FHA Remains the Mortgage Lifeline

By Robert Freedman, Senior Editor, REALTOR® Magazine

Stevens doesn’t talk about concerns among lawmakers and in the media about whether FHA is getting over-extended or whether the safety measures the agency rolled out about a month and a half ago are working. These include requiring borrowers with a credit score of 580 or less to put up a minimum 10 percent down (it remains 3.5 percent down for those with higher credit scores) and upping the mortgage insurance premium. No doubt it’s too soon to tell what impact those changes are having.

But he does reiterate what has always made FHA a remarkably stable agency over its seven decades, and that’s its focus on owner-occupant borrowers and its requirement that applications be fully documented. As he tells Gil Gross, the show’s host, “We don’t do investment properties. We only do 30-year, fully amortizing, fixed-rate mortgages, and every loan is fully documented, so when we approve a borrower . . . we know their ability to repay that loan has been verified.”

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Inman: “An Economy and a Country to Invest in”

By Katie Tarbox, Senior Editor, REALTOR® Magazine

The opening session of Inman Real Estate Connect 2010 in New York was markedly more optimistic than just a year ago where practitioners gathered at the Marriott Marquis for the three-day conference. While still cautious, Brad Inman, the founder of Inman News, said he was encouraged by the fact that the stock market has been so bullish since March of last year in his kickoff speech.

However, he also warns that some hesitation is in order, and recommended watching the following closely: Read more

Is the New GFE an Improvement?

Happy New Year, everyone!

As usual, we’re ringing in the new year with a lot of unfinished business (health care reform, financial institution reform, and so on). One thing that was finally settled, however – after years of debate — was the federal government’s changes to the Good Faith Estimate and HUD-1.

Not so fast. It’s hard to find people in the real estate business, particularly mortgage brokers, who are happy with the changes. Wes Cordeau of Houston wrote to me in response to an article in REALTOR® Magazine:

“Unfortunately, the new GFE does not address two points of major importance: 1) How much to close and 2) How much is the monthly payment? In fact, the new GFE addresses closing costs in such a way as to confuse the borrower immensely, because it addresses the costs as ‘Total Settlement Charges” and does not include some important offsets, yet makes us include items that are historically paid by the seller. On page 1, it addresses the monthly payment in two sections–one concerning only principle, interest, and mortgage insurance and the other addressing only payment of escrows for taxes and property insurance. This is more confusing to the consumer! Everyone in this business understands that taxes, insurance, and HOA fees can can add hundreds to the monthly payment, yet they’re not addressed clearly in the GFE.

The fact that a three-page document has 42 pages of explanatory handouts and 51 pages of FAQs (four per page) tells me that this is the most ill-designed form I have ever seen!”

Although I haven’t experienced the forms as a consumer, having listened to Phil Schulman’s 90-minute explanation at NAR in San Diego (worth the time; you can access it at REALTOR.org’s RESPA page), I agree with Wes that the “simplified” forms raises as many questions as answers. Yes, the language is generally more clear, but I wish HUD had done some focus groups with consumers and real estate practitioners before they gave the forms the green light.

What do you think? Are the new GFE and HUD-1 an improvement over what we had before? Or are they going to cause new problems and delays at the closing table? What changes would you recommend?

Note: REALTOR® Magazine on Jan. 13 completed a video walk-through of the new GFE and HUD-1. Watch the how-to video to get a better understanding of how the forms are to be filled out.

Top 10 Real Estate Developments of the ’00s: #2

By Brian Summerfield, Online Editor, REALTOR® Magazine

We’re getting close! Here’s the second-ranked trend on our list of top real estate developments of this decade: Read more

Top 10 Real Estate Developments in the ’00s: #3

By Brian Summerfield, Online Editor, REALTOR® Magazine

We’ve cracked the top three! Here’s the next installment of our series on the top developments in real estate this past decade: Read more

Top 10 Real Estate Developments of the ’00s: #6

By Brian Summerfield, Online Editor, REALTOR® Magazine

Five down, five to go! In this installment of our top real estate developments of the decade, we examine an infamous issue for practitioners: Read more

Top 10 Real Estate Developments of the ’00s: #7

By Brian Summerfield, Online Editor, REALTOR® Magazine

Our countdown of the most significant developments in real estate during this decade continues with the seventh-ranked trend: Read more

Top 10 Real Estate Developments of the ‘00s

By Brian Summerfield, Online Editor, REALTOR® Magazine

Lately, it seems like everywhere I look on the Web, I find some kind of best-of list for the past decade. Not wanting us to be left out of this retrospective frenzy, I thought I’d compile my own list of the top 10 developments in real estate through the ‘00s.

Each day between now and Monday, Dec. 21, I’ll be overviewing the 10 best—and worst—things this decade had to offer for real estate professionals right here on Speaking of Real Estate. So, without further delay, here’s #10 on the list: Read more

Health Reform Is Gaining: Are You Covered?

By Robert Freedman, Senior Editor, REALTOR® Magazine

Few legislative efforts in Washington are more complicated than health care reform. The legislation that’s now under debate in the Senate is more than 2,000 pages long (2,074 to be exact).

Given the breadth and depth of the legislation in the House as well as in the Senate, it’s a full-time job understanding what the impact will be on you should a bill finally make its way to President Obama for signature—something that could actually happen in another month or so. Read more

A Quiet NAR Success on Its Calls for Action

By Robert Freedman, Senior Editor, REALTOR® Magazine

There are many reasons for the success of NAR’s most recent Call for Action, to which more than 18 percent of NAR members—a record— responded.

First and foremost is the compelling subject of the CFA: getting the home buyer tax credit extended and expanded. As NAR Chief Ecionomist Lawrence Yun has been saying for weeks, residential home prices are stabilizing and are on the cusp of heading up—the all-important precursor to restored confidence in homeownership. We’re relying on that improved confidence to boost sales, tighten inventories, and restore healthy credit markets.

Given that, letting the credit expire on Nov. 30 could have stopped sales momentum dead in its tracks.

It was also huge that Congress added the $6,500 credit for repeat buyers, because throughout 2009 much of the sales weight has been carried by first-time buyers. For market stability, repeat buyers needed to get off the fence and Congress saw that. Read more

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