Posted September 7, 2015

We’re from the Government, We’re Here to Help You : )

Fannie Mae, later this year, will be rolling out a new program called HomeReady to help lower- and moderate-income borrowers purchase homes. This will be integrated into their Desktop Underwriting program and will automatically flag potential borrowers for inclusion in the program by utilizing the DU findings. Here are some details:

• HomeReady will eliminate or cap certain loan level pricing adjustments (LLPAs) such as those associated with credit score, LTV, etc. – possibly translating to a low mortgage rate

• A non-borrower household member’s income can be considered when determining the borrower’s DTI ratio

• Will also allow income for non-occupant borrowers, such as parents of a borrower, to be used to supplement qualifying income

More details will be released soon – we’ll keep you updated. Stay tuned . . .

Gas: Unleaded, Diesel, or 3-Bedroom Colonial

According to a recent study from Florida Atlantic University and Longwood University, a strong indicator of home prices is what you pay at the pump. The study encompasses a 10-year span and reveals the following:

• For every $1 decrease in gas prices, the average selling price of a home CLIMBED by 2.4% (that’s about $4,000 more per sold property included in the study)

• Also, for that $1 per gallon decrease in gasoline price, the average time to sell a property falls by 25 days

• AND, that same $1 decrease was also shown to increase a seller’s chances of closing the sale by about 20 percent

The analysis of the results explained: When prices at the pump are lower, consumers have more disposable income, which equates to a larger pool of prospective home buyers. Food for thought: on the other side of the same coin, one might be able to pick up a relative bargain when gas prices are high.

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The Definition of Insanity (in Real Estate)

More than a couple of years ago, I witnessed something that makes me laugh and cringe at the same time. Having lunch at a local restaurant, I spied a real estate agent and a loan originator having what I would characterize as a “first date”. I couldn’t help but overhear little snippets of their conversation, and as far as I could tell, things were going relatively well . . . at least until the agent asked the LO this question: “So, do you like to sit at open houses with agents?” I immediately looked to the LO’s face awaiting the response. I didn’t need to hear another single word coming out of the LO’s mouth because his face said everything: you would have thought the agent had asked him if he enjoyed bobbing for apples in a pool of acid judging by the look on his face. While his face was communicating complete revulsion, his lips said, “Yes, of course.” And that’s when I looked over at the agent’s face to see, ...

Time for a New York-Style Housing Fix

Previously, I’ve written about a man who works in our office who lived in New York City back in the late ‘80s and early ‘90s – let me assure you that while that does seem like a very long time ago, it’s not nearly as far bac k as when the wheel was invented and humankind learned to harness the power of fire. If you’ve been to New York City recently and blissfully walked around Harlem to get chicken and waffles at Sylvia’s on Malcolm X Boulevard between 126 th and 127 th Streets or stopped in at Keybar on 13 th Street between First Avenue and Avenue A to wedge yourself into a cozy corner next to their notable fireplace, you wouldn’t get a sense that these areas were once . . . not as welcoming and glitzy as you now see them. Our office mate has told some fairly interesting stories of living in those and other areas of New York City that give a much different sense. In the late ‘80s/early ‘90s, no matter how many great things you heard about Sylvia’s food, 127 th Str...

Change: the Only Sure Thing

Which headline is better for grabbing your attention and prompting you to read the article to which it’s attached: “Credit Reports to Exclude Certain Negative Information, But Read on to See if This Even Applies to You” or “ Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores”? Obviously, the former is less than tantalizing while the latter makes you say, “Tell me more!” I was in the “tell me more” camp, and the folks at The Wall Street Journal sucked me into their vortex. The development, set to go into practice on July 1 st , is certainly a departure from how the Big Three (Experian, TransUnion , and Equifax) have done things in the past, but it’s not going to wave a magic wand and make bankruptcies, foreclosures, short sales, etc., go away. It’s sort of a bittersweet development. Let me explain: Many tax liens and civil judgments will be removed from people’s credit reports if they don’t include a complete list of a...

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