Korene's Blog

MARKET UPDATE SEPTEMBER 2014

SAVING BORROWERS MONEY IN THE FOLLOWING STATES:

Arizona, California, 

PENDING STATE LICENSES:

Colorado, Florida, Idaho, Indiana, Montana, Nevada, New Mexico, Oregon, South Dakota, Texas, Utah, & Washington, Georgia, Illinois, Nebraska, North Carolina

HOUSING SHOWS LIFE IN THE SPRING

The national median home price jumped 6.2% over the spring this year per the S&P / Case-Shiller home price index. New homes sales did drop, while existing homes sales grew. Las Vegas showed the strongest gains in June with a 15.2% increase. (cnnfn.com)

 “The national median existing-home price is projected to grow between 5% and 6% this year and between 4% and 5% next year.” (housingwire.com)

FREDDIE MAC REPORT

The latest Freddie Mac housing report shows that the housing market is returning to “normal” housing fundamentals.

“The economic growth and labor market gains we saw in the second quarter of this year are projected to continue, strengthening household formations and the housing sector. A recovering housing sector will sustain the rally in homebuilding despite likely increases in long-term interest rates,” Frank Nothaft, Freddie Mac vice president and chief economist, said. “Increased construction activity will further accelerate the improvement in labor markets and fuel even more household formations and more housing demand. The result is an economy that gradually recovers back towards its potential," he continued.

1. The Labor Market

The labor market is steadily picking back up, adding 230,000 new jobs on average for the first seven months of this year. According to the most recent jobs report, full-time jobs rebounded modestly, rising by 285,000 in July following June's 523,000 collapse, which was only made up for by part-time job growth of 779,000.

2. Household Formations

According to Freddie Mac, the U.S. Census Bureau reported that over the past four quarters, net household formations totaled only 458,000, compared with long-term projections by the Joint Center for Housing Studies of 1.2 to 1.3 million per year.

3. Home Affordability

The monthly mortgage payment-to-rent ratio for the U.S. is near the lowest it has been in more than 35 years. Despite some increases in house prices and interest rates, the ratio is projected to remain relatively low.

4. Economic Growth

Latest forecast has economic growth averaging 3.3% in 2015 and the unemployment rate continuing to gradually decline. (housingwire.com)

CHINA FACES A HOUSING BUBBLE

A new report out in August shows that home prices in practically every city in China fell in July. Asia economist Shen Jian-Guang stated that ““The key issue is the mortgages, despite all types of local government easings. The high rate is damping sentiment of owner occupiers.”

Worse times for China’s real estate sector are still ahead, wrote Standard Chartered Plc economists led by Lan Shen in an Aug. 6 report, after surveying managers of 30 Chinese developers in six cities. Developers are offering “moderate discounts,” while buyers are still very cautious regardless of how much developers cut prices, Standard Chartered found.

Nationwide home sales fell 28% in July. (Bloomberg.com)

High interest rates and massive over development may lead to not only a housing slowdown in the world’s second largest economy, but also to housing bubble. And why should this matter to home owners in the United States? Remember, it is a global economy. Keep an eye on China as it may affect us here at home.

BANK OF AMERICA GETS WACKED AGAIN

Bank of America gets tagged with another huge settlement. Bank of America agreed to pay a $16.65 billion dollar settlement, the largest in U.S. history, because of misleading buyers of mortgage backed bonds regarding the actual quality of those bonds. Bank of America has now paid out almost $74 billion due to unlawful and/or unethical practices in relationship to the financial crisis.

In 2010, it paid $2.8 billion to Fannie Mae and Freddie Mac over mortgages.

In 2011, it paid trustee Bank of New York $8.6 billion and bond insurer Assured Guaranty $1.6 billion after they filed lawsuits over bond deals that went sour.

In 2012, it paid nearly $12 billion to help settle lawsuits over wrongful foreclosures and more than $2 billion in a class-action suit it inherited from Merrill Lynch.

Last year, it paid Fannie Mae $10 billion more for mortgages and forked over nearly $3 billion more for foreclosures.

Earlier this year, it paid the Federal Housing Finance Authority more than $9 billion and settled for $1.3 billion with the U.S. Attorney in New York's southern district. And those are just the big ones. (cnnfn.com)

Anticipate an increase to bank fees in the future. Banks are very good at not losing money.

FORECLOSURE TICK UP

In July, foreclosure filings ticked up 2% over June of this year. However, foreclosure filings in July were still down 16% over July of 2013; according to RealtyTrac. 109,434 foreclosures were filed in July 2014; one in every 1,203 homes in the United States.

“July was the 46th consecutive month where U.S. foreclosure activity was down on a year-over-year basis,” said Daren Blomquist, vice president at RealtyTrac. “After nearly four years of falling foreclosures, we are starting to see evidence that

Despite the annual decrease nationally, foreclosure starts increased from a year ago in 14 states, including Nevada (up 128%), Texas (up 29%), New York (up 17%), Massachusetts (up 12%), and Michigan (up 6%).

A total of 51,595 U.S. properties were scheduled for foreclosure auction in July, up 10% from the previous month but still down 3% from a year ago. Non-judicial foreclosure auctions increased 26% from June to July, but were still down 7% on a year-over-year basis.          

Despite the annual decrease nationally, scheduled foreclosure auctions increased from a year ago in 20 states, including New Jersey (up 105%), Oregon (up 50%), Louisiana (up 32%), Utah (up 30%), Connecticut (up 18%), and New York (up 16%). (housingwire.com)

STRONG NUMBERS FOR EXISTING HOME SALES

Posting the highest increase of the year, existing home sales jumped 2.4% month over month in July. Numbers are good, but down by 4.3% from July of 2013. Median home prices are up 4.9% from this time last year; at $222,900.

Lawrence Yun, NAR chief economist, says sales momentum is slowly building behind stronger job growth and improving inventory conditions. “The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market,” he said. “More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.” (housingwire.com)

AZ IS STILL GIVING AWAY MONEY TO UNDERWATER HOMEOWNERS

The State of Arizona currently has more than $100 million to contribute to homeowners that are underwater and qualify for HARP, FHA, or VA. The Arizona Department of Housing will offer up to $100K per homeowner(s) that owes more than their home is worth in principle reduction.

The State assistance is not a 2^nd mortgage, does not require repayment, and is forgivable after five years and may now be combined with Second Mortgage Extinguishment up to $60,000! If you or someone you know, owes more than your home is worth, and obtained the mortgage prior to June 1st, 2009, call or email me to see if you qualify for a principle reduction. Borrowers that have already completed a HARP refinance do not qualify.

CORPORATE HOME OWNERSHIP BENEFITS PROGRAM

For the last several years, Geneva Financial, LLC has been offering free home ownership mini seminars for local companies and organizations. Seminars are generally 60 minutes in length and are on one of several topics (i.e. First Time Home Buyers, Real Estate Investment, Home Owners in Distress, and The Importance of Home Ownership); and can be catered to an individual company’s or organization’s needs. Seminars are free to both company and employees. If your company or organization is interested in learning more about our free corporate mini seminars, please contact Korene Clopine-Seaman at 623-340-0934 or korene@klcsloanteam.com  

RATE WATCH

APPLY ONLINE: www.klcsloanteam.com/application

Interest rates as of 08/30/2014. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to value not to exceed 80%. 740+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote. Published rates do not apply to HARP loans.