FHA Tightening Up on Loans

Dave Stevens, the newly-appointed head of the Federal Housing Administration, recently shared these facts about the current housing market:

Some of the pertinent facts about the market that Dave brought out in his presentation were:

• “90% of all residential loans originated in the first quarter of 2009 were sold to either Freddy Mac or Fannie Mae
• 80% of insured loans in 2009 were to first-time Buyers (So it looks like the tax credits to these Buyers did work)
• FHA did a “terrible job” of monitoring lenders. Within the past 6 months, FHA has suspended the licenses of 359 lenders …That’s more than all of the suspensions since the year 2000.
• The cost of FHA insurance to Borrowers has been increased by 35%. This represents an increase in closing costs and monthly charges. The increase was to make up for the costs of foreclosures and short sales and to bring FHA’s charges into proper balance as a federal agency.
• When Seller concessions of up-to 6% were allowed, over 50% of the loans became delinquent. For that reason, FHA reduced the maximum allowable concessions to 3%.
• As of January 1, 2010, every loan officer must be licensed.”

The housing market is a HUGE market–and, as they say, it takes time to turn a big ship.  Signs are indicating that real estate markets continue to be “local markets” and the nation is still showing “soft” markets.

Because of these changes and trends, it is more imperative now that you seek wise counsel for real estate needs from a qualified & educated real estate agent.  We can be that agent for you.

Possible Changes in FHA Loans Coming Soon?

The Federal Housing Authority might institue the following changes in as little as the next couple of months.  Another reason, beside the first-time homebuyer tax credit extension, to get into contract on a home as soon as possible.

December 2nd Congressional Hearing

HUD Secretary Donovan and FHA Commissioner testified that they expect FHA to annouce major changes to ensure FHA’s long-term financial soundness.  Some examples are as follows:

1.  Increas the down payment required from 3.5% to 5%

2.  Increase upfront premium from 1.75%  to up to 3%

3.  Eliminate the ability to include the upfront premium into the loan amount

4.  Increase the monthly mortgage insurance premium (MIP) to .55%

5.  Reduce the amount of seller concessions to the buyer from up to 6% to up to 3%

6.  Increase the minimum FICO score of the buyer

7.  Loan to Value (LTV) ratios possibly determined by buyer’s FICO score

8.  Increase accountability of FHA lenders for fraud

One important thing to note:  none of these proposed changes require Congressional approval.  These only require administrative approval and can quickly implemented.

That being said, these changes, and others that might be on the table, could make it more difficult and expensive for borrowers to obtain an FHA loan.  In essence, the number of eligible buyers may, in fact, be greatly decreased.

 

First Time Home Buyer Tax Credit IRS Form

For those of you trying to take advantage of the First Time Home Buyer Tax Credit, there is an IRS form that must be included with your tax return.  Here it is to make your compliance easier.  Happy tax filing!

Nevada Foreclosure Activity

Everyone is intersted in the foreclosure activity here in Nevada.  A new article posted today by Realty Trac reveals the following:

Nevada Foreclosure Activity Up in Third Quarter
By RealtyTrac Staff   

 

Total foreclosure filings up 10 percent from Q2, and up 59 percent from Q3 2008.

 

Nevada reported 47,925 properties with foreclosure filings in the third quarter of 2009, an increase of 10 percent from the previous quarter and 59 percent above the level reported in the third quarter of 2008, according to the latest RealtyTrac^® U.S. Foreclosure Market Report.

One in every 23 Nevada housing units received a foreclosure filing in the third quarter, the highest state foreclosure rate in the nation.

 

Foreclosure activity in the Silver State was up 5 percent in September from the previous month to 18,766 properties with foreclosure filings, and remained elevated on a yearly basis, up 44 percent from September 2008. The state’s foreclosure rate was highest in the nation for the month — with one in every 59 housing units receiving a foreclosure filing — 6.3 times the national average.

 

“Nevada foreclosures continued to climb during the third quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “The largest increase was in bank-owned properties, which jumped nearly 30 percent during the quarter. Nevada’s 13.3 percent unemployment rate is at a historic high and contributing to the rising foreclosure activity. Rising joblessness is making it harder for borrowers to meet mortgage payments.”

 

As it has for almost two years now, California continues to lead the nation in total foreclosure activity by a large margin on both a monthly and quarterly basis. For the third quarter, it reported 250,054 properties with foreclosure filings. Florida posted the second highest activity level — 156,924 properties with foreclosure filings. Arizona reported 50,342 properties with foreclosure filings, third highest level in the nation. Nevada came in fourth highest, reporting 47,925 properties with foreclosure filings during the quarter, while Illinois tallied the fifth highest total, documenting 37,270 properties with foreclosure filings. The top five states alone represented 58 percent of all foreclosure filings in the nation during the quarter.

 

For September, the nation’s top 5 states for total foreclosure filings were California (86,337), Florida (55,036), Nevada (18,766), Michigan (16,767), and Georgia (14,972). Activity in the top five states accounted for 58 percent of the nation’s foreclosure total in September.

 

Clark County posts state’s top foreclosure rate in third quarter

Clark County posted the highest county foreclosure rate in the state for the third quarter, with one in every 20 housing units receiving a foreclosure filing — seven times the national average. Lyon County was a close second, with one in every 20 housing units receiving a foreclosure filing during the quarter — 6.9 times the national average. Nye County posted the third highest foreclosure rate, where one in every 22 housing units received a foreclosure filing — 6.2 times the national average.

 

Five counties accounted for 99 percent of foreclosure activity for third quarter

Clark County led the way, tallying 40,408 properties with foreclosure filings for the quarter. Washoe County came in second highest, reporting 4,799 properties with foreclosure filings. Lyon County came in third, tallying 906 properties with foreclosure filings. Fourth highest for the quarter was Nye County, reporting 751 properties with foreclosure filings. Douglas County documented 386 properties with foreclosure filings, the state’s fifth highest foreclosure total in the quarter.

 

State contributes 5 percent to nation’s foreclosure activity for quarter and month

Nevada accounted for 5 percent of the 937,840 properties with foreclosure filings reported nationwide for the third quarter and 5 percent of the 343,638 properties with foreclosure filings reported for September. Total U.S. activity declined 5.4 percent between the second and third quarter of the year, but was up 23 percent from the third quarter of 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter, the highest quarterly foreclosure rate since RealtyTrac began issuing its report in 2005.

 

Report methodology

The RealtyTrac Monthly U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the month — broken out by type of filing at the county, state and national level. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month — which is extremely rare — only the most recent filing is counted in the report. The report also checks if the same type of document was filed against a property in a previous month. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state the property is in, the report does not count the property in the current month.

  

 

Nevada Top Foreclosure Rates by County – Q3 2009

 

County	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	/Natl. Avg.	/State Avg.
United States	153,255	188,986	263,957	94,590	237,052	937,840	136	n/a	n/a
Nevada	19,949	0	16,329	0	11,647	47,925	23.00	5.93	n/a
Clark	16,788	0	13,615	0	10,005	40,408	20	6.99	1.18
Lyon	368	0	313	0	225	906	20	6.88	1.16
Nye	307	0	226	0	218	751	22	6.17	1.04
Washoe	1,996	0	1,852	0	931	4,779	37	3.67	0.62
Churchill	89	0	62	0	41	192	57	2.41	0.41

 

 

Nevada Top Foreclosure Totals by County – Q3 2009

 

County	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	% Chg Q2 09	% Chg Q3 08
United States	153,255	188,986	263,957	94,590	237,052	937,840	136	5.40	22.50
Nevada	19,949	0	16,329	0	11,647	47,925	23.00	9.68	58.88
Clark	16,788	0	13,615	0	10,005	40,408	20	8.82	53.62
Washoe	1,996	0	1,852	0	931	4,799	37	14.14	84.66
Lyon	368	0	313	0	225	906	20	13.11	78.00
Nye	307	0	226	0	218	751	22	10.93	147.85
Douglas	166	0	121	0	99	386	60	5.75	139.75

 

 

Nevada Top Foreclosure Rates by County – Sept 2009

 

County	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	/Natl. Avg.	/State Avg.
United States	56,979	65,186	97,925	35,727	87,821	343,638	372	n/a	n/a
Nevada	8,568	0	6,327	0	3,871	18,766	59	6.34	n/a
Lyon	250	0	210	0	109	569	32	11.80	1.86
Clark	7,246	0	5,311	0	3,265	15,822	50	7.47	1.18
Nye	93	0	105	0	69	267	62	5.99	0.94
Churchill	66	0	53	0	26	145	75	4.98	0.79
Washoe	777	0	560	0	320	1,657	107	3.47	0.55

 

 

Nevada Top Foreclosure Totals by County – Sept 2009

 

County	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	% Chg Aug 09	% Chg Sept 08
United States	56,979	65,186	97,925	35,727	87,821	343,638	372	-4.14	29.20
Nevada	8,568	0	6,327	0	3,871	18,766	59	4.83	44.11
Clark	7,246	0	5,311	0	3,265	15,822	50	5.90	37.52
Washoe	777	0	560	0	320	1,657	107	-20.57	44.09
Lyon	250	0	210	0	109	569	32	505.32	712.86
Nye	93	0	105	0	69	267	62	-24.15	126.27
Douglas	68	0	53	0	38	159	146	40.71	89.29

Home Buyer’s Tax Credit Extended & Expanded!

Today Congress passed a new extension and expansion of the Home Buyer’s Tax Credit.  It is before the President for his signature, anticipated within the next couple of days.  There are some changes to the tax credit which you can view here:  Comparison Chart of Home Buyer Tax Credits.  Questions?  Contact us today!

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