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What’s Up With Housing?

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The bill working its way through Congress has “significant improvements,” including a commitment to protect current owners from substantial rate increases.
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For the sixth consecutive month, May home prices venture into record territory.
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The CFPB recently loosened rules, and agents now have easier access to the closing disclosure providing certain private information is removed. However now, as before, the lenders decide how to handle it.
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According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.
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For the second time in six weeks, a company connected to the same lawyer stood poised to profit from a Pinellas County foreclosure auction that confused even experienced real estate investors.
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It’s cheaper to rent than own a home in 11 states, but Florida’s average monthly rent, $1,543, is still higher than the cost of an average monthly mortgage: $1,376.


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8 Signs a Home Buyer Isn’t Serious

Pseudo Homebuyers

If all those excited home buyer declarations like “This place is just perfect for us” and “I have to have it!” were binding, selling houses would be a breeze. But, as with everything in life, it’s not what people say, it’s what they do that really matters.

Still, it’s hard for home sellers to not get their hopes up when a buyer’s gushing over their home—only to be disappointed when the buyer disappears without a peep.

So what are some signs a buyer isn’t serious about your home?

It’s a good thing experienced Realtors® can tell the difference between the buyer who means business and the one who has no intention of actually sealing the deal—and that these pros graciously agreed to clue us in.

Do any of the following red flags sound familiar? Keep each in mind, and you can save yourself the drama of dashed hopes.

Sign No. 1: The buyer is flying solo

If a buyer doesn’t have a real estate agent yet, he probably isn’t serious about shopping for a home.

“Buyer’s agents come at no cost to the buyer, since the seller pays the buyer’s agent’s commission,” explains Daniel Bortz, a Realtor in Maryland, Virginia, and Washington, DC. Do you think a shopper who can’t be bothered to enlist free expert help is motivated enough to start putting papers in motion? We don’t think so either.

To put things in perspective, consider this: 87% of buyers recently purchased their home through a real estate agent or broker, according to a survey conducted last year by the National Association of Realtors® of recent home buyers and sellers. You do the math!

Sign No. 2: The buyer just began shopping

The old adage that timing is everything applies to selling homes as well. Typical home buyers take three months to buy, so if a seller is entertaining interest from someone on Day 1 or Week 1 of her house hunt, chances aren’t good that she’s the one.

“Many buyers look at a number of houses before they decide what they want,” says Bortz. “And if they’re at the early stages in their search, you’re less likely to receive an offer.”

Sign No. 3: You meet the buyer at an open house

It’s also less likely that a seller will score an offer from a buyer at an open house. According to a report from the NAR, only half of home buyers visit open houses—and those who do may be trying to avoid too much attention by hiding in the herd.

Serious buyers, on the other hand, will conduct their home search online, then once they spot a home they like, request a private showing.

It’s like dating: Asking to see a home one on one carries more weight than asking someone, “Hey, wanna hang out in a group?”

Sign No. 4: No pre-approval from a lender

There’s no need to read between the lines of this sign.

“You need to include a pre-approval letter from your lender when you submit an offer on a property,” says Bortz. “Without one, there’s no indication to the seller that you can actually afford to purchase the home.”

Sign No. 5: A speedy visit

Buyers who zip along while they’re checking out the property aren’t likely to cross the finish line with you.

“Rushing through an open house is a definite sign of lack of interest,” says Abigail Harris, a sales associate with Coldwell Banker residential brokerage in the Boston area. Breezing through without asking questions, however, isn’t necessarily a bad sign, she adds. “Many buyers feel that they have all the answers and don’t need to ask questions.”

Sign No. 6: All promises, no action

Call it a bait and … stall.

“You can tell that a buyer is dragging her feet if she says she’s very interested in making an offer but it is taking days for her to actually submit one,” says Bortz, who has encountered this phenomenon a number of times. “Typically such buyers are seriously interested, but they’re also strongly considering making an offer on another property, so they might be weighing their options before they make an offer on one of them.”

Sign No. 7: A (really) lowball offer

Everyone wants to score a deal, but if a buyer offers an “unreasonably low” sum, says Harris, that’s a “sure sign that they don’t really want the property.”

“Serious buyers in today’s market make their best offer right out of the gate,” explains Bortz. “So I’m honestly not sure why someone would throw out a ridiculously lowball offer. Maybe [it’s] just to test the waters?”

Sign No. 8: Lots of nitpicking

Even after the buyer has made an offer and you have accepted it, she still might not be 100% onboard with buying the property. Is she obsessed with finding faults and problems in the home?

“That’s a definite showing of disinterest,” says Harris. Bortz agrees, adding, “If she has a home inspection contingency and wants you to fix every single little thing that the inspector spots, such as a loose door knob, she might be looking for you to just give in and say, ‘No, I’m not fixing anything,’ so that she can back out of the deal.”

Thanks to Jennifer O’Neill, a Boston-area writer who just recently bought her first house. A former staffer at Allure, SELF, Us Weekly, and Yahoo Parenting, she admits that this new homeowner gig may be her most challenging pursuit yet. Realtor.com 


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Are You Too Nice for Your Own Good?

We’re taught to be kind to everyone, but that means keeping your guard down against potential predators. Unfortunately, to stay safe, you must adapt your nature to a more dangerous world.

Realtor Safety MonthFollowing up on our May Coffee Corner discussing Safety, and the fact that September is Realtor Safety Month, I wanted to share some additional insights on this important topic delivered by Realtor Magazine’ Graham Wood.

In Robert Siciliano’s eyes, no one is ever truly prepared to defend themselves against an attacker. “It goes against human nature,” says Siciliano, CEO of IDTheftSecurity.com, who teaches personal safety skills to real estate professionals. “We inherently need to trust one another in order to survive.”

According to Siciliano, most of us went through “civilized conditioning” as children, where our parents taught us to be courteous to others. While that’s a virtue of society, it also teaches us to keep our guard down — and hampers our ability to assess true danger — when dealing with strangers. “As good as it is to make [kids] behave, it also suppresses their instinctual need for survival. So when they come into contact with a predator, they don’t know how to deal with it,” Siciliano says.

Having the physical skill to thwart an attacker is only half the battle when it comes to personal safety. The attitude you’ve learned to adopt in social situations may be the biggest hazard to your safety. That’s why some experts suggest reconsidering your outlook on the world, even if it’s uncomfortable.

“A lot of people in society choose to ignore what’s going on around them,” says Gianni Cerretani, a martial artist and mortgage loan originator with HomeBridge Financial Services who teaches a mental-preparedness safety course for real estate pros in Atlanta. A year ago, the Georgia Real Estate Commission approved his class for continuing education credits for local REALTORS®. “We teach that you have to deal with the fact that violence happens and criminals are out there. If you’re aware of it, you have a better chance of surviving.”

Is It Rude to Be On Guard?
Cerretani was inspired to begin teaching safety after the case of a man disguised as a woman who brutally attacked several agents in the Atlanta area. The suspect, Jeffrey Shumate, was arrested last year after one such incident, but he has been linked to other attacks dating back to 2000. His first intended victim was Alicia Parks, an agent who was showing him a vacant property. “He was wearing white high heels, black stockings, and bright pink lipstick,” recalls Parks, GRI, a sales associate with Keller Williams Realty Lanier Partners in Gainesville, Ga. “He had on leather gloves, and he said his hands were severely burned and he didn’t want anyone to see them.”

Though she says she was on high alert from the moment they met, Parks thought the incident was a joke — even after the man began using provocative language. But after calling her his girlfriend and trying to get her to follow him to the back of the house, she knew she was in trouble. The meeting only came to an end after Parks accidentally set off the home’s alarm system, prompting the man to flee. “I didn’t even mean to set it off. I just pushed the wrong numbers,” she says.

Parks had an odd feeling when she first spoke to the man over the phone, but she went to the showing anyway. “Just the way he talked to me on the phone, he was so insistent that I come show him that house right away, and it was vacant. But I didn’t know him so I didn’t want to judge him.”

Siciliano, who helped formulate the original REALTOR® Safety initiative with the National Association of REALTORS®, says most people ignore gut feelings of fear or mistrust because they don’t want to come off as rude. They also don’t think ahead about safety because they adopt the mistaken idea that if they don’t think about it, it won’t happen to them.

“They live under the myth that if you’re prepared for a dangerous situation wherever you go, you’re paranoid,” he says. “It’s the it-can’t-happen-to-me syndrome.”

Modifying Your Frame of Mind
Cerretani aims to change how people think about safety. Teaching physical combat is an important component of safety training, he notes, but “to try and teach someone who has never done self-defense in their lives how to do martial arts training in a four-hour class is a waste of time. They’re never going to retain that information.” So instead, he focuses on mental tips such as these:

Look at yourself as a victim. “We ask people, ‘How would you attack you?’” Cerretani says. That question gets people thinking about the weaknesses in their daily routine. Are you often working alone outside the office? Are you aware of whether a door has been locked after you’ve entered a home with a client? Are you leaving a listing when it’s dark? Are your keys in your hand before you get to your car? “One or two people in every class say they don’t lock their house. People aren’t aware that they’re not aware of their vulnerabilities.”
Be hyperaware in “transitional zones.” Stepping out of your car and into a parking lot, or entering a gas station, particularly at night, are situations in which your level of safety can swing widely. “If you really pay attention to a gas station at night — we call it the ‘watering hole’ for criminals — there’s so much commotion going on that it’s very easy to have a criminal activity happen,” Cerretani says.
Watch people’s hands. Certain hand movements — such as balled-up fists — can signal an intention to attack. Other places to pay special attention to include beltlines and underneath shirts to determine whether a person is carrying a concealed weapon.
Focus on what’s near you. Most people focus on their final destination or goal, which can leave them vulnerable. For example, when entering a parking lot, those who are looking for their car are more focused on what’s further away. “If attackers are closer to you and you’re looking far out, you’re vulnerable,” Cerretani says.
Watch your back when you’re on your phone. Put your back against a wall when you’re engulfed in texting or talking on a device so no one can come up behind you and surprise you.

Is the Industry Better Prepared?
Timperis Robertson, founder of the Interactive Real Estate Academy, works with Cerretani to set up his safety class at real estate offices in the Atlanta area. She took his course before it was added to the CE curriculum, and she says it had a big impact on the way she thinks about her day-to-day routine. “It really makes you think about where you’re most vulnerable,” says Robertson, who is also a practitioner with First Home Realty in Lithonia, Ga. “It touches on the situations we face or may face every day. Those are things we don’t think about. We’re just so happy to have a client interested in a property.”

While it takes a concerted effort to change your thinking around safety, it appears many real estate professionals are making strides. With 42 percent of REALTORS® saying they use a safety app on their smartphone, according to the National Association of REALTORS®’ 2016 Member Safety Report — a staggering leap from the 13 percent who said so in NAR’s 2015 survey — a sea change is evident in the way pros are preparing for danger.

More REALTORS® also say they carry a self-defense weapon in the field, the most popular ones being pepper spray, a firearm, or a pocket knife. However, fewer indicated that their brokerage has standard procedures for agent safety — 44 percent in 2016 versus 46 percent in 2015 — a possible indicator that agents are taking on more ownership of their own protocols.

Still, it can be difficult to get agents who have never experienced an attack to think about common-sense safety measures, says Kimberly Allard-Moccia, who helped develop the Massachusetts Association of REALTORS®’ first safety class. “You think you’re going to just run if something happens,” says Allard-Moccia, GRI, broker-owner of Century 21 Professionals in Braintree, Mass. “Let’s face it: If most of us in the room are over 50 and wearing inch-and-a-half heels, you’re not going to make it.”

If you don’t think about safety ahead of time and prepare for the worst, “you will cycle in denial and delay,” she adds, “and that’s when you become a victim.”


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10 Reasons Why Mortgage Investors Are Rejecting TRID Loans

TRID

The other shoe has dropped: With thousands of loans closed under the new regulatory regime now making their way to the secondary market, investors are refusing to buy them due to compliance problems and loan document errors.

Takeaways:

*With thousands of loans closed under TRID making their way to the secondary market, investors are refusing to buy them due to compliance and documentation issues.
*The majority of infractions are minor and technical in nature, such as failing to include an agent or broker’s contact information or inconsistencies among forms.
*The biggest sticking point on the real estate side of the transaction appears to be the use of third-party authorization forms to give agents access to a consumer’s Closing Disclosure.
*Anticipating delays and adding extra days to the transaction timeline is one way agents can hedge against roadblocks.

With the Consumer Financial Protection Bureau’s (CFPB) TILA-RESPA Integrated Disclosures (TRID), or “Know Before You Owe” rule now in effect for four months, it’s no secret that the sweeping change to the mortgage application process has impacted homebuying for all parties involved. Reports of compliance issues are quite common.

In December, Moody’s Investors Services released a credit outlook report in which its analysts estimated that several third-party firms found TRID violations in more than 90 percent of the loans they audited.

The reasons why investors are rejecting these so-called “defective” or “scratch-and-dent” loans may surprise you, as some of the infractions are minor and technical in nature, according to two of the nation’s top RESPA compliance attorneys.

A roundtable seeking answers…

Marx Sterbcow, managing attorney of the New Orleans-based law firm Sterbcow Law Group, and Rich Horn, the former CFPB attorney who helped write the TRID rule and now has his own firm in Washington, D.C., teamed up to publish a list of the top 10 reasons mortgage investors are rejecting TRID loans.

The list was discussed last month on a cross-industry trade group conference call involving the National Association of Realtors (NAR), the Real Estate Services Providers Council (RESPRO), the Mortgage Bankers Association (MBA), the American Land Title Association (ALTA) and others.

“The liability and risk environment were already high before TRID, and TRID has done nothing but escalate it,” said John Campbell, a research analyst at Stephens Inc. “If lenders and private investors aren’t willing to take on the risk of buying potentially tainted loans — loans that could put them at future risk one day — then the market loses funding sources and liquidity. There’s a grace period from the GSEs (government-sponsored enterprises) which helps, but that’s just one side of the market.”

closing-disclosure-H25B-1-1

Here are the 10 reasons investors are refusing to purchase TRID loans, according to the attorneys, as well as some tips for how agents can help prevent these issues from happening.

Top 10 reasons investors are rejecting TRID loans

1. The Loan Estimate (LE) and Closing Disclosure (CD) bear the same date.

Under TRID rules, a creditor may not provide a revised LE on or after the date the creditor provides the consumer with the CD. Because the CD must be provided to the consumer no later than three business days before consummation, the consumer must receive a revised LE no later than four business days prior to consummation.

2. On the CD, title fees aren’t being input properly.

The regulatory text requires a space between “Title” and a hyphen, followed by “Settlement Agent Fee.” Some forms erroneously say, “Title-Settlement Agent Fee,” when they should say, “Title — Settlement Agent Fee.

3. Page 5 of the CD is missing certain contact information, such as the real estate agent or broker’s license number.

Some lenders preparing the CD are leaving this information off the form because it isn’t necessarily included on all sales contracts, which vary by state.

NAR is working with its state associations to educate agents on this issue and possibly include this information on all sales contracts. The attorneys noted that if an individual is not required to have a license number, you can leave that cell blank. You should be using your license identification number, not your NMLS identification number, which is typically only obtained by lenders and brokers.

4. The CFPB’s Office of Regulations stated in a webinar that if the alternative CD is used, there is no place to show subordinate financing on the alternative CD, and there is no requirement to do so.

Essentially, each transaction will have its own cash to close, and the settlement agent has to figure out the “master” cash to close.

5. On page 1 of the CD, the title company’s “file number” is not included.

This is the settlement agent’s file number “for identification purposes.” The CFPB has stated that it “may contain any alpha-numeric characters and need not be limited to numbers.”

Settlement agents are advised to use any number that they assign to the file in their own systems to identify it, and it may contain both letters and numbers.

6. Failure to meet legal disclosure requirements.

For example, the lender or bank sent the loan file to the investor with a copy of an executed, third-party authorization to release the nonpublic, personal information (NPPI) form to real estate agents, giving them access to a borrower’s CD.

Such forms are viewed as “insufficient” in the secondary market because they do not meet the disclosure requirements of some laws, including Regulation P and the Gramm-Leach-Bliley Act. Some state real estate associations, such as those in Louisiana and Texas, have created their own authorization forms, but Sterbcow cautioned that investors are rejecting them.

7. Some settlement agents are not providing sellers with the CD, or are providing the HUD-1 or ALTA Settlement Statement instead.

Those forms cannot replace the CD under the TRID rules.

8. Lenders are reporting that their settlement agents still do not understand the simultaneous issuance rules.

Therefore, they are getting estimates that do not comply.

9. Incorrect use of the “Optional” designation.

This designation is used for insurance, warranty, guarantee or event-coverage products disclosed under the “Other” category, such as optional owner’s title insurance, credit life insurance, debt suspension coverage, debt cancellation coverage, home warranties and similar products.

10. Fee names on the LE and CD do not match.

The attorneys cautioned that a title company or settlement agent can change the fee names if circumstances change, but those fee names should remain the same on both forms from then on.

Advice for agents

Although agents may view this list and think most of the errors don’t apply to them, Ken Trepeta, RESPRO’s president and executive director, painted a picture of how these issues may play out and impact the entire housing industry.

“If lenders can’t sell the loans to investors, they may go out of business — particularly small- and moderate-sized mortgage lenders and banks that cannot portfolio loans,” Trepeta said. “So there will be fewer options for consumers, and credit could be constrained.”

In addition, “if investors are nitpicking technical issues, it is just going to slow down the process further as people double- and triple-check everything before they allow a transaction to close,” Trepeta said. He anticipated this happening, and in his previous role as director of real estate services for NAR, he advised agents to add 15 days to their transaction timeline.

“It is also why I said people should not wait until closing to address issues, because every little thing is going to be scrutinized, and getting approvals for changes will take time and every change will require an approval,” he said.

“So everything needs to be done right the first time, even though there are cure provisions. Because of buybacks, robo-signing and all the lawsuits in the past, we are now in an era with zero tolerance for even minor errors or deviations.”

NAR President Tom Salomone agreed, adding that anticipating longer closing times “is still an important practice as the industry continues to adapt” to the TRID rule and new closing process.

“December’s existing-home sales are a reason for cautious optimism that the work to prepare for Know Before You Owe is paying off. Nonetheless, our data continues to show longer closing timeframes, and that remains a cause for concern,” Salomone said.

In particular, the sixth item on this list — concerning the use of third-party authorization forms to give agents access to a consumer’s CD — seems to be the biggest sticking point for the real estate side of the transaction. Trade associations are attempting to work with the CFPB to get some guidance on this issue.

Samuel Gilford, a spokesman for the CFPB, said the bureau is aware of the concern, but noted, “These privacy concerns existed before the Know Before You Owe mortgage disclosure rule and are governed by Regulation P, which was not changed by that rule.

“In general, real estate agents and their clients have historically been able to negotiate these legitimate privacy concerns, and we expect they will continue to do so,” Gilford said. “We would note that Regulation P contains various exceptions from prohibitions on sharing personal financial information, and continue to listen and gather information about whether the purposes expressed by residential real estate brokerages and their agents would meet any of those exceptions.”

Loan Estimate

via Amy Swinderman, Inman News 


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Interesting Housing News

Realtors: Please join us at next Tuesday’s 9:30 AM Coffee Corner, and learn exciting new ways to grow your business in 2016.

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Pantone's 2 colors for 2016Pantone’s 2 colors for 2016…  Rose Quartz, a “warmer, embracing rose tone” and Serenity, a “cooler, tranquil blue” are intended to demonstrate balance by reflecting connection, wellness, and peace.

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Downtown St Petersburg Multi-FamilyAnother 366 Apartments Expected to Break Ground This Month in Downtown St Petersburg.

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Smart Home AutomationSmart: Myth Vs. Reality for Home Tech and Automation… 2016 is being hailed as the year that our homes truly enter the high-tech future, and all that talk about the “Internet of things” becomes more than just blather.

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FARIt took longer to close a home loan in November… is TRID the culprit?  VA loans closed in an average 50 days while conventional loans took 49 days. According to NAR, almost half of all Realtors are reporting longer closing times.

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Will the FHA Play an Encore on MIP Cut?Will the FHA Play an Encore on MIP Cut?  If the FHA drops the annual MIP again it will attract hordes of new borrowers who will instantly pay 1.75 percent of their loans into the program in the form of the up-front MIP.

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http://www.TitleSecurityFL.com

 


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Flood Bill Passes House AND Senate, Obama Signs

Last week, fellow Pinellas Realtor Organization Business Affiliate Tracy Baer with North Shore Insurance was our Coffee Corner guest speaker, updating us on the latest Flood Insurance news.

Homeowner Flood Insurance Affordability Act Of 2014In addition to the article below, Tracy handed out an informative PDF presentation regarding the Homeowner Flood Insurance Affordability Act Of 2014.  Please contact me in the comment section if you would like a copy.

 

 President Obama has signed The Homeowner Flood Insurance Affordability Act.

This marks a long, arduous journey to fix some of the most damaging aspects of Biggert-Waters.  A big thank you goes out to the Public Policy team at NAR and Florida Realtors.

The US Senate passed The Homeowner Flood Insurance Affordability Act by a vote of 72-22. This is the bill that the US House passed last week. This is incredible news for REALTORS® and property owners. The bill will now to sent directly to President Obama for his signature. Both US Senators Nelson and Rubio voted in favor of the bill. Here is a synopsis of what the bill accomplishes:

* Reinstates Grandfathering – This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. All post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping – for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy.

* Caps Annual Rate Increases at 15% – This bill decreases FEMA’s authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, the class average cap was 10%. Currently (Post Biggert- Waters), the class average cap is 20%. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy (e.g., 1% of $250,000 = $2,500).

* Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates

* Permanently Removes the Sales Trigger – This bill removes the policy sales trigger, which allows a purchaser to take advantage of a phase in. The new purchaser is treated the same as the current property owner.

* Allows for Annual Surcharges – This legislation applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP.

* Funds the Affordability Study and Mandates Completion – This legislation funds the affordability study required by Biggert-Waters and mandates its completion in two years.

* Includes the Home Improvement Threshold – This bill returns the “substantial improvement threshold” (i.e. renovations and remodeling) to the historic 50% of a structure’s fair market value level. Under Biggert-Waters, premium increases are triggered when the renovation investments meet 30% of the home’s value.

* Additional provisions – This legislation includes several other provisions including preserving the basement exception, allowing for payments to be made in monthly installments, and reimbursing policy holders for successful map appeals


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Housing News: A Week In Review

Housing RecoveryOvercoming NAR’s Home Sales “Subdued” Reference…
The Truth About National Association of Realtors‘ Home Sales Numbers

http://bit.ly/1h5JqrK

 

Eau de CondoEau de Condo… Some condo developers are betting that the best way to a buyer’s heart is through the nose.

http://on.wsj.com/1iuDMz9

Jumbo LoansJumbo Loans for Micro Homes…
Buyers in expensive markets are turning to jumbo loans to help buy diminutive apartments with sizeable price tags.

http://on.wsj.com/1rKHysW – VIDEO

 

Paying All CashInvestors paying all-cash for homes are coming back to the market at rates not seen since last Spring.
http://bit.ly/1jC9LMV

 

http://www.TitleSecurity.net