Once again, a beach renourishment project in North Myrtle Beach has been pushed back.
The project was originally scheduled to start in July. Then, it was rescheduled for next week, but it's now set to start on August 11th.
The equipment for the project is set to arrive Monday and will be stored at the 55th Avenue beach access in North Myrtle Beach.
The project will consist of placing 750,000 cubic yards of sand over 8.6 miles starting at Cherry Grove and moving further south.
The work will end sometime in September.
Friday, August 1, 2008
SC DOT to check contractors on immigration compliance
The state Transportation Department will begin making sure contractors comply with immigration laws.
The Greenville News reported Friday the decision comes a day after a state senator asked the agency to investigate the immigration status of contactor employees.
Pickens Sen. Larry Martin asked for the investigation after getting complaints from constitutents about a company that appeared to employ mostly Hispanics.
Martin says he discussed the issue with Transportation Secretary Buck Limehouse this week and he agreed to put language in all new contracts requiring companies to make sure they're following state and federal immigration laws.
A new state law requires all contractors to verify the status of all new employees beginning next year.
The Greenville News reported Friday the decision comes a day after a state senator asked the agency to investigate the immigration status of contactor employees.
Pickens Sen. Larry Martin asked for the investigation after getting complaints from constitutents about a company that appeared to employ mostly Hispanics.
Martin says he discussed the issue with Transportation Secretary Buck Limehouse this week and he agreed to put language in all new contracts requiring companies to make sure they're following state and federal immigration laws.
A new state law requires all contractors to verify the status of all new employees beginning next year.
Mortgage rates fell modestly this week
Rate: 6.7 percent (30-year fixed) Average points: 0.41
Mortgage rates fell modestly this week, one week after surging to their highest levels in the past year.
The average 30-year fixed-rate mortgage fell 7 basis points, to 6.7 percent. A basis point is one-hundredth of a percentage point.
The average 15-year fixed -- a popular option for refinancing -- fell 10 basis points, to 6.22 percent. The average jumbo 30-year fixed fell 3 basis points, to 7.65 percent.
The one-year adjustable-rate mortgage rose 2 basis points, to 6.26 percent. The popular 5/1 ARM slid 13 basis points, to 6.35 percent.
Mortgage applications fell sharply for the week ending July 25, according to the Mortgage Bankers Association. Applications plunged a seasonally adjusted 14.1 percent from the week before, the slowest pace of activity since December 2000.
Refinancing activity fell by 22.9 percent. Applications for new purchases decreased by 7.8 percent.
The MBA also reported that fixed-rate mortgages are growing in popularity in the United States. Fixed-rate loans (not including interest-only loans) made up 63.6 percent of first mortgages issued in the second half of 2007, compared to 53.4 percent in the first half of the year.
In other housing news, May home prices in 20 U.S. cities fell by a record 15.8 percent compared to the previous year, according to the widely watched S&P/Case-Shiller Home Price Index. It was the 22nd straight month that the index has reported a decline in U.S. house values.
Recently, Congress passed a housing bill intended to stanch the flood of U.S. foreclosures and spur a housing turnaround. President Bush signed the bill into law July 30.
Mortgage rates fell modestly this week, one week after surging to their highest levels in the past year.
The average 30-year fixed-rate mortgage fell 7 basis points, to 6.7 percent. A basis point is one-hundredth of a percentage point.
The average 15-year fixed -- a popular option for refinancing -- fell 10 basis points, to 6.22 percent. The average jumbo 30-year fixed fell 3 basis points, to 7.65 percent.
The one-year adjustable-rate mortgage rose 2 basis points, to 6.26 percent. The popular 5/1 ARM slid 13 basis points, to 6.35 percent.
Mortgage applications fell sharply for the week ending July 25, according to the Mortgage Bankers Association. Applications plunged a seasonally adjusted 14.1 percent from the week before, the slowest pace of activity since December 2000.
Refinancing activity fell by 22.9 percent. Applications for new purchases decreased by 7.8 percent.
The MBA also reported that fixed-rate mortgages are growing in popularity in the United States. Fixed-rate loans (not including interest-only loans) made up 63.6 percent of first mortgages issued in the second half of 2007, compared to 53.4 percent in the first half of the year.
In other housing news, May home prices in 20 U.S. cities fell by a record 15.8 percent compared to the previous year, according to the widely watched S&P/Case-Shiller Home Price Index. It was the 22nd straight month that the index has reported a decline in U.S. house values.
Recently, Congress passed a housing bill intended to stanch the flood of U.S. foreclosures and spur a housing turnaround. President Bush signed the bill into law July 30.
65% “somewhat trusted” their real estate agent
Nobody trusts every professional completely – that’s the good news. But unfortunately while 50% of people in a Harris Poll completely trusted their doctor, only 7% completely trusted their real estate agent. At the other end of the spectrum only 4% didn’t trust their doctor “at all” but 20% didn’t trust their real estate agent “at all.”
I guess we’ve seen and heard references to polls like this forever and after awhile we become numb to the whole thing. We’ll take heart. That same poll also said that 65% of the respondents “somewhat trusted” their real estate agent. Oh, and stockbrokers came in last.
But the real question is not why the perception exists but rather what can be done to change it. Unfortunately we often default to NAR and expect them to change our image for us … as if with all their money they just need to throw some of it in the right direction. Well, they are but it isn’t the answer. Point in fact – many folks don’t even pay any attention to the ads that NAR puts out and, I suspect, a very significant portion of them don’t even know what NAR is or that it even exists. So, are we just victims of bad press and word of mouth?
No, in my opinion we are the victims of our failure to take responsibility for the reason we are perceived as untrustworthy and unprofessional. For many years we have failed in informing our customers just what a valuable service we provide for them. As a general rule we allow them to view us as just a 6% part of the process. Are there exceptions? Of course! But as an industry we are guilty as charged. Let’s look at the exceptions.
The true real estate professionals are the ones that have made a concentrated effort to take their career seriously. They have continued their education beyond just licensing and the bare minimum CE standards set by the state. Enhancing their career doesn’t just involve taking more specialized courses to gain additional skill sets. It involves making a mental shift from being a commission oriented, independent agent to a customer-centric consultant; often in a specialized market niche.
Report after report, from the National Association of Realtors® (NAR) and other third parties, continually tell us that the customer wants us to listen and respond, not talk and tell them what we think they need or want. Harsh criticism? Yes. But it begs the point – we have failed and continue to fail to relate to and meld with our customers on their level. So what’s the answer?
You’re absolutely right – there is no one, complete answer. However, one of the parts of the answer is specialization. Have you ever thought why the medical profession continues to push for specialized medicine? It’s simply too hard to be all things to all people would be their answer; and they wouldn’t be wrong. On the other hand I would add to that – the more specialized you are, the better chance you have against the competition. Here’s some old news … many in our industry have long since figured that out and are reaping the benefits in the midst of this tough market.
NAR’s own studies have repeatedly shown that Realtors® with advanced designations and specialized skill sets make more money than those who don’t – in fact it’s roughly double. Many organizations like NAR have invested heavily in developing advance study courses in a wide range of subjects to assist Realtors® in enhancing their knowledge and capacity to generate higher incomes.
I guess we’ve seen and heard references to polls like this forever and after awhile we become numb to the whole thing. We’ll take heart. That same poll also said that 65% of the respondents “somewhat trusted” their real estate agent. Oh, and stockbrokers came in last.
But the real question is not why the perception exists but rather what can be done to change it. Unfortunately we often default to NAR and expect them to change our image for us … as if with all their money they just need to throw some of it in the right direction. Well, they are but it isn’t the answer. Point in fact – many folks don’t even pay any attention to the ads that NAR puts out and, I suspect, a very significant portion of them don’t even know what NAR is or that it even exists. So, are we just victims of bad press and word of mouth?
No, in my opinion we are the victims of our failure to take responsibility for the reason we are perceived as untrustworthy and unprofessional. For many years we have failed in informing our customers just what a valuable service we provide for them. As a general rule we allow them to view us as just a 6% part of the process. Are there exceptions? Of course! But as an industry we are guilty as charged. Let’s look at the exceptions.
The true real estate professionals are the ones that have made a concentrated effort to take their career seriously. They have continued their education beyond just licensing and the bare minimum CE standards set by the state. Enhancing their career doesn’t just involve taking more specialized courses to gain additional skill sets. It involves making a mental shift from being a commission oriented, independent agent to a customer-centric consultant; often in a specialized market niche.
Report after report, from the National Association of Realtors® (NAR) and other third parties, continually tell us that the customer wants us to listen and respond, not talk and tell them what we think they need or want. Harsh criticism? Yes. But it begs the point – we have failed and continue to fail to relate to and meld with our customers on their level. So what’s the answer?
You’re absolutely right – there is no one, complete answer. However, one of the parts of the answer is specialization. Have you ever thought why the medical profession continues to push for specialized medicine? It’s simply too hard to be all things to all people would be their answer; and they wouldn’t be wrong. On the other hand I would add to that – the more specialized you are, the better chance you have against the competition. Here’s some old news … many in our industry have long since figured that out and are reaping the benefits in the midst of this tough market.
NAR’s own studies have repeatedly shown that Realtors® with advanced designations and specialized skill sets make more money than those who don’t – in fact it’s roughly double. Many organizations like NAR have invested heavily in developing advance study courses in a wide range of subjects to assist Realtors® in enhancing their knowledge and capacity to generate higher incomes.
U.S. new home prices are down 13%
U.S. new home prices are down 13%, new home sales have reduced by 39% and property listings are down 22% since the real estate market's historic peak set in March of 2007. This marks the worst real estate bear market since 1970.
Winans International Real Estate Index (New U.S. Homes)
Percentage Change Since March 31, 2007
U.S. West Northeast South Midwest
Price (13%) (15%) (10%) (9%) (8%)
Sales (39%) (52%) (43%) (33%) (33%)
Listings (22%) (20%) (21%) (22%) (23%)
While this is humbling news to millions of homeowners nationwide, not everyone is feeling the pain in the same degree.
As can be seen in the chart above, the greatest declines in home prices and sales volume have been felt in the Western states. The Midwest has faired the best in the nation with the least price declines and better sales activity.
In comparing today's real estate to past bear markets, it is interesting to note that while price declines were worse in 1969/70 (-18% vs. -13%), sales and listings have "dried up" much worse today than 38 years ago.
Fortunately, while the current condition is bad it is not record setting. The worst decline of U.S. new home prices in the last 150-years was the -68% decline from 1929 to 1932.
Winans International Real Estate Index (New U.S. Homes)
Bear Market Historical Comparisons:
% Change 2007-2008 1969-1970 1929-1932
Price (13%) (18%) (68%)
Sales (39%) (16%) NA
Listings (22%) (7%) NA
Duration (yrs) NA 1.5 3.0
(Source: http://www.investmentatlas.com)
The Winans International Real Estate Index (WIREI) measures U.S. new home prices from 1830 to present day. More information on the Winans International Real Estate Index can be found at http://www.winansintl.com
Winans International Real Estate Index (New U.S. Homes)
Percentage Change Since March 31, 2007
U.S. West Northeast South Midwest
Price (13%) (15%) (10%) (9%) (8%)
Sales (39%) (52%) (43%) (33%) (33%)
Listings (22%) (20%) (21%) (22%) (23%)
While this is humbling news to millions of homeowners nationwide, not everyone is feeling the pain in the same degree.
As can be seen in the chart above, the greatest declines in home prices and sales volume have been felt in the Western states. The Midwest has faired the best in the nation with the least price declines and better sales activity.
In comparing today's real estate to past bear markets, it is interesting to note that while price declines were worse in 1969/70 (-18% vs. -13%), sales and listings have "dried up" much worse today than 38 years ago.
Fortunately, while the current condition is bad it is not record setting. The worst decline of U.S. new home prices in the last 150-years was the -68% decline from 1929 to 1932.
Winans International Real Estate Index (New U.S. Homes)
Bear Market Historical Comparisons:
% Change 2007-2008 1969-1970 1929-1932
Price (13%) (18%) (68%)
Sales (39%) (16%) NA
Listings (22%) (7%) NA
Duration (yrs) NA 1.5 3.0
(Source: http://www.investmentatlas.com)
The Winans International Real Estate Index (WIREI) measures U.S. new home prices from 1830 to present day. More information on the Winans International Real Estate Index can be found at http://www.winansintl.com
Wednesday, July 30, 2008
1031 exchange - largely unregulated industry
A firm that acted as a middle man in a popular real-estate-investment strategy has closed its doors, leaving investors scrambling to recover millions and pointing to flaws in the largely unregulated industry.
The latest problems in the industry involve Vesta Strategies LLC of San Jose, Calif., which closed its doors this month and has yet to return millions of dollars of client money.
Vesta was founded in 2004 by Chicago businessman John Terzakis and his partner, Robert Estupinian. Prior to starting Vesta, Mr. Terzakis had a history of failed real-estate deals and soured relationships -- information Mr. Terzakis isn't required to disclose to potential clients. Now the two men are accusing each other in separate lawsuits of diverting millions of dollars from Vesta for personal use.
The firm was involved in the real-estate-investing strategy known as 1031 exchanges, which gained popularity during the real-estate boom of recent years because they allowed investors to buy and sell properties without paying taxes.
To avoid paying capital-gains taxes in these real-estate deals, investors need to buy a new property such as an apartment building or strip mall within 180 days of selling their old property, and in the interim they need to keep their cash with a "qualified intermediary." Vesta was one of hundreds of companies that played that role.
Californian Christina Pappas was seeking to carry out a 1031 exchange when, on the advice of her escrow company, she handed over $2.5 million to Vesta in April from the sale of a property. She soon found another building to purchase within the IRS-mandated 180-day time frame. But a Vesta representative failed to wire her money to complete the property exchange by the June 16 closing, and still hasn't done so, she says.
The 57-year-old Ms. Pappas filed suit against Vesta last month, but she fears she won't recoup the money, which accounted for much of her retirement savings. "If I would have known any of this, I would have paid my taxes instead" of attempting a 1031 exchange, she says.
Vesta held $10 million to $30 million in client money at any one time, according to Mr. Estupinian. But as real-estate markets have cooled, companies that manage the exchanges have gone through a shakeout, which in some cases has triggered losses for investors and allegations of fraud in the largely unregulated industry. Now, calls are mounting for regulatory oversight of the companies that handle money used in 1031s, so named for the section of the Internal Revenue Code where the strategy is described.
While most facilitators are reputable, the lack of regulation and disclosure means anyone can set up an exchange company "even if they have a criminal background or a lot of bad business deals in their past," said Mary Foster, president of the Federation of Exchange Accommodators, a trade group that has pressed the Federal Trade Commission and the Internal Revenue Service to set guidelines for the industry.
In 2005, at the height of the boom, 415,000 exchange transactions with a cumulative value of $230 billion were completed, according to Deloitte Tax LLP.
Problems at Vesta surfaced publicly in December, when Mr. Terzakis sued Mr. Estupinian, the firm's former chief executive, alleging he misappropriated several million dollars of Vesta's money for his family's use. Among the many payments Mr. Terzakis asserts Mr. Estupinian made with Vesta's money: a $96,000 salary for Mr. Estupinian's wife, who allegedly did little work for the company; a $1.3 million house; a $160,308 oceanfront apartment in Long Beach; $50,000 for a pair of dogs; and $42,795 in tuition toward Mr. Estupinian's doctorate degree.
Mr. Estupinian denies the allegations and filed a countersuit accusing Mr. Terzakis of embezzling about $25 million. "Beginning as far back as 2000, John Terzakis has been treating the client funds as his own personal piggy bank in order to fund his many personal business and development projects," Mr. Estupinian's countersuit states. The suits were filed in U.S. District Court in San Jose.
Mr. Terzakis declined to comment beyond issuing a statement noting that he "took over" Vesta in November upon firing Mr. Estupinian. "I then made the commitment to solve its problems during both Vesta's operations and, now, after its closure," he says in the statement. "I continue to stand behind that commitment and will do so until this matter is resolved."
For his part, Mr. Estupinian says he had started requiring separate trusts for clients' money last year and "no client funds were in jeopardy" when he left Vesta.
This isn't the first time a company headed by Mr. Terzakis has been sued by customers and business associates. For years, Mr. Terzakis and partners sold fractional interests in commercial-real-estate deals through a company called Urban Investment Trust in Chicago. Several of those deals ended up in court.
The allegations in the lawsuits, filed in U.S. District Court in Chicago, follow a common theme: Mr. Terzakis and partners would purchase a commercial property -- a shopping center or office building -- and sell shares in the property to investors, often based on claims that were later alleged to be misleading. The lawsuits allege that Urban, as manager of the property, would eventually quit paying taxes, maintenance and insurance costs on the property and also stop making payments to investors.
Clients accused Mr. Terzakis of misappropriating their investments. Mr. Terzakis denies the claims and countered in court filings that the investments just didn't work out. In many cases, Mr. Terzakis settled the claims.
Many of Mr. Terzakis's former investors won't speak of him due to the terms of their settlements. One who will is John Greytak Sr., a Sebring, Fla., investor who put money into five shopping centers early this decade at Mr. Terzakis's direction.
After Urban quit making payments to investors, Mr. Greytak forced out Urban as the properties' manager and spent the next several years trying to revive the foundering properties and salvage his money and that of other investors. He sued Mr. Terzakis in 2003 and settled with him in 2005.
The latest problems in the industry involve Vesta Strategies LLC of San Jose, Calif., which closed its doors this month and has yet to return millions of dollars of client money.
Vesta was founded in 2004 by Chicago businessman John Terzakis and his partner, Robert Estupinian. Prior to starting Vesta, Mr. Terzakis had a history of failed real-estate deals and soured relationships -- information Mr. Terzakis isn't required to disclose to potential clients. Now the two men are accusing each other in separate lawsuits of diverting millions of dollars from Vesta for personal use.
The firm was involved in the real-estate-investing strategy known as 1031 exchanges, which gained popularity during the real-estate boom of recent years because they allowed investors to buy and sell properties without paying taxes.
To avoid paying capital-gains taxes in these real-estate deals, investors need to buy a new property such as an apartment building or strip mall within 180 days of selling their old property, and in the interim they need to keep their cash with a "qualified intermediary." Vesta was one of hundreds of companies that played that role.
Californian Christina Pappas was seeking to carry out a 1031 exchange when, on the advice of her escrow company, she handed over $2.5 million to Vesta in April from the sale of a property. She soon found another building to purchase within the IRS-mandated 180-day time frame. But a Vesta representative failed to wire her money to complete the property exchange by the June 16 closing, and still hasn't done so, she says.
The 57-year-old Ms. Pappas filed suit against Vesta last month, but she fears she won't recoup the money, which accounted for much of her retirement savings. "If I would have known any of this, I would have paid my taxes instead" of attempting a 1031 exchange, she says.
Vesta held $10 million to $30 million in client money at any one time, according to Mr. Estupinian. But as real-estate markets have cooled, companies that manage the exchanges have gone through a shakeout, which in some cases has triggered losses for investors and allegations of fraud in the largely unregulated industry. Now, calls are mounting for regulatory oversight of the companies that handle money used in 1031s, so named for the section of the Internal Revenue Code where the strategy is described.
While most facilitators are reputable, the lack of regulation and disclosure means anyone can set up an exchange company "even if they have a criminal background or a lot of bad business deals in their past," said Mary Foster, president of the Federation of Exchange Accommodators, a trade group that has pressed the Federal Trade Commission and the Internal Revenue Service to set guidelines for the industry.
In 2005, at the height of the boom, 415,000 exchange transactions with a cumulative value of $230 billion were completed, according to Deloitte Tax LLP.
Problems at Vesta surfaced publicly in December, when Mr. Terzakis sued Mr. Estupinian, the firm's former chief executive, alleging he misappropriated several million dollars of Vesta's money for his family's use. Among the many payments Mr. Terzakis asserts Mr. Estupinian made with Vesta's money: a $96,000 salary for Mr. Estupinian's wife, who allegedly did little work for the company; a $1.3 million house; a $160,308 oceanfront apartment in Long Beach; $50,000 for a pair of dogs; and $42,795 in tuition toward Mr. Estupinian's doctorate degree.
Mr. Estupinian denies the allegations and filed a countersuit accusing Mr. Terzakis of embezzling about $25 million. "Beginning as far back as 2000, John Terzakis has been treating the client funds as his own personal piggy bank in order to fund his many personal business and development projects," Mr. Estupinian's countersuit states. The suits were filed in U.S. District Court in San Jose.
Mr. Terzakis declined to comment beyond issuing a statement noting that he "took over" Vesta in November upon firing Mr. Estupinian. "I then made the commitment to solve its problems during both Vesta's operations and, now, after its closure," he says in the statement. "I continue to stand behind that commitment and will do so until this matter is resolved."
For his part, Mr. Estupinian says he had started requiring separate trusts for clients' money last year and "no client funds were in jeopardy" when he left Vesta.
This isn't the first time a company headed by Mr. Terzakis has been sued by customers and business associates. For years, Mr. Terzakis and partners sold fractional interests in commercial-real-estate deals through a company called Urban Investment Trust in Chicago. Several of those deals ended up in court.
The allegations in the lawsuits, filed in U.S. District Court in Chicago, follow a common theme: Mr. Terzakis and partners would purchase a commercial property -- a shopping center or office building -- and sell shares in the property to investors, often based on claims that were later alleged to be misleading. The lawsuits allege that Urban, as manager of the property, would eventually quit paying taxes, maintenance and insurance costs on the property and also stop making payments to investors.
Clients accused Mr. Terzakis of misappropriating their investments. Mr. Terzakis denies the claims and countered in court filings that the investments just didn't work out. In many cases, Mr. Terzakis settled the claims.
Many of Mr. Terzakis's former investors won't speak of him due to the terms of their settlements. One who will is John Greytak Sr., a Sebring, Fla., investor who put money into five shopping centers early this decade at Mr. Terzakis's direction.
After Urban quit making payments to investors, Mr. Greytak forced out Urban as the properties' manager and spent the next several years trying to revive the foundering properties and salvage his money and that of other investors. He sued Mr. Terzakis in 2003 and settled with him in 2005.
Housing and Economic Recovery Act of 2008
H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:
GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.
Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.
Tuesday, July 29, 2008
excellent week to lock in some loans
After yet another volatile week for rates, when the smoke cleared rates ended the week slightly better than where they began. The week ahead is jam packed with economic news including Consumer Confidence, GDP, and the all important Jobs Report. So what's in store for rates for the week ahead?
Last week, rates managed to hold fairly steady and then improve as comments from Philadelphia Fed President Charles Plosser, pushed rates lower when he said "inflation is too high" and the Fed must "back up their words with action." These statements helped rates slightly improve.
On Thursday, rates managed to fall to their lowest point of the week as several negative economic reports were released including a higher than expected Jobless Claims report.
Several economic reports are scheduled for release this week including Friday's Jobs Report. So will rates manage to mount even a better come back this week? That remains to be seen, however on thing is almost certain - Rates will likely remain volatile.
The bottom line: It's likely the key economic releases will drive rates, keep your ears open for the breaking economic news and watch the market for what could be an excellent week to lock in some loans.
Last week, rates managed to hold fairly steady and then improve as comments from Philadelphia Fed President Charles Plosser, pushed rates lower when he said "inflation is too high" and the Fed must "back up their words with action." These statements helped rates slightly improve.
On Thursday, rates managed to fall to their lowest point of the week as several negative economic reports were released including a higher than expected Jobless Claims report.
Several economic reports are scheduled for release this week including Friday's Jobs Report. So will rates manage to mount even a better come back this week? That remains to be seen, however on thing is almost certain - Rates will likely remain volatile.
The bottom line: It's likely the key economic releases will drive rates, keep your ears open for the breaking economic news and watch the market for what could be an excellent week to lock in some loans.
Biker After Action Report
Horry County's Public Safety Department released a report giving exact details.
The Biker After Action Report also gives details about the number of citations, accidents, fatalities, traffic, noise, and the effect on law enforcement.
Horry County does the After Action Report every year, but there's likely more attention directed to it this year because there's a push by some to get rid of the bike rallies.
Myrtle Beach City Council plans to ask Horry County Council to help the city deter bikers from the Grand Strand in May.
The Biker After Action Report also gives details about the number of citations, accidents, fatalities, traffic, noise, and the effect on law enforcement.
Horry County does the After Action Report every year, but there's likely more attention directed to it this year because there's a push by some to get rid of the bike rallies.
Myrtle Beach City Council plans to ask Horry County Council to help the city deter bikers from the Grand Strand in May.
Sunday, July 27, 2008
Qualifying for a mortgage
Qualifying for a mortgage is certainly not as easy as it used to be. The turmoil that has gripped the housing and the credit markets has led to lenders tightening their approval standards. But while it is more difficult to qualify, it is not impossible.
- Check your credit reports. The three main reporting agencies are Equifax, Experian and TransUnion. You’ll want to make sure that all the information on these reports is correct. If you find some information that is incorrect, you should report the discrepancy immediately to all three reporting agencies. Anything negative on your credit report can hurt you, even if it’s not right.
- Boost your FICO score. Most mortgage lenders use the FICO score to determine if a borrower will default. Because the score measures your ability to repay a loan, there are steps you can take to improve it. Pay down your debt, pay all your credit accounts on time and keep open accounts with a $0 balance.
- Put money aside for a down payment. Sock enough away for a 5% to 10% down payment. This will show that you are serious about becoming a homeowner. Most lenders feel more comfortable granting a mortgage with a larger down payment. No-down-payment mortgages, a staple of the housing boom, have virtually disappeared. To qualify for a government-insured Federal Housing Administration loan, you’ll need to put at least 3% down.
- Get realistic about your budget. Your mortgage payment should be about 25% of your monthly household income. Choose a price range that fits this. If you make $4,000 a month, don’t take a mortgage out for much more than $1,000 a month. This will ensure that you have adequate reserves to make your payments.
- Check your credit reports. The three main reporting agencies are Equifax, Experian and TransUnion. You’ll want to make sure that all the information on these reports is correct. If you find some information that is incorrect, you should report the discrepancy immediately to all three reporting agencies. Anything negative on your credit report can hurt you, even if it’s not right.
- Boost your FICO score. Most mortgage lenders use the FICO score to determine if a borrower will default. Because the score measures your ability to repay a loan, there are steps you can take to improve it. Pay down your debt, pay all your credit accounts on time and keep open accounts with a $0 balance.
- Put money aside for a down payment. Sock enough away for a 5% to 10% down payment. This will show that you are serious about becoming a homeowner. Most lenders feel more comfortable granting a mortgage with a larger down payment. No-down-payment mortgages, a staple of the housing boom, have virtually disappeared. To qualify for a government-insured Federal Housing Administration loan, you’ll need to put at least 3% down.
- Get realistic about your budget. Your mortgage payment should be about 25% of your monthly household income. Choose a price range that fits this. If you make $4,000 a month, don’t take a mortgage out for much more than $1,000 a month. This will ensure that you have adequate reserves to make your payments.
American consumers to be feeling better
Wall Street desperately wants American consumers to be feeling better. And they are this month, according to the latest national consumer-confidence survey by Reuters and the University of Michigan.
But the survey's overseers are advising the rest of us to pretty much ignore the upturn in confidence, saying it most likely is the proverbial "dead cat bounce."
In other words, there's no confidence in the confidence number.
The Reuters/UofM consumer sentiment index rose to 61.2 this month from the June reading of 56.4, which was a 28-year low. The survey's index of consumer expectations also rose, to 53.5 from 49.2 in June.
"Even after the small July gain, the overall level of consumer confidence is dismal and still points toward declines in the pace of spending in late 2008 and early 2009," said Richard Curtin, director of the survey.
Although it's possible that the uptick indicates that consumers had "overestimated the extent of the economic damage," don't bet on it, Curtin said.
"It is more likely that the gains reflect a 'dead-cat bounce,' a phenomena that has been repeatedly observed over the past 50 years: Following a steep decline in confidence, a small gain is recorded before confidence resumes its downward slide," he said. (ASPCA warning: Do not try this on cats at home.)
One highlight from the July survey: Half of consumers expected their living standards to decline in the year ahead.
"The appraisals of consumers of their own finances as well as conditions in the national economy remained very negative, near the worst levels recorded in the 50-year history of the surveys," Curtin said.
But the survey's overseers are advising the rest of us to pretty much ignore the upturn in confidence, saying it most likely is the proverbial "dead cat bounce."
In other words, there's no confidence in the confidence number.
The Reuters/UofM consumer sentiment index rose to 61.2 this month from the June reading of 56.4, which was a 28-year low. The survey's index of consumer expectations also rose, to 53.5 from 49.2 in June.
"Even after the small July gain, the overall level of consumer confidence is dismal and still points toward declines in the pace of spending in late 2008 and early 2009," said Richard Curtin, director of the survey.
Although it's possible that the uptick indicates that consumers had "overestimated the extent of the economic damage," don't bet on it, Curtin said.
"It is more likely that the gains reflect a 'dead-cat bounce,' a phenomena that has been repeatedly observed over the past 50 years: Following a steep decline in confidence, a small gain is recorded before confidence resumes its downward slide," he said. (ASPCA warning: Do not try this on cats at home.)
One highlight from the July survey: Half of consumers expected their living standards to decline in the year ahead.
"The appraisals of consumers of their own finances as well as conditions in the national economy remained very negative, near the worst levels recorded in the 50-year history of the surveys," Curtin said.
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