The future of the Texas commercial real estate market looks bright
July 27, 2008
Dallas, Texas (WiredPRNews.com) — At a time when the economy is on a seemingly constant downslide, it is hard to know exactly where the real estate market in any given city is going. Home sales everywhere are down and foreclosures are occurring in record numbers. New construction and commercial real estate sales have slowed down tremendously and Realtors all over the country are working hard with potential home buyers to invest in a home and get home sales back on the incline.
However, for the commercial real estate market in Texas, things are continuing to look up; particularly in the commercial real estate sector. According to Lewis Realty Advisors, a real estate valuation and consulting firm located in Houston, Texas, major metropolitan areas around the state are continuing to post gains in significant areas such as employment and population, two of the most important groups in terms of business.
David Lewis, who is the founder of the company, tells Dallas Business Journal that while he does not feel as though Texas is not immune to some of the same economic problems that has affected other regions of the country, he does see many positive trends in the area of real estate and in the general economy of the state of Texas.
The report names Dallas/Forth Worth, Austin, Houston and San Antonio as top gainers in terms of job growth in the nation. Coinciding with those numbers are increased numbers of population growth for all four cities as well. The economy in Texas relies mainly on healthy education, technology and health care sectors. However, the energy sector is what continues to drive the Texas economy, with a large presence in the Dallas/Fort Worth area.
Lewis’ view of the numbers is that because Texas is seeing overall growth, it is a signal that Texas real estate is performing just as well and likely will continue the trend for the foreseeable future.
Joan Severson - Dallas Real Estate Agent
TReXGlobal.com Releases ‘Partner Program’ for Real Estate Professionals
July 27, 2008
NewswireToday - /newswire/ - Fremont, CA, United States, 07/27/2008 - “Residential investors account for the most underserved market in the real estate industry, but most agents think that the investor market is small and unworthy of focus,” said Pankaj Shukla, CEO and Founder of TReXGlobal (The Real Estate eXchange).
TReXGlobal.com unveiled a free new platform for real estate professionals to attract business with real estate investors – the T-ReX “Partner Program.”
“Residential investors account for the most underserved market in the real estate industry, but most agents think that the investor market is small and unworthy of focus,” said Pankaj Shukla, CEO and Founder of TReXGlobal.com. “In reality, this is a huge market, and investors provide a great opportunity for real estate professionals – especially with current market conditions.”
According to the National Association of Realtors®, 22% of all property purchases last year were for investment purposes – and 75% of these purchases were single family homes, townhouses, and condominiums. Eight out of ten investors surf through agents’ websites looking for deals, but the inability to identify these investors and market to their needs results in lost opportunities for real estate professionals.
With the T-ReX Partner Program, agents can generate more business by converting web visitors into investor clients using free co-branded web tools. These free web tools save thousands of dollars for the agent’s investor clients. Agents also have access to an online Marketing Toolkit that contains step by step guides that assist real estate professionals with marketing and communication efforts. This helps real estate professionals cultivate relationships with investors and generate long-term recurring business.
About T-ReX Global (The Real Estate eXchange)
T-ReX Global (trexglobal.com) is a leading provider of simple web applications for real estate investors to help them save thousands of dollars. The Partner Program helps real estate professionals cultivate relationships with investors using co-branded web tools.
T-ReX Global’s web tools have been featured in Forbes, The Chicago Tribune, Accounting Today, WebCPA.com, and other publications. T-ReX Global was also one of thirty companies chosen to demonstrate at Launch: Silicon Valley 2008. The company has partnerships with H&R Block, First American Corporation, and IPX 1031 Investment Property Exchange Services.
T-ReX was founded by CEO Pankaj Shukla (Former VP Intuit Small Business) and President Narinder Sandhu (Former VP Intuit Payroll Services). Both have over 20 years of experience real estate and product development.
More Bad News for Financial Institutions
July 27, 2008
Mike Larson takes a closer look at the declining second quarter earnings of both big and small financial institutions. In this issue of Money and Markets, Mr. Larson discusses how although there is bad news for financial institutions, finance and real estate companies aren’t doing that badly.
Jupiter, FL (PRWEB) July 27, 2008 — Mike Larson takes a closer look at the declining second quarter earnings of both big and small financial institutions. Mr. Larson discusses how although there is bad news for financial institutions, finance and real estate companies aren’t doing that badly.
American Express recently reported a 38% year over year plunge in second-quarter profits. Earnings per share of 56 cents were far below the Wall Street consensus of 83 cents. According to the company’s CEO Kenneth Chenault, “Consumer spending slowed during the latter part of the quarter and credit indicators deteriorated beyond our expectations. The scope of the economic fallout was evident even among our longer term, superprime cardmembers.”
Megabank Wachovia recently recorded a loss of $8.9 billion, or $4.20 per share, in the second quarter. Analysts were looking for a loss of just 78 cents per share. The bank said it plans to slash almost 11,000 jobs. It also cut its quarterly dividend down 87% to just 5 cents a share.
Even the smaller regional banks are seeing more bad news. Regions Financial turned in a 55% drop in profit. Fifth Third of Cincinnati lost $202 million, a huge swing from 2007, when it generated $376 million in net income. KeyCorp of Cleveland did much worse. Its quarterly loss: $1.13 billion versus the income in 2007of $334 million.
Despite the news, shares of finance and real estate companies haven’t been doing that badly. In fact, they’ve been surging. Wachovia was up as much as 148% from its recent intraday low to intraday high. Bank of America surged 86%, while JPMorgan Chase gained 47%.
According to Larson, investors are ignoring all the bad news for a few different reasons. They figure that the Fannie Mae and Freddie Mac rescue program being put into place will be enough to backstop those firms. The Treasury Department is getting authority to extend an unlimited amount of credit to the two Government Sponsored Enterprises, and to buy an unspecified amount of their shares.
Some of the banks that have reported earnings have said they don’t need to raise capital immediately. Many have opted instead to sell off assets. Merrill Lynch unloaded its stake in the Bloomberg news service for $4.43 billion, for instance, while SunTrust Banks is liquidating 40 million shares of Coca-Cola.
“A housing support bill is finally making it into law. The bill has several provisions, including a tax credit of as much as $7,500 for first-time home buyers and a property tax deduction for certain homeowners. It will also authorize a mortgage program that requires lenders to recognize some losses on their existing loans, but that gives them an out by allowing them to then be paid off with new, lower-balance loans backed by the Federal Housing Administration,” Larson states.
To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?Wall-Street-in-Financial-Stock-Fantasyland-2015
About Mike Larson and Money and Markets
Mike Larson joined the company in 2001, and has more than 10 years of experience researching and writing about personal finance, investing, and the housing and mortgage industry. In 2003, Mr. Larson was named associate editor of the company’s monthly Safe Money Report. In this role, he is responsible for writing and editing as well as analyzing trading opportunities for clients. Mr. Larson is also a regular contributor to the company’s daily e-letter, Money and Markets.
Before joining Weiss Research, Mr. Larson was a personal finance reporter for Bankrate.com, where he wrote extensively on mortgage lending, banking, residential real estate, and Federal Reserve Board policy. His responsibilities included analyzing economic data and interest rate trends for a weekly column and developing rate forecasts for a regular index feature. Previously, Mr. Larson held positions at Bloomberg News and the Boston Herald.
Recognized as an interest rate and mortgage market expert, Mr. Larson’s views have been quoted in the Washington Post, Chicago Tribune, Dow Jones Newswires, Reuters, Sun-Sentinel and the Palm Beach Post. He has also appeared as an investment expert to discuss the housing market on CNBC, CNN, and Bloomberg Television. His writing has been acknowledged by both the National Association of Real Estate Editors and the Massachusetts Press Association.
Among the first analysts to call the housing slide, Mr. Larson’s new policy paper, “How Federal Regulators, Lenders and Wall Street Created America’s Housing Crisis: Nine Proposals for a Long-Term Recovery” has received broad media coverage following its July 2007 submission to the Federal Reserve and FDIC. Mr. Larson holds B.A. and B.S. degrees from Boston University.
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.
Social Networking Brings Real Estate Industry to the Next Level
July 27, 2008
BuyerBeacon, The Official Real Estate Matchmaker, offers an interactive and user friendly tool for home buyers and sellers. The website is in response to an online real estate marketplace where it can cost hundreds of dollars to sell your home online. Owners Peter Fabbri III and Cory Ruell believe that “it’s time to make the home buying process smoother, quicker, easier and more affordable, and that is why we have developed buyerbeacon.com!” Development of the Buyer Beacon website started in August 2007 and nearly one year later, is being unveiled to the public.
Lake Orion, MI (PRWEB) July 27, 2008 — Buyer Beacon LLC (http://www.buyerbeacon.com), operating out of Lake Orion, Michigan, is a residential real estate website that leverages the matchmaking ability of a dating site. Buyerbeacon.com allows homebuyers and sellers of properties to network and communicate with each other through the website. Home buyers create a buyer profile and enter specified search criteria (including location, price range, etc. of their desired home) while home sellers create profiles detailing what makes their home perfect; Buyer Beacon collects the information to match users up via e-mail notification. Users are also free to search, browse, and communicate through the website to find their perfect match. Realtors may reap the benefits of the site by utilizing it as an instrument to aid in finding a perfect buyer for clients. Realtors can interact with the buyers by sending and receiving emails, they have the ability to list 15+ homes, add up to 15 pictures per property, and have access to a listing management tool inside of their profile. SAMSA Programmer, Josh Taylor, adds, “The Buyer Beacon site ventures into a new tier of social networking unlike any other because it focuses on property listings.”
The idea for this social networking website tailored for real estate buyers and sellers was created by owners Peter Fabbri III and Cory Ruell as a solution to the hassle of trying to find a home. One of the Co-founders of Buyer Beacon developed the initial plan for the website after driving around weekend after weekend looking for the perfect home with no success. Fabbri comments on the new site, “The concept of our website has not yet been seen in the Internet real estate industry. We offer a free, no obligation way to market and find buyers for your home that is very interactive and user friendly.” He goes on to say, “In an online real estate marketplace where it can cost hundreds of dollars to sell your home online, it’s time to make the home buying process smoother, quicker, easier and more affordable, and that is why we have developed buyerbeacon.com!” Fabbri and Ruell plan on marketing Buyer Beacon, “The Official Real Estate Matchmaker,” nationally, within the next year.
Development of the Buyer Beacon website started in August 2007 and nearly one year later, is being unveiled to the public. Buyerbeacon.com could not come at a better time as the U.S. real estate industry is suffering and sellers cannot find buyers for their homes. Buyerbeacon.com offers sellers the ability to take the initiative and for the first time ever use the Internet to find buyers. Fabbri commented, “The beauty of buyerbeacon.com is that home sellers and homebuyers both benefit from using the site. Sellers can pursue buyers anxious to buy a home. Buyers can find their perfect home without a lot of legwork. It’s a win-win for both buyers and sellers! Internet matchmaking at its finest and its free!” SAMSA (http://www.samsa.com) provided web development including database design and PHP programming. SAMSA used cutting edge scripting, (Spry technology) to make subtle effects throughout the website and used a PHP-programmed site backed with a mySQL database for the website’s data. They also provided graphic and web design and web host the Buyer Beacon site.
When it came to developing the website, Buyer Beacon owners explain, “We performed a lot of due diligence selecting our website vendor, as it was the heart and soul of our idea. SAMSA stuck out from the crowd through their professionalism, their dedication to their clients, and their reasonable prices.” Ruell adds, “Peter and I would 100% recommend SAMSA to any other business clients and acquaintances. SAMSA did a wonderful job with our site in a reasonable time frame.” In regards to working with the SAMSA team through the process of getting the website developed and ready to go live to the public, they state, “SAMSA has been a treat to work with; they handled everything we asked of them professionally and diligently. They took the vision we gave them for the site and created a final result that exceeded our expectations.”
Buyerbeacon.com User Benefits:
The Standard Profile for sellers is free and includes one home listing, ability to upload eight pictures, search homebuyer and seller profiles, add favorites, and receive new homebuyer e-mail alerts.
The Premium Profile for sellers is $10.95/month after a one-month free trial and in addition to the standard profile perks includes, 15 additional free listings, the ability to send and read emails, upload 15 pictures per listing, add and manage additional listings, and it provides premium display within search results for each listing.
The Premium Profile for buyers is free and includes the ability to send and read e-mails, upload a profile picture, search seller listings, add favorites, and receive new seller e-mail alerts.
Upping Your Resale Value: NY & New Jersey Home Improvement Tips From MyHome LLC
July 26, 2008
Industry leader MyHome Renovation provides useful New York & New Jersey home improvement tips for upping the resale value of your home or saving on utility costs.
(PRWEB) July 26, 2008 — To further their ongoing efforts to educate Tri-state area homeowners about the diverse NY & NJ home improvement market, MyHome LLC (http://www.myhomeus.com) owners Mayan Metzler and Yoel Piotraut recently released some new home improvement tips on their website (http://www.myhomeus.com/energy-efficiency/energy-efficiency.php) to help homeowners up their resale value and improve their curb appeal. In the wake of today’s real estate crisis, MyHome is dedicated to informing the general public about ways to minimize losses on home investments with practical solutions that prepare homeowners for when the market swings back in the right direction.
“The first thing we tell clients is to make your home more energy efficient,” says MyHome President Mayan Metzler. “This can range from adding attractive siding or replacement windows to seal your thermal envelope to installing Photovoltaic (PV) panels to your NY or NJ home that tap the sun as a power source.”
According to Metzler, these improvements not only enhance the appearance of your home and potentially increase its value but they save homeowners money on utility costs while bettering the planet at the same time. “It’s a quadruple win,” Metzler says.
Further, while implementing large-scale changes like installing alternative energy sources, such as PV technology or geothermal heating and cooling, can have a dramatic long term impact on your home’s value, there are also simple and cost-effective ways to make more immediate changes that may not up your resale but can drastically reduce your monthly expenses which amounts to the same thing. These include adding spray insulation, switching to LED bulbs, or applying heat reflective exterior paint.
“It’s all about playing smart, and we provide consistent updates on our website at http://www.myhomeus.com to give clients useful ways for achieving these goals,” says MyHome CEO Yoel Piotraut. “And homeowners need not stop with their houses. We all know that a well maintained lawn and landscape design can have a huge impact on resale, but choosing eco-conscious alternatives for your lawn and garden, such as plants with low water needs, can save you maintenance and water costs while beautifying the property. Even better, plants like trellised vines near windows can decrease passive solar heat in the summer, and increase it in the winter when they lose their blooms–which directly impacts utility costs.”
Other ways to improve resale value as well as your daily life include making sure kitchens, bathrooms, and all cabinetry are well maintained. In addition, painting rooms in neutral colors or using tile flooring for maximum durability can have a positive effect on resale when the market turns around.
“We believe that an informed client is better able to be proactive in a time when the NJ real estate market presents certain obstacles,” Metzler says. “By making this information easily available to clients we hope to help them implement some key changes that can not only improve how they live but also save them some money in a time when the economy is on everybody’s mind.”
As full-service NY & NJ home improvement specialists, MyHome prides itself on its customer education process along with its exemplary service and track record. For more information on MyHome and its many products and services call 1-800-730-0148 or log on at http://www.myhomeus.com.
About MyHome
MyHome is a full-service home improvement provider focused on client relations. A corporate leader in delivering world-class service for the past ten years, MyHome specializes in designing, managing, building, and coordinating every part of your building project. With recent media coverage from Forbes.com to NBC’s “The Today Show” MyHome’s development projects are getting noticed nationwide. For more information please visit to http://www.myhomeus.com.
New Mortgage Foreclosure Law Information Hotline
July 25, 2008
Joseph Gross Host Of America’s #1 Mortgage Talk Show “Your Home - Your Future” has set up a hotline to broadcast his highly informative interview with NY State Assemblyman Darryl Towns.
Teaneck, NJ (PRWEB) July 25, 2008 — National Mortgage Expert, Joe Gross and Host of America’s #1 Mortgage Talk Show, “Your Home - Your Future” on 1160 AM WVNJ, has a new hotline, 212-461-2780, in which consumers can dial in and listen to his interview with Assemblyman Darryl Towns who sponsored the recent New York Law to prevent New York residents from losing their homes to foreclosure.
“The hotline was created for those consumers who cannot connect to the internet, or do not have the radio show broadcast in their area, or would like to hear the show again. I have given them an easy way to do so, simply by dialing 212-461-2780,” said Joe Gross. “Your Home - Your Future” Hotline is all about helping listeners get the tools and information they need to protect their home today and the future.
New York State Assemblyman Darryl Towns, the Chair of the New York State Assembly Banking Committee, broke down all the aspects and facts each consumer needs to know on how to protect their most valuable asset, their home. He has worked very hard to get this Bill passed and now it’s up to each consumer to understand it and do what’s necessary to save their house from foreclosure. He shared the information what every consumer needs to know on “How to Protect Themselves from Foreclosure Even if They Didn’t Pay Their Mortgage” and “How to Protect Themselves from Unscrupulous Mortgage Lenders”
“What we found were a large number of questionable lending practices such as interest-only mortgages made with little or no income verification. While these schemes have helped drive the homeownership rate in the United States to a record 70 percent, they have also placed millions of Americans, particularly in low-income communities and communities of color, at risk for foreclosure,” Assemblyman Towns said.
New York has been suffering from a 25% increase in foreclosures and over 50,000 people will be foreclosed on this year. As a result, Assemblyman Towns took the initiative to bring forward this Bill so all New York citizens can, and will, be protected.
“It is very important in this Mortgage Market Collapse to provide consumers with all the information they need so they can make an informed decision,” says Joe Gross, host of “Your Home - Your Future”.
“This is a very important time for all people that own a home, or those that want to become homeowners, to do the proper research and get into a loan that will work for them today and the future. With the Mortgage Market Collapse lenders have been going out of business and constantly changing their guidelines so every consumer needs to be updated and kept informed as to what’s happening.” Gross says.
Joe just finished writing his book titled, “How the Greed of Wall Street, and your Mortgage Lender are destroying America’s Credit.” If you own a home, you must have this book. In the book he discloses the secrets every consumer must know to protect themselves. This book was just released and will hopefully benefit all those that are suffering from this Mortgage Market Collapse and are in danger of losing their home. Joe offers on his radio show an opportunity for those that want to get the Book FREE, so tune in Thursdays at 2:00 on WVNJ 1160 AM or www.saveyournewyorkhome.com.
Joe is available for interviews and welcomes your mortgage-related questions. He can be reached at 800-653-2684 or at http://www.saveyournewyorkhome.com
Media Contact: Please contact Theresa Consoli with any questions or interview requests: 800-653-2684:
Fax: 201-837-1128
Qualified Mortgage Inc.
1086 Teaneck Road
Teaneck, NJ 07666
Luxury Real Estate in Las Vegas, NV & Henderson, NV
July 25, 2008
Luxury homes and estates require considerable time as well as specially designed marketing programs in order to attract buyers. This is mainly due to the number of buyers capable of purchasing high priced real estate. Any real estate agent would be privileged to list and sell a multi million dollar property, however; not every agent has the experience combined with the techniques to do so successfully.
Sena & Associates with North American Realty of Nevada is announcing the entry into the Luxury Las Vegas Real Estate Market. Tony Sena, the team leader advised “We were getting numerous requests from buyers interested in purchasing high end Las Vegas Real Estate and at that point it made sense to hold the inventory.” Sena and Associates offers a customized marketing plan designed to get your luxury home sold in less time with less stress.
Sena & Associates focuses on 3 key areas when assisting buyers and sellers of high-end properties. These include: defining the property, creating a customized marketing plan, and delivering exceptional service.
It is essential that luxury homes and estates are clearly defined. High-end homes and estates are unique because of their quality, historic significance, or eminent location. Sena & Associates is a team of experienced real estate professionals with the knowledge required to define and present a luxury property to its best advantage.
A customized marketing plan is crucial for your property. Buyers may come from the local area, another state or from anywhere in the world. Sena & Associates has the resources to provide marketing that will reach the greatest number of prospective buyers. Sena & Associates uses a wide variety of methods to market your home. These include: display advertising in national and international editions, placements in premier home magazines, customized press releases, and direct mail. Our website provides potential buyers access to: virtual tours, expanded listing information, and a property search. Considering that over 80% of all buyers search the Internet for available properties, a top ranked website like ours is always beneficial.
Like all of our clients, luxury home and estate owners demand exceptional service that is responsive, highly professional, and most of all, effective. Sena & Associates will take on this challenge, and make your real estate transaction a successful one. We continually prove that we can market homes to the maximum number of qualified buyers worldwide, as well as handle every inquiry with discretion, efficiency and sophistication.
Sena & Associates has the experience, knowledge, and ability to properly market your luxury home, and provide you with the customer service you deserve. When you are ready to sell your luxury home please afford them an opportunity for an interview. Sena and Associates can be reached 7 days a week at 702-376-0088 or you can visit them on their webste at www.SenaSellsVegas.com.
My Mississauga Home Now Offers a Live Realtor
July 24, 2008
My Mississauga Home has added a Live Chat feature to its website so consumers can now speak to a licensed real estate agent right away. This messenger service will further enhance the sites interactive options to consumers and get answers to their questions regarding real estate as quickly as possible.
Mississauga, ON (PRWEB) July 24, 2008 — In an effort to maximize the visitor’s time My Mississauga Home is excited to introduce its Live Realtor. Visitors can now speak directly to a licensed real estate agent while browsing the site, allowing them to gain the exact information they are looking for in very little time.
“This service will allow visitors to get answers quickly, without having to wait for an email or a phone call to be returned.” says Deepak Verma, My Mississauga Home’s Realtor. “The primary focus for this website has always been to find ways to provide as much value as possible for the consumer and to get them the information they need in as little time as possible.”
This service is very simple to use. When a realtor is available online, all the visitor has to do is click on the Live Chat icon and a real-time conversation is initiated just as an online messenger service such as Yahoo or MSN.
My Mississauga Home realizes the plethora of information available to consumers on the web. The goal of this site is to make it as concise as possible so the consumers can find the information they need when making their real estate decisions.
Oxford Funding Predicts More to Come for Mortgage Crisis
July 24, 2008
HOUSTON, TX–(Marketwire - July 24, 2008) - The current mortgage situation isn’t bad for everyone, at least from Bob Dunn’s perspective.
A new Fox Business News poll just released shows that 55% of those polled do not believe that the “worst of the subprime-mortgage mess” is over for major U.S. banks.
“With banks continuing to increase their reserves for bad loans, Oxford Funding Corporation is in an excellent position to continue to increase its position in mortgage portfolios at significant discounts,” says Bob Dunn, President of Oxford.
The company recently began selling individual mortgage loans to accredited investors. This type of opportunity had been reserved exclusively for banks and institutional investors.
Oxford Funding (PINKSHEETS: OXFD) is a publicly traded asset resolution company specializing in the purchase, sale, and management of individual and bulk mortgage loan portfolios.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words “believes,” “expects,” “anticipate” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone’s past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof.
MN Mortgage Broker Interprets Pending “Housing Rescue” Legislation As Killing Off The First Time Home Buyer And Extending The Housing Crisis
July 24, 2008
Mortgage industry veteran shares her knowledge as it applies to Section 113 of the “Housing Rescue” Legislation eliminating down payment assistance (DPA) that is pending before congress this week. Our fragile real estate and mortgage markets will be impacted extremely negatively if this bill passes and is signed into law. FHA loans are now providing up to 40% of new loan originations and up to 30% of those loans are using DPA programs. It is estimated that between 300,000-500,000 families will be unable to purchase a home next year if this change becomes law. First time buyers will remain renters and homes will stagnate on the market unless we maintain the use of down payment assistance with existing FHA mortgage programs. Working class families and minorities are projected to be the groups most affected.
Edina, MN (PRWEB) July 24, 2008 — Mortgage Broker-Venture Development shares salient points and opinions regarding the government proposed solution to the housing crisis. In an article today in the Washington Post, Chairman Barney Frank of the House Financial Services Committe is quoted as saying that “the House will yield to the Senate on the termination of seller participation in down payment assistance programs.” Down Payment Assistance will end as we know it if this is signed into law by the president. Down payment assistance under the current guidlines allows the private sector to provide the solution. The Bill as proposed presents no government alternative or any alternative suggestion on how to keep the program intact.
The progression of home sales within the housing market is dependent on first time home buyers starting the domino affect. Their home purchases are the catalysts that allow people to sell their existing home and then move into a new property such as a larger home, condo or townhouse. In order to keep the housing market moving forward, we need to encourage home ownership at the beginning of the cycle. Mortgage programs that are underwritten with greater flexibility regarding credit, income and down payment will create more homeowners. We need mortgage loan programs that allow you to buy a home with as little money down as possible. This law will make buying a home more difficult with the elimination of a loan financing option.
As recently as March of 2008, there were conventional loans that allowed for 100% financing such as the Home Possible, My Community, and 80/20 combination first and second mortgage programs. Declining property values coupled with high mortgage delinquencies in all real estate markets have all but eliminated investors for these types of high LTV loans. In addition, due to large losses by private mortgage insurance companies (PMI) there is an unwillingness of mortgage insurers to insure these loans. Hence these loan programs have either been eliminated or now require a down payment. With Fannie Mae and Freddie Mac’s current financial problems and the overall state of the mortgage markets, don’t expect that they will be creating any new high loan to value zero down mortgage products anytime soon. The Housing Crisis will get worse-not better-by eliminating mortgage programs that work. We are bearing witness to that today.
Herein lies the problem. Most first time home buyers lack sufficient resources for the down payment and closing costs. They often have good credit and the ability to make a payment. Until they save enough money, they are left out the housing market. FHA loans currently allow buyers to obtain down payment assistance (DPA) from a relative or from a qualified down payment assistance provider. This means that buyers without enough current resources may be able to obtain enough funds to buy a home today. There are a number of approved down payment assistance providers-some of the largest names are Nehemiah, Genesis, and Ameridream. In a nutshell, these non-profit organizations issue down payment assistance to a prospective home buyer and then collect funds from the seller of a home who has agreed to participate in this program at the time of closing. The non-profit charities charge an administrative fee of between $300 and $500 to facilitate with the assistance of this funding. FHA sometimes refers to this arrangement as seller funded down payment-which they don’t allow. Although the funding is coming from a non-profit, the FHA perception is that it is actually from the seller, albeit indirectly. The problem stems from losses. According to FHA, they have experienced larger losses on portfolios of loans that were funded with DPA funds. Further studies are needed. HUD has provided statistics that are open to interpretation.
In fact, FHA hopes to eliminate these programs altogether through the fast tracked housing bill going through congress now. Time is of the essence as the Senate and House are fast-tracking this bill.! The senate version-which is the supported version-will eliminate DPA. What would this mean? Let me make this clear-if this bill passes fewer houses will be sold. More qualified homeowners will remain as renters. More homes will stay on the market and the real estate and mortgage crisis will get worse. DPA funding offers a solution to our crisis by making homeownership possible.
Mortgage foreclosures can be addressed with better underwriting rather than through legislation. If there are problems with the way things are being done within the current DPA program then let’s work on modifying them. Let’s identify solutions-such as raising the minimum required credit score on DPA funded loans. This would probably lower the defaults and match the underwriting to the risk. Elimination or outright banning of DPA programs that are currently helping our ailing housing market is foolish. As a Minnesota FHA mortgage broker who works in the market on a daily basis, I can tell you about clients who are good people who want to become homeowners. Their shot at owning a home depends on these programs. Get involved and learn more. The consequences of making the wrong decision about the fate of DPA’s will affect our entire economy.
Many mortgage brokers and banks are not offering FHA financing. Twin Cities mortgage broker Venture Development provides FHA mortgages and works with buyers that wish to utilize down payment assistance. We encourage all borrowers-not just first time buyers- to consider FHA financing and compare it to conventional or veteran financing options. The interpretations and opinions expressed herein are those of the Principals of MN mortgage broker Venture Development.
