Friday, July 18, 2014
Thursday, June 19, 2014
Sunday, June 1, 2014
Saturday, May 31, 2014
Friday, May 30, 2014
Reverse Mortgage Goes from Last-Chance Loan to Retirement Tool
As regulations reshape the reverse mortgage,
lenders hope to end up with a safer, more reputable product.
Meantime, the changes are turning the economics of this business on its head.
Under new rules, seniors can no longer receive the entire proceeds from a Federal Housing Administration-insured reverse mortgage in one lump sum. Instead, they are generally limited to just 60% of the funds during the first 12 months. The rationing of proceeds is to make sure borrowers have some equity left when they leave the closing table, reducing the likelihood of default.
Soon, the FHA will also require reverse mortgage lenders to conduct financial assessments to ensure borrowers have the necessary residual income to pay taxes and insurance and maintain the property.
These changes alone are having a profound effect on how the reverse mortgage is pitched to seniors.
"With the new protections, financial planners are starting to view HECMs as a retirement tool," says Jeffrey Taylor, a reverse mortgage consultant who helped launched the first FHA reverse mortgage product in 1991. "It is forcing the industry to market differently and to look for a new borrower."
Previously, many seniors who were facing foreclosure used FHA-insured HECM loans as their last chance to pay off their mortgage and stay in the home. While reverse mortgages don’t require monthly loan payments, borrowers are obligated to pay hazard insurance and property taxes. Many borrowers defaulted when they couldn't afford to pay taxes and insurance, prompting FHA to change its rules.
Rather than a lifeline for the desperate, the product is now more suitable as a kind of insurance for the comfortable.
"Critics claim the new borrower doesn't need a reverse mortgage. In a way they are correct," says Taylor, the president of Wendover Consulting in Greensboro, N.C. "The new borrower wants to put a line of credit in place in case they need it later down the road." HECM lines of credit can be used for emergencies or they can be tapped to boost a senior's monthly income.
Another regulatory wrinkle has mightily influenced the way reverse mortgages are structured.
Ginnie Mae, the agency that sets standards for securitization of FHA loans, has banned from its pools fixed-rate reverse mortgages that disburse funds as a line of credit. Ginnie worried that if interest rates rise, its servicers would have to finance additional draws at a loss.
Following Ginnie Mae's announcement, warehouse lenders began to pull back on funding HECMs with fixed-rate lines of credit. If this trend continues, it will be effectively shut such loans out of the market.
Seniors can still get a fixed-rate HECM and take out up to 60% of loan proceeds in a lump sum. But they have to wait 12 months or refinance (which is expensive) to tap the remaining loan proceeds.
The net result of the FHA and Ginnie reforms is that the adjustable-rate line of credit now dominates the reverse mortgage scene instead of fixed-rate products. About 75% to 80% of HECMs being originated today are adjustable-rate, according to Joe Demarkey, the director of product development at Reverse Mortgage Funding.
The shift in the market means lenders have to be more patient, too. A fixed-rate, lump-sum HECM can be securitized immediately and the issuer can take all the profits upfront. On an adjustable-rate line of credit HECM, the lender has to wait until the borrower begins to draw down the line of credit before the draws can be securitized.
Ocwen Financial (OCN), whose main business is servicing loans, wrote $163 million in FHA-insured reverse mortgages in the first quarter and reported a pretax loss of $6.3 million in its origination business. But the company expects future draws on the first-quarter crop of reverse mortgages to generate more profits down the road, at a discounted present value of $8 million.
"The shift in business to a variable rate product, with lower upfront funding and larger future draws, creates current-period losses, but will generate future period gains," Ocwen Chief Executive Ron Faris said on a May 1 conference call. "These tail earnings arise as existing loans request additional draws, which generate gains on sale with very little expense."
The company expects slow growth in reverse mortgage originations this year, Faris said.
A week later, rival servicer Walter Investment Management (WAC) reported a pretax loss of $2.8 million on its reverse mortgage origination business due to lower HECM volumes in the first quarter.
"We believe the new product profitability is superior to the historical product, but the curve is back-end weighted due the lower initial originated balances," said Walter's chief investment officer, Denmar Dixon. Higher margins will be realized as additional draws are securitized, he said.
Walter originated $245 million in reverse mortgages in the first quarter, down from $556 million in the prior quarter.
The most popular reverse mortgage now is an adjustable-rate HECM with a 10% lifetime cap. This means that with a starting interest rate of 3%, the rate cannot go higher than 13% during the life of the reverse mortgage.
Demarkey's firm, which has offices in New York and New Jersey, recently introduced a new product called HECM MAX5, billed as the industry's first adjustable-rate product with a 5% lifetime cap. If the starting rate is 3%, the rate on a MAX5 cannot exceed 8% no matter how high other mortgage rates go.
The new lender started originating HECMs in the fourth quarter of 2013 through its correspondent channel and began funding brokered loans in January. A few weeks ago, it began recruiting and hiring loan officers for its retail sales channel. Reverse Mortgage Funding is licensed in 47 states, the District of Columbia and Puerto Rico.
Demarkey and Reverse Mortgage Funding Chief Executive Craig Corn previously worked at MetLife's reverse mortgage shop.
The FHA reported last week that HECM originations totaled $4 billion in the first quarter, up from $3.4 billion in the prior quarter.By
MAY 29, 2014 3:56pm ET
For more information on getting a Reverse Mortgage, Contact Nathan Nelson: 805-565-5570 x 121 Or, go to www.TeamNelsonFunding.com
Friday, May 16, 2014
Thursday, May 15, 2014
Iconic investor Warren Buffett announced the acquisition of Intero Real Estate Services by Buffett's HomeServices of America
A deal that brings iconic investor Warren Buffett to the Silicon Valley housing market was announced Tuesday with the acquisition of Intero Real Estate Services by Buffett's HomeServices of America.
The acquisition of the fast-growing Cupertino real estate brokerage expands Buffett's real estate footprint in California, where HomeServices already has operations in Southern California and the Central Valley. The sale price was not disclosed.
"It's a very, very good company and we paid fair value," said Ron Peltier, chairman and CEO of HomeServices. "The owners clearly did not need to sell."
Since its founding in 2002, Intero has grown to 2,000 agents in seven states, including California.
Founded in 2002, Intero has grown to 13 offices throughout San Mateo, Santa Clara and San Benito counties, with nearly 50 affiliates in six states, including California. (Joanne HoYoung Lee/Staff file photo)
The company says it moved 7,300 properties for $5.7 billion in the greater Silicon Valley area in 2013, and its affiliates generated more than $1.5 billion.
Intero President and CEO Gino Blefari said the company's growth plans are now backed by the resources of one of the country's biggest residential real estate companies.
"This will allow us to grow even more," he said.
The deal means that HomeServices now has more than 23,000 real estate professionals in 25 states.
HomeServices, a Berkshire Hathaway affiliate, has reportedly had its sights on the valley for some time.
Wednesday, May 7, 2014
Thursday, May 1, 2014
Tips On Buying a Foreclosed Home
With regard to a "foreclosed" home, which means it is now owned by the bank, it is exactly like buying any other home with a couple of key differences:
1. The seller is a bank. They tend to be less responsive so don't expect a quick response to your offer, or to any issues that come up during escrow.
2. The seller has never lived in the property. As such their disclosures about the property are worthless, and they are going to make you sign something saying that you acknowledge that. Ultimately you can't "sign away your rights", but it is super important that you do your own thorough due diligence.
3. The property may be in need of repairs. Before the 2008 crash the banks almost always fixed up the property to market condition, now they do it in far fewer cases. Depending on how bad the condition is it may affect your ability to get financing.
4. Despite 3, there is NO requirement that your offer be all cash (contrary to another answer). Some banks may have a preference for all cash offers - but that is true of EVERY seller, bank or not.
5. Fannie Mae actually gives preference to owner occupants giving them a "First Look" where there offers are considered before investors. More on that here: Special Offers and Incentives.
6. There is a very small possibility that you'll be the subject of harassment or even a lawsuit by the prior owner. As a "bonafide purchaser for value" you don't have much to worry about despite stories to the contrary. Even if a court finds the prior owner was wrongfully foreclosed on, the legal standard is that you get to stay and the fact that the prior owner can't return to their former home is included in the calculation of damages they get from the bank. Even if a court somehow ruled otherwise, your title insurance policy would then kick in to protect you from financial loss.
Courtesy of Sean O'Toole, Property Radar
Tuesday, April 22, 2014
Saturday, April 19, 2014
Thursday, April 3, 2014
Monday, March 31, 2014
How To Prepare For A Salary Negotiation: A Check List ...by Sean Blanda
We would never buy a house without first inspecting every nook and cranny. We’d never buy a new car without comparing similar models. But when it comes to negotiating our salaries, why do many of us just cross our fingers and hope for the best?
Like buying a house or a car, our yearly salary has a massive impact on our financial well-being. As we’ve covered before, even a small raise in the beginning of your career can have an outsize impact on your life-time earnings. Yet we’re never taught how to negotiate.
“This is an opportunity to make thousands of dollars within a few minutes, you have to take advantage,” says Jim Hopkinson author of Salary Tutor: Learn the Salary Negotiation Secrets No One Ever Taught You. Come prepared, he says, and you put yourself leaps and bounds ahead of other candidates. We asked Hopkinson how creatives can be ready for the negotiating table:
1. Get in the right mindset.
If you’ve never negotiated before (or your last negotiation went poorly), it’s likely you have some preconceived notions about negotiations being adversarial or awkward. Instead, view the negotiation as a discussion and a partnership. When negotiating, you need to aim for a “friendly but assertive” mindset. Remember that you’re not being a nuisance, you’re taking control of your financial future, an admirable and necessary aspect of being a professional.
If you’ve gotten far enough to receive a job offer or raise, the company (or client) has already invested lots of time and mental energy in you and a little negotiation is not going to make them rescind their offer.
“They’re offering you the money and a job so it may appear that they hold all the cards, but you are offering stuff in return, too. You’re going to put in your expertise and bring your experience and work ethic to the table,” says Hopkinson.
2. Research a salary range.
Before you negotiate your salary, you need to have an objective measurement of what you’re worth on the open market. By providing facts and figures backed up by research, you replace “I think I’m worth…” with “Someone in my position typically makes between $35,000 and $40,000.” The former is subjective and easily shot down, the latter is objective and encourages both sides to arrive at a fair number together.
“It shows you’re not pulling numbers out of thin air,” says Hopkinson. “Then it’s not you against me, we’re working together to make something that works for the both of us.”
To get a realistic number there are several resources at your disposal:
- The Department of Labor Statistics – The U.S. Federal government has comprehensive studies of widely held jobs organized by location.
- Glassdoor – Features salaries by company and, as a bonus, reviews of the interview process of select organizations.
- Salary.com – Enter in a job title and location and Salary.com will give you a range. Useful for negotiations to determine what the “top performers” are making in your field.
- LinkedIn Job Listings – Many LinkedIn listings have salary information. If you have a premium account, you can even sort jobs by salary range in the sidebar.
- Your Network – Before the negotiation, shoot emails to anyone you know who hires in your industry: “I’m applying for position X at a company in Chicago. My research tells me that the common range is $40,000-$50,000, does that sound right to you? If you were to hire someone for this, what would the range be?”
Remember to research comparable job titles and companies. One company’s “community manager” is another’s “customer service associate.”
3. Show your accomplishments.
If the negotiation is for a raise, rather than a new job, you should have materials that help demonstrate your value to the organization. Depending on your field, these can be projects pushed forward, a portfolio of work completed, or clients landed. Highlight ways you made and saved the company money. It’s likely that you are one of many employees at your company, so a little refresher on your contributions can place all of your great work at the forefront your employer’s mind.
This can be anything from printed materials to an actual presentation. “I’ve had clients that did a little bit of everything and were able to show [using research] that if her company had to hire for her four different roles, it would cost them another $150,000 a year,” says Hopkinson. “So it’s planting that seed and the person she was negotiating with was probably thinking, ‘Oh God, I hope she doesn’t leave because it would be a nightmare.’”
4. Come ready to discuss more than money.
Numbers are only one side of the equation. You may offer a salary range and discover that the company can’t budge. In this case you can be willing to negotiate more than money. If you’re stonewalled on the salary, you can also discuss:
- Accelerated review schedule
- Additional vacation
- Conferences you’d like to attend (or other educational opportunities)
- Relocation fees
- An altered bonus structure
Hopkinson recalls one client who was told her salary couldn’t improve because salaries were standardized across the company. She pressed for more. “They came back and said, ‘We’ll give you a one-time bonus in January 2014, we’ll double the bonuses that we give you quarterly, and we’ll pay you for two months to live in the corporate housing for free when you move here.’”
The dollars for these perks often come out of different budgets than your salary. Teach yourself the phrase, “Are there any other compensation elements that we can discuss?”
“The main goal for you,” says Hopkinson, “is to be able to walk out of the room and say I was prepared and I did everything I could.”
5. Remember a few key phrases.
The best way to get good at negotiation is to know your numbers cold and then practice with a friend who takes different approaches each time you role play. To help deflect some common negotiation enders, you should teach yourself the following phrases and strategies before your meeting.
One of the cardinal rules of negotiation is that you should never be the first to name a number (read more rules of negotiation here). Sometimes, the other party will pressure you to come clean with what you make so they can adjust their offer accordingly. Deflect this with any of the below phrases.
“My current employment contract does not allow me to reveal that information, what kind of range did you have in mind?”
…
“As you know, it’s a really small industry that we’re in and I’m pretty sure my current employer wouldn’t be too happy if I was revealing what they’re paying over there, so let me ask you what kind of range did you have in mind?”
…
“You have much more information about this job than I do.”
…
“What’s in your budget?”
—
People are naturally conditioned to fill silences. When being made an offer, don’t feel compelled to answer right away. Remember: you’re in control of the conversation. Let any offers breathe and oftentimes, you’ll be on the offensive without saying a word as the other party rushes to fill the dead air.
Them: “What if we gave you a 6 percent bump in pay?”
You: “I see… [silence]”
Them: “…and an additional two vacation days”
—
When you present your salary, always do so in a range and mention that you’d like to be in the upper part of said range (provided you can back up that you are successful at your role). Never name a specific number as you could be “anchoring” the number lower than if you had waited.
“I hope to be in the upper end of that range. Is that something you can do?”
—
And lastly, whenever you offer a number, always back it with facts that you’ve pulled from reliable sources.
“Based on my research…”
How about you?
Have you successfully negotiated your salary or raise? What specific actions did you take?
SEAN BLANDA
Wednesday, March 26, 2014
New Downtown SB Lofts
Barry Berkus designed Chapala Lofts in the Heart of Downtown SB. Open Floor Plan w/almost 1,300 SF of Live/Work area. 14' Ceilings & Massive Wall Space for Art Collection! Zoned - 1 Bedroom with 1 Legal Workspace Office w/Separate Entrance. 2 Full Baths. Covered Parking for 2 cars in Gated Common Garage plus Storage. Balcony Terrace provides City and Mountain Views and a Peek of the Pacific!
212 W Anapamu St Santa Barbara CA 93101
The beauty and artistry of Craftsman Architecture harmoniously sited along a magnolia-lined street within Santa Barbara’s downtown urban landscape. This meticulously restored 3 bed, 2 bath 1920s single-level bungalow offers a warm and welcoming haven… the convenience of city life just beyond the elegantly hedged front entry. Rated a “Walker’s Paradise” according to Walk Score...
... daily errands can be achieved without the use of a car. Situated just a few blocks off State Street, the home is within close proximity to the Santa Barbara downtown area's finest shops, dining and cultural excursions.
The main home, guest suite, intimate garden and patio blend to create a comfortable and stylish living environment characterized by the use of natural elements, distinctive architectural details, and a connection to nature. New, wood-beamed, angular roof supported by tapered stucco columns along with a roomy front porch and hedges that enclose the front yard and garden, create abundant curb appeal and the perfect venue to visit with guests.
Inside the home, dramatic 10-foot ceilings and abundant natural light showcase the beauty of the built-in wood cabinets and bookshelves, extensive door, window and fireplace mouldings and gleaming hardwood floors. Ample master, two guest rooms and two bathrooms offer vintage charm. Gourmet kitchen includes a Wolf range, Villeroy and Boch ceramic farm sink, Stainless refrigerator and a generous pantry. Just outside the kitchen door, is a private patio... and serenity.
The main home, guest suite, intimate garden and patio blend to create a comfortable and stylish living environment characterized by the use of natural elements, distinctive architectural details, and a connection to nature. New, wood-beamed, angular roof supported by tapered stucco columns along with a roomy front porch and hedges that enclose the front yard and garden, create abundant curb appeal and the perfect venue to visit with guests.
Inside the home, dramatic 10-foot ceilings and abundant natural light showcase the beauty of the built-in wood cabinets and bookshelves, extensive door, window and fireplace mouldings and gleaming hardwood floors. Ample master, two guest rooms and two bathrooms offer vintage charm. Gourmet kitchen includes a Wolf range, Villeroy and Boch ceramic farm sink, Stainless refrigerator and a generous pantry. Just outside the kitchen door, is a private patio... and serenity.
Sunday, March 23, 2014
Monday, March 17, 2014
Malaysia Airlines Everything we Know | Flight 370 Graphic | Last Known Sequence of Events
Malaysia Airlines Flight 370 is still missing after dropping off air traffic control screens less than an hour into a flight from Kuala Lumpur to Beijing on March 8.
Agence France-Presse has created this helpful graphic showing what is known about the sequence of events.
Note that Malaysian officals now say that authorities "don't know" when the ACARS system, one of the plane's automatic tracking systems, was switched off.
Experts agree that the it will be extremely difficult to find the plane if it crashed into a deep and remote part of the Indian Ocean. The other possibility, according to the final satellite communications with the plane, places it in nothern Thailand, China, or central Asia.
Read more: http://www.businessinsider.com/flight-370-graphic-2014-3#ixzz2wEo2sdEz
Sunday, March 9, 2014
Monday, March 3, 2014
Wednesday, February 26, 2014
Wednesday, February 5, 2014
Just Got an Offer on My Home and I am SO MAD!
I JUST GOT AN OFFER ON MY HOME AND I'M SO MAD
Feb 5, 2014
Don't Get Mad, Get Even More For Your Home
First, you're shocked. Then you get angry. "They offered WHAT?"
As you glare at your REALTOR, all you can think of is how insulted you are. How could buyers offer you so little for your home? Don't they know what you paid for it? All you've put into to it? Don't they know how much the house down the street sold for?
Before you throw the offer in the trash, take a deep breath, cool down, and get some perspective.
Here's the other side:
You and your buyer aren't as far apart as you think. You just need to work through your differences.
Don't get mad at the one person who made an offer on your home. Get mad at all the other buyers who walked through your home and didn't make an offer.
Find out the negatives where your buyers are focused. Deferred maintenance or dated decor are expensive to correct. You didn't want to put in the money; why should the buyer?
Look for where you can compromise. Are you willing to make the repairs and updates buyers want? If not, are you willing to lower the price? And if you don't lower the price, can you afford to wait for another offer that may never come?
Think back to when you and your Realtor first discussed pricing for your home. She pointed out that buyers want as close to new as possible, didn't she? Now you're seeing your home through the buyer's eyes and their offer.
The support for the buyer's side is that others saw your home and didn't like it well enough to make an offer. You have to accept that condition is a bigger factor than you thought it would be.
Think about how you'll feel when you become the buyer. Would you pay full asking price for a home that needs work if there are others in better condition?
Set your pride aside and rework the numbers to something that's fair to you and the buyers. When they see you're making the effort, they'll either improve their offer or accept your counteroffer.
Keep your eye on the prize - getting your home sold, not beating the buyer.
Realty Times Blanche Evans
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Friday, January 17, 2014
Thursday, January 9, 2014
Infographic: History of Mortgage Rates
Since 1971, when mortgage rates first started being tracked, they
have ranged from a high of 18.63 percent in the early 80′s to a low of
3.20 percent in late 2013. Currently, rates are still relatively low and
for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment. But, what will the future hold?
“After dropping to all-time lows at the end of 2012, rates have steadily rebounded throughout 2013. Now that the Federal Reserve has announced plans to begin winding down its stimulus program, which has helped keep rates low while the economy was still fragile, we expect rates will rise above 5 percent in 2014 as the economic recovery gains steam. Although those who missed out on mortgages in the 3 percent range may be disappointed that they missed that historic window, rates are still extraordinarily low by historic standards,” says Erin Lantz, director of Zillow Mortgage Marketplace.
“After dropping to all-time lows at the end of 2012, rates have steadily rebounded throughout 2013. Now that the Federal Reserve has announced plans to begin winding down its stimulus program, which has helped keep rates low while the economy was still fragile, we expect rates will rise above 5 percent in 2014 as the economic recovery gains steam. Although those who missed out on mortgages in the 3 percent range may be disappointed that they missed that historic window, rates are still extraordinarily low by historic standards,” says Erin Lantz, director of Zillow Mortgage Marketplace.
Tuesday, January 7, 2014
10 Things Buyers Hate About Your Home!
You’re in the market for a new home, whether you need more space or less, you must first sell your present residence. One might think that the slow housing marking would potentially have buyers pounding at your door, but this is not necessarily the case. Prices are steady at the moment and seem not to be plummeting any further. This is good for a buyer and can be good for you, however, home buyers are smarter and leerier these days. They are less apt to make hasty decisions and less apt to buy out of their range, which is partially what contributed to the great housing market collapse. Houses are selling these days, but how quickly they sell is really up to you, the seller, and your agent. The houses that move are those that are priced well. Today’s buyer is savvy and has done his research. Buyers also want a turn-key home that is immediately ready for them to move in and unpack. What they don’t want are…HERE
Saturday, January 4, 2014
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