A new bill in the Senate is proposing that borrowers who buy energy-efficient homes be able to qualify for larger mortgages. The bipartisan bill, called the SAVE Act, would allow mortgage lenders to factor energy savings into the value of a home.
"It's about energy efficiency, it's about savings, it's about increasing the borrowing power for the borrower. I think it's a win-win for the industry," said Sen. Johnny Isakson, R-Ga., a co-sponsor of the bill.
If the bill is approved, lenders with loans backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration would account for expected energy cost savings. The bill would also require lenders to add the value of expected energy savings to the value of the home in the appraisal, CNBC reports. Source: “How a greener home could get you a bigger mortgage,” CNBC (July 19, 2013)
Did Cash Buyers Save the Housing Market?
Cash real estate sales have risen the last few years to some of the highest levels on record, and a new report by CoreLogic suggests that these sales heavily helped to contribute to stabilizing the residential housing market and leading it into recovery.
In the early 2000s, cash sales averaged 25 percent of home sales. But in 2007 and 2008, cash sales began to rise as foreclosures started to increase. By 2012, cash sales were making up 40 percent of sales and have since inched down to 39 percent as of May 2013.
“Without cash sales overall, sales today would be much lower and the price declines would have been worse,” Mortgage News Daily reports about CoreLogic’s findings. “More recently, cash sales have helped fuel price increases dramatically in several boom and bust markets. Median prices for cash sales are up 24 percent from a year ago while prices of sales generally have increased 15 percent.”
The rise in home prices will lead to a lower presence of cash sales as investor activity returns to more traditional levels, CoreLogic notes. With cash sales receding in recent months, first-time and trade-up home buyers will need to step in to keep the recovery expanding, CoreLogic notes. Source: “Cash Sales Saved Housing Market -CoreLogic,” Mortgage News Daily (July 16, 2013)
In the early 2000s, cash sales averaged 25 percent of home sales. But in 2007 and 2008, cash sales began to rise as foreclosures started to increase. By 2012, cash sales were making up 40 percent of sales and have since inched down to 39 percent as of May 2013.
“Without cash sales overall, sales today would be much lower and the price declines would have been worse,” Mortgage News Daily reports about CoreLogic’s findings. “More recently, cash sales have helped fuel price increases dramatically in several boom and bust markets. Median prices for cash sales are up 24 percent from a year ago while prices of sales generally have increased 15 percent.”
The rise in home prices will lead to a lower presence of cash sales as investor activity returns to more traditional levels, CoreLogic notes. With cash sales receding in recent months, first-time and trade-up home buyers will need to step in to keep the recovery expanding, CoreLogic notes. Source: “Cash Sales Saved Housing Market -CoreLogic,” Mortgage News Daily (July 16, 2013)
Housing Inventories Rising Faster Than Usual
The number of homes for sale rose 4.3 percent in June to 1.9 million—the highest level in the past year. These gains are also higher than usual for this time of year, according to newly-released housing data from realtor.com®.
Following two years of declines, housing inventory is finally reversing course. More home owners are seeing rising prices and may be more apt to try to sell their homes.
The number of homes for sale has risen the most in the past year in areas that had seen the largest declines, such as Sacramento, Calif. (up 11 percent), Atlanta (up 10.9 percent), Phoenix (up 6.2 percent), and Miami (up 2.2 percent). From May to June, inventories soared by the highest month-over-month amounts in Southern California, with inventories up 51.5 percent in Orange County, 45.7 percent in Los Angeles, and 18.1 percent in San Diego, according to realtor.com®.
However, inventories of homes for sale remain far below last year’s level in markets such as Boston (down 35.1 percent), Denver (down 30.1 percent), Detroit (down 25.7 percent), Seattle (down 23.2 percent), and San Francisco (down 21.7 percent).
Realtor.com® also reports that median asking prices climbed 0.5 percent in June from May, reaching $199,900. Median asking prices are up by 5 percent over last year. Source: “Housing Listings Multiply in June,” The Wall Street Journal (July 15, 2013)
Following two years of declines, housing inventory is finally reversing course. More home owners are seeing rising prices and may be more apt to try to sell their homes.
The number of homes for sale has risen the most in the past year in areas that had seen the largest declines, such as Sacramento, Calif. (up 11 percent), Atlanta (up 10.9 percent), Phoenix (up 6.2 percent), and Miami (up 2.2 percent). From May to June, inventories soared by the highest month-over-month amounts in Southern California, with inventories up 51.5 percent in Orange County, 45.7 percent in Los Angeles, and 18.1 percent in San Diego, according to realtor.com®.
However, inventories of homes for sale remain far below last year’s level in markets such as Boston (down 35.1 percent), Denver (down 30.1 percent), Detroit (down 25.7 percent), Seattle (down 23.2 percent), and San Francisco (down 21.7 percent).
Realtor.com® also reports that median asking prices climbed 0.5 percent in June from May, reaching $199,900. Median asking prices are up by 5 percent over last year. Source: “Housing Listings Multiply in June,” The Wall Street Journal (July 15, 2013)
Foreclosures Down 29% From Year Ago
Foreclosures are continuing a steady fall, as home prices rise and the housing market picks up nationwide.
About 1 million homes were in some stage of foreclosure in May, down from 1.4 million in May 2012, a 29 percent decline, according to CoreLogic’s latest foreclosure report. As of May, the foreclosure inventory represented 2.6 percent of all homes with a mortgage -- down from 3.5 percent a year prior.
There were 52,000 foreclosures completed nationwide in May, down 27 percent year over year. However, the numbers are still elevated compared to what’s considered normal for the market. Prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006, according to CoreLogic.
Since September 2008 -- the start of the financial crisis -- about 4.4 million foreclosures have been completed, CoreLogic’s data shows.
Meanwhile, shadow inventory is down 34 percent from reaching its 2010 peak. It was under 2 million units in April, representing a 5.3 month supply.
“We continue to see a sharp drop in foreclosures around the country and, with it, a decrease in the size of the shadow inventory,” says Anand Nallathambi, president and CEO of CoreLogic. “Affordability, despite the rise in home prices over the past year, and consumer confidence are big contributors to these positive trends. We are particularly encouraged by the broad-based nature of the housing market recovery so far in 2013.”
The stock of seriously delinquent homes, which is the main driver of shadow inventory, is at the lowest level since December 2008, adds Mark Fleming, chief economist for CoreLogic. “Over the last year, it has decreased in 42 states by double-digit figures, resulting in rapid declines in shadow inventory for the first quarter of 2013,” Fleming says.
The following five states account for nearly half of all completed foreclosures nationally and had the highest number of completed foreclosures in the last 12 months ending in May:
About 1 million homes were in some stage of foreclosure in May, down from 1.4 million in May 2012, a 29 percent decline, according to CoreLogic’s latest foreclosure report. As of May, the foreclosure inventory represented 2.6 percent of all homes with a mortgage -- down from 3.5 percent a year prior.
There were 52,000 foreclosures completed nationwide in May, down 27 percent year over year. However, the numbers are still elevated compared to what’s considered normal for the market. Prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006, according to CoreLogic.
Since September 2008 -- the start of the financial crisis -- about 4.4 million foreclosures have been completed, CoreLogic’s data shows.
Meanwhile, shadow inventory is down 34 percent from reaching its 2010 peak. It was under 2 million units in April, representing a 5.3 month supply.
“We continue to see a sharp drop in foreclosures around the country and, with it, a decrease in the size of the shadow inventory,” says Anand Nallathambi, president and CEO of CoreLogic. “Affordability, despite the rise in home prices over the past year, and consumer confidence are big contributors to these positive trends. We are particularly encouraged by the broad-based nature of the housing market recovery so far in 2013.”
The stock of seriously delinquent homes, which is the main driver of shadow inventory, is at the lowest level since December 2008, adds Mark Fleming, chief economist for CoreLogic. “Over the last year, it has decreased in 42 states by double-digit figures, resulting in rapid declines in shadow inventory for the first quarter of 2013,” Fleming says.
The following five states account for nearly half of all completed foreclosures nationally and had the highest number of completed foreclosures in the last 12 months ending in May:
- Florida
- California
- Michigan
- Texas
- Georgia
10 Tips for Moving with Kids
Moving can be a regular hassle in the best of scenarios, but moving with children in tow is a whole other kettle of fish. Kids are often wary of change, so it's best to be well prepared. Follow these ten steps to make the moving process as stress-free as possible.
1. Breaking the news
Breaking the news of your move can be one of the most critical moments of the entire process. Use the first announcement to explain to your kids how you think the move will benefit the whole family. You’re going to want to bring the kids in on the moving process by having them help out, but don’t cross that bridge just yet — leave this for after the initial talk. If you have more than one kid, address each of them later in private once they've had some time to let it all sink in. Express to them personally what you’re expecting. Kids are aspirational, and if you make it clear to them that you need their help as part of the process, they’re more likely to step up and help out. Being as open and clear about what moving entails will always be better in the long run. With young children, don’t assume that they'll have a good grasp on what it all means right away. Patience is the key.
2. Keep the lines of communication open
Take the time to talk to your kids about the move. If applicable, ask them what room in the house they'd like, or how they want it to look. Use these conversations as an opportunity to explain the things you think they'll like about the neighbourhood you’re moving to. Take your children seriously and listen to their feelings and concerns even when you can’t address their desires directly. Sometimes, more than anything, children just wants to know that they've been heard, even if they can’t have their way.
3. Out with the old
This part of the process will depend a lot on the temperament of your kids, but it's time to pare down the household and make room for the new. Getting rid of old stuff can be a pain, or it can be a fun family activity (and as a bonus, you can have a garage sale at the end of it!). It can be tedious and time-consuming to try to go through your child’s things, having to ask them piece by piece what they want to keep or give away, but if you get the kids excited with the prospect of a garage sale, then the kids will do a better job sorting than you ever could. Margaret, mother of two, has another take:
4. Timing is everything
If you can, try to time the move around the more stable periods in your kids’ lives. Moving during the school year can be disruptive and make integration into the new community and school environment much more difficult.
5. Take advantage of relatives and friends
If you have small children, every minute they can be in another’s care will make the moving process that much easier. If your kids are a bit older, these can be opportune days for them to say their prolonged goodbyes to their friends in the neighbourhood. This will also allow you to space out the packing process a lot more.
6. Pack small boxes of the kids' things last
Go through the contents of these special, easy-access boxes with your kids item by item, and label them well! Don’t make the mistake of packing a favourite toy, book, or videogame too soon. When you arrive at the new place, you likely won’t have the luxury of friends and family that can entertain the kids while you sort through your new life, so you’ll want to have the kids entertain themselves for a time while you get to sorting through boxes. Jennifer, mother of two, also advises:
7. Saying Goodbye
You’re likely leaving a lot of people behind that you and your children had relationships with. A goodbye party can be a great way to bookend your time with the old place. If you can, though, have your neighbour or family member host the event. This can double as a goodbye present and will also save you the nightmare of planning a party in a half-packed house.
8. Familiarize your family with the new neighbourhood
Research the opportunities and activities that are close to your kids' hearts. Don’t just tell them about it; show them! It can be easy to be a bit of a hermit when you’ve just moved to a new place and don’t know anyone, so your kids might just need a push in the right direction. If they’re teenagers, mind that you don’t push too hard, but letting slip about the local youth culture and music scenes in the early days can pay later.
9. Keep the familiar that works
Routine can be very comforting in new environments and can help children deal with separation anxiety. Do your best to keep important family times and activities the same as soon as you can after arriving at the new house. Family meetings, dinners, weekly traditions — try to keep these consistent or go out and find a new local equivalent to meet your needs. Modifying old traditions in this way can also allow you to bridge the gap between the old and new and make the new place feel like home a lot quicker.
10. Remember your own needs
You’re doing a lot of work to make your kids comfortable with the move and you’re doing your best to make the process as painless as possible for them. You know it will be better for them in the long run, but sometimes that still won’t mean they understand right away. It’s okay. In all of this, remember to treat yourself with as much consideration and kindness as the rest of the family. You’re doing your best and a lot is counting on you. It's okay to make mistakes, and moving is stressful business. Relax. Breathe. It’s going to be great.
Kids by Suzette Pauwels
1. Breaking the news 
Breaking the news of your move can be one of the most critical moments of the entire process. Use the first announcement to explain to your kids how you think the move will benefit the whole family. You’re going to want to bring the kids in on the moving process by having them help out, but don’t cross that bridge just yet — leave this for after the initial talk. If you have more than one kid, address each of them later in private once they've had some time to let it all sink in. Express to them personally what you’re expecting. Kids are aspirational, and if you make it clear to them that you need their help as part of the process, they’re more likely to step up and help out. Being as open and clear about what moving entails will always be better in the long run. With young children, don’t assume that they'll have a good grasp on what it all means right away. Patience is the key.
2. Keep the lines of communication open
Take the time to talk to your kids about the move. If applicable, ask them what room in the house they'd like, or how they want it to look. Use these conversations as an opportunity to explain the things you think they'll like about the neighbourhood you’re moving to. Take your children seriously and listen to their feelings and concerns even when you can’t address their desires directly. Sometimes, more than anything, children just wants to know that they've been heard, even if they can’t have their way.
Moving by Marco Varisco
3. Out with the old
This part of the process will depend a lot on the temperament of your kids, but it's time to pare down the household and make room for the new. Getting rid of old stuff can be a pain, or it can be a fun family activity (and as a bonus, you can have a garage sale at the end of it!). It can be tedious and time-consuming to try to go through your child’s things, having to ask them piece by piece what they want to keep or give away, but if you get the kids excited with the prospect of a garage sale, then the kids will do a better job sorting than you ever could. Margaret, mother of two, has another take:
We have moved back when I was still expecting. The only thing that we learned from the experience is to unpack things only as they are needed: emotional mementos and actual necessities. This way, whatever is still in boxes after 60 days can be easily disposed of.Paring down can be some of the hardest work of moving, so make it easy on yourself.
4. Timing is everything
If you can, try to time the move around the more stable periods in your kids’ lives. Moving during the school year can be disruptive and make integration into the new community and school environment much more difficult.
5. Take advantage of relatives and friends
If you have small children, every minute they can be in another’s care will make the moving process that much easier. If your kids are a bit older, these can be opportune days for them to say their prolonged goodbyes to their friends in the neighbourhood. This will also allow you to space out the packing process a lot more.
6. Pack small boxes of the kids' things last
Go through the contents of these special, easy-access boxes with your kids item by item, and label them well! Don’t make the mistake of packing a favourite toy, book, or videogame too soon. When you arrive at the new place, you likely won’t have the luxury of friends and family that can entertain the kids while you sort through your new life, so you’ll want to have the kids entertain themselves for a time while you get to sorting through boxes. Jennifer, mother of two, also advises:
Make sure vaccination cards, medicine, any prescription they may have and medical insurance papers are readily available and not stuck in some anonymous package.These are not the sorts of items you don't want to have to hunt around for should the need arise in a new place.
Empy Apartment by Matt Biddulph
7. Saying Goodbye
You’re likely leaving a lot of people behind that you and your children had relationships with. A goodbye party can be a great way to bookend your time with the old place. If you can, though, have your neighbour or family member host the event. This can double as a goodbye present and will also save you the nightmare of planning a party in a half-packed house.
8. Familiarize your family with the new neighbourhood
Research the opportunities and activities that are close to your kids' hearts. Don’t just tell them about it; show them! It can be easy to be a bit of a hermit when you’ve just moved to a new place and don’t know anyone, so your kids might just need a push in the right direction. If they’re teenagers, mind that you don’t push too hard, but letting slip about the local youth culture and music scenes in the early days can pay later.
9. Keep the familiar that works
Routine can be very comforting in new environments and can help children deal with separation anxiety. Do your best to keep important family times and activities the same as soon as you can after arriving at the new house. Family meetings, dinners, weekly traditions — try to keep these consistent or go out and find a new local equivalent to meet your needs. Modifying old traditions in this way can also allow you to bridge the gap between the old and new and make the new place feel like home a lot quicker.
Moving by Pawel Loj
10. Remember your own needs
You’re doing a lot of work to make your kids comfortable with the move and you’re doing your best to make the process as painless as possible for them. You know it will be better for them in the long run, but sometimes that still won’t mean they understand right away. It’s okay. In all of this, remember to treat yourself with as much consideration and kindness as the rest of the family. You’re doing your best and a lot is counting on you. It's okay to make mistakes, and moving is stressful business. Relax. Breathe. It’s going to be great.
Don't Let Credit Checks Derail Buyers
Buyers may want to purchase furniture to outfit their new home prior to closing. But if they’re not careful, they could cause delays in closing or even lose their home loan.
Since 2010, mortgage giant Fannie Mae has mandated that lenders recheck a borrower’s credit prior to closing on a mortgage. If anything new arises in the credit re-check, lenders may want to delay the closing to verify the borrower can still afford the mortgage. In some cases, the lenders may even cancel the mortgage prior to closing, which could mean a higher interest rate on a new loan.
“We tell our clients about this upfront, and keep reminding them through the entire process not to go buy a new bed or a refrigerator,” says Michael Daversa, president and founder of Atlantic Residential Mortgage. “What you’re supposed to do is keep everything status quo.”
During the credit re-check prior to closing, lenders will scan for any new credit card accounts that have been opened as well as any new credit inquiries. For example, a credit inquiry from a car company may indicate to a lender that the buyer is in the market for a new car, which could send up a red flag if the buyer is going to take on more debt.
Fannie Mae’s maximum debt-to-income ratio is 45 percent—a maximum of 45 percent of a gross monthly income can be allocated for mortgage and housing expenses and other debt.
“It’s more of an issue for people on the cusp of approval where they just get in under the wire,” David Stein, the chief operating officer and a partner of Residential Home Funding, told The New York Times. “If someone was a 44 percent at the approval, if they incurred more debt at the credit refresh, and the debt goes over 45, we can’t close that loan.”
To avoid delays, lenders recommend that borrowers check with their lender before taking on any new debt. Borrowers should also notify any lenders about any changes in employment or job loss. Lenders will reverify borrowers’ employment status prior to closing, and even a change in the company’s name by the borrower’s employer has the potential to delay closing. Source: “Pre-Closing Credit Checks,” The New York Times (July 5, 2013)
Since 2010, mortgage giant Fannie Mae has mandated that lenders recheck a borrower’s credit prior to closing on a mortgage. If anything new arises in the credit re-check, lenders may want to delay the closing to verify the borrower can still afford the mortgage. In some cases, the lenders may even cancel the mortgage prior to closing, which could mean a higher interest rate on a new loan.
“We tell our clients about this upfront, and keep reminding them through the entire process not to go buy a new bed or a refrigerator,” says Michael Daversa, president and founder of Atlantic Residential Mortgage. “What you’re supposed to do is keep everything status quo.”
During the credit re-check prior to closing, lenders will scan for any new credit card accounts that have been opened as well as any new credit inquiries. For example, a credit inquiry from a car company may indicate to a lender that the buyer is in the market for a new car, which could send up a red flag if the buyer is going to take on more debt.
Fannie Mae’s maximum debt-to-income ratio is 45 percent—a maximum of 45 percent of a gross monthly income can be allocated for mortgage and housing expenses and other debt.
“It’s more of an issue for people on the cusp of approval where they just get in under the wire,” David Stein, the chief operating officer and a partner of Residential Home Funding, told The New York Times. “If someone was a 44 percent at the approval, if they incurred more debt at the credit refresh, and the debt goes over 45, we can’t close that loan.”
To avoid delays, lenders recommend that borrowers check with their lender before taking on any new debt. Borrowers should also notify any lenders about any changes in employment or job loss. Lenders will reverify borrowers’ employment status prior to closing, and even a change in the company’s name by the borrower’s employer has the potential to delay closing. Source: “Pre-Closing Credit Checks,” The New York Times (July 5, 2013)
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