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SPECIAL WEBINAR TONIGHT!
I’m pleased to announce that we’ll be hosting attorney
Ron Ballard of California this tonight at 8:30 PM ET,
5:30 PM PST for a nuts and bolts training call on
recent developments in the law.
Handling lender objections to option contracts and
how to avoid them in advance
When and how flipping becomes fraud and how to
stay legal as well as ethical
Why you can have two different values for the same
property on the same day
What duties are owed to the lender on a short sale
Issues in seeking payment for loss mitigation services
without a real estate or law license
So please, take the time right now to register to
join us tonight at 8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/504681122
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Majority of 06 – 07 mortgages under water
Fitch Ratings says that 60% of remaining performing borrowers within ‘06- and ‘07-vintage residential mortgage-backed securities (RMBS) bear negative home equity, meaning they owe more than their houses are worth, and all that negative equity is hampering sustained improvement in RMBS performance. The rate of borrowers rolling into delinquency status showed “notable improvement” in the first half of 2009 and stabilized during the summer at an elevated level, but “increased modestly” in September, Fitch said. The rating agency expects US unemployment to peak at 10.3% in the middle of next year, further pressuring current borrowers. House prices will ultimately decline another 10% over the next year. “Home price figures in recent months were temporarily helped by the reduced share of distressed property liquidations due to foreclosure moratoriums and servicers’ increased efforts to qualify borrowers for modifications,” Fitch said. “However, the number of distressed borrowers has continued to grow.”
Weekly mortgage applications down
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 9, 2009 decreased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.7 percent compared with the previous week. The Refinance Index decreased 0.1 percent from the previous week, the seasonally adjusted Purchase Index decreased 5.0 percent from one week earlier, and the unadjusted Purchase Index decreased 4.8 percent compared with the previous week and 6.8 percent lower compared to one year ago. The four week moving average for the seasonally adjusted Market Index is up 5.6 percent, the four week moving average is up 1.6 percent for the seasonally adjusted Purchase Index, and the Refinance Index is up 8.0 percent. The refinance share of mortgage activity increased to 67.4 percent of total applications from 66.3 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent from 6.1 percent of total applications from the previous week.
Want a mansion cheap?
The U.S. housing crisis came after years of easy credit and soaring property values, but even now that the worst of the housing crisis seems over, wealthy homeowners are still being squeezed by a combination of weak home prices and the stock market crash. “I think for wealthy homeowners it will get worse before it gets better,” said Dennis Hedlund, founder of iEmergent, a forecaster for mortgage and real estate companies. “I don’t think home prices have bottomed yet. Many people are stuck at the high end, as there aren’t many buyers out there.” Ray Schafer, co-owner of home builder Michael Raymond Custom Homes, has cut his asking price for one luxury home by $50,000 to just under $1.2 million, without drawing out any offers. “We can’t hold onto inventory forever,” Schafer said, “So we’re just lowering the price until it’s such an extreme bargain someone picks it up.” More U.S. homes at the high end may also come from foreclosures. According to data from research firm First American CoreLogic, the rate at which wealthy homeowners are falling behind on their mortgage payments is increasing. It says 9.4 percent of those with jumbo prime mortgages — those over $417,000 — are 90 days or more behind on their payments. This pales next to the 33.8 percent of subprime loans that are delinquent 90 days or more, but the rate is rising. While the subprime delinquency rate is 1.3 times higher than a year ago, the jumbo prime delinquency rate is 2.6 times higher, suggesting that wealthy homeowners overstretched themselves as much as their poorer counterparts did.
Retail sales down, but up excluding cars
The Commerce Department said that total retail sales fell 1.5 percent in September following the clunker surge, the biggest decline since December, after surging by a revised 2.2 percent in August. But if automotive sales are removed, it actually rose for a second straight month in September, suggesting that consumer spending could possibly support the economic recovery. “There’s solidity, or new strength, in all discretionary spending categories and many of those were strong last month,” said Pierre Ellis, senior economist at Decision Economics in New York. “We evidently have hit the bedrock level of consumer spending and can even see a little bit of normalcy going forward.” Consumer spending normally accounts for about 70 percent of U.S. economic activity. There are worries that relentlessly high unemployment will remain a drag on consumer spending and take some steam out of the economy’s nascent recovery from a recession that started at the end of 2007.
House prices down 2%
According to Integrated Asset Services (IAS), a default management and residential collateral valuation service provider, house prices declined 0.2% from July to August, the second month of declines after a fourth-month-long rally that brought a 2.8% increase earlier this year. The last time national home prices were at the August 2009 level was in February 2005, and prices in August this year were 8% lower than the prices in August 2008. Price increases of 0.7% in the Midwest and Northeast were tempered by declines in the South and West of 0.1% and 1.2%, respectively. “Ordinarily, there’s nothing ominous about a slowdown at the end of summer,” said Dave McCarthy, IAS president and CEO. “But these are hardly ordinary times. We know there’s a sizable inventory of bank-owned homes out there that will be listed at some point, and that could ignite a new wave of stress in the housing market.” McCarthy said a “shadow inventory” of foreclosed homes that aren’t listed and are unsold has the potential to hurt housing recovery. “When the shadow supply hits the market, home prices will be pressured, particularly in markets with large numbers of foreclosures,” he said.
Majority of 06 – 07 mortgages under water
Fitch Ratings says that 60% of remaining performing borrowers within ‘06- and ‘07-vintage residential mortgage-backed securities (RMBS) bear negative home equity, meaning they owe more than their houses are worth, and all that negative equity is hampering sustained improvement in RMBS performance. The rate of borrowers rolling into delinquency status showed “notable improvement” in the first half of 2009 and stabilized during the summer at an elevated level, but “increased modestly” in September, Fitch said. The rating agency expects US unemployment to peak at 10.3% in the middle of next year, further pressuring current borrowers. House prices will ultimately decline another 10% over the next year. “Home price figures in recent months were temporarily helped by the reduced share of distressed property liquidations due to foreclosure moratoriums and servicers’ increased efforts to qualify borrowers for modifications,” Fitch said. “However, the number of distressed borrowers has continued to grow.”
Expand the Home-Buyer’s Credit
Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers. Currently the first-time home buyer credit is available in full to those buying their primary residence who make $75,000 or less ($150,000 for joint filers). A partial credit is available to those making between $75,000 and $95,000 ($150,000 to $170,000 for joint filers). The credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30, but some lawmakers not only want to extend the deadline, but make the credit available to all homebuyers who meet income eligibility requirements. And some want to increase the amount of the credit from $8,000 to $15,000. Through mid-September, 1.4 million tax returns had qualified for the credit, according to the IRS.
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Bathrooms – the Most Important Room in the House?
For years the kitchen reigned as the supreme room of central importance when it came to showing and selling a home but recently, the humble bathroom has been gaining ground. A recent survey by the National Kitchen and Bathroom Association reports a total of 15.5 million bathroom construction and remodeling jobs during 2006 including 7.4 million master baths, 5.9 million other full baths and 2.2 million powder rooms. Total spending on bathrooms reached more than $95 billion for the year and with good reason. The bathroom has become a focal point of interest and investment for those who desire more than a purely utilitarian function provided by one of the most frequently used rooms in the average home.
Good Investment
In fact, the 2006 “cost vs. value” survey by Remodeling Online found an upscale bathroom remodel delivered a 77% return on investment: a smart move for homeowners trying to sell a house in a declining real estate market. Beyond the economic impact, the top trends in bathroom design reflect a move toward creating an experiential environment that transforms the mundane into the extraordinary. There are three main drivers to this new trend: luxury, technology and cleanliness.
So, what are the top trends? According to Ken Peterson, CKD (Certified Kitchen Designer), President of the SEN Design Group, a national organization of over 175 independent kitchen and bath professionals; “Top bathroom trends for custom homes include Chromatherapy (spa package beginning at $3,000 including speakers, aromatherapy, steam generator, etc.), heated floors, towel warmers ($600 – $799), make-up mirrors, sanitation including air bubbles”. These lovely innovations merge seamlessly with new technologies such as ProSun Internationals “SunShower”; a sun tanning system combined with chromatherapy enhanced shower. The new model combines an “anti-aging” feature to this already popular choice. Joining the pack, NeoQi has released the “Energy cocoon” complete with sauna function, hydrotherapy, air massage, steam infrared sauna, aroma therapy, chromatherapy and hand shower.
Hi-Tech…Toilets?
Not to be outdone, the lowly toilet has gone high-tech and ever so more clean! From Toto’s “Neorest” which features build in air deodorizer, heated seat, oscillating spray massage, front to back warm water wash with heated dry to Kohler’s C3 toilet seat with built in bidet and remote control settings for water temperature, pressure and dry settings.
True Tech…for the Bathroom
Indeed, technology is all the rage and one of the most in demand features of every well equipped bathroom is the new TileVision Waterproof TV by Steel Cube. These stylish 23” displays have been adapted for use in wet environments and can be embedded directly into the shower wall or any other desired area. The full-function waterproof remote control provides more than ample opportunity to catch the news or just channel surf while preparing for work. Tim Galloway, Sales Director for Steel Cube reports “The range of bathroom TV’s that we sell is very popular, and actually outsell the other TV’s on our website. I guess in the UK people are partial to spending quite a lot of time on the toilet, and this lets them do that, and watch Coronation Street.”
Technology will continue to be one of the hottest trends with new products released daily. Sensoractivated Chromatherapy faucets, “Smart Showers” that are programmable to the preferred temperature, massage settings and preferences of each individual user including favorite aromatherapy settings. Combined with the optional CD player, LCD TV, Bose Speaker and an array of colors and textures this is not a typical bathing experience. In fact, the future of bathing has never been so bright!
See you at the top!
Chris McLaughlin
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Copyright Loss Mitigation Institute LLC 2009.
All Rights Reserved.
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Finally, a blog for Real Estate professionals
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About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting nearly
400 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris
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