDPE, SFR, BPOR, e-PRO, RSPS. “SKYLINE CONNECTION INC.”        www.YourSkylineConnection.com cell / text: (571) 276-0986; mailto: KirillRealtor@Yahoo.com; ~Elena Gorbounova, LL.M., REALTOR®, Associate BROKER, GRI. cell / text: (703) 625-7888; mailto: ElenaYSC@gmail.com
RE/MAX Allegiance; 6226 Old Dominion Dr., Mclean, VA 22101 Office: 703-237-9500; E-Fax: 1866-821-0782 PowerPoint on the Region http://tinyurl.com/YSCInfo ——————————- MBA– Masters in Business Administration DPP– Distressed Properties Professional® CDPE – Certified Distressed Property Expertl® (short sales) SFR– Short Sale and Foreclosure Resource Certificationl® BPOR – Broker Price Opinion Resource e-PRO– Certified Internet/Tech RSPS – Resort & Second-Home Property Specialistl®

 

LLM– Legal Law in Masters GRI– Graduate Realtor Institutel® CSI – Certified Spinning Instructor/Mad Dogg Athletics – Nationally Accredited Certification ME (Metabolic Effect) Nutritionist – Nationally Accredited Certification NVAR 100% Club, 2011, 2010, 2009, 2008 NVAR Multi-Million Dollar Sales Club, 2011 NVAR Residential Top Producer, 2011

 

RE/MAX Allegiance is the World’s Number One Selling RE/MAX Company.     

 

FHA Fees

In summary, FHA will be increasing their Up Front MI Premium to 1.75% in addition to increasing the yearly premium:

Loan amounts <$625,500                          125 bps (120 bps if you have 5% or more down)

Ex 1:      $500,000 loan would currently have a $5000 Up Front Mortgage Insurance Premium.  After April 9^th, this will be $8750.  The yearly premium (also known as the monthly MI) currently is $479 per month (with a 3.5% down payment.  After April 9^th, it will be $520 per month. 

Loan amounts >$625,500                          150 bps (145 bps if you have 5% or more down)

Ex 2:      $700,000 loan would currently have a $7000 Up Front Mortgage insurance Premium.  After April 9^th, this will be $12,250.  The monthly MI currently is $670 per month.  After April 9^th, this will be $875 per month.

This becomes effective April 9^th, 2012.  If you have any buyers with FHA loans in process or soon to be in process, make sure their lender has pulled the FHA case number before April 9^th to lock in the current mortgage insurance pricing model. 

There are still many other conventional options outside of FHA financing that only require 5% down for loans under $417k and 10% down for loans $417k – $625,500.

Video Market Update

http://www.youtube.com/watch?v=pO6mGZffsp0&feature=player_embedded

Video Market Update