Mortgage Bonds mounted an impressive reversal higher yesterday, after foreign participation in the 7-Year Note auction helped ease market concerns.
Advanced Gross Domestic Product for the 2nd Quarter came in better than expected, while the 1st Quarter was revised lower. The report also showed consumer spending is down, as consumer savings increased to the highest level since 1998.Currently, prices are higher after some up-and-down movement earlier this morning. I recommend floating for now. But be prepared to act if the situation changes. I will keep you posted.
Leonard Winslow, branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112
Property Search
Friday, July 31, 2009
Thursday, July 30, 2009
HERA, Housing Recovery Act. Closing
HERA: Housing and Economic Recovery ActHERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance. Under HERA:
No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.leonard.winslow@dominiontrustmortgage.com/leonard.winslow
No fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days.
Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.leonard.winslow@dominiontrustmortgage.com/leonard.winslow
Mortgage rates Charlottesville
Mortgage Bonds are trading lower and flirting with several Moving Averages, as the 50-, 100- and 200-day Moving Averages all lay within a few basis points of current levels.
Initial Jobless Claims rose slightly more than expected. However, the closely watched four-week moving average fell for a fifth straight week to the lowest level since January. Continuing Jobless Claims also fell for a third straight week to the lowest since April. With Bonds struggling this morning and a hefty Treasury auction on tap today that may pressure Bonds. The good news is, despite all the chaos of the markets, the 30-year mortgage rates are still near multi-year lows and still present a great opportunity.
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Initial Jobless Claims rose slightly more than expected. However, the closely watched four-week moving average fell for a fifth straight week to the lowest level since January. Continuing Jobless Claims also fell for a third straight week to the lowest since April. With Bonds struggling this morning and a hefty Treasury auction on tap today that may pressure Bonds. The good news is, despite all the chaos of the markets, the 30-year mortgage rates are still near multi-year lows and still present a great opportunity.
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Wednesday, July 29, 2009
ALERT TO LOCK INTEREST RATE
Bond market is declining. Rates are getting worse. Recommend locking
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Leonard Winslow, Branch Manager, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Bond Market Comment
Bonds are trading slightly higher this morning, as Stocks move lower on news of the worst decline of the year in the Chinese Stock market.
In economic news, Durable Goods Orders came in weaker than expectations. However, when you remove the volatile transportation orders, Durable Goods Orders actually rose better than anticipated. Overall, recent readings of this report do suggest some stabilization within the economy.
Currently, Mortgage Bonds are trading just above the 25-, 50- and 200-Day Moving Averages. Be prepared to change course if today’s Treasury auction or other market news impacts Bonds negatively.
Leonard Winslow, Branch Manager at Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112
In economic news, Durable Goods Orders came in weaker than expectations. However, when you remove the volatile transportation orders, Durable Goods Orders actually rose better than anticipated. Overall, recent readings of this report do suggest some stabilization within the economy.
Currently, Mortgage Bonds are trading just above the 25-, 50- and 200-Day Moving Averages. Be prepared to change course if today’s Treasury auction or other market news impacts Bonds negatively.
Leonard Winslow, Branch Manager at Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112
Tuesday, July 28, 2009
Bond Market Comment
Mortgage Bonds are trading higher so far this morning, after trading lower yesterday.
The Home Price Index came in at its best reading in nearly twelve months and the first month-over-month improvement in three years. This is good news, especially when combined with the last few months of improved Existing and New Home Sales.. The Treasury Department's auction of $42 Billion in 2-yr T Notes happens today and this could give direction to bonds.
Be ready to lock if this auction is not received well.
Leonard Winslow, Dominion Trust Mortgage 434-760-2580 (cell)
leonard.winslow@dominiontrust mortgage.com
www.dominiontrustmortgage.com/leonard.winslow
The Home Price Index came in at its best reading in nearly twelve months and the first month-over-month improvement in three years. This is good news, especially when combined with the last few months of improved Existing and New Home Sales.. The Treasury Department's auction of $42 Billion in 2-yr T Notes happens today and this could give direction to bonds.
Be ready to lock if this auction is not received well.
Leonard Winslow, Dominion Trust Mortgage 434-760-2580 (cell)
leonard.winslow@dominiontrust mortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Monday, July 27, 2009
Market Comment
The Treasury debt hitting the market this week is taking an early toll on Mortgage Bonds. The auctions are competing for investor dollars and servicing the massive debt is also a concern for the health of the economy.
Oil continues to track the weakness in the US Dollar and has moved back up to near $70 a barrel, which is no help to Bonds either. New Home Sales will be released this morning, and if this report shows a slight improvement as expected, this would be welcome news.With the aforementioned supply coming to the market this week, Bonds will have a stiff headwind to fight.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112
Oil continues to track the weakness in the US Dollar and has moved back up to near $70 a barrel, which is no help to Bonds either. New Home Sales will be released this morning, and if this report shows a slight improvement as expected, this would be welcome news.With the aforementioned supply coming to the market this week, Bonds will have a stiff headwind to fight.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112
Sunday, July 26, 2009
Mortgage Rates Upcoming Week
What to expect this week with Mortgage Rates in Charlottesville and the rest of Virginia
There are several important reports scheduled for release this week that are likely to affect mortgage pricing. The first is tomorrow's release of June's New Home Sales that gives us a measurement of housing sector strength and mortgage credit demand. It is expected to show an increase in sales of newly constructed homes, indicating that the housing sector gained some strength. That would be considered negative news for bonds, but since this data tracks only 25% of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.
The Conference Board will post their Consumer Confidence Index (CCI) for July late Tuesday morning. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesd ay. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June's reading.
Wednesday brings us two events that are relevant to mortgage rates. The first will come from the Commerce Department when they will post June's Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline in news orders of 0.5% from May to June. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates Wednesday morning. If it reveals a much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much.
The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke's testimony to Congress last week gave us a recent update, I don't think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates Wednesday afternoon as a result of this report.
There is no relevant monthly or quarterly data scheduled for release Thursday, but there are two releases scheduled to be posted Friday morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates Friday. But a larger than expected decline would likely fuel a bond market rally and lead to lower mortgage pricing.
The second report of the day Friday is the 2nd Quarter Employment Cost Index (ECI) that measures employers' costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
Also worth mentioning are a couple of Treasury auctions that may affect bond tradi ng and mortgage rates this week. The two most important are Wednesday's 5-year Note and Thursday's 7-year Note sales. The last auctions of these securities were met with very good demand from investors. That led to bond strength following the sales. Results of this week's auctions will be posted 1:00 PM ET each day. If investor interest is strong again, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday's preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence mortgage rates.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
There are several important reports scheduled for release this week that are likely to affect mortgage pricing. The first is tomorrow's release of June's New Home Sales that gives us a measurement of housing sector strength and mortgage credit demand. It is expected to show an increase in sales of newly constructed homes, indicating that the housing sector gained some strength. That would be considered negative news for bonds, but since this data tracks only 25% of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.
The Conference Board will post their Consumer Confidence Index (CCI) for July late Tuesday morning. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesd ay. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June's reading.
Wednesday brings us two events that are relevant to mortgage rates. The first will come from the Commerce Department when they will post June's Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline in news orders of 0.5% from May to June. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates Wednesday morning. If it reveals a much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much.
The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke's testimony to Congress last week gave us a recent update, I don't think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates Wednesday afternoon as a result of this report.
There is no relevant monthly or quarterly data scheduled for release Thursday, but there are two releases scheduled to be posted Friday morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates Friday. But a larger than expected decline would likely fuel a bond market rally and lead to lower mortgage pricing.
The second report of the day Friday is the 2nd Quarter Employment Cost Index (ECI) that measures employers' costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
Also worth mentioning are a couple of Treasury auctions that may affect bond tradi ng and mortgage rates this week. The two most important are Wednesday's 5-year Note and Thursday's 7-year Note sales. The last auctions of these securities were met with very good demand from investors. That led to bond strength following the sales. Results of this week's auctions will be posted 1:00 PM ET each day. If investor interest is strong again, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday's preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence mortgage rates.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Friday, July 24, 2009
Mortgage Rates Charlottesville
Daily Mortgage Information for Charlottesville
Friday's bond market has opened fairly flat despite slightly stronger than expected economic news. The stock markets are in negative ground with the Dow down 37 points and the Nasdaq down 32 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 to .250 of a discount point.
The University of Michigan's revised Index of Consumer Sentiment was today's only relevant economic data. It revealed a reading of 66.0 that was a little higher than the preliminary reading of 64.6. This means that more surveyed consumers felt more comfortable with their own financial situations than earlier this month. This technically is negative news for bonds and mortgage pricing because higher levels of consumer confidence means consumers are more apt to make large purchases in the near future. That adds fuel to economic growth that makes bonds less appealing to investors. However, today's report is consid ered to be only moderately important to the markets, so its impact has been relatively minimal.
Unless the stock markets stage a sizable rally or sell-off, I suspect bond prices and mortgage rates will remain near current levels the rest of the day. There is not relevant news or events expected this afternoon to influence trading either way.
Next week is pretty busy in terms of economic releases. There is relevant economic data scheduled for release four out of the five days, including Monday morning when June's New Home Sales data is posted. This report is the sister release to this week's Existing Home Sales data, but is next week's least important monthly or quarterly report. Look for more details on next week's events in Sunday's weekly preview.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my cl osing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Friday's bond market has opened fairly flat despite slightly stronger than expected economic news. The stock markets are in negative ground with the Dow down 37 points and the Nasdaq down 32 points. The bond market is currently down 2/32, which will likely push this morning's mortgage rates higher by approximately .125 to .250 of a discount point.
The University of Michigan's revised Index of Consumer Sentiment was today's only relevant economic data. It revealed a reading of 66.0 that was a little higher than the preliminary reading of 64.6. This means that more surveyed consumers felt more comfortable with their own financial situations than earlier this month. This technically is negative news for bonds and mortgage pricing because higher levels of consumer confidence means consumers are more apt to make large purchases in the near future. That adds fuel to economic growth that makes bonds less appealing to investors. However, today's report is consid ered to be only moderately important to the markets, so its impact has been relatively minimal.
Unless the stock markets stage a sizable rally or sell-off, I suspect bond prices and mortgage rates will remain near current levels the rest of the day. There is not relevant news or events expected this afternoon to influence trading either way.
Next week is pretty busy in terms of economic releases. There is relevant economic data scheduled for release four out of the five days, including Monday morning when June's New Home Sales data is posted. This report is the sister release to this week's Existing Home Sales data, but is next week's least important monthly or quarterly report. Look for more details on next week's events in Sunday's weekly preview.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my cl osing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Wednesday, July 22, 2009
Mortgage Forgiveness Debt Relief Act of 2007
Mortgage Forgiveness Debt Relief Act of 2007
Prior to the passage of this law, for any debt that was forgiven in a short sale or foreclosure, the homeowner would receive a 1099 and would have to report this forgiveness or cancelled debt to the IRS as income.
The law was passed on December 20th 2007 which eliminates the phantom tax on debt cancellation in mortgage discharge from January 1st 2007 to January 1st 2011 as long as the debt was incurred on a principal residence. (So this doesn't apply to investors)
A couple key things to note about this. Debt for a second mortgage or HELOC (Home Equity Line of Credit) is not eligible. Debt for a second home or investment properties is not eligible. Up to $2,000,000 is eligible on the principal residence.
Rob Alley, Realtor at Keller Williams Charlottesville
Certified Short Sale Specialist in Virginia
Certified REO Property Specialist
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Prior to the passage of this law, for any debt that was forgiven in a short sale or foreclosure, the homeowner would receive a 1099 and would have to report this forgiveness or cancelled debt to the IRS as income.
The law was passed on December 20th 2007 which eliminates the phantom tax on debt cancellation in mortgage discharge from January 1st 2007 to January 1st 2011 as long as the debt was incurred on a principal residence. (So this doesn't apply to investors)
A couple key things to note about this. Debt for a second mortgage or HELOC (Home Equity Line of Credit) is not eligible. Debt for a second home or investment properties is not eligible. Up to $2,000,000 is eligible on the principal residence.
Rob Alley, Realtor at Keller Williams Charlottesville
Certified Short Sale Specialist in Virginia
Certified REO Property Specialist
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
The Problem of PMI & Charlottesville Short Sales
The Problem of PMI & Charlottesville Short Sales
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
A lot of Charlottesville short sale investors become very confused as soon as PMI is mentioned.
PMI or Private Mortgage Insurance is that monthly fee many Charlottesville homeowners pay each and every month for what appears like no apparent reason (in their opinion).
Of course, there was a reason for it and if you are contemplating a short sale deal, this reasoning is a valid concern.
PMI was created for the express purpose of insuring against default by home buyers that didn't put at least 20 percent down when purchasing a home.
It does not mean life insurance in case one of the bread winners is killed in an accident. That's a totally separate insurance product.
The idea was simple enough; Charlottesville real estate rarely ever falls and when it does, it rarely falls by much more than 20 percent.
Because the majority of mortgages are amortized, the closing costs and larger up-front payments effectively reduce the risk even more.
To compensate for the difference between anticipated losses and the actual loss of any profit (after taking amortization etc into account) most Charlottesville homeowners would be forced to pay for PMI until the loan to debt ratio fell below 80 percent.
Sounds like a good plan of protection so what could be the problem when it comes to a Charlottesville short sale?
Well, the thought process is like this...if the PMI or private mortgage insurance will cough up a higher cost in the event of a default than the short sale offer, then it's less likely the lender will want to negotiate below a given amount.
However, this isn't always the situation.
In some instances the primary mortgage holder will accept a short sale offer if there is a second mortgage or promise of future payment - a controversial but relatively common situation since legally the current homeowner is responsible for any gap.
Of course, faced with the prospect of losing their home and still owing money, most Charlottesville homeowners tend to either walk away entirely or simply file for bankruptcy protection.
Because of the drama associated with PMI and short sales, many investors simply opt to avoid them altogether.
Before making that decision it's important to clear up a few myths surrounding PMI and short sales...
1. PMI pays up to 20 percent...not 80 percent.
The private mortgage insurance was put into place because the original Charlottesville owner didn't put at least 20 percent down...it's the difference between 100 percent financing and 80 percent (or whatever amount above 80 percent financing obtained for the original loan).
2. Transactions costs, maintenance fees and other expenses must also be taken into account.
3. AIG United Guaranty is one of the larger entities holding many of these issues. As you know (or should know), AIG is facing just a few problems of their own to the point that some mortgage companies no longer want to negotiate directly with the PMI during the course of a short sale.
So, the bottom line is this; when making an offer for Charlottesville short sales on any property be sure to find out for sure (don't leave it to the homeowner to know or understand if they pay PMI) if the property is impacted by PMI.
If so, realize that some of the loss will be mitigated by the PMI and plan your calculations accordingly.
Should you decide to continue the negotiation process, be sure you fully understand the additional level of complexity added by the existence of PMI into the equation.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Buying Charlottesville Homes from a Wholesaler
8 Reasons to buy Charlottesville houses from an experienced Real Estate Wholesaler:
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
8.) Like Sam’s Club, experienced Charlottesville wholesalers can buy houses in bulk, thus buying them at deep discounts. These savings are then passed on to you.
7.) Good wholesalers understand the real way to make money wholesaling is by doing volume.They look at hundreds of Charlottesville houses only to make 20 offers that lead to the best deals. This means wholesalers aren’t trying to get rich on every deal. It also means their research saves you time.
6.) Wholesalers usually mark up their deals a few thousand and leave a sizeable profit margin for the next guy or gal. The really well connected ones can buy at such great discounts that often there is room for two wholesalers to make money.
5.) The real pros only sell deals that make you money. They do this because you will continue to buy from them. The more money you make, the more everyone makes. I mean, seriously… who doesn’t like to make money?
4.) Wholesalers are an important piece of the real estate investment puzzle, so to speak. They play a very important role and one that allows you to always be focusing on your exit strategy.
3.) Because of their connections and years in the business, experienced Charlottesville wholesalers get first shot at the best deals in town.
2.) An experienced Charlottesville wholesaler has a goal to make sure the end investor is well taken care of. This can include providing related contacts (property management, contractors, title companies, etc) and could also mean providing rehab project management, for a fee. This service is vitally important to out of town buyers.
1.) Experienced wholesalers love helping you build your Charlottesville real estate investment portfolio and will go out of their way to see you succeed. It’s all about relationships, and a true wholesale pro wants to build one with you for the long term. After all, they’re in this business for the long haul.
Bottom line is experienced Charlottesville wholesalers are the best in every city at finding diamonds in the rough—and we all know that diamonds in the rough equal profits. Profits, and the freedom that comes with it, are the reasons we become real estate investors. Heck, more millionaires have been created through investing in real estate than any other vehicle.
History says the time to buy is in a down market. Who are we to argue with history?
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Charlottesville Homeowners with 2nd Mortgages
Charlottesville Homeowners with 2nd Mortgages and the options they have.
You probably know that Charlottesville bankruptcy judges do NOT have the
power to reduce the principal of a first mortgage in the event you file for bankruptcy personally.
There was a move to change this. But the powerful lobby for the big elite banks defeated it in congress.
But are there cases where filing a Charlottesville bankruptcy can wipe out a mortgage?
Regarding 2nd Charlottesville mortgages...I have read that the US bankruptcy code section 6 allows for wiping out a second mortgage in a situation where the 1st mortgage loan amount is greater than the current value of the home.
Such that the second mortgage becomes an unsecured debt and subject to the bankruptcy provisions.
Is this true or even possible in your experience?
In a personal Charlottesville bankruptcy, if the second mortgage has no
equity coverage, the judge can turn the second mortgage into a personal loan and you can discharge it in bankruptcy.
Let's look at an example.
Say you owe $200,000 on a first and $100,000 on a second.
And say your Charlottesville house is worth $150,000.
The second has no equity at all.
The judge can turn the second into an unsecured loan, upon a motion that you bring in Charlottesville bankruptcy court.
The loan is then handled like a credit card or medical bill.
It is unsecured and can be discharged.
But don't think you have to file for bankruptcy in order to handle a second mortgage this way.
You can do a short sale, and often pay the second a few thousand dollars and get a release of liability.
But what if the second won't give that release to you?
You may be able to negotiate a small note for the second.
Or just let it go and hope they don't come after you.
If they do come after you, you can always file for bankruptcy later.
Oftentimes, a second mortgage can be handled by paying them a small amount and doing the Charlottesville short sale, and then just putting things off.
What you can put off until later will often be much easier to handle.
You probably can settle these left-over second mortages for a fraction of what you originally owe, quite often.
Without a Charlottesville bankruptcy.
And while improving your FICO score.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
You probably know that Charlottesville bankruptcy judges do NOT have the
power to reduce the principal of a first mortgage in the event you file for bankruptcy personally.
There was a move to change this. But the powerful lobby for the big elite banks defeated it in congress.
But are there cases where filing a Charlottesville bankruptcy can wipe out a mortgage?
Regarding 2nd Charlottesville mortgages...I have read that the US bankruptcy code section 6 allows for wiping out a second mortgage in a situation where the 1st mortgage loan amount is greater than the current value of the home.
Such that the second mortgage becomes an unsecured debt and subject to the bankruptcy provisions.
Is this true or even possible in your experience?
In a personal Charlottesville bankruptcy, if the second mortgage has no
equity coverage, the judge can turn the second mortgage into a personal loan and you can discharge it in bankruptcy.
Let's look at an example.
Say you owe $200,000 on a first and $100,000 on a second.
And say your Charlottesville house is worth $150,000.
The second has no equity at all.
The judge can turn the second into an unsecured loan, upon a motion that you bring in Charlottesville bankruptcy court.
The loan is then handled like a credit card or medical bill.
It is unsecured and can be discharged.
But don't think you have to file for bankruptcy in order to handle a second mortgage this way.
You can do a short sale, and often pay the second a few thousand dollars and get a release of liability.
But what if the second won't give that release to you?
You may be able to negotiate a small note for the second.
Or just let it go and hope they don't come after you.
If they do come after you, you can always file for bankruptcy later.
Oftentimes, a second mortgage can be handled by paying them a small amount and doing the Charlottesville short sale, and then just putting things off.
What you can put off until later will often be much easier to handle.
You probably can settle these left-over second mortages for a fraction of what you originally owe, quite often.
Without a Charlottesville bankruptcy.
And while improving your FICO score.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Charlottesville Foreclosure Projections
Charlottesville Foreclosure Projections
If the majority of Wall Street economists are right, the U.S. recession will end this quarter and the global recovery won't be far behind. And our window of opportunity for once in a lifetime deals is here, but not for long. (Read on below.)
On Wednesday, the International Monetary Fund is expected to nudge up its forecast for 2010 global growth from the current estimate of 1.9 percent, primarily because fears of a more serious economic setback have not materialized.
That makes for a brighter backdrop to this week's meeting of leaders from the Group of Eight major industrial nations in Italy, where the economic outlook is top of the agenda.
As you have noticed lately in the skittishness of the stock market, recovery will not be a smooth process. As Bank of America Securities economist, Drew Matus, put it, this quarter marks a "new beginning with some nagging reminders of the past."
First, the good news.
1. The U.S. housing slump appears to be near an end after 3-1/2 years of decline. That, combined with a strong stock market performance in the second quarter, should stop the bleeding in household wealth. (Read more about housing bottom news here.)
2. Government stimulus money is flowing in the United States and other major economies including Japan, China and Germany.
3. Global manufacturing surveys show output expanding after a year-long period of contraction. In the United States, the pace of new orders is improving while inventories keep shrinking, so production may need to pick up soon to meet demand.
4. Figures due on Thursday are expected to provide a good illustration of that. Economists polled by Reuters think U.S. wholesale inventories dropped 1.1 percent in May, while sales were flat.
Those are among the reasons why Matus recently raised his U.S. economic outlook to show an above-consensus 2.7 percent jump in 2009 gross domestic product.
Now for the bad news.
1. Wednesday's report on U.S. consumer credit bears close watching for more evidence that Americans are paring their credit card debt as banks clamp down on lending and consumers rethink attitudes toward borrowing and spending.
2. Job losses are likely to keep piling up at least through the end of the year. Last week's disappointingly weak June employment report served as a reminder of that. The data showed employers cut a net 467,000 positions last month, far more than expected and considerably more than in May.
The White House expects unemployment to climb to 10 percent in the next two to three months, far higher than it envisioned back in January when it was pushing for its $787 billion economic stimulus package.
"The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn't yet indicate that we have gone off the track," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
If there is a bright side to stubbornly high unemployment, it would be that it helps keep inflation at bay even after the recovery gets going.
That takes some of the heat off the U.S. Federal Reserve and its central bank counterparts in Europe and Japan to raise interest rates once the recovery begins.
Those low rates and even lower home prices are making affordability at levels not seen since the 1970s.
It's absolutely time for you to buy below todays already low prices, from very motivated sellers, and then quickly sell and put profits in your bank today. This window of opportunity is here now, but it is hard to say for how long.
All the key indicators show how Charlottesville housing is not only stabilizing, but improving.
Just today the Pending Charlottesville home sales show a sustained upward trend, rising for the fourth month in a row, from our very favorable housing affordability and a first-time buyer tax credit boosting activity.
The Pending Charlottesville Home Sales Index based on contracts signed in May, increased 0.1 percent from an upwardly revised reading in April, and is 6.7 percent higher than May 2008.
The last time there were four consecutive monthly gains was in October 2004.
Wow, the Charlottesville real estate market is really heating up.
And if you haven't already jumped in to get your Charlottesville foreclosure deals, you need to do that NOW.
Regional Breakdown:
Northeast rose 3.1 percent May over April and is 6.8 percent above May 2008.
Midwest slipped 1.3 percent May over April, but is 11.4 percent above May 2008.
South declined 1.7 percent May over April, but is 7.9 percent higher than May 2008.
West rose 2.2 percent May over Apri, and is 0.7 percent above May 2008.
NAR’s Housing Affordability Index remains at historic highs.
The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970.
“Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” NAAR's chief economist, Yun said.
A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest.
Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford.
The affordable price was significantly higher than the median existing Charlottesville single-family home price in May, which was $172,900.
The first-time buyer tax credit also is benefiting the market.
“Strong activity by entry level Charlottesville home buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.
Pending home sales is a forward looking report.
Therefore you should see existing-home sales continue to trend up through the rest of the year. Even with all the new Charlottesville foreclosures hitting the market, with builders not building, supply is shrinking.
In some parts of the country, like California, housing supply is less than a 4 month supply.
That is great news for us, as you will see multiple offers when you price your houses right on the resale.
And at the same time, there is a ton of inventory from the banks that has NOT hit the market, but they own it and need to sell it.
That is what we call "phantom inventory" and you absolutely want to work those leads for bottom picking deals.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
If the majority of Wall Street economists are right, the U.S. recession will end this quarter and the global recovery won't be far behind. And our window of opportunity for once in a lifetime deals is here, but not for long. (Read on below.)
On Wednesday, the International Monetary Fund is expected to nudge up its forecast for 2010 global growth from the current estimate of 1.9 percent, primarily because fears of a more serious economic setback have not materialized.
That makes for a brighter backdrop to this week's meeting of leaders from the Group of Eight major industrial nations in Italy, where the economic outlook is top of the agenda.
As you have noticed lately in the skittishness of the stock market, recovery will not be a smooth process. As Bank of America Securities economist, Drew Matus, put it, this quarter marks a "new beginning with some nagging reminders of the past."
First, the good news.
1. The U.S. housing slump appears to be near an end after 3-1/2 years of decline. That, combined with a strong stock market performance in the second quarter, should stop the bleeding in household wealth. (Read more about housing bottom news here.)
2. Government stimulus money is flowing in the United States and other major economies including Japan, China and Germany.
3. Global manufacturing surveys show output expanding after a year-long period of contraction. In the United States, the pace of new orders is improving while inventories keep shrinking, so production may need to pick up soon to meet demand.
4. Figures due on Thursday are expected to provide a good illustration of that. Economists polled by Reuters think U.S. wholesale inventories dropped 1.1 percent in May, while sales were flat.
Those are among the reasons why Matus recently raised his U.S. economic outlook to show an above-consensus 2.7 percent jump in 2009 gross domestic product.
Now for the bad news.
1. Wednesday's report on U.S. consumer credit bears close watching for more evidence that Americans are paring their credit card debt as banks clamp down on lending and consumers rethink attitudes toward borrowing and spending.
2. Job losses are likely to keep piling up at least through the end of the year. Last week's disappointingly weak June employment report served as a reminder of that. The data showed employers cut a net 467,000 positions last month, far more than expected and considerably more than in May.
The White House expects unemployment to climb to 10 percent in the next two to three months, far higher than it envisioned back in January when it was pushing for its $787 billion economic stimulus package.
"The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn't yet indicate that we have gone off the track," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
If there is a bright side to stubbornly high unemployment, it would be that it helps keep inflation at bay even after the recovery gets going.
That takes some of the heat off the U.S. Federal Reserve and its central bank counterparts in Europe and Japan to raise interest rates once the recovery begins.
Those low rates and even lower home prices are making affordability at levels not seen since the 1970s.
It's absolutely time for you to buy below todays already low prices, from very motivated sellers, and then quickly sell and put profits in your bank today. This window of opportunity is here now, but it is hard to say for how long.
All the key indicators show how Charlottesville housing is not only stabilizing, but improving.
Just today the Pending Charlottesville home sales show a sustained upward trend, rising for the fourth month in a row, from our very favorable housing affordability and a first-time buyer tax credit boosting activity.
The Pending Charlottesville Home Sales Index based on contracts signed in May, increased 0.1 percent from an upwardly revised reading in April, and is 6.7 percent higher than May 2008.
The last time there were four consecutive monthly gains was in October 2004.
Wow, the Charlottesville real estate market is really heating up.
And if you haven't already jumped in to get your Charlottesville foreclosure deals, you need to do that NOW.
Regional Breakdown:
Northeast rose 3.1 percent May over April and is 6.8 percent above May 2008.
Midwest slipped 1.3 percent May over April, but is 11.4 percent above May 2008.
South declined 1.7 percent May over April, but is 7.9 percent higher than May 2008.
West rose 2.2 percent May over Apri, and is 0.7 percent above May 2008.
NAR’s Housing Affordability Index remains at historic highs.
The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970.
“Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” NAAR's chief economist, Yun said.
A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest.
Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford.
The affordable price was significantly higher than the median existing Charlottesville single-family home price in May, which was $172,900.
The first-time buyer tax credit also is benefiting the market.
“Strong activity by entry level Charlottesville home buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.
Pending home sales is a forward looking report.
Therefore you should see existing-home sales continue to trend up through the rest of the year. Even with all the new Charlottesville foreclosures hitting the market, with builders not building, supply is shrinking.
In some parts of the country, like California, housing supply is less than a 4 month supply.
That is great news for us, as you will see multiple offers when you price your houses right on the resale.
And at the same time, there is a ton of inventory from the banks that has NOT hit the market, but they own it and need to sell it.
That is what we call "phantom inventory" and you absolutely want to work those leads for bottom picking deals.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Tuesday, July 21, 2009
Mortgage Rates Charlottesville and Central Virginia
Charlottesville and Central Virginia Daily Mortgage Rate Information and Suggestions from Dominion Trust Mortgage and Leonard Winslow
Tuesday's bond market initially opened in negative territory but has since rallied well into positive ground. The stock markets are mixed with the Dow up 60 points and the Nasdaq down 3 points. The bond market is currently up 19/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point.
Today's bond rally is the result of Fed Chairman Bernanke's semi-annual testimony to Congress on the status of the economy and monetary policy. He stated that the economy's slowdown has slowed significantly, meaning the recession may be ending relatively soon. But he cautioned that there is uncertainty ahead for the economy and strengthening may be gradual. He also sated that the labor market remains weak and that the unemployment rate will likely remain higher than they would prefer until 2012 or later.
The weak employment and housing markets should help keep inflation under control in the near future, making long-term securities such as mortgage-related bonds more attractive to investors. This led to the surge in bond prices this morning and pushed today's mortgage rates lower. And if bond prices continue to rise, we may even see more improvements in rates later today. In other words, today's events were extremely favorable to mortgage shoppers.
Mr. Bernanke will repeat this act tomorrow to the Senate Banking Committee, likely with little change to his prepared testimony. Therefore, his words are not expected to have much of an impact on the markets unless an answer to a Senator's question surprises traders or contradicts something portrayed today.
There is no relevant economic data scheduled for release tomorrow to influence bond trading or mortgage rates. This should be good news for mortgage rates as today's rally may continue into tomorrow's trading with nothing on the calendar that has the potential to derail it.
The next monthly econo mic data comes from the National Association of Realtors Thursday morning when they post June's Existing Home Sales figures. This report gives us a measurement of housing sector strength and mortgage credit demand, but it is not considered highly important and often has a minimal impact on mortgage rates. Current forecasts are calling for an increase from May's sales totals. A smaller than expected increase or a decline in sales would be considered good news for bonds and mortgage rates because a weak housing sector would make it difficult for the economy to recover anytime soon. However, unless this data varies greatly from forecasts it probably will not lead to much of a change in rates.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Tuesday's bond market initially opened in negative territory but has since rallied well into positive ground. The stock markets are mixed with the Dow up 60 points and the Nasdaq down 3 points. The bond market is currently up 19/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point.
Today's bond rally is the result of Fed Chairman Bernanke's semi-annual testimony to Congress on the status of the economy and monetary policy. He stated that the economy's slowdown has slowed significantly, meaning the recession may be ending relatively soon. But he cautioned that there is uncertainty ahead for the economy and strengthening may be gradual. He also sated that the labor market remains weak and that the unemployment rate will likely remain higher than they would prefer until 2012 or later.
The weak employment and housing markets should help keep inflation under control in the near future, making long-term securities such as mortgage-related bonds more attractive to investors. This led to the surge in bond prices this morning and pushed today's mortgage rates lower. And if bond prices continue to rise, we may even see more improvements in rates later today. In other words, today's events were extremely favorable to mortgage shoppers.
Mr. Bernanke will repeat this act tomorrow to the Senate Banking Committee, likely with little change to his prepared testimony. Therefore, his words are not expected to have much of an impact on the markets unless an answer to a Senator's question surprises traders or contradicts something portrayed today.
There is no relevant economic data scheduled for release tomorrow to influence bond trading or mortgage rates. This should be good news for mortgage rates as today's rally may continue into tomorrow's trading with nothing on the calendar that has the potential to derail it.
The next monthly econo mic data comes from the National Association of Realtors Thursday morning when they post June's Existing Home Sales figures. This report gives us a measurement of housing sector strength and mortgage credit demand, but it is not considered highly important and often has a minimal impact on mortgage rates. Current forecasts are calling for an increase from May's sales totals. A smaller than expected increase or a decline in sales would be considered good news for bonds and mortgage rates because a weak housing sector would make it difficult for the economy to recover anytime soon. However, unless this data varies greatly from forecasts it probably will not lead to much of a change in rates.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Charlottesville and Central Virginia Short Sale Information - Commission
The most common concerns and questions regarding a short sale is commission. Who pays the commission?
In a short sale, the bank pays everything at closing from the cost of the termite inspection all they way to the recordation fee. This includes the commission. The listing agent should be in contact with the bank on behalf of the seller and the contract. The listing agent is resposible to negotiate the overall commission with the bank. THE SELLER (HOMEOWNER) DOES NOT HAVE TO PAY THE COMMISSION. Most banks will pay anywhere between 4% and 6%. Depending on the listings agent and their ability to negotiate, I have seen commissions as high as 8%. Of course, the larger banks have their SOP, or Standard Operating Procedure. Can't really negotiate that, but the smaller, more local banks can generally be pursuaded a little bit more.
In conclusion, if you or anyone you know is in trouble of losing their home, tell them to short sale before they get foreclosed on. A short sale is way better for the individual than a foreclosure is. There are certified people in the Charlottesville and Central Virginia area that can help. Visit www.charlottesvilleshortsale.com for more information or to save your home!
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
In a short sale, the bank pays everything at closing from the cost of the termite inspection all they way to the recordation fee. This includes the commission. The listing agent should be in contact with the bank on behalf of the seller and the contract. The listing agent is resposible to negotiate the overall commission with the bank. THE SELLER (HOMEOWNER) DOES NOT HAVE TO PAY THE COMMISSION. Most banks will pay anywhere between 4% and 6%. Depending on the listings agent and their ability to negotiate, I have seen commissions as high as 8%. Of course, the larger banks have their SOP, or Standard Operating Procedure. Can't really negotiate that, but the smaller, more local banks can generally be pursuaded a little bit more.
In conclusion, if you or anyone you know is in trouble of losing their home, tell them to short sale before they get foreclosed on. A short sale is way better for the individual than a foreclosure is. There are certified people in the Charlottesville and Central Virginia area that can help. Visit www.charlottesvilleshortsale.com for more information or to save your home!
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Mortgage Rates Charlottesville
Monday's bond market has opened down slightly following stronger than expected economic news and minor gains in stocks. The stock markets are starting the week in positive territory with the Dow up 22 points and the Nasdaq up 5 points. The bond market is currently down 2/32, which should keep this morning's mortgage rates at Friday's levels.
The Conference Board, who is a New York-based business research group, reported that their Leading Economic Indicators (LEI) rose 0.7% last month. Analysts were expecting a 0.5% increase, meaning that the index is predicting more economic activity over the next three to six months than many had thought. That news is considered bad for bonds, but fortunately this index is considered to be only moderately important to bonds and mortgage rates.
There is no relevant economic data scheduled for release tomorrow, but Fed Chairman Bernanke will speak before the House Financial Services Committee. This is day one hi s semi-annual testimony on the Fed's monetary policy and the status of the economy. He will speak to the Senate Banking Committee Wednesday morning. Analysts and traders will be watching his words closely for any hint of the Fed's next move with key interest rates. They will likely create a great deal of volatility in the markets during the testimony and the question and answer session that follows.
If his testimony indicates that inflation is a point of concern or that the economy looks to recover sooner than thought, we will likely see the bond market tank and mortgage rates rise. We usually see the most movement in rates during the first day of testimony as the Chairman's prepared words for both appearances are quite similar to each other, meaning that the second day rarely gives us anything we did not hear during the first day.
Overall, this is a moderately significant week for the bond market and mortgage rates. If we get weaker than expected ec onomic results and Chairman Bernanke's words do not surprise the markets, we may see mortgage rates move lower for the week. However, if Mr. Bernanke's testimony raises inflation concerns- rates may again move higher on the week.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
The Conference Board, who is a New York-based business research group, reported that their Leading Economic Indicators (LEI) rose 0.7% last month. Analysts were expecting a 0.5% increase, meaning that the index is predicting more economic activity over the next three to six months than many had thought. That news is considered bad for bonds, but fortunately this index is considered to be only moderately important to bonds and mortgage rates.
There is no relevant economic data scheduled for release tomorrow, but Fed Chairman Bernanke will speak before the House Financial Services Committee. This is day one hi s semi-annual testimony on the Fed's monetary policy and the status of the economy. He will speak to the Senate Banking Committee Wednesday morning. Analysts and traders will be watching his words closely for any hint of the Fed's next move with key interest rates. They will likely create a great deal of volatility in the markets during the testimony and the question and answer session that follows.
If his testimony indicates that inflation is a point of concern or that the economy looks to recover sooner than thought, we will likely see the bond market tank and mortgage rates rise. We usually see the most movement in rates during the first day of testimony as the Chairman's prepared words for both appearances are quite similar to each other, meaning that the second day rarely gives us anything we did not hear during the first day.
Overall, this is a moderately significant week for the bond market and mortgage rates. If we get weaker than expected ec onomic results and Chairman Bernanke's words do not surprise the markets, we may see mortgage rates move lower for the week. However, if Mr. Bernanke's testimony raises inflation concerns- rates may again move higher on the week.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Short Sales - General How to Guide for Realtors and Consumers
Short Sale How To Phone Call Rules:
1) Listen to the Homeowner: Some Realtors/Investors are so excited to offer services that they just talk and talk. Make the homeowner feel that they're understood by you before you start talking. However, don't let this progress too far because some people start crying. When they expose themselves, it hurts your ability to deal with the homeowner's situation. On the phone; listen 70% and speak 30% of the time.
2) Project Confidence: Homeowners will want to deal with professionals who know what they're doing. Project confidence on the phone when discussing preforeclosure marketing and short sales.
3) Be honest: Don't make unrealistic promises. Ask the homeowner to take a look at their other options before signing on with you. If the person wants to keep their house, look at the avenues through which that might be possible, either in renting or leasing to own with you.
Always use a "two-call approach." Never solidify an entire preforeclosure deal on the first call. It shows the customer that you need to check to see if this will be a fit and gives you control over the situation. They immediately know that you are a business and that they may not qualify for your services, when you say that you'll look at the deal and call them back.
8 Short Sale How To Steps:
You'll have to work to keep the homeowner's interest in a preforeclosure deal. There are eight short sale how to steps to make the first phone call work for you:
1) Make Introductions: Often on the phone Realtors and Investors are so anxious to offer their services that they don't take the time to introduce themselves. Tell the homeowner that you are a preforeclosure specialist giving people help in tough situations.
2) Ask for More: Ask the customer to tell you more about their story. Don't ask direct questions. Also, take the responsibility off of them and put it onto the house. Tell the homeowner you may not be able to help them out, but you will give them their best option.
3) Qualify the deal: You can't accept every deal and neither should you. It's best that you don't take any deals less than $100,000 or from people with bad attitudes. Avoid people who are angry, upset, have a "poor me" mentality. Also look at the amount owed on the mortgage. Banks work on percentages, so take this into account.
4) Asking for More Short Sale How To Information: There's more to the preforeclosure marketing deal than equity and location. Ask the homeowner if they have FHA loans or VA loans. You can get huge discounts on FHA loans and have more time to close, sometimes up to 90 days to close rather than 30 days. Make sure there are enough repairs to get a great discount but not so many that no one will look at the property. Ask about their mortgage holders. Different banks have special docs that are often required. Divorce often comes up in these foreclosure situations so ask about their family situation. Ask when they are moving? The system is becoming so fast that you can often have short sale negotiations completed in 30-60 days.
5) Explain Yourself: Use the previous step to move into talking about your preforeclosure services. You specialize in working with folks who are behind in payments. You don't charge anything for your services no matter the cost of the house or the preforeclosure deal. On the downside there are a lot of people who need your services, so you can't accept everyone.
6) Let's pretend: This is a very powerful system because it doesn't hold you accountable for everything. Say, "Let's pretend we're able to help you out. Does this sound like it would be a fit for you?" This is a very loose question that doesn't put them on the spot or make you sound like a shyster. If they say yes, go over all the documents.
7) Explain the Documentation: Go over exactly what the homeowner will need for your first meeting and later for the short sale package. Let the homeowner know that the bank needs copies of these too. There are six documents:
• 2 months of bank statements • 2 recent pay stubs • 2 years of tax returns
• Financial hardship letter describing what's going on with their house and why they are unable to pay, such as bankruptcy.
• Mortgage statements from the lender of the past due loan. You'll need copies of these to know where to start the short sale.
• Financial statement listing the homeowner's income at its lowest and all monthly expenses at their highest. Show the bank that the homeowner's expenses are higher than their income.
8) A Second Call: You can have a second person follow up with the homeowner. Make sure you edify this second person by raising the influence of something or someone. The homeowner will have a respect for him or her when they call. If it's just you, get another person who can call back the homeowners ASAP. For now, set yourself up and say you have other folks you need to check with to make sure this is a deal you can do.
Short Sale How To: The Second Phone Call
The first call is very important to a preforeclosure marketing deal. Your second call will be a breeze if you handle the first call well. There are four steps in the second call:
1) Offer Congratulations: Tell the homeowner that you'll be able to take the deal and congratulate them. Your services are much better than the others out there. The homeowners should feel good that they have chosen you rather than bad competition.
2) Go Over Documents: Go through all the documents that you will need again. Make sure the clients understand it and everything is clear.
3) Set up a Meeting: Pick a time to meet with the homeowners either at their house or at your office. Ask them if they have a pen to write it down when you state the time and place of the meeting. The last thing you want is to have them forget the appointment.
4) Confirm the Meeting: Your time is valuable so emphasize that strongly to the homeowner. Many clients are in this situation because they have trouble meeting obligations. They may not have the best scheduling or organization skills.
Follow these short sale how to steps-the first call, second call, and meeting-flow as seamlessly as possible and your preforeclosure marketing plans will go smoothly. Each completed call ensuring that you have a successful short sale package and a homeowner willing to sign on with you.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
1) Listen to the Homeowner: Some Realtors/Investors are so excited to offer services that they just talk and talk. Make the homeowner feel that they're understood by you before you start talking. However, don't let this progress too far because some people start crying. When they expose themselves, it hurts your ability to deal with the homeowner's situation. On the phone; listen 70% and speak 30% of the time.
2) Project Confidence: Homeowners will want to deal with professionals who know what they're doing. Project confidence on the phone when discussing preforeclosure marketing and short sales.
3) Be honest: Don't make unrealistic promises. Ask the homeowner to take a look at their other options before signing on with you. If the person wants to keep their house, look at the avenues through which that might be possible, either in renting or leasing to own with you.
Always use a "two-call approach." Never solidify an entire preforeclosure deal on the first call. It shows the customer that you need to check to see if this will be a fit and gives you control over the situation. They immediately know that you are a business and that they may not qualify for your services, when you say that you'll look at the deal and call them back.
8 Short Sale How To Steps:
You'll have to work to keep the homeowner's interest in a preforeclosure deal. There are eight short sale how to steps to make the first phone call work for you:
1) Make Introductions: Often on the phone Realtors and Investors are so anxious to offer their services that they don't take the time to introduce themselves. Tell the homeowner that you are a preforeclosure specialist giving people help in tough situations.
2) Ask for More: Ask the customer to tell you more about their story. Don't ask direct questions. Also, take the responsibility off of them and put it onto the house. Tell the homeowner you may not be able to help them out, but you will give them their best option.
3) Qualify the deal: You can't accept every deal and neither should you. It's best that you don't take any deals less than $100,000 or from people with bad attitudes. Avoid people who are angry, upset, have a "poor me" mentality. Also look at the amount owed on the mortgage. Banks work on percentages, so take this into account.
4) Asking for More Short Sale How To Information: There's more to the preforeclosure marketing deal than equity and location. Ask the homeowner if they have FHA loans or VA loans. You can get huge discounts on FHA loans and have more time to close, sometimes up to 90 days to close rather than 30 days. Make sure there are enough repairs to get a great discount but not so many that no one will look at the property. Ask about their mortgage holders. Different banks have special docs that are often required. Divorce often comes up in these foreclosure situations so ask about their family situation. Ask when they are moving? The system is becoming so fast that you can often have short sale negotiations completed in 30-60 days.
5) Explain Yourself: Use the previous step to move into talking about your preforeclosure services. You specialize in working with folks who are behind in payments. You don't charge anything for your services no matter the cost of the house or the preforeclosure deal. On the downside there are a lot of people who need your services, so you can't accept everyone.
6) Let's pretend: This is a very powerful system because it doesn't hold you accountable for everything. Say, "Let's pretend we're able to help you out. Does this sound like it would be a fit for you?" This is a very loose question that doesn't put them on the spot or make you sound like a shyster. If they say yes, go over all the documents.
7) Explain the Documentation: Go over exactly what the homeowner will need for your first meeting and later for the short sale package. Let the homeowner know that the bank needs copies of these too. There are six documents:
• 2 months of bank statements • 2 recent pay stubs • 2 years of tax returns
• Financial hardship letter describing what's going on with their house and why they are unable to pay, such as bankruptcy.
• Mortgage statements from the lender of the past due loan. You'll need copies of these to know where to start the short sale.
• Financial statement listing the homeowner's income at its lowest and all monthly expenses at their highest. Show the bank that the homeowner's expenses are higher than their income.
8) A Second Call: You can have a second person follow up with the homeowner. Make sure you edify this second person by raising the influence of something or someone. The homeowner will have a respect for him or her when they call. If it's just you, get another person who can call back the homeowners ASAP. For now, set yourself up and say you have other folks you need to check with to make sure this is a deal you can do.
Short Sale How To: The Second Phone Call
The first call is very important to a preforeclosure marketing deal. Your second call will be a breeze if you handle the first call well. There are four steps in the second call:
1) Offer Congratulations: Tell the homeowner that you'll be able to take the deal and congratulate them. Your services are much better than the others out there. The homeowners should feel good that they have chosen you rather than bad competition.
2) Go Over Documents: Go through all the documents that you will need again. Make sure the clients understand it and everything is clear.
3) Set up a Meeting: Pick a time to meet with the homeowners either at their house or at your office. Ask them if they have a pen to write it down when you state the time and place of the meeting. The last thing you want is to have them forget the appointment.
4) Confirm the Meeting: Your time is valuable so emphasize that strongly to the homeowner. Many clients are in this situation because they have trouble meeting obligations. They may not have the best scheduling or organization skills.
Follow these short sale how to steps-the first call, second call, and meeting-flow as seamlessly as possible and your preforeclosure marketing plans will go smoothly. Each completed call ensuring that you have a successful short sale package and a homeowner willing to sign on with you.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Monday, July 20, 2009
Anti Deficiency Laws - Virginia Has None
Anti Deficiency Laws
Some states have anti-deficiency laws. These are laws that protect purchasers of residential real property used for his/her primary residence pursuant to a purchase money mortgage. In the event that the purchaser fails to make the mortgage payment and the property is foreclosed and sold to pay the mortgage, a deficiency between the sale price and the outstanding balance of the mortgage could occur. Under anti-deficiency laws, the purchaser will not be held responsible for any deficiency the lender can only recover the property and the proceeds of a subsequent sale; the purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance.
What the Lender Can Recover
The lender can only recover the property and the proceeds of a subsequent sale. The purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance. This allows the purchaser to walk away from a property without owing a deficiency judgment amount. Anti-deficiency laws typically provide no protection for second mortgages or home equity lines. Also, there is no protection when the property is not used as the primary residence of the purchaser.
Anti-Deficiency Laws
While anti-deficiency laws can protect a homeowner in some cases, the majority of Americans have recently obtained two loans in the purchase of homes, often referred to as a "piggy-back mortgage." The first mortgage would have been for 80 % of the purchase price with all or a portion of the balance of the purchase price obtained by means of a home equity line of credit or second mortgage. If the first loan is foreclosed and the amount of the sale is enough to only pay off the first lender, the second lender will be entitled to sue the owner for the value of its loan. Many anti-deficiency laws won’t protect the homeowner for amount owed on the second loan.
State Foreclosure Deficiency Laws (Virginia Does Not Have an Anti Deficiency Law)
ALASKA: Alaska has a broad form of anti-deficiency statute that precludes a deficiency judgment following the completion of a no judicial foreclosure.
ARIZONA: Arizona's anti-deficiency statutes prevent a lender from suing a person for any losses on a home after foreclosure.
CALIFORNIA: California's anti-deficiency law applies only to funds used to purchase a residence. The anti-deficiency law does not apply to additional financing such as second mortgages or home-equity loans.
FLORIDA: In Florida, mortgages must be foreclosed by filing a lawsuit in court. Florida is unusual in that the state has passed few statues regulating foreclosures.
MASSACHUSETTS: A proper sale prevents the borrower from exercising any right to reclaim the property through redemption. If the foreclosure sale proceeds are not enough to pay off the lender, then the borrower is liable for the deficiency.
NORTH DAKOTA: The lender may not ask for a deficiency in the foreclosure suit if it has already brought another suit just to collect on the loan. Any cash surplus from the sale, beyond that needed to pay off the mortgage and the foreclosure costs must be paid to the borrower.
OREGON: A deficiency judgment cannot be obtained through a non-judicial deed of trust foreclosure by advertisement.
SOUTH CAROLINA: Deficiency judgments are permitted.
TEXAS: Deficiency judgments can only be for the difference between FAIR MARKET VALUE and the balance owed on the loan. There is no right of redemption.
Some states have anti-deficiency laws. These are laws that protect purchasers of residential real property used for his/her primary residence pursuant to a purchase money mortgage. In the event that the purchaser fails to make the mortgage payment and the property is foreclosed and sold to pay the mortgage, a deficiency between the sale price and the outstanding balance of the mortgage could occur. Under anti-deficiency laws, the purchaser will not be held responsible for any deficiency the lender can only recover the property and the proceeds of a subsequent sale; the purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance.
What the Lender Can Recover
The lender can only recover the property and the proceeds of a subsequent sale. The purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance. This allows the purchaser to walk away from a property without owing a deficiency judgment amount. Anti-deficiency laws typically provide no protection for second mortgages or home equity lines. Also, there is no protection when the property is not used as the primary residence of the purchaser.
Anti-Deficiency Laws
While anti-deficiency laws can protect a homeowner in some cases, the majority of Americans have recently obtained two loans in the purchase of homes, often referred to as a "piggy-back mortgage." The first mortgage would have been for 80 % of the purchase price with all or a portion of the balance of the purchase price obtained by means of a home equity line of credit or second mortgage. If the first loan is foreclosed and the amount of the sale is enough to only pay off the first lender, the second lender will be entitled to sue the owner for the value of its loan. Many anti-deficiency laws won’t protect the homeowner for amount owed on the second loan.
State Foreclosure Deficiency Laws (Virginia Does Not Have an Anti Deficiency Law)
ALASKA: Alaska has a broad form of anti-deficiency statute that precludes a deficiency judgment following the completion of a no judicial foreclosure.
ARIZONA: Arizona's anti-deficiency statutes prevent a lender from suing a person for any losses on a home after foreclosure.
CALIFORNIA: California's anti-deficiency law applies only to funds used to purchase a residence. The anti-deficiency law does not apply to additional financing such as second mortgages or home-equity loans.
FLORIDA: In Florida, mortgages must be foreclosed by filing a lawsuit in court. Florida is unusual in that the state has passed few statues regulating foreclosures.
MASSACHUSETTS: A proper sale prevents the borrower from exercising any right to reclaim the property through redemption. If the foreclosure sale proceeds are not enough to pay off the lender, then the borrower is liable for the deficiency.
NORTH DAKOTA: The lender may not ask for a deficiency in the foreclosure suit if it has already brought another suit just to collect on the loan. Any cash surplus from the sale, beyond that needed to pay off the mortgage and the foreclosure costs must be paid to the borrower.
OREGON: A deficiency judgment cannot be obtained through a non-judicial deed of trust foreclosure by advertisement.
SOUTH CAROLINA: Deficiency judgments are permitted.
TEXAS: Deficiency judgments can only be for the difference between FAIR MARKET VALUE and the balance owed on the loan. There is no right of redemption.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
If you are in the process of Foreclosure or maybe facing Foreclosure soon, Consult Your Case for Free with a local Charlottesville Certified Short Sale Specialist to see which legal options you have available.
Why a Deed in Lieu of Foreclosure is a Bad Thing
A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower ) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.
How a Deed in Lieu of Foreclosure Works
In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.
Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.
Neither the borrower nor the lender is obliged to proceeed with the deed in lieu of foreclosure until a final agreement is reached.
Looks easy and sounds good right? Well, not if you are the bank...and that generally becomes a problem for the homeowner. Why would this be so difficult to get the bank to voluntarily agree to this situation? Because the homeowner generally has no equity in their property when they pursue this option. So if the bank does a Deed in Lieu, they have the EXACT SAME PROBLEM that the homeowner did. They have no equity in a property that they now have to move. When a bank sees this, it is very hard to get them to voluntarily enter an agreement to take the deed to the house.
Banks don't want to own houses. They want to lend money and collect interest. If you want a better understanding of how mortgages connect the individual homeowner to Wall Street, check out this link.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
How a Deed in Lieu of Foreclosure Works
In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.
Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.
Neither the borrower nor the lender is obliged to proceeed with the deed in lieu of foreclosure until a final agreement is reached.
Looks easy and sounds good right? Well, not if you are the bank...and that generally becomes a problem for the homeowner. Why would this be so difficult to get the bank to voluntarily agree to this situation? Because the homeowner generally has no equity in their property when they pursue this option. So if the bank does a Deed in Lieu, they have the EXACT SAME PROBLEM that the homeowner did. They have no equity in a property that they now have to move. When a bank sees this, it is very hard to get them to voluntarily enter an agreement to take the deed to the house.
Banks don't want to own houses. They want to lend money and collect interest. If you want a better understanding of how mortgages connect the individual homeowner to Wall Street, check out this link.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Virginia Among the Top 10 in Foreclosure Filings
The US Foreclosure Market Report was published by RealtyTrac. It has some big numbers and shows where the Charlottesville Real Estate Market is headed along with the state of Virginia and the Nation. I have copied the report below for you to have.
1.9 MILLION FORECLOSURE FILINGS REPORTED ON MORE THAN 1.5 MILLION U.S. PROPERTIES IN FIRST HALF OF 2009
By RealtyTrac Staff
Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.
“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac.
“Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”
View heat map and share your comments on this report.
Nevada, Arizona, Florida post top state foreclosure rates
More than 6 percent of Nevada housing units (one in 16) received at least one foreclosure filing in the first half of 2009, giving it the nation’s highest foreclosure rate during the six-month period. A total of 68,708 Nevada properties received a foreclosure filing from January to June, an increase of 23 percent from the previous six months and an increase of 61 percent from the first half of 2008.
Arizona registered the nation’s second highest state foreclosure rate in the first half of 2009, with 3.37 percent of its housing units (one in 30) receiving at least one foreclosure filing, and Florida registered the nation’s third highest state foreclosure rate, with 3.08 percent of its housing units (one in 33) receiving at least one foreclosure filing.
Other states with foreclosure rates ranking among the nation’s 10 highest were California (2.94 percent), Utah (1.46 percent), Georgia (1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho (1.26 percent) and Colorado (1.25 percent).
California, Florida, Arizona post highest foreclosure totals
A total of 391,611 California properties received a foreclosure filing in the first half of 2009, the nation’s highest total and 2.94 percent of the state’s housing units (one in 34) — the nation’s fourth highest state foreclosure rate. California foreclosure activity in the first half of 2009 increased nearly 14 percent from the previous six months and increased nearly 15 percent from the first half of 2008.
With 268,064 properties receiving a foreclosure filing in the first six months of 2009, Florida documented the second highest state total. Florida foreclosure activity in the first half of 2009 increased 7 percent from the previous six months and was up nearly 42 percent from the first half of 2008.
Arizona’s 89,799 properties receiving a foreclosure filing in the first six months of 2009 was the third highest state total. Arizona foreclosure activity in the first half of 2009 increased 13 percent from the previous six months and was up nearly 55 percent from the first half of 2008.
Other states with totals among the 10 highest in the country were Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937), Georgia (56,391), Texas (49,144) and Virginia (28,368).
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the first half of the year at the state and national level. Data is also available at the individual county level. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during six-month period, only the most recent filing is counted in the report.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
1.9 MILLION FORECLOSURE FILINGS REPORTED ON MORE THAN 1.5 MILLION U.S. PROPERTIES IN FIRST HALF OF 2009
By RealtyTrac Staff
U.S. Foreclosure Activity Up 11 Percent in Q2 to Highest Quarterly Total on Record
June Marks Fourth Straight Month with More Than 300,000 Properties with Filings
IRVINE, Calif. – July 16, 2009 – RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.
Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.
“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac.
“Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”
View heat map and share your comments on this report.
Nevada, Arizona, Florida post top state foreclosure rates
More than 6 percent of Nevada housing units (one in 16) received at least one foreclosure filing in the first half of 2009, giving it the nation’s highest foreclosure rate during the six-month period. A total of 68,708 Nevada properties received a foreclosure filing from January to June, an increase of 23 percent from the previous six months and an increase of 61 percent from the first half of 2008.
Arizona registered the nation’s second highest state foreclosure rate in the first half of 2009, with 3.37 percent of its housing units (one in 30) receiving at least one foreclosure filing, and Florida registered the nation’s third highest state foreclosure rate, with 3.08 percent of its housing units (one in 33) receiving at least one foreclosure filing.
Other states with foreclosure rates ranking among the nation’s 10 highest were California (2.94 percent), Utah (1.46 percent), Georgia (1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho (1.26 percent) and Colorado (1.25 percent).
California, Florida, Arizona post highest foreclosure totals
A total of 391,611 California properties received a foreclosure filing in the first half of 2009, the nation’s highest total and 2.94 percent of the state’s housing units (one in 34) — the nation’s fourth highest state foreclosure rate. California foreclosure activity in the first half of 2009 increased nearly 14 percent from the previous six months and increased nearly 15 percent from the first half of 2008.
With 268,064 properties receiving a foreclosure filing in the first six months of 2009, Florida documented the second highest state total. Florida foreclosure activity in the first half of 2009 increased 7 percent from the previous six months and was up nearly 42 percent from the first half of 2008.
Arizona’s 89,799 properties receiving a foreclosure filing in the first six months of 2009 was the third highest state total. Arizona foreclosure activity in the first half of 2009 increased 13 percent from the previous six months and was up nearly 55 percent from the first half of 2008.
Other states with totals among the 10 highest in the country were Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937), Georgia (56,391), Texas (49,144) and Virginia (28,368).
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the first half of the year at the state and national level. Data is also available at the individual county level. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during six-month period, only the most recent filing is counted in the report.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Almost 2 Million Foreclosure Filings This Year!
Nearly two million foreclosure filings were recorded during the first half of the year, according to the market research company RealtyTrac. One in every 84 homes in the United States has received at least one foreclosure filing, the company says.
RealtyTrac released its mid-year 2009 U.S. Foreclosure Market Report Thursday, which shows a total of 1,905,723 foreclosure filings — including default notices, auction sale notices, and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009. That figure represents a 9 percent increase from the previous six months and a nearly 15 percent increase from the first six months of 2008.
During the month of June alone, there were 336,173 properties with a foreclosure filing – the fourth straight month with more than 300,000, helping to boost the April through June total to the highest since RealtyTrac began issuing its report in 2005.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealetate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
RealtyTrac released its mid-year 2009 U.S. Foreclosure Market Report Thursday, which shows a total of 1,905,723 foreclosure filings — including default notices, auction sale notices, and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009. That figure represents a 9 percent increase from the previous six months and a nearly 15 percent increase from the first six months of 2008.
During the month of June alone, there were 336,173 properties with a foreclosure filing – the fourth straight month with more than 300,000, helping to boost the April through June total to the highest since RealtyTrac began issuing its report in 2005.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealetate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Friday, July 17, 2009
ALERT TO LOCK INTEREST RATE
Bonds are below the 25 and 200 day moving levels. Housing starts came in better than expectations. If it does not get back to these support levels we could be in for a wild ride. Reconmend locking at this time
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Thursday, July 16, 2009
Mortgage rates Charlottesville
Mortgage bonds are recovering to the 50 and 200 day moving average. The bonds are up 59 basis points fortth day. Cautiously floating. Will be interesting to see what happens to Citi which is a company that makes loans to small businesses.
Leonard Winslow, Dominion Trust Mortgage
(434) 767-2580 Cell
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Leonard Winslow, Dominion Trust Mortgage
(434) 767-2580 Cell
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
What is the Credit Crisis?
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
There are a couple of key things to take from this. One, it doesn't matter what you think about the area in which you live. YOU ARE NOT INSULATED FROM THIS. Yes, there are some markets that will be worse, like Detroit and the car industry, but EVERYONE will be affected.
Two, its coming to Charlottesville and fast. There have been more and more REOs and Short Sales in Charlottesville month after month. We have an over supply and not enough demand, leaving people who need to sell their home without the ability to do so. Prices are coming down, but there is not enough equity in every home to enable the homeowner to keep lowering the price to get a buyer without doing a short sale.
Three, agents and homeowners need to be aware and prepared for this. If you think the market is turning around, you are wrong. If you have a home listed and you can, SELL NOW, don't wait. It's going to get worse before it gets better. Refer to Preforeclosures Rising in Charlottesville, Charlottesville Real Estate Market Trends - Sold Statistics, Charlottesville Real Estate Market Trends - Months of Inventory, and the Alert To Lock Interest Rates from Leonard Winslow at Dominion Trust Mortgage with the bond Market struggling right now.
If you don't want to listen to me, call someone in Northern Virginia. They will tell you this is the EXACT SAME TREND they experienced in 2007 and look at their market now. Almost the whole market is REO and Short Sale driven.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Wednesday, July 15, 2009
ALERT TO LOCK INTEREST RATE
Producer price Index came out this morning higher than expectations. Also Intel reported higher than expected earning and painted a rosy picture. Bonds have moved lower (rates higher) on this news. Bonds are down 53 Bps. Lock your rate. Lender should be repricing for the worse.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Tuesday, July 14, 2009
ALERT TO LOCK INTEREST RATE
Mortgage bonds are down at the worse levels of the day. Advise to lock at this time. PPI numbers coming out tomorrow and could be hotter than expected. Stocks doing better and are draining money from bonds.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Monday, July 13, 2009
Why Banks Need Broker Price Opinions - BPOs
Why Banks Need Broker Price Opinions - BPOs: "Why Do Banks need Broker Price Opinions?
Asset managers and bank personnel make decisions on several properties every day. Reading through a lengthy 20 page appraisal and filtering out the critical information is a waste of their time. These asset managers need concise, financial documents that make their choices easier. That's why BPOs are so critical to their job. In addition, a BPO saves the bank over $200 per property compared with a standard appraisal. That money adds up quickly and saves the bank thousands and thousands of dollars a year.
Another reason BPOs are preferred by banks is that the turnaround time is much quicker than appraisals. BPOs can usually be performed by agents in under 48 hours. Many appraisers visit the property within 48 hours, but then require another day or two to process the information and create the full report."
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Asset managers and bank personnel make decisions on several properties every day. Reading through a lengthy 20 page appraisal and filtering out the critical information is a waste of their time. These asset managers need concise, financial documents that make their choices easier. That's why BPOs are so critical to their job. In addition, a BPO saves the bank over $200 per property compared with a standard appraisal. That money adds up quickly and saves the bank thousands and thousands of dollars a year.
Another reason BPOs are preferred by banks is that the turnaround time is much quicker than appraisals. BPOs can usually be performed by agents in under 48 hours. Many appraisers visit the property within 48 hours, but then require another day or two to process the information and create the full report."
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
What is a Broker Price Opinions - BPO?
Why Banks Need Broker Price Opinions - BPOs: "When a bank or asset manager obtains a new foreclosed listing to sell, they immediately need to know the home's value. Typically a bank will assign one to three agents to evaluate the approximate selling value of a home. These banks expect each agent to submit three comparable sold listings and three comparable active listings as well as an estimate of what the agent thinks the home will sell for.
A Broker Price Opinion is not as detailed as an appraisal and does not entail as much work. BPOs differ from Appraisals in a number of ways:
Appraisals typically cost over $300. Most BPOs pay brokers between $50 and $100.
Appraisals require detailed square footage measurements. BPOs rely on county assessors' recorded measurements.
Appraisals use a standard format recognized and used by lenders and mortgage professionals for precise property valuations. BPO's are prepared in different formats and are used simply as decision making tools for asset managers of each bank.
Appraisals are typically 15-20 pages long with detailed information on each aspect of a property. BPO's are usually 2 pages long with information pertaining only to a final selling price."
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
A Broker Price Opinion is not as detailed as an appraisal and does not entail as much work. BPOs differ from Appraisals in a number of ways:
Appraisals typically cost over $300. Most BPOs pay brokers between $50 and $100.
Appraisals require detailed square footage measurements. BPOs rely on county assessors' recorded measurements.
Appraisals use a standard format recognized and used by lenders and mortgage professionals for precise property valuations. BPO's are prepared in different formats and are used simply as decision making tools for asset managers of each bank.
Appraisals are typically 15-20 pages long with detailed information on each aspect of a property. BPO's are usually 2 pages long with information pertaining only to a final selling price."
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
ALERT TO LOCK INTEREST RATE
Mortgage bonds are down 31, Lenders may change there rates. If you have not done so, LOCK
Leonard Winslow, Dominion Trust Mortgage
434-760-2580
www.domininiontrustmortgage.co/leonard.winslow
Leonard Winslow, Dominion Trust Mortgage
434-760-2580
www.domininiontrustmortgage.co/leonard.winslow
Mortgage rates Charlottesville
Mortgage Bonds have begun the week by continuing to bounce around within a wide range between a key ceiling of resistance and floor of support.
In the news today, Wall Street banking analyst Meredith Whitney, who had made an early and accurate call predicting the demise in financial companies, has made some positive comments on the financial sector. Goldman Sachs and several other Banks are due to report Second Quarter earnings this week, and these reports could have a big impact on Stocks. The reports from earnings season could add to the volatility.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
In the news today, Wall Street banking analyst Meredith Whitney, who had made an early and accurate call predicting the demise in financial companies, has made some positive comments on the financial sector. Goldman Sachs and several other Banks are due to report Second Quarter earnings this week, and these reports could have a big impact on Stocks. The reports from earnings season could add to the volatility.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Mortgage Rate Charlottesville Upcoming Week Watch
This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting.
The first piece of data comes Tuesday morning with the release of June's Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.8% increase in the overall reading and a 0.1% rise in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected jump in the core reading could send mortgage rates higher Tuesday.
June's Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.5% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.
Next on tap is Wednesday's release of June's Consumer Price Index (CPI). It is a mirror of Tuesday's PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.6% increase in the overall index and a 0.1% rise in the core data. The core data is also considered to be the key reading because it gives us a more stable measure of inflat ion. Higher than expected readings could raise inflation fears and push mortgage rates higher both days.
June's Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.6% decline in production, indicating that the manufacturing sector showed weakening conditions during the month. That is basically good news for bonds, however, with seasonal shutdowns and auto-related weakness likely included, a sizable decline should not surprise many.
Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting or give any indication of the Fed's possible next move with mo netary policy.
There is no relevant monthly or quarterly data scheduled for release Thursday. Friday's only relevant data is June's Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don't see this data having much of an impact on mortgage rates Friday unless it varies greatly from forecasts.
Overall, I think we will probably see the most movement in mortgage pricing Tuesday or Wednesday due to the importance of the economic releases those days. The week's corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. If the major earnings reports show better than expected results, we can expect to see the major stock indexes rally. This would lead to a shift of funds from bonds to stocks and in the process bonds will fall. The results would be higher mortgage rates. The other possibility is weaker than expected results from the key companies that would lead to stock selling and a bond market rally. One thing is safe bet though- it will likely be an active week for the markets and mortgage rates. Accordingly, please proceed cautiously if still floating an interest rate.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
The first piece of data comes Tuesday morning with the release of June's Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.8% increase in the overall reading and a 0.1% rise in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected jump in the core reading could send mortgage rates higher Tuesday.
June's Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.5% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.
Next on tap is Wednesday's release of June's Consumer Price Index (CPI). It is a mirror of Tuesday's PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.6% increase in the overall index and a 0.1% rise in the core data. The core data is also considered to be the key reading because it gives us a more stable measure of inflat ion. Higher than expected readings could raise inflation fears and push mortgage rates higher both days.
June's Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.6% decline in production, indicating that the manufacturing sector showed weakening conditions during the month. That is basically good news for bonds, however, with seasonal shutdowns and auto-related weakness likely included, a sizable decline should not surprise many.
Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting or give any indication of the Fed's possible next move with mo netary policy.
There is no relevant monthly or quarterly data scheduled for release Thursday. Friday's only relevant data is June's Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don't see this data having much of an impact on mortgage rates Friday unless it varies greatly from forecasts.
Overall, I think we will probably see the most movement in mortgage pricing Tuesday or Wednesday due to the importance of the economic releases those days. The week's corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. If the major earnings reports show better than expected results, we can expect to see the major stock indexes rally. This would lead to a shift of funds from bonds to stocks and in the process bonds will fall. The results would be higher mortgage rates. The other possibility is weaker than expected results from the key companies that would lead to stock selling and a bond market rally. One thing is safe bet though- it will likely be an active week for the markets and mortgage rates. Accordingly, please proceed cautiously if still floating an interest rate.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Friday, July 10, 2009
Charlottesville Real Estate Market 2009 Mid Year Report
The Charlottesville Real Estate Market Report was release yesterday. I have shared the information with you below:
CAAR Market Report
2009 Mid-Year
Published by the Charlottesville Area Association of REALTORS®
Where Are We Now?
The pace of home purchases in the Charlottesville area continues to improve from the dismal 4th quarter of 2008, but sales lag well behind compared to last year. The sale of homes has been increasing month to month for six months in a row. The steady improvement is easy to predict with the seasonal upswing the market naturally experiences this time of year, but based on pending sales in the MLS, we may continue to see sales increase beyond the seasonal selling season. For the first time in many months, the number of contracts in June was up from the previous year. It will be interesting to see if this trend continues.
Fueling these homes sales is the significant decrease in real estate prices. This report will detail some statistics that indicate that home prices have fallen steeply (20% or more) and this has resulted in an increase in sales. There is some evidence that sellers are starting to embrace the current market environment and price their home accordingly. The average Days on Market (DOM) has been dropping in recent months, and the median time a property takes to sell is now only 75 days. That indicates that many homes – likely the ones priced correctly – are selling quickly.
Mid-Year Home Sales
There were 1131 homes sold in the Charlottesville area during the first six months of 2009, which was down 28% (-440 sales) from 2008. After the 1st quarter, annualized sales were down 33.9%, which demonstrates the 2nd quarter improvement. All local areas were down from last year: Albemarle -15.6%, Charlottesville -35.2%, Fluvanna -34.7%, Greene -24.5%, Louisa -38.4%, Nelson -39%, and Orange – 47.1%. Monthly sales for the region have improved slightly each month since November 2008, but much of that can be attributed to seasonal swings.
Sales in the Central Valley region were generated from the Greater Augusta MLS, which has more complete data on the Valley market than the CAAR MLS. Sales were down in the Valley by 25.5 % compared to last year.
Have Home Prices Slipped?
Based on the data from the CAAR MLS, we believe that the numbers clearly show a significant decrease in home prices. The median prices listed below are the middle of the market of properties that sold. Simply put, this is an indication of what buyers were willing/able to pay and is not a true reflection of individual home prices. It is probably safe to assume that a steady, year-to-year decrease in the median price is a good indication that prices are going down, but it is not an exact measurement.
We believe the number displays below provide compelling evidence that our local real estate market has experienced a noteworthy drop in home prices. The CAAR market reports have been discussing this trend since the Fall of 2007, but this report finally shows clear evidence of the decline. The one caveat that we need to make is that part of this median price decline is a reflection of an increase in home sales in the lower price ranges. Of the 719 homes that sold in the 2nd quarter, 509 were sold for $300,000 or less. This surge in the lower end of the market will naturally pull the median price down.
Each property is affected differently by this price decline. The only way to know what your home will sell for is to have a REALTOR® or appraiser prepare a comparative market analysis (CMA) for your property. This market is changing very quickly and to be up-to-date, you need to do a CMA every two weeks. Pricing a property correctly is the best way to sell it!
Overall, the median home price (including attached homes) declined $22,900 (-8.5%) compared to the first half of last year. All areas covered in this report showed a decline. Median prices for other locales include: Albemarle (-9.4%), Charlottesville (-6.8%), Fluvanna (-19.6%), Greene (-3.4%) Louisa (-20.8%), Nelson (-6.7%) Orange (-29.7%) and the Valley (-8%).
Median Sales Prices
Price Per Square Foot (Finished)
Another indicator that allows us to see the drop in home prices is a major drop in the price per square foot numbers. The average price per square foot of finished space in homes is not a scientific number, but a downward trend over the years clearly indicates a decrease in prices (and vice versa). According to the chart below, prices peaked in 2006 and have declined for the past three years. The $18 per square foot drop in 2009 is by far the largest decline we have experienced in recent years.
Inventory Heading in the Right Direction
The inventory of homes for sale in the Charlottesville area generally increases in the first half of the year, with many homes coming on the market for the spring selling season. The good news is that in 2009 we have seen the inventory of homes shrink – not enough, but it is heading in the right direction. Having this excess of inventory is causing many of the problems with our local housing market. Until we are able to reduce the number of homes for sale, we will continue to be in a strong buyer’s market with soft home prices and very creative incentives. That’s good for buyers, but it is not any better for the long-term housing market than the strong seller’s market we experienced just a few years ago.
Currently, we have 3,602 homes on the market, compared to 3,761 at this time last year. This small decrease from last year is a positive sign, but we have a long way to go before we see appropriate inventory levels in the 2,000 to 2,500 range. The median price of homes currently for sale is $299,000, which is $9,900 less than last year. The average DOM (days on market) of these homes is 155 days, which is four days more than last year and 30 days more than homes that have sold. The most telling statistic related to homes currently on the market is that the average price per square foot is $203 compared to $143 for homes that have sold in the first 6 months of 2009.
Housing affordability is the positive aspect of this market. There are 871 homes for sale $200,000 or less with an average DOM of 141 and an average price per square foot of $143. There are 289 homes currently on the market priced at a million dollars or more with an average DOM of 226.
Days on Market (DOM)
The average number of days a property is on the market is a great indicator of a housing market’s strength. The average DOM for the Charlottesville area has been steadily increasing for the past several quarters. This trend continued in the 2nd quarter, but the increase was just 3 days more than 2008’s mid-year number. Although the increase was only a modest 3 days, it still supports the fact that we have too many homes on the market for the amount of sales. Until we work the inventory of available homes down to a more manageable number, DOM will stay high. A balanced market should have a DOM of approximately 90, but we have not been in that range since 2007.
New Construction Still Slow
It is important to note that many “new” homes are not included in CAAR MLS statistics. It is very common for a buyer to contact a builder directly to custom build a home. With that said, the historical perspective of the pace of new home sales gives us a reasonably good picture of the market for new construction. As the chart below shows, new home sales are still struggling and until the inventory of homes for sale declines, new construction will lag.
Condos and Townhomes (Attached Homes)
The sale of attached homes is only reported in Charlottesville and Albemarle because very few properties in this category are located in other counties, except Nelson. Since the condos in Nelson are primarily in the Wintergreen Resort market, we have decided not to include them in this report. One of the more interesting numbers in this report is the small increase in the sale of attached homes in Albemarle that first showed up in the 2009 1st Quarter Market Report. Charlottesville attached home sales are down 33.3%, while Albemarle sales edged up 1.8% compared to 2008. The chart below shows the attached homes sold in 2009 compared to past years. Inventory levels of attached homes for sale are still high, with an average DOM of 174 for properties currently on the market. The median price of an attached home currently on the market is $219,900. The median price for an attached home that sold in the first six months of 2009 is $223,000 for Albemarle and $239,388 for Charlottesville.
Conclusions and Predictions
Although we have been recommending the need for sellers to reduce their prices under the current market conditions, evidence of these price reductions has not shown up until this quarterly report. There is a direct relation between lower prices and higher sales. As more and more sellers price their properties according to the current market, sales should continue to increase. Increased sales is not something we normally see in the second half of the year, but this year, fueled by realistic prices, low interest rates, tax credits, and pent-up demand, may be an exception. We should see a slow but steady improvement in the number of sales for the balance of the year.
By the 4th quarter of 2009, we will likely see a year-to-year sales improvement, but only because the 4th quarter of 2008 was so bad it will be hard not to beat. 2009 is slowly heading in a positive direction in terms of sales and inventory levels and we expect that trend to continue. We may see more evidence of price declines in future market reports as more and more sellers accept the reality of this market. Additional declines in prices are possible, but it will be hard to tell if these price drops are a result of more sellers finally pricing their properties based on the current market, or a real decline in home values. Only time, and future market reports, will reveal this to us.
This Quarterly Market Report is produced by the Charlottesville Area Association of REALTORS® using data from the CAAR MLS and the Greater Augusta MLS where noted. For more information on this report or the real estate market, pick up a copy of the CAAR Real Estate Weekly, visit www.caar.com, or contact your REALTOR®.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
CAAR Market Report
2009 Mid-Year
Published by the Charlottesville Area Association of REALTORS®
Where Are We Now?
The pace of home purchases in the Charlottesville area continues to improve from the dismal 4th quarter of 2008, but sales lag well behind compared to last year. The sale of homes has been increasing month to month for six months in a row. The steady improvement is easy to predict with the seasonal upswing the market naturally experiences this time of year, but based on pending sales in the MLS, we may continue to see sales increase beyond the seasonal selling season. For the first time in many months, the number of contracts in June was up from the previous year. It will be interesting to see if this trend continues.
Fueling these homes sales is the significant decrease in real estate prices. This report will detail some statistics that indicate that home prices have fallen steeply (20% or more) and this has resulted in an increase in sales. There is some evidence that sellers are starting to embrace the current market environment and price their home accordingly. The average Days on Market (DOM) has been dropping in recent months, and the median time a property takes to sell is now only 75 days. That indicates that many homes – likely the ones priced correctly – are selling quickly.
Mid-Year Home Sales
There were 1131 homes sold in the Charlottesville area during the first six months of 2009, which was down 28% (-440 sales) from 2008. After the 1st quarter, annualized sales were down 33.9%, which demonstrates the 2nd quarter improvement. All local areas were down from last year: Albemarle -15.6%, Charlottesville -35.2%, Fluvanna -34.7%, Greene -24.5%, Louisa -38.4%, Nelson -39%, and Orange – 47.1%. Monthly sales for the region have improved slightly each month since November 2008, but much of that can be attributed to seasonal swings.
Sales in the Central Valley region were generated from the Greater Augusta MLS, which has more complete data on the Valley market than the CAAR MLS. Sales were down in the Valley by 25.5 % compared to last year.
Have Home Prices Slipped?
Based on the data from the CAAR MLS, we believe that the numbers clearly show a significant decrease in home prices. The median prices listed below are the middle of the market of properties that sold. Simply put, this is an indication of what buyers were willing/able to pay and is not a true reflection of individual home prices. It is probably safe to assume that a steady, year-to-year decrease in the median price is a good indication that prices are going down, but it is not an exact measurement.
We believe the number displays below provide compelling evidence that our local real estate market has experienced a noteworthy drop in home prices. The CAAR market reports have been discussing this trend since the Fall of 2007, but this report finally shows clear evidence of the decline. The one caveat that we need to make is that part of this median price decline is a reflection of an increase in home sales in the lower price ranges. Of the 719 homes that sold in the 2nd quarter, 509 were sold for $300,000 or less. This surge in the lower end of the market will naturally pull the median price down.
Each property is affected differently by this price decline. The only way to know what your home will sell for is to have a REALTOR® or appraiser prepare a comparative market analysis (CMA) for your property. This market is changing very quickly and to be up-to-date, you need to do a CMA every two weeks. Pricing a property correctly is the best way to sell it!
Overall, the median home price (including attached homes) declined $22,900 (-8.5%) compared to the first half of last year. All areas covered in this report showed a decline. Median prices for other locales include: Albemarle (-9.4%), Charlottesville (-6.8%), Fluvanna (-19.6%), Greene (-3.4%) Louisa (-20.8%), Nelson (-6.7%) Orange (-29.7%) and the Valley (-8%).
Median Sales Prices
Price Per Square Foot (Finished)
Another indicator that allows us to see the drop in home prices is a major drop in the price per square foot numbers. The average price per square foot of finished space in homes is not a scientific number, but a downward trend over the years clearly indicates a decrease in prices (and vice versa). According to the chart below, prices peaked in 2006 and have declined for the past three years. The $18 per square foot drop in 2009 is by far the largest decline we have experienced in recent years.
Inventory Heading in the Right Direction
The inventory of homes for sale in the Charlottesville area generally increases in the first half of the year, with many homes coming on the market for the spring selling season. The good news is that in 2009 we have seen the inventory of homes shrink – not enough, but it is heading in the right direction. Having this excess of inventory is causing many of the problems with our local housing market. Until we are able to reduce the number of homes for sale, we will continue to be in a strong buyer’s market with soft home prices and very creative incentives. That’s good for buyers, but it is not any better for the long-term housing market than the strong seller’s market we experienced just a few years ago.
Currently, we have 3,602 homes on the market, compared to 3,761 at this time last year. This small decrease from last year is a positive sign, but we have a long way to go before we see appropriate inventory levels in the 2,000 to 2,500 range. The median price of homes currently for sale is $299,000, which is $9,900 less than last year. The average DOM (days on market) of these homes is 155 days, which is four days more than last year and 30 days more than homes that have sold. The most telling statistic related to homes currently on the market is that the average price per square foot is $203 compared to $143 for homes that have sold in the first 6 months of 2009.
Housing affordability is the positive aspect of this market. There are 871 homes for sale $200,000 or less with an average DOM of 141 and an average price per square foot of $143. There are 289 homes currently on the market priced at a million dollars or more with an average DOM of 226.
Days on Market (DOM)
The average number of days a property is on the market is a great indicator of a housing market’s strength. The average DOM for the Charlottesville area has been steadily increasing for the past several quarters. This trend continued in the 2nd quarter, but the increase was just 3 days more than 2008’s mid-year number. Although the increase was only a modest 3 days, it still supports the fact that we have too many homes on the market for the amount of sales. Until we work the inventory of available homes down to a more manageable number, DOM will stay high. A balanced market should have a DOM of approximately 90, but we have not been in that range since 2007.
New Construction Still Slow
It is important to note that many “new” homes are not included in CAAR MLS statistics. It is very common for a buyer to contact a builder directly to custom build a home. With that said, the historical perspective of the pace of new home sales gives us a reasonably good picture of the market for new construction. As the chart below shows, new home sales are still struggling and until the inventory of homes for sale declines, new construction will lag.
Condos and Townhomes (Attached Homes)
The sale of attached homes is only reported in Charlottesville and Albemarle because very few properties in this category are located in other counties, except Nelson. Since the condos in Nelson are primarily in the Wintergreen Resort market, we have decided not to include them in this report. One of the more interesting numbers in this report is the small increase in the sale of attached homes in Albemarle that first showed up in the 2009 1st Quarter Market Report. Charlottesville attached home sales are down 33.3%, while Albemarle sales edged up 1.8% compared to 2008. The chart below shows the attached homes sold in 2009 compared to past years. Inventory levels of attached homes for sale are still high, with an average DOM of 174 for properties currently on the market. The median price of an attached home currently on the market is $219,900. The median price for an attached home that sold in the first six months of 2009 is $223,000 for Albemarle and $239,388 for Charlottesville.
Conclusions and Predictions
Although we have been recommending the need for sellers to reduce their prices under the current market conditions, evidence of these price reductions has not shown up until this quarterly report. There is a direct relation between lower prices and higher sales. As more and more sellers price their properties according to the current market, sales should continue to increase. Increased sales is not something we normally see in the second half of the year, but this year, fueled by realistic prices, low interest rates, tax credits, and pent-up demand, may be an exception. We should see a slow but steady improvement in the number of sales for the balance of the year.
By the 4th quarter of 2009, we will likely see a year-to-year sales improvement, but only because the 4th quarter of 2008 was so bad it will be hard not to beat. 2009 is slowly heading in a positive direction in terms of sales and inventory levels and we expect that trend to continue. We may see more evidence of price declines in future market reports as more and more sellers accept the reality of this market. Additional declines in prices are possible, but it will be hard to tell if these price drops are a result of more sellers finally pricing their properties based on the current market, or a real decline in home values. Only time, and future market reports, will reveal this to us.
This Quarterly Market Report is produced by the Charlottesville Area Association of REALTORS® using data from the CAAR MLS and the Greater Augusta MLS where noted. For more information on this report or the real estate market, pick up a copy of the CAAR Real Estate Weekly, visit www.caar.com, or contact your REALTOR®.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com
Functional and Economic Obsolescence
Functional and Economic Obsolescence
Though many pieces of real estate are very similar, no two are the same. One home will almost always have idiosyncrasies that separate it from other properties, regardless of whether two properties share the same floor plan or design.
Differences in age, condition, location, and utility can yield different results, and often produce different home values as well.
Functional Obsolescence
When properties are built, they don’t always adhere to the standards of a given neighborhood, floor plan, or site design. When this happens, depreciation is caused by a loss of building utility, otherwise known as functional obsolescence. In other words, if a building has reduced usefulness due to poor design, the value must be reduced.
Examples include buildings that are too big or lavish within a certain area which is considered an overimprovement, or a property that is relatively small or poor compared those around it, which is considered an underimprovement. If a building is said to be out-of-place or poorly designed for its location, it could be considered functionally obsolete.
If a property lacks a feature such as sideyard, or only contains one bathroom despite having five bedrooms, functional obsolescence occurs. It can however be curable or incurable, depending on the situation. If it is possible to tear out a wall or add a room, assuming cost is less than the value benefit, it’s considered curable. Incurable obsolescence is typically defined as overimprovements that will suffer value loss whether intact or removed.
Economic Obsolescence
Also referred to as external, location, or environmental obsolescence, this type of depreciation occurs outside the subject property. Typically this type of obsolescence occurs sometime after the property is built, as the environment around the home changes.
Examples include airport noise, toxic waste, nuclear power plants, freeway noise, dust and air pollens, changes in zoning, and more. For this reason properties located next to the freeway or under the flight path will experience reductions in value. Some even say that economic obsolescence occurs when market demand changes. Consider a home with only one bathroom. If all the new properties in the area are being built with 2 or more bathrooms, obsolescence can occur.
Most economic obsolescence is incurable, mainly because it is out of the control of the owner of the subject property, and any effort to cure such a problem would be very costly and value depleting.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
Though many pieces of real estate are very similar, no two are the same. One home will almost always have idiosyncrasies that separate it from other properties, regardless of whether two properties share the same floor plan or design.
Differences in age, condition, location, and utility can yield different results, and often produce different home values as well.
Functional Obsolescence
When properties are built, they don’t always adhere to the standards of a given neighborhood, floor plan, or site design. When this happens, depreciation is caused by a loss of building utility, otherwise known as functional obsolescence. In other words, if a building has reduced usefulness due to poor design, the value must be reduced.
Examples include buildings that are too big or lavish within a certain area which is considered an overimprovement, or a property that is relatively small or poor compared those around it, which is considered an underimprovement. If a building is said to be out-of-place or poorly designed for its location, it could be considered functionally obsolete.
If a property lacks a feature such as sideyard, or only contains one bathroom despite having five bedrooms, functional obsolescence occurs. It can however be curable or incurable, depending on the situation. If it is possible to tear out a wall or add a room, assuming cost is less than the value benefit, it’s considered curable. Incurable obsolescence is typically defined as overimprovements that will suffer value loss whether intact or removed.
Economic Obsolescence
Also referred to as external, location, or environmental obsolescence, this type of depreciation occurs outside the subject property. Typically this type of obsolescence occurs sometime after the property is built, as the environment around the home changes.
Examples include airport noise, toxic waste, nuclear power plants, freeway noise, dust and air pollens, changes in zoning, and more. For this reason properties located next to the freeway or under the flight path will experience reductions in value. Some even say that economic obsolescence occurs when market demand changes. Consider a home with only one bathroom. If all the new properties in the area are being built with 2 or more bathrooms, obsolescence can occur.
Most economic obsolescence is incurable, mainly because it is out of the control of the owner of the subject property, and any effort to cure such a problem would be very costly and value depleting.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/
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