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Metro Atlanta Real Estate News

Sales & Appraisal Expertise in Atlanta Since '89

By Hank Miller - Broker/Appraiser | Broker in Alpharetta, GA
  • FHFA Director Loosens Mortgage Requirements to "Keep Liquidity in Markets"

    Posted Under: Market Conditions in Atlanta, Home Buying in Atlanta, Financing in Atlanta  |  May 16, 2014 1:57 PM  |  337 views  |  No comments

    Demonstrating the epic stupidity that legends are made of, the esteemed new head of the FHFA Mel Watt made a few announcements on Tuesday. In short, they are designed to help the banks and expand credit access for “underserved borrowers.” Those folks in the middle…well you know the drill. These announcements reverse those in place under former head of the FHFA Edward J. DeMarco.

    The FHFA’s new director, Mel Watt, made several announcements Tuesday that  aim to maintain Fannie Mae and Freddie Mac’s role in the housing Bowl-of-Stupidmarket as well as broaden home lending by the mortgage giants. Watt also announced that the FHFA would ease standards that it provides to banks on buying back faulty loans. For example, lenders will now allow two delinquent payments in the first 36 months after their acquisition of a loan. The change is intended to increase mortgage lending. Many banks tightened credit standards, partially because of a requirement that they take losses if a borrower defaults. “Our overriding objective is to ensure that there is broad liquidity in the housing finance market and to do so in a way that is safe and sound,” Watt said.

    Seriously? This is must be because banks have suffered so during the crash and have been so cooperative with owners trying to do the right things. They care very deeply and want to help – just watch the TV commercials. Just don’t dare ask for help…or bring up a bailout or any of the taxpayer money they receive.

    Watt also announced that Fannie Mae and Freddie Mac would keep current loan limits in place that the mortgage giants guarantee. The FHFA had planned to reduce the current limits on loans, which had set off an outcry in the housing industry that such a move could further hamper lending. Fannie Mae and Freddie Mac own or guarantee about 60 percent of mortgages in the United States. Last year, the FHFA had announced it was weighing a plan to gradually reduce the maximum loan amounts that Freddie Mac and Fannie Mae would be able to purchase for single-family mortgages. The FHFA wanted to reduce the current loan limits from $417,000 in most areas of the country and $625,500 in high-cost areas to $400,000 and $600,000, respectively, a reduction of 4.1 percent.

    This really isn’t a bad move. The best move would be to underwrite a borrower depending on their entire financial picture – and not try to jam everyone into one box. How many well qualified and responsible buyers with steady well paying jobs and 750+ credit scores get roasted on a spit?

    FHA also released its “Blueprint for Access” which outlines the additional steps the agency is taking to expand credit access for “underserved borrowers.” In the Blueprint for Access, the FHA announced that it is launching a pilot program called Homeowners Armed with Knowledge, or HAWK for short, that further incorporates housing counseling into the home-buying process for borrowers using FHA-insured financing. Under the HAWK program, homebuyers will qualify for savings on their FHA-insured loans by completing HUD-approved housing counseling provided by independent nonprofit organizations. The FHA said that the counseling is designed to help buyers understand the rights and responsibilities of homeownership and to improve buyers’ budgeting skills and housing decisions.

    Can some define “underserved” borrowers? None of articles, including the FHA site, define this term. At least that flashy HAWK acronym provides a feeling of strength…no doubt this is a winning move for the economy. Once that counseling is completed, success is all but certain. Best of all, it allows the administration the opportunity to call the economy and the real estate market “improving and strong”.

    What a clown show.

    - See more at: http://hankmillerteam.com/2014/05/14/mortgage-lending-standards-dropped/#sthash.XVNiO7zo.dpuf
  • Should You Lock an Interest Rate?

    Posted Under: Market Conditions in Roswell, Home Buying in Roswell, Financing in Roswell  |  December 17, 2013 2:27 PM  |  459 views  |  No comments

    Interest rates fluctuate frequently, often depending on the news. If you are considering buying a home or refinancing your home, your loan officer may suggest locking in the interest rate on your loan. There are some valid reasons why this is a good idea including:

    Saving Money For The Long-term

    Over the life of a loan, an increase of as little as one-quarter of a percent can cost thousands of extra dollars. Spending a small amount of money now to lock in a rate can save money over the life of the loan. Your loan officer will explain the difference in rate increases initially, over a year and over the life of the loan.

    You May Not Qualify At Higher Rates

    Whether you are considering refinancing your property or you are buying a new home, you may discover your rate just qualified for your loan to meet the required debt-to-income ratios. An interest rate increase may mean you will not qualify for the loan.

    Closing Times May Impact Their Decision

    If a loan is scheduled to close within 30 days, it may be a good idea to consider locking in the interest rate your loan officer is offering. The lock will help protect against potential increases in rates during that period of time. This will help you plan your final closing costs and ensure your monthly payments will not be higher that estimated.

    Don’t Forget: Upcoming News Impacting Rates

    There are often issues that will have a serious impact on interest rates. For example, the current Quantitative Easing program by the Fed is keeping rates low. Should the Fed reveal they intend to modify or taper their program; chances are fairly good that rates will take a slight hike. Loan officers can help you unwind the news and make sure your refinance is not negatively impacted by interest rate increases.

    Not every refinance customer will want or need to lock in their interest rates. However, once a loan has been approved, you should consider talking with your loan officer about the potential of locking in. The small fee that may be required could save you thousands of dollars over the life of your loan.

    If you have questions about anything to do with mortgages, call Kevin Ramirez at 404-610-9883 or email him at kevinr@fairwaymc.com

    - See more at: http://hankmillerteam.com/2013/12/17/should-home-buyers-lock-in-interest-rates/#sthash.dkqy8Yac.dpuf
  • Case-Shiller Not Accurate Where it Counts

    Posted Under: General Area in Atlanta, Market Conditions in Atlanta, Financing in Atlanta  |  December 17, 2013 2:24 PM  |  454 views  |  No comments

    Location, location, location. Remember that any time real estate reports are provided. One size reporting does not fit in Atlanta; reports like Case-Shiller and even local MLS data is fine for national and regional audiences but meaningless at the micro market level. Median prices are up over the last year – but how much and why has to be explored. Each area is different; small areas within even the MLS area are different. Looking down to the high school-middle level is a good idea and being specific with the type of home considered is also advisable.

    Atlanta is far to diverse to be considered as a single entity. How does activity in East Point correlate to activity in Cumming? Snellville data relate to Douglasville? And those distant points to Midtown and VA Highlands? North Fulton to South Fulton? The AJC touched on this and cautions readers to keep the data in context (CLICK HERE if they want to charge to read it). Case-Shiller say’s the Atlanta market is up 19% and MLS data shows it up 35%. Please.

    Consider the big picture (all Atlanta market MLS regions) then the breakout by smaller MLS regions for 3rd qtr ’13 activity:

    • 20%+- of all sale were distressed but areas ranged to as low as 4%+- to almost 50%+-
    • 3rd qtr year over year total sales were down 1%+- but that ranged from down 31%+- to up 90%+-
    • Sept months of supply was 3.3 months, ranged from 2.1+- to 7+-
    • Change in median price year over year for Atlanta shows an increase of 35%+- with ranges of -1%+- t0 +230%+-. That’s correct, two MLS areas saw over 100% increases, three saw 75%+- increases – thank you investors.

    The impact of institutional investors cannot be overstated. Nor can the fact that many of these 50%+ median price increases are in the sub 100K almost exclusive investor areas. Pull that out and the picture changes.

    Home buyers in Atlanta are getting smarter and more savvy everyday, the transparency allowed by the internet is a very good thing. Hopefully, home sellers understand that the 30 second head line is not to be taken literally; we saw many overplay their hand during 2013 and we expect to see overpriced homes hit the market as 2014 opens. Remove the influence of institutional investors on this data and an entirely different – and less robust – picture is painted. And don’t forget that those investors will be dumping inventory as soon as something better comes along.

    Success for active and perspective home buyers and home sellers is founded upon preparation. Those educated about the market with a basic understanding of the process will find success; some quicker than others.

    Please feel free to contact HMT with any appraisal questions or for a detailed look at the data for any market. CLICK HERE and HERE to see a sample reports by school and CLICK HERE to see one comparing price points in zip codes. Of course the Atlanta Real Estate Market Conditions page is available with data for over 100 area zips.

    - See more at: http://hankmillerteam.com/2013/11/27/keep-reported-price-increases-in-atlanta-home-values-in-context/#sthash.YztJg2zz.dpuf
  • Strategic Defaulters being Hunted for Deficiencies

    Posted Under: Market Conditions in Roswell, Financing in Roswell, Foreclosure in Roswell  |  October 18, 2013 7:22 AM  |  416 views  |  1 comment

    They’re back, they’re mad and on the hunt for strategic defaulters. We wrote about the OIG “mortgage cops”  about a year ago; sounds like they’re back at it.  Fannie and Freddie have been tasked to collect unpaid mortgage debt from “strategic defaulters,” those underwater home owners who skipped out on their mortgages even though they had the ability to pay. If a home is sold at foreclosure but the proceeds don’t cover the outstanding balance of the home owner’s loan, the mortgage giants can pursue judgments against the home owner forcing him or her to pay the deficiency. And the Federal Housing Finance Agency, which regulates Fannie and Freddie, is pushing them to step up their efforts to do just that.

    uncle sam

    "According to the report by the inspector general’s office criticizing Freddie Mac’s lax practices, the company has left billions on the table. The report found that Freddie Mac, which has received some $71 billion in taxpayer assistance since it was taken into conservatorship by the FHFA in September 2008, did not refer nearly 58,000 foreclosures with estimated deficiencies of some $4.6 billion for collection by its vendors. As of December, the big secondary mortgage market company had nearly 50,000 foreclosures still on its books, carrying a value of some $4.3 billion. And as of March 31, it held 364,000 mortgages that were 60 days or more delinquent and were, therefore, likely foreclosure candidates."

    "Fannie Mae’s portfolio of troubled assets is much larger. At the end of last year, it owned more than 105,000 foreclosed properties valued at $9.5 billion and carried a “substantial” shadow inventory of 576,000 seriously delinquent mortgages that were 90 days late or more and likely to end up in foreclosure. Fannie Mae earned a slap on the wrist for not taking any action on nearly 30,000 accounts because statutes of limitation had expired or were about to. For the same reason, the report says, it failed to pursue deficiencies of some 15,000 accounts that already had been reviewed for collection by its vendors."

    The FHFA says Fannie and Freddie haven’t been aggressive enough in going after strategic defaulters, and the inspector general’s office notes that the GSEs could cut their losses by making it more of a priority. The inspector general’s office estimates that Fannie and Freddie could recoup billions of dollars if they made strategic defaulters pay up. So far, the office has found that Freddie Mac did not refer 58,000 foreclosures — estimated deficiencies of $4.6 billion — for collection.

    "The FHFA criticized the GSEs for failing to even attempt to pursue former homeowners for deficiencies after their homes were sold in the wake of foreclosure, estimating that about 58,000 foreclosures with estimated deficiencies were simply abandoned – at a cost of some $4.6 billion. Although many of those foreclosures were likely the result of true financial hardship, “not going after defaulters where it is permissible to do so not only reduces the chances of recovering potentially billions [but]…incentivizes other borrowers to walk away from mortgages they can afford to pay,” said the FHFA."

    Some states do not allow deficiency judgments, but in more than 30 states and the District of Columbia, they are permissible. The FHFA says it will more closely monitor how effective Fannie Mae and Freddie Mac are in collecting deficiency judgments.

    We have many posts on strategic default and about the ability for lenders to pursue deficiency judgments, they might be worth a look. Of course if you find yourself in this position, speaking with an experienced attorney is a must to ensure a complete understanding of GA law. If you’re contemplating foreclosure or short sale, drop us an email as HMT works closely with Windward Law Group to help owners navigate the short sale process in GA. See the full article referenced here.

    - See more at: http://hankmillerteam.com/2013/10/17/fannie-mae-freddie-mac-vow-to-pursue-strategic-defaulters/#sthash.7SMHuUbD.dpuf
  • FHA Continues to Encourage Failure

    Posted Under: Market Conditions in Alpharetta, Home Buying in Alpharetta, Financing in Alpharetta  |  October 18, 2013 7:00 AM  |  336 views  |  No comments

    For the first time in it’s 79 year history, FHA will require a $1.7 BILLION dollar bailout. If FHA were held to the same standards as private mortgage insurers, this hole would be $25 BILLON.  One in eight families getting an FHA loan from 1975 to 2011 has already been or will end up in foreclosure. As the bubble developed, the Department of Housing and Urban Development (HUD) forced Fannie Mae, Freddie Mac, and private lenders to adopt, and even go beyond, FHA’s weak underwriting practices. In 2004, HUD took credit for mandating looser underwriting by what it termed a “revolution in affordable lending”. In other words, if you have a pulse you qualify.

    This trend continues as the Fed seems to be happy placing marginal and poorly qualified buyers into situations where the outcome is almost certain. But some still insist on feigning surprise and shock:

    “This is incredibly disappointing,” stated Rep. Randy Neugebauer, R-TX. “I’m shocked to find out now that FHA will require nearly double the amount they projected. Unfortunately, the Administration is losing credibility on this issue.” He continued, “This news is a clear sign that we must act quickly to reform the FHA, or taxpayers will be paying the price again and again.”

    Yes, we must act quickly – because that’s what Washington is known for; being quick and decisive. The FHA draw does not need direct authorization from Congress, which means there is no ‘must pass’ piece of legislation. What this means is that like the debt ceiling, there is no reason to even slow down – just keep things rolling and let the tax payers absorb the hit. Spending equals a recovering economy so keep it up.

    Hold on – Maxine Waters says it’s not as dire as the data indicates….

    “Although this one-time transfer of funds from the Treasury is legally necessary, it’s important to note that FHA is far from bankrupt, holding over $30 billion in reserves and continuing to generate revenue,” explained Rep. Maxine Waters, D-Calif. She concluded, “Above all, we must strive to have a healthy, viable FHA that can continue to facilitate homeownership for first-time and low-income homebuyers, while standing ready in the unfortunate event of another housing downturn.”

    Her comment is so asinine and absurd that it almost defies logic – but this is the standard approach by Washington. Keep pumping money into things where failure is all but certain and then have the tax payers write the bail out check. Washington assumed a stranglehold over the real estate industry (I mean helped) and they continue to pump money into MSBs to artificially prop up the market. This will end in disaster, the only question is who will catch the blame?

    Home buyers know the mortgage market is chaotic at best – many times it seems as if the best qualified have the most trouble…we’ve posted many articles over the years about qualifying for mortgages. The only thing certain is that no one is surprised by anything anymore. Nightmare at FHA is a great site for all things wrong with FHA – hit the map and you can see data down to the zip code for Atlanta and many other areas around the nation.

    atlanta FHA

    - See more at: http://hankmillerteam.com/2013/10/17/fha-continues-to-encourage-failure/#sthash.ys0sb34q.dpuf

    www.hmtatlanta.com
  • The Economic Slump? Uh...It Was Real Estate Crash, Genius!

    Posted Under: General Area in Atlanta, Market Conditions in Atlanta, Financing in Atlanta  |  October 1, 2013 2:53 PM  |  509 views  |  No comments

    Sometimes the obvious is just too easy an answer. “We” can quickly deduce why something happens but for reasons unknown, “we” feel compelled to complicate the explanation. The “we” is “they”; politicians, domestic business, international business, banks, Wall Street, the media…all of this brain power and yet there remains vigorous discussion on what led the economy into this deep recession and why it’s taking so long to get back on track. Five years after the economic collapse, there remains a clear and obvious answer – the housing bubble popped and dragged everything down. Quite simple and quite obvious, even to the real estate and economic "experts" ...even if they can't see the obvious.eschew-obfuscation_design

    Dean Baker hits it perfectly in a recent article:

    Many economists and business writers view the duration and severity of the downturn as being a mystery. They argue that it has something to do with the financial crisis, although the exact nature of the relationship is often not quite clear, with the financial crisis looming as a dark cloud hanging over the head of an otherwise healthy economy.

    Fortunately, for arithmetic fans the story was never very difficult. In the last business cycle the economy was being driven in large part by a housing bubble. The unprecedented run-up in nationwide house prices lead to booms in both residential construction and consumption. This was easy to see even before the bubble burst and should be completely apparent to everyone now. In the 1980s and 1990s before the bubble began to drive the housing market, residential construction accounted for an average of less than 4.4 percent of GDP. At the peak of the bubble-driven building boom in 2005, construction rose to more than 6.5 percent of GDP.

    Many things happened after 9/11, one of them was a concerted effort to raise the rate of home ownership. Some observers commented that it appeared as if ownership were being made a “right”; that the ease of money, relaxation of requirements and increased availability of inventory seemed to be a sanctioned process. We all know what happened as this played out and we all know what has happened since the bubble burst.

    The $8 trillion in equity created by the housing bubble made homeowners feel wealthier. They consumed based on this wealth, believing that it would be there for them to draw on for their children’s education, their own retirement or for other needs. When the bubble burst, homeowners cut back their consumption since this wealth no longer existed. However contrary to what you often read in the paper, consumption is not currently low, it is actually quite high when compared with any time except the years of the stock and housing bubbles.

    In the decades of the ’60s, ’70s, and ’80s, people on average consumed less than 90 percent of their after-tax income, meaning that the saving rate was over 10 percent. The share of income going to consumption rose sharply in the 1990s due to the stock bubble and then even more in the last decade due to the housing bubble. Consumption peaked at more than 97 percent of income in 2005.

    America is no longer a manufacturing power, we are a consumer nation. We are an economy that is based upon spending, not saving. Keeping it simple, unless we live within our means we run a deficit. Who couldn’t see the disaster coming directly as a result of the housing bubble. Of course Wall Street, banks and even Washington are partially to blame, but let’s not forget to assign personal responsibility. How many people bought homes they couldn’t afford, used them as ATM machines, bled out every dollar and then realized…uh oh? Some were caught by surprise, many others just didn’t care and ran wide open until they ran out of money….and then pointed fingers in every direction.

    As Baker concluded:

    A long and severe downturn was entirely predictable. There is no mystery about the downturn or the potential routes to recovery. The only problem is that the people in control of economic policy have no interest in taking the steps necessary to bring the economy back to full employment. And most of the people who write about the economy are doing their best to say that it is all just so mysterious since it is far too simple for them to understand. Happy 5th anniversary!

    This is a worth a read – unless you prefer the obfuscation and babble that “they” spew.

    Hank Miller,SRA 
    Associate Broker & Certified Appraiser
    Atlanta Communities Real Estate
    678-428-8276 direct
    hank@hmtatlanta.com
    www.hmtatlanta.com 

  • You Do In Fact Have to Qualify for a Mortgage

    Posted Under: General Area in Roswell, Home Buying in Roswell, Financing in Roswell  |  October 1, 2013 2:38 PM  |  477 views  |  No comments
    30% of Americans are unlikely to qualify for a mortgage, despite historically low interest rates and levels of affordability not seen in years. Zillow looked at 13 million loan quotes and more than 225,000 purchase loan requests on Zillow Mortgage Marketplace in September, comparing them to a similar study conducted in September 2010.

    Borrowers who have FICO credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote in September. This was unchanged from three years ago, even if they offered a relatively high downpayment of 15%-25%. According to data provided by myFICO.com, nearly 28.4% of Americans have a credit score of 620 or lower.

    At the same time, the bar has been set higher for those looking to get the lowest available mortgage rates. Typically, the best mortgage rates are reserved for borrowers with credit scores of 740 or higher, compared to 720 in 2010. Data revealed that 40.3% of Americans currently fall into this category. Three years ago, 47% of Americans had credit scores over 720 and were able to get the best rates. Borrowers with credit scores above 740 did not receive significantly better mortgage rates.

    mortgage deniedIn the September study, borrowers with credit scores of 740 or above got an average low annual percentage rate of 4.42% for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 739 received APRs, on average, between 5.09%-4.47%, with the APR rising as the credit score drops. Those with credit scores below 620 received too few loan quotes to calculate the average low APR.

    “Despite all-time high levels of affordability in the housing market, tightened lending standards mean that nearly one-third of Americans are unlikely to be able to achieve the American Dream of homeownership because they can’t qualify for a mortgage due to a low credit score,” said Erin Lantz, director of mortgages at Zillow.

    “Your credit score is the single most important factor in determining your mortgage interest rate and monthly payment. To avoid any surprises when buying a home, check your credit score and report at least six months before you intend to buy to see if there are any costly inaccuracies, pay down high-balance lines of credit and make sure your bills are always paid on time,” he added.

    However, let’s never lose site of the fact that Washington continues to push for lenders to approve buyers with weak credit, this as FHA announced that they will need a $1.7B bailout to cover shortfalls and losses – this the FIRST TIME EVER that this has been required. And let’s not forget the administration just announced that they will continue to pour $85 BILLION a month into the economy to keep it propped up and maintain lower interest rates. Just as long as the big banks turn a buck…the taxpayers will always be there to bail out the risky loans.

    Hank Miller,SRA 
    Associate Broker & Certified Appraiser
    Atlanta Communities Real Estate
    678-428-8276 direct
    hank@hmtatlanta.com
    www.hmtatlanta.com

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