2/28/10
CNN Money reports 25% home price decline ahead for our area!!
Take a look at this eye-opening post on our Winston Trails blog...If you're a home owner, you NEED to read it. Just click right here
2/10/10
New credit card rules to take effect soon...H.R. 627
The Credit Card Act of 2009 phases in, with the majority of consumer protections kicking in Feb. 22, 2010. If you are into reading lengthy government documents, click on the blog post title ( or the link below) and you will be redirected to the 33 page, HR 627 document entitled: ‘‘Credit Card Accountability Responsibility and Disclosure Act of 2009’’
If you'd rather just see a brief summary... here you go:
Sec. 101. Prior notice of rate increases required. Prohibits increase in APR without 45 days= notice. Prohibits applying rate increases retroactively to existing balances. Requires clear notice of right to cancel credit card when APR is raised.
Sec. 102. Freeze on interest rate terms and fees on canceled cards. Prevents APR from being raised, or repayment terms being cancelled, if a cardholder cancels a card.
Sec. 103. Limits on fees and interest charges.
< Prohibits double cycle billing: Prohibits credit card issuers imposing interest charges on any portion of a balance that is paid by the due date.
< Over-the-limit fee restrictions: Cardholders must be given the option of having a fixed credit limit that cannot be exceeded, and card companies cannot charge overlimit fees on cardholders with fixed limits. Cardholders may elect to prohibit the creditor from completing overlimit transactions that will result in a fee or constitute a default under the credit agreement. Overlimit charges can only be charged when an extension of credit, rather than a fee or interest charge, causes the credit limit to be exceeded. Overlimit charges can only be applied once during a billing cycle.
< Prohibits charging interest on fees: Prohibits the charging of interest on credit card transaction fees, such as late fees and overlimit fees.
< Limits on charging certain fees: Prohibits credit card issuers from charging a fee to allow a credit card holder to pay a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise. Requires fees to be reasonably related to cost. Foreign currency exchange fees may only be imposed in an account transaction if the fee reasonably reflects costs incurred by the creditor and the creditor publicly discloses its method for calculating the fee.
Sec. 104. Consumer right to reject card before notice is provided of open account. Gives cardholders who get preapproved the right to reject the card up until they activate it without having their credit adversely affected.
Sec. 105. Use of terms clarified. Prevents card companies from using the terms fixed rate and prime rate in a misleading way by establishing a single definition.
Sec. 106. Application of card payments. Prohibits credit card companies from setting early deadlines for credit card payments. Requires payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges. Prohibits late fees if the card issuer delayed crediting the payment. Prohibits card companies from charging late fees when a cardholder presents proof of mailing payment within 7 days of the due date.
Sec. 107. Length of billing period. Requires credit card statements to be mailed a least 21 days before the bill is due (current requirement is 14 days).
Sec. 108. Prohibition on universal default and unilateral changes to cardholder agreements. Prevents credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholders behavior with respect to that card. Prevents credit card issuers from changing the terms of a credit card contract for the length of the card agreement. Allows penalty rate increases only for specific, material actions or omissions of the consumer specified in the card agreement. Requires issuers to lower penalty rates that have been imposed on a cardholder after 6 months if the cardholder commits no further violations.
Title II B ENHANCED CONSUMER DISCLOSURES
Sec. 201. Payoff timing disclosures. Requires credit card issuers to provide individual consumer account information and to disclose the period of time it will take the cardholder to pay off the card balance if only minimum monthly payments are made. Also requires issuers to disclose the total amount of interest the cardholder will pay to pay off the card balance if only minimum monthly payments are made.
Sec. 202. Requirements relating to late payment deadlines and penalties. Requires full disclosure in billing statements of required payment due dates and applicable late payment penalties. Requires that cardholders be given a reasonable period to make payment. Requires that payment at local branches be credited same-day.
The above summary only details a small portion of what the bill regulates...if you have any credit cards (and who doesn't), it may pay to print out and read the entire bill.
I hope this is helpful to you.
If you'd rather just see a brief summary... here you go:
Sec. 101. Prior notice of rate increases required. Prohibits increase in APR without 45 days= notice. Prohibits applying rate increases retroactively to existing balances. Requires clear notice of right to cancel credit card when APR is raised.
Sec. 102. Freeze on interest rate terms and fees on canceled cards. Prevents APR from being raised, or repayment terms being cancelled, if a cardholder cancels a card.
Sec. 103. Limits on fees and interest charges.
< Prohibits double cycle billing: Prohibits credit card issuers imposing interest charges on any portion of a balance that is paid by the due date.
< Over-the-limit fee restrictions: Cardholders must be given the option of having a fixed credit limit that cannot be exceeded, and card companies cannot charge overlimit fees on cardholders with fixed limits. Cardholders may elect to prohibit the creditor from completing overlimit transactions that will result in a fee or constitute a default under the credit agreement. Overlimit charges can only be charged when an extension of credit, rather than a fee or interest charge, causes the credit limit to be exceeded. Overlimit charges can only be applied once during a billing cycle.
< Prohibits charging interest on fees: Prohibits the charging of interest on credit card transaction fees, such as late fees and overlimit fees.
< Limits on charging certain fees: Prohibits credit card issuers from charging a fee to allow a credit card holder to pay a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise. Requires fees to be reasonably related to cost. Foreign currency exchange fees may only be imposed in an account transaction if the fee reasonably reflects costs incurred by the creditor and the creditor publicly discloses its method for calculating the fee.
Sec. 104. Consumer right to reject card before notice is provided of open account. Gives cardholders who get preapproved the right to reject the card up until they activate it without having their credit adversely affected.
Sec. 105. Use of terms clarified. Prevents card companies from using the terms fixed rate and prime rate in a misleading way by establishing a single definition.
Sec. 106. Application of card payments. Prohibits credit card companies from setting early deadlines for credit card payments. Requires payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges. Prohibits late fees if the card issuer delayed crediting the payment. Prohibits card companies from charging late fees when a cardholder presents proof of mailing payment within 7 days of the due date.
Sec. 107. Length of billing period. Requires credit card statements to be mailed a least 21 days before the bill is due (current requirement is 14 days).
Sec. 108. Prohibition on universal default and unilateral changes to cardholder agreements. Prevents credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholders behavior with respect to that card. Prevents credit card issuers from changing the terms of a credit card contract for the length of the card agreement. Allows penalty rate increases only for specific, material actions or omissions of the consumer specified in the card agreement. Requires issuers to lower penalty rates that have been imposed on a cardholder after 6 months if the cardholder commits no further violations.
Title II B ENHANCED CONSUMER DISCLOSURES
Sec. 201. Payoff timing disclosures. Requires credit card issuers to provide individual consumer account information and to disclose the period of time it will take the cardholder to pay off the card balance if only minimum monthly payments are made. Also requires issuers to disclose the total amount of interest the cardholder will pay to pay off the card balance if only minimum monthly payments are made.
Sec. 202. Requirements relating to late payment deadlines and penalties. Requires full disclosure in billing statements of required payment due dates and applicable late payment penalties. Requires that cardholders be given a reasonable period to make payment. Requires that payment at local branches be credited same-day.
The above summary only details a small portion of what the bill regulates...if you have any credit cards (and who doesn't), it may pay to print out and read the entire bill.
I hope this is helpful to you.
2/3/10
The next chapter in the book entitled: The housing crisis..what they DON"T want you to know!
On our main blog, I just posted a startling entry which details the reasoning behind the likelihood of a "second leg down" in local home values...rather than duplicate the entire post here, just click here or on the post title to read the entire post.
Thanks...Steve Jackson
Thanks...Steve Jackson
1/28/10
Kensington short sale...SOLD after 653 days on the market!
A Kensington model on Houlton Circle that had been on the market since April of 2008 has finally sold for $345,000.
The original agent placed it on the market at $549,000, eventually reducing it to $410,000. After 269 days on the market, the owner switched agents. The new agent priced it at $400,000, had it on the market for over a year, and eventually sold it for $345,000. A selling price over $200,000 less than the original asking price...think someone made a pricing error here?
I see this too often, where wrong pricing, whomever is at fault (agent, owner, or both) ends up costing the seller tens of thousands..and in this case hundreds of thousands of dollars...as well as a great deal of time and stress.
The original agent placed it on the market at $549,000, eventually reducing it to $410,000. After 269 days on the market, the owner switched agents. The new agent priced it at $400,000, had it on the market for over a year, and eventually sold it for $345,000. A selling price over $200,000 less than the original asking price...think someone made a pricing error here?
I see this too often, where wrong pricing, whomever is at fault (agent, owner, or both) ends up costing the seller tens of thousands..and in this case hundreds of thousands of dollars...as well as a great deal of time and stress.
1/26/10
Journeys End homes currently under contract...a very informative breakdown
There are currently 8 Journeys End homes under contract...which is good news.
But...look at the map graphic below for "the rest of the story"
There are only three homes (of 8 total) that are NOT Short Sales
This does not bode well for property values going forward as short sales typically sell at a discount to non short sales. And with the ratio being 5 "under contract" homes being short sales and only 3 being non short sales, this could cause an appriasal problem with sales later this year...this is an excellent graphic backing up the advice that I have been giving to sellers/potential sellers in Journeys End lately: the window of opportunity is small, try to get on the market, under contract, and sold in the next 3-5 months.
Thanks for reading,
Steve Jackson
Journeys End sales the previous 60 days...map view
There were 6 recorded sales in Journeys End in the previous 60 days...only 1 of them was a short sale.
- Santa Fe...short sale...$300,000...pool/lakeview
- Biltmore...$335,000...lake/pool
- Windsor...$415,000...lake/pool
- Santa Fe...$327,500
- Biltmore...$315,000...pool
- Windsor...$369,000...pool/canal
1/19/10
Journeys End Foreclosure details
As of 1/15/10 there were 26 Journeys End homes in some stage of the foreclosure process...below is a breakdown by street:
- C Durham - 7
- Houlton Circle - 6
- Finamore - 4
- Bither - 2
- Nikki - 2
- Kaleb - 1
- Jessica - 1
- Eamlyn - 1
- Eugene - 1
- Wilbur - 1
1/10/10
Buckingham under contract....
The extended Buckingham with a pool that went on the market a month ago at $365,000 has gone under contract.
The current owners purchased the home for $387,500 in 2003.
The current owners purchased the home for $387,500 in 2003.
This is the basic Buckingham floorplan...I believe the original owners had the builder make the covered patio a part of the home.
1/5/10
Industry insiders expect market to resume fall...
NEW YORK (CNNMoney.com) -- After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.Prices have risen more than 3% since May, according to S&P/Case-Shiller. But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up.
Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%."We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."
There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.
The above is a snippet of a CNNmoney.com article from Friday, January 1st.
Take a look at this mortgage interest rate comparison I've done:
4.5% on a $400k loan = 2025.19/mo
8% on a $276k loan = 2026.74/mo
Right now...we are at about a 5%+ average mortgage rate...it has risen the past 3 weeks, and that is with the feds direct involvement with the rate mechanism. If the feds "backs away" from direct involvement some time this year, rates will surely increase. It is not too inconceivable that rates could rise to 8%, which, in the example above, reduces the buying power of the representative buyer $124,000!
If the "blame" for the housing bubble has been "low interest rates and loose lending standards" what effect will the opposite have? Couple higher rates, extremely tight/restrictive lending standards, the end of buyer tax credits and a wave of bank-owned homes...It's not a pretty picture being painted.
Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%."We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."
There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.
The above is a snippet of a CNNmoney.com article from Friday, January 1st.
Take a look at this mortgage interest rate comparison I've done:
4.5% on a $400k loan = 2025.19/mo
8% on a $276k loan = 2026.74/mo
Right now...we are at about a 5%+ average mortgage rate...it has risen the past 3 weeks, and that is with the feds direct involvement with the rate mechanism. If the feds "backs away" from direct involvement some time this year, rates will surely increase. It is not too inconceivable that rates could rise to 8%, which, in the example above, reduces the buying power of the representative buyer $124,000!
If the "blame" for the housing bubble has been "low interest rates and loose lending standards" what effect will the opposite have? Couple higher rates, extremely tight/restrictive lending standards, the end of buyer tax credits and a wave of bank-owned homes...It's not a pretty picture being painted.
12/30/09
Yuma price reduction in Journeys End, today.
This home is not being marketed as a short sale.
12/29/09
SOLD...Santa Fe
The home was sold by the original owners who purchased the home in December of 2000 for $219,554. The sale was a conventional sale...not a short sale.
12/23/09
FHA, 1st time buyers, and perceptions...
Nearly 40% of existing homes purchased in November used a Federal Housing Administration (FHA)-insured mortgage, according to a National Association of Realtor (NAR) survey.
As a result, the FHA is having to defend the program, saying that it is well enough capitalized to avoid any major losses in case of surging defaults. Earlier this month, Department of Housing and Urban Development secretary Shaun Donovan was before Congress defending the FHA, and ensuring the House Financial Services Committee that the single-family insurance program is “not the next subprime.”
The increase in demand caused the capital reserve ratio at the FHA to drop below the Congressionally mandated 2% minimum, leaving HUD and the FHA scrambling to ensure the FHA program’s soundness.
A number of proposals are being considered, including the raising of insurance premiums, raising the minimum FICO (credit score) requirements, raising the minimum required down payments and reducing the allowable seller contribution...all of which will make it more difficult for buyers to qualify for and obtain financing (and hence, not good for sellers).
Other results from the Realtors confidence index showed first time homebuyers accounted for 51% of all transactions and are actively competing with investors for distressed properties...
And, distressed properties aren’t just affecting transaction price, however. The presence of distressed properties is influencing buyers’ perceptions of other homes for sale and many buyers have pricing expectations that treat every property as if it were a distressed sale.
Additionally, HUD issued a ruling that borrowers who were in default on their mortgage at the time of a short sale are not eligible for an FHA-insured mortgage for three years...
As a result, the FHA is having to defend the program, saying that it is well enough capitalized to avoid any major losses in case of surging defaults. Earlier this month, Department of Housing and Urban Development secretary Shaun Donovan was before Congress defending the FHA, and ensuring the House Financial Services Committee that the single-family insurance program is “not the next subprime.”
The increase in demand caused the capital reserve ratio at the FHA to drop below the Congressionally mandated 2% minimum, leaving HUD and the FHA scrambling to ensure the FHA program’s soundness.
A number of proposals are being considered, including the raising of insurance premiums, raising the minimum FICO (credit score) requirements, raising the minimum required down payments and reducing the allowable seller contribution...all of which will make it more difficult for buyers to qualify for and obtain financing (and hence, not good for sellers).
Other results from the Realtors confidence index showed first time homebuyers accounted for 51% of all transactions and are actively competing with investors for distressed properties...
And, distressed properties aren’t just affecting transaction price, however. The presence of distressed properties is influencing buyers’ perceptions of other homes for sale and many buyers have pricing expectations that treat every property as if it were a distressed sale.
Additionally, HUD issued a ruling that borrowers who were in default on their mortgage at the time of a short sale are not eligible for an FHA-insured mortgage for three years...
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