RisMedia Consumer News

Syndicate content
Updated: 7 hours 39 min ago

Why Your Mortgage Is Getting More Expensive

February 21, 2018 - 3:48pm

(TNS)—World events are conspiring to make it more expensive for you to borrow money to buy a house.

Mortgage rates have increased for five consecutive weeks, according to Bankrate data, bringing interest on a 30-year fixed rate loan to 4.44 percent—the highest level in 11 months—while home prices continue to rise due to a lack of available homes.

After years of tepid economic growth, animal spirits are aflame. Inflation and wage growth recently found a groove, while the Federal Reserve’s plan to raise short-term interest rates multiple times for a consecutive year has reduced the value of government debt. The yield on 10-year Treasuries is close to a four-year high. (Bond prices and yields are inversely related.)

Oh, and China may reduce its appetite for U.S. bonds.

Homebuyers Should Get off the Fence
Mortgage rates are moved by the yield on 10-year Treasuries, rather than short-term rate hikes by the Fed. That’s why mortgage rates fell throughout 2017, for instance, even as the central bank raised the federal funds rate three times.

Rates remain cheap, however, compared to historical prices. A 30-year fixed-rate mortgage came with an interest rate above 6 percent just before the Great Recession in 2007.

Potential homeowners should get off the fence and make a bid, assuming you have an affordable home target and adequate savings, because rates are likely only heading north.

Why Mortgage Rates Are Increasing
You’ve seen this movie before.

Immediately after the 2016 election, investors sold government debt en masse, causing the 10-year yield to rise from 1.88 percent on November 8 to 2.60 percent five weeks later. That dramatic rise was predicated on investors thinking a newly Republican-controlled Washington would bring about faster economic growth through infrastructure spending and tax cuts.

Optimism waned throughout 2017, though, as the GOP failed to overhaul the Affordable Care Act, casting doubt on their cohesion as a governing party. The long-promised massive infrastructure bill never materialized, while the prospects of a tax overhaul dampened. By the first week of September, the 10-year yield was 2.05 percent.

But then Republicans made progress on a $1.5 trillion tax bill, while the employment picture continued to brighten, and the U.S. economy grew at a solid clip over the last six months of the year.

With Congress agreeing to a $300 billion spending bill—which will only throw more coal on the burning economy—investors see fewer reasons to own bonds. Economic growth and higher pay could result in long-awaited inflation gains. Prices have been rising below the Fed’s 2 percent target, according to the central bank’s preferred prices gauge, for years now.

Higher inflation is a boon for fixed-rate borrowers but hurts debtors. The January jobs report, which showed a 2.9 percent-year-over year earnings increase, was a signal to market observers that inflation may be coming.

Meanwhile, Bloomberg reported in January that China, the largest foreign holder of U.S. debt, may reduce or cease U.S. debt purchases, causing market jitters.

Should You Be Worried?
Given the recent run-up in yields, you may be worried—but don’t panic just yet.

“This is not alarming,” notes Chris Vincent, fixed income portfolio manager at William Blair. “There is no significant drama in the credit markets.”

Markets, after nearly a decade of low rates and low growth, are adjusting to the new normal and corresponding volatility—and while China may own over a trillion dollars of U.S. debt, that’s less than 20 percent of all debt owned by foreign nations, and a fifth of what America owes itself.

You are entering a world where it’s going to become more expensive to borrow money. It’s time to get used to it.

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

The post Why Your Mortgage Is Getting More Expensive appeared first on RISMedia.

Categories: Real Estate

Survey Finds Hidden Costs of Homeownership

February 19, 2018 - 4:04pm

(TNS)—Your day burns brightly on both ends.

You prod your kids out of bed at daybreak, get them dressed, fed and off to school. You drive to work, endure meetings, colleagues, power lunches, memos and strategy sessions, only to return home through gridlocked traffic just as the sun sets, beg your kids to eat dinner, wash them, coax them to sleep, do the dishes and then mercifully collapse in front of the television set.

You fret over your emergency savings account, retirement savings account, credit card debt, mortgage rate, health insurance, college savings, and on and on.

It makes sense, then, you’d opt to pay a cleaning or lawn service every week to lighten your load. Hiring someone to keep your property in working order, either on your own or through homeowners association fees, doesn’t come cheap, though.

More than three in five homeowners—63 percent—use at least one recurring home maintenance provider, while 35 percent use two, according to a recent Bankrate survey. The average homeowner pays $2,000 annually on maintenance services, the survey finds.

Costs of Owning a Home
The price of biweekly landscaping probably never factored into your calculus when deciding how much house you can afford.

The average home mortgage neared $250,000 last year, according to the National Association of REALTORS®, which came with a monthly principal and interest payment of $973, or about one-sixth of median family income.

Homeowners saw an average property tax bill of $3,300 in 2016, according to ATTOM’s most recent data, adding another $275 to your monthly budget. You’ll also owe hundreds more in insurance premiums depending on where you live and what type of house you own.

That doesn’t even include the money you need saved in case something unexpected happens. If your air conditioning unit or washer and dryer gives out, you could immediately owe hundreds, if not thousands.

Kevin Mahoney, CEO of fee-only financial advice firm Illumint, recommends to designate a savings account as a “home maintenance fund.” Mahoney, who recently bought a renovated row house in Washington, D.C., contributes $100 to $200 a month as a hedge against unexpected repairs and wear-and-tear. Maintaining a house fund will inoculate you against high-interest debt, leaving your budget open for routine maintenance services.

Cost You Probably Didn’t Think About
After the years required to amass a sufficient down payment—the average among new homebuyers is 11 percent—and all the big costs staring homeowners in the face, it’s little wonder if you don’t account for smaller fare.

But the price tag for convenience can rise quickly.

People who opt for housekeeping shell out an average of $285 a month, while HOA dues ($210) and landscaping ($144) followed behind. A home security system costs $130, slightly more than pool care ($123). Snow removal ($84), septic service ($67) and trash and recycling collection ($55) proved more affordable.

Unsurprisingly, renters are less likely than homeowners to pay for recurring maintenance services, and when they do, they pay less for most services.

On average, renters pay less for housekeeping ($128), HOA dues ($71), pool care ($70), landscaping ($61) and snow removal ($24); however, they fork over a little more for security systems ($142), septic service ($113), and trash and recycling collection ($63).

Nate Masterson, a director of Finance for Maple Holistics, pays $1,000 annually for gardening services, and another $70 to clear his Riverside, N.Y., home of snow.

“It would require a lot of strenuous work to perform either task, and it’s simply more worthwhile for me to pay a professional,” says Masterson, 34.

Make Sure You Account for All Costs
Americans broadly struggle mightily to save.

The average person wouldn’t pay for an unexpected $1,000 expense from their savings, per a recent Bankrate survey, while the median amount in a savings and checking account for a middle-income household has essentially remained flat over the past 27 years, according to Federal Reserve data.

Credit card debt recently hit an all-time high, while the personal savings rate has dropped precipitously over the past two years.

If you don’t have a fully-funded emergency fund comprising three to six months’ worth of expenses in a high-yield savings account, strongly consider suspending as many as these services as possible until you do. Dropping almost $300 a month on housekeeping while lacking $1,000 in the bank is simply too risky. What if the roof caves in? At the very least, start contributing to a home maintenance fund.

You may not have a say in other costs—trash collection and HOA fees were two of the three most common—but make sure to account for those expenses into your budget prior to moving in, and in your emergency fund.

Life’s hard, and there’s nothing wrong with paying someone else to mow your lawn. Unless you can’t afford it.

©2018 Bankrate.com
Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

The post Survey Finds Hidden Costs of Homeownership appeared first on RISMedia.

Categories: Real Estate

Buyers Entering the Market Solo Struggle

February 12, 2018 - 4:33pm

Accumulating a down payment is a struggle—and even more so for singles, according to a new report.

Singles are facing more than 10 years of saving, assuming they make a 20 percent down payment on a median-priced property, an analysis by Zillow reveals. Conversely, couples can do it in half the time: 4.6 years.

In addition, buyers have limited options when solo: 45 percent of inventory, compared to couples, who can afford 82 percent of supply.

“Nearly two-thirds of Americans agree that buying a home is a central part of living the American Dream, but for unmarried or un-partnered Americans, that dream is increasingly out of reach,” says Aaron Terrazas, senior economist at Zillow. “Single buyers typically have more limited budgets, which means they are likely competing for lower-priced homes that are in high demand. Having two incomes allows buyers to compete in higher-priced tiers where competition is not as stiff.”

The challenge is intensified in markets with rising values, the report shows. Couples face 14 years of saving in San Jose, Calif.—already a haul—but for singles, that span stretches over 30 years. In San Francisco, Calif., couples can amass enough for 20 percent down in 12.6 years, but singles have a longer road, at 27.8 years.

A handful of markets are more realistic for singles: Indianapolis, Ind. (7.5 years of saving); Cleveland, Ohio, and Detroit, Mich. (8 years); and St. Louis, Mo., and Pittsburgh, Pa. (8.1 years).

Across the largest metros:

Analysts assumed buyers are portioning off 10 percent of their income each year to savings. According to 2016 Census data, annual earnings were a median $80,800 for couples and $34,500 for singles.

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Buyers Entering the Market Solo Struggle appeared first on RISMedia.

Categories: Real Estate

Automation and Customization: Renter Wishes

January 27, 2018 - 12:01am

Apartment dwellers’ preferences are shifting…toward what owners want, new research shows.

According to the National Multifamily Housing Council (NMHC), an apartment industry organization, convenience, personalization and smart home technology are high on renters’ wish lists. In the NMHC’s 2018 Consumer Housing Insights Survey, 92 percent of respondents believe convenience and ease are important in a rental. Further necessitating the need are the 63 percent of respondents who say they are busy with a “hectic” life.

Homeowners have similar tastes—in fact, the National Association of REALTORS® (NAR) found that two generations of homeowners are looking for walkability, and Coldwell Banker Real Estate research reveals 32 percent have incorporated smart technology, including smart locks and thermostats.

The ability to customize is also in-demand, according to the NMHC survey. Ninety-four percent believe personalization is significant, and 60 percent believe their home is indicative of who they are.

Seventy-eight percent, meanwhile, are after a rental that can be altered easily to meet their needs, whether in the future or the present. Tellingly, 40 percent expect to remote-work, highlighting interest in office space, or, at the very least, reliable cell reception and internet.

Source: National Multifamily Housing Council (NMHC)

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Automation and Customization: Renter Wishes appeared first on RISMedia.

Categories: Real Estate

Amazon Closes In: What HQ2 Means for Housing in the Top 20

January 25, 2018 - 4:07pm

Amazon is a step closer to finalizing its HQ2 plans, having narrowed its sights on the top 20 contenders after receiving over 230 proposals from across North America. While the winning city could be any one of the short-list nominees, Amazon has made one thing clear: It is looking to build HQ2 away from the West Coast, which currently houses its principal headquarters in Seattle, Wash. Although Los Angeles is still in the realm of possibility after making Amazon’s top 20 list, most of the other locations are closer to the East Coast, with a few others scattered across the country.

Here are the cities Amazon is zoning in on:

  • Toronto, Canada
  • Columbus, Ohio
  • Indianapolis, Ind.
  • Chicago, Ill.
  • Denver, Colo.
  • Nashville, Tenn.
  • Los Angeles, Calif.
  • Dallas, Texas
  • Austin, Texas
  • Boston, Mass.
  • New York City, N.Y.
  • Newark, N.J.
  • Pittsburgh, Pa.
  • Philadelphia, Pa.
  • Montgomery County, Md.
  • Washington, D.C.
  • Raleigh, N.C.
  • Northern Virginia, Va.
  • Atlanta, Ga.
  • Miami, Fla.

“Amazon will bring thousands of high-paying jobs to one of these cities and will boost overall local economic growth—all of those highly-skilled engineers will need doctors, real estate agents, barbers, babysitters and baristas, too,” said Aaron Terrazas, senior economist at Zillow, in response to the top 20.

With new job opportunities, the chosen city can expect a surge in relocations or commuters from those seeking employment.

“We would pull from other big cities like Cleveland and Cincinnati and even outside of the state,” says Lee Ritchie, REALTOR® and team leader of the Ritchie Realty Group at RE/MAX Metro Plus in Columbus, Ohio. “We are already pulling in people from outside of the community.”

Daniel Evenchen, REALTOR® with the Mike McCann Team, Berkshire Hathaway HomeServices Fox & Roach REALTORS®, believes Philadelphia’s prime location nearby other massive metro areas is one of the biggest reasons Amazon has short-listed it.

“Of a location perspective, we’re very close to Baltimore, Washington D.C. and New York, but, comparatively, we have a lot of room for growth,” says Evenchen.

If Amazon attracts more individuals willing to relocate rather than commute, the winning location will need to prepare for an influx of incoming buyers and renters. The top 20 cities are already making plans for the possibility of HQ2.

“It is affecting the decisions of buyers and sellers right now,” Evenchen says. “I have a lot of clients who are thinking of selling and brought up Amazon. They are kind of holding off on selling and are thinking of renting their homes instead so that the value of their home appreciates if Amazon comes through. Buyers are thinking this is a great time to buy, as well.”

However, adapting to a flood of new buyers will not be easy. Many of the top 20 cities are currently dealing with tight inventory, a problem that will only be exacerbated if Amazon moves in. The proof is in Seattle.

“…Accommodating growth on this scale will be a challenge for any city,” Terrazas said. “As Amazon grew from a startup bookstore into the nation’s dominant retailer, Seattle grew alongside it—which caused some growing pains. Seattle home values have almost doubled and rents have increased by half, straining affordability.”

Evenchen foresees a challenge in the new construction market. Since the rental market in Philadelphia is moving quickly, any incoming buyers who are looking for new housing may be met with few options.

“The Philadelphia real estate market is probably going to experience a very sharp increase,” says Evenchen. “Right now, the market is extremely soft. We are seeing tenants and renters really negotiating in a tough market. At this point, vacant land is extremely difficult to come by. It’s highly sought-after. [Amazon] would probably just reinforce what’s been going on.”

Ritchie believes Columbus will face similar challenges.

“Our struggle would be that we wouldn’t have enough inventory,” Ritchie says. “We need builders to construct more houses, and prices on existing homes would go up for sure. The Downtown Columbus market—the urban market—is very hot, and a lot of people want to work here. There will be plenty of rentals, but, at this juncture, we may have difficulty in this market.”

Regardless of challenges, these cities made Amazon’s top 20 list for a reason. Ritchie believes Columbus caught Amazon’s eye because of its ability to attract millennials, and its talented workforce, moderate housing costs and standard of living. Terrazas agrees.

“Columbus may be a surprise to some, but it has long featured a dynamic combination of size, affordability, access to higher education and room to grow,” said Terrazas, stating that the top 20 list is made up of well-established cities.

“Boston is home to some of the nation’s most prestigious universities, and clearly fits Amazon’s requirement for ready access to top-tier tech talent,” Terrazas said. “Austin has been among the nation’s hottest markets for several years now, and is also home to Whole Foods, which Amazon recently acquired. Atlanta and Pittsburgh have the benefit of being incredibly affordable markets, with some of the lowest median home values and rents among the top 20 list. Amazon clearly has a tough job choosing between these 20 unique communities, and it will be interesting to see how things shake out in the coming months.”

As for Philadelphia, Evenchen believes the location’s potential is in its diversity.

“It’s very much a big little town,” Evenchen says. “It’s a city of neighborhoods. It’s extremely walkable and bike-able. Our public transportation is pretty robust and there has been a great deal of investment in parks and recreation. They just dedicated $90 million to connect the Delaware River to the hub, making it a little more accessible to the waterfront.”

Meanwhile, other cities, such as Los Angeles, are already dealing with more severe challenges.

“With very dense buildings, there are only a few places in Los Angeles where there are walkable areas,” says Natalya Shcherbatyuk, broker/owner of Flat Rate Real Estate. “At the same time, traveling around the city by car is a nightmare. The streets and freeways are overloaded all day, and not only during rush hour.”

However, with every challenge comes an opportunity. Shcherbatyuk believes one of the city’s biggest obstacles may turn out to be an advantage.

“Right now there is a construction boom in L.A.,” Shcherbatyuk says. “There is an acute shortage of housing for rent [at an affordable price] and the expensive apartments are empty, so maybe it will not be necessary to build a lot of new housing for high-salaried Amazon employees.”

Over 85 percent of the cities that submitted proposals didn’t make the cut, and many feel Amazon is losing out on their location’s advantages.

“Obviously, we are all disappointed Amazon did not name Detroit as one of the 20 cities they will be further evaluating for their new ‘HQ2,'” said Dan Gilbert, founder and chairman of Quicken Loans, in response to the top 20. “We are not deterred in any way, shape or form. Detroit is the most exciting city in the country right now, and the momentum continues to build every single day.”

Cities that were not chosen should not discount the possibility of other major tech giants making their way over. With the new tax bill in place, various companies have announced they are putting their tax cuts to good use.

“We have no doubt our best days are ahead of us,” Gilbert said of Detroit. “There are numerous large and small deals you will continue to see develop into reality in the months and years ahead.”

Apple, for example, announced its plans to build a new major campus stateside; however, the New York Times reports that Tim Cook, the company’s CEO, will not be following in Amazon’s footsteps, and instead using a different strategy to find Apple’s ideal location, rather than relying on a public bidding process.

Regardless of how these companies decide on new ventures, the winning cities can expect a bustling local economy that creates new jobs and a busy real estate market.

“It would be good for everyone,” Ritchie says. “For jobs, for new inventory, and, of course, for sellers whose home values would increase.”

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Amazon Closes In: What HQ2 Means for Housing in the Top 20 appeared first on RISMedia.

Categories: Real Estate

Home Laundry: To Vent or Not to Vent

January 16, 2018 - 3:30pm

I once believed it was a forgone conclusion that when adding certain laundry appliances to a home, it would mean installing exhaust ducting and cutting a hole to the outside for venting.

However, a recent report from Michele Weaver at Design Basics, LLC highlighted a growing trend in ventless dryers that can be easily located and relocated within a home because vent piping, exhaust holes and venting to the outside are not needed.

The mechanics of a home dryer can cause energy and safety problems if lint becomes trapped in the vent. This demands more energy use and frequent cleaning. Weaver believes one of the major trends consumers will be seeing in these key appliances will be the further refinement of ductless technology.

She says vent hoses snaking through a home’s framing have become a leading cause of the 2,900 (average) home clothes dryer fires reported annually, according to the U.S. Fire Administration.

J.D. Wollf at HomeSteady.com recently explained that a ventless or condenser dryer— also known as a Heat Pump Clothes Dryer (HPCD)—doesn’t need a vent because instead of expelling the hot, moist air, a heat exchanger removes the moisture from the hot air and “recycles” it, passing it back through the drying clothes. The excess water is then drained away or caught in a container that is later emptied.

The trade-off for energy savings and safety is a requirement for slightly more maintenance than vented dryers. Wollf says the condensing unit must be cleaned about once a month to remove any lint.

A study at the Florida Solar Energy Center at the University of Central Florida states that while an unvented HPCD uses less electricity than a standard resistance dryer, it was found to release significantly more heat than a conventional dryer during operation, demanding additional cooling energy that may compromise overall savings.

However, the study points out that with a current retail cost of $948, there is only a small premium on the HPCD dryers, making them cost-effective when chosen at time of replacement.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Home Laundry: To Vent or Not to Vent appeared first on RISMedia.

Categories: Real Estate

Infographic: How Recent Buyers Purchased Their Home

January 13, 2018 - 12:01am

Demand and home prices are increasing, but that has yet to keep homebuyers out of the market. Here is how they did it:

 For more information, please visit www.nar.realtor.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Infographic: How Recent Buyers Purchased Their Home appeared first on RISMedia.

Categories: Real Estate

‘Aging in Place’ Begins Early: Report

January 8, 2018 - 4:09pm

Homeowners are getting older, and to continue on in their current house, improvements are necessary.

“Aging in place,” however, is not just about adding railings and ramps—in fact, 46 percent of homeowners aged 75-plus began improvements early with the expectation that they would grow older, but stay put, according to a HomeAdvisor report. The most common remodels, the report shows:

  • Add Lever-Style Doorknobs
  • Add Pull-Out Shelves
  • Add a Smart Fire Detection System
  • Add a Smart Security System
  • Replace Stone/Tile With Carpet/Wood

Homeowners at an earlier stage, aged 55-75, are also making modifications, but not necessarily due to aging concerns (though they are, fortuitously, ideal for just that). These include adding automated features like a programmable thermostat or voice activation, and, in bathrooms, grab bars and higher toilets.

According to HomeAdvisor, a “holistic” movement is occurring—a comprehensive, and, at times, preventative, approach to living over the years. Early on, that could mean addressing issues that could be unsafe, like a cracked walkway. Later, that could mean cutting clutter and organizing (accessible storage, for example), or eliminating labor-intensive chores, such as adding gutters that clean themselves. The outcome is a lifestyle that is not only beneficial currently, but also crucial down the line, when age can impede the ability to carry out chores and upkeep.

Other key improvements to consider, the report shows:

  • Lighting
  • Modifications in Shower (Bench, threshold)
  • Moving Master Bedroom to First Floor
  • Ramps
  • Wider Doorways

Source: HomeAdvisor

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post ‘Aging in Place’ Begins Early: Report appeared first on RISMedia.

Categories: Real Estate

Would You Play Pretend Neighbors With These TV Characters?

January 4, 2018 - 4:05pm

Good neighbors are hard to find—unless you live near your favorite fictional star. Which character on the small screen is the most sought-after in 2018?

The best on the block, according to the annual Celebrity Neighbor Survey by Zillow, are Leonard and Penny from “The Big Bang Theory,” with 19 percent of the vote. Leonard is played by Johnny Galecki, whose ranch in San Luis Obispo was destroyed in a fire last summer. Penny is portrayed by Kaley Cuoco, who, after briefly residing at Lamar Odom and Khloe Kardashian’s former home in Tarzana, made headlines with her single-gal spread.

One TV twist: Nine percent of respondents to the survey said they’re not fans of “Big Bang” characters Sheldon and Amy. The most nightmare-ish, however? Thirty-one percent said they’d dread living in proximity to the titular Simpsons—but 11 percent, still, said the opposite.

“‘The Big Bang Theory’ is one of the most popular shows on television, so it is not surprising that American adults chose its leading couple as the most desirable neighbors for 2018,” says Jeremy Wacksman, CMO at Zillow. “On the other hand, it wouldn’t be easy to live next to the Simpsons, who have spent nearly 30 seasons causing chaos for neighbor Ned Flanders and the rest of Springfield. However, as the stars of one of TV’s longest-running shows, the Simpsons are certainly beloved by some: they also tied for second on the most desirable neighbor list.”

The faves following Leonard and Penny in the ranking: The Dunphys from “Modern Family” (No. 2 alongside the Simpsons); Will and Grace from “Will & Grace” (No. 3); Jack and Rebecca Pearson from “This Is Us” (No. 4); and The Johnsons from “Black-ish” (No. 5).

After the Simpsons, the neighbors not welcome are: The Lannisters from “Game of Thrones” (No. 2); Olivia Pope from “Scandal” (No. 4); and the Jennings from “The Americans” (No. 5).

2018’s choices differ from those in prior years, when Americans were asked to pick a real-life star to share a fence with. In 2017, that honor went to the Obamas.

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Would You Play Pretend Neighbors With These TV Characters? appeared first on RISMedia.

Categories: Real Estate

Borrowers Beware: These Mortgage Rules Could Soon Get a Facelift

January 4, 2018 - 4:04pm

(TNS)—Getting a mortgage today is much different than it was before the financial crisis.

Loans have to meet certain standards and there are many rules lenders and servicers have to follow. But after a shakeup in leadership at the Consumer Financial Protection Bureau (CFPB), the future of some policies is uncertain.

Here’s why: The new acting director of the CFPB, budget director Mick Mulvaney, is expected to review regulations that haven’t been finalized, and he may try to alter rules that are already in place.

Here are three policies Mulvaney could change and what adjustments to them might mean for homeowners and homebuyers. The CFPB has already announced plans to reconsider certain rules.

Home Mortgage Disclosure Act
When you apply for a mortgage, some information—including your race, ethnicity and sex—could be released to the public.

For thousands of lenders, reporting mortgage information is mandatory under the Home Mortgage Disclosure Act (HMDA). While the law has been around since 1975, the amount of data made publicly available is increasing, and not everyone is thrilled.

The mortgage industry believes that publishing so much data raises concerns about consumer privacy. And there’s no way to opt out of having your information shared, notes Richard Andreano Jr., partner at the Ballard Spahr law firm.

“They expanded the data set so much that there was a concern that if it was all made public, at what point are borrowers able to be identified using HMDA data?” asks Alexander Monterrubio, director of Regulatory Affairs at the National Association of Federally-Insured Credit Unions (NAFCU).

Consumer advocates want more information released. Doing so, they argue, protects borrowers from discriminatory lending. It also holds lenders accountable for their actions, says Jaime Weisberg, senior campaign analyst at the Association for Neighborhood & Housing Development (ANHD).

The latest HMDA requirements went into effect Jan. 1, 2018, but the CFPB, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency announced that lenders won’t be penalized for mistakes made while collecting data in 2018 or reporting it in 2019. They also won’t have to resubmit data unless errors are “material.”

The CFPB also said that it would revisit certain aspects of HMDA.

“HMDA could be made almost worthless,” says Peter Smith, a senior researcher at the Center for Responsible Lending. “We need a good body of rules to make sure lenders are playing a fair game with consumers.”

Ability-to-Repay and Qualified Mortgage Standards
Another rule that has been subject to debate is the qualified mortgage (or ability-to-repay) rule implemented in 2014. It requires most lenders to make a “good faith effort” to determine whether someone can afford a mortgage and eventually pay it back.

Critics say the new standards have kept many people, including low-income individuals, from becoming homeowners.

The CFPB is obligated to review the ability-to-pay rule since the Bureau is required to assess existing regulations within five years.

With the CFPB’s change in leadership, there may be pressure to loosen lending requirements, says Barry Zigas, director of Housing Policy at the Consumer Federation of America. There’s already a Senate bill aiming to give qualified mortgage status to loans offered by many banks and credit unions without requiring the lender to meet every condition under the ability-to-repay rule.

The bill’s supporters say it would give more consumers access to mortgages. But Zigas calls it a “dangerous effort to undermine consumer protections.” If it passes, a financial institution may legally avoid going through all of the steps lenders take to ensure borrowers can repay their loans, like considering their debt obligations, verifying income and employment history, and calculating their monthly debt-to-income ratio

TRID Rule
In 2015, the CFPB combined the mortgage disclosure obligations required by the Truth in Lending Act and the Real Estate Settlement Procedures Act under the TILA-RESPA Integrated Disclosure (TRID) rule. One result of the TRID rule is that consumers preparing to close on a house have two documents explaining their closing costs and mortgage terms, rather than four.

While the new forms helped simplify the closing process for homebuyers, the TRID rule created other problems. For one, it could prevent buyers from closing on their homes as quickly as they want to, says Brandy Bruyere, vice president of Regulatory Compliance at NAFCU.

For many items on the disclosures, there’s little or no tolerance for last-minute changes, and lenders have had to choose between rejecting borrowers’ requests and eating additional fees.

The CFPB has worked to fix the TRID rule and clear up confusion for lenders. But it hasn’t addressed every issue, leading members of Congress to create a bill that would make additional adjustments.

“The TRID disclosures are solid, and any significant change would add additional costs and uncertainty to the closing process,” says Smith from the CRL.

Rules Won’t Change Overnight
The CFPB’s final rules can’t be modified without issuing a notice and asking the public for feedback. Take these steps to ensure your voice is heard, especially if you’re concerned about how rule changes could affect you.

Comment on any potential policy changes. When the opportunity arises, visit the CFPB’s website and comment on the rules the agency is proposing. “The CFPB doesn’t have to do what the comments say, but they have to provide a reason for not doing so to avoid the rule being struck down as arbitrary and capricious,” says Benjamin Olson, a former deputy assistant director for the Office of Regulations at the CFPB.

Contact your representative. Congressional leaders can review certain rules issued by the CFPB and potentially overturn them. That’s what happened with the CFPB’s arbitration rule. The policy would’ve made it easier for consumers to file class action lawsuits against banks, but lawmakers used their powers under the Congressional Review Act to kill it before it could take effect. Legislators are now considering the CFPB’s final rule on payday lending and may seek to repeal it.

Use the complaint database. If you’ve had issues with your mortgage lender or servicer and you’re having trouble resolving them, file a complaint with the CFPB. Typically, you’ll receive a response within 15 days. You can use the same database if you’re having problems with other financial entities, like the bank managing your checking or savings account.

If you’re looking at mortgage rates and preparing to buy a home for the first time, read reviews and do your homework before choosing a lender.

©2017 Bankrate.com

Distributed by Tribune Content Agency, LLC

For the latest real estate news and trends, bookmark RISMedia.com.

The post Borrowers Beware: These Mortgage Rules Could Soon Get a Facelift appeared first on RISMedia.

Categories: Real Estate

Homes in Major Markets Realize Thousands in One Year

November 28, 2017 - 4:06pm

Homes in major markets have realized over $10,000 in the last year in value, according to the October Zillow® Real Estate Market Report. In fact, the median nationally has risen over $12,500. Appreciation is highest in the San Jose, Calif., metropolitan area, where prices have soared $118,200, or 12.3 percent, to a median $1,076,400. Nationally, there are now 11.7 percent fewer homes for sale compared to one year ago.

“We are in the midst of an inventory crisis that shows no signs of waning, impacting potential buyers all across the country,” says Dr. Svenja Gudell, chief economist at Zillow. “Home values are growing at a historically fast pace, and those potential buyers want to get in the market while they still can. But with homes gaining so much value in just one year, buyers—especially first-time buyers—have to set aside more and more money for a down payment just to keep up with them. Unfortunately, there’s just not enough homes for sale, and demand will continue to drive prices higher until we reach a better balance between supply and demand.”

For more information, please visit www.zillow.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Homes in Major Markets Realize Thousands in One Year appeared first on RISMedia.

Categories: Real Estate

Best and Worst Places for Millennial Home-Buying

November 21, 2017 - 4:19pm

Members of the millennial generation, especially first-time buyers, are already struggling to purchase a home due to student loan debt, trouble saving for a down payment and tight inventory—factors cited in the National Association of REALTORS® (NAR) 2017 Profile of Home Buyers and Sellers. According to GOBankingRates, slow wage growth and low unemployment rates across the country are also impacting the homeownership rate.

There are, however, specific locations that may be easier to purchase in because of low median list prices and low monthly mortgage payments. GOBankingRates rated the most and least expensive states across the U.S. to help millennial buyers find affordable housing. The report uses a median income of $60,932 to represent ages 25-34, and the following rankings are based on a 20 percent down payment and a 30-year, fixed rate mortgage.

Top 5 Most Affordable States

  1. West Virginia
    Median Lis price: $154,900
    Estimated time to save for a down payment: 2.5 years
    Monthly mortgage payment: $693
  1. Ohio
    Median list price: $150,000
    Estimated time to save for a down payment: 2.5 years
    Monthly mortgage payment: $704
  1. Arkansas
    Median list price: $150,000
    Estimated time to save for a down payment: 2.5 years
    Monthly mortgage payment: $757
  1. Indiana
    Median list price: $167,000
    Estimated time to save for a down payment: 2.7 years
    Monthly mortgage payment: $757
  1. Iowa
    Median list price: $169,000
    Estimated time to save for a down payment: 2.8 years
    Monthly mortgage payment: $766

Top 5 Most Expensive States

  1. Hawaii
    Median list price: $599,000
    Estimated time to save for a down payment: 9.8 years
    Monthly mortgage payment: $2,584
  1. California
    Median list price: $499,950
    Estimated time to save for a down payment: 8.2 years
    Monthly mortgage payment: $2,168
  1. Massachusetts
    Median list price: $419,900
    Estimated time to save for a down payment: 6.9 years
    Monthly mortgage payment: $1,833
  1. Colorado
    Median list price: $408,068
    Estimated time to save for a down payment: 6.7 years
    Monthly mortgage payment: $1,780
  1. Oregon
    Median list price: $352,000
    Estimated time to save for a down payment: 5.8 years
    Monthly mortgage payment: $1,551

For more details, read the entire GOBankingRates report.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Best and Worst Places for Millennial Home-Buying appeared first on RISMedia.

Categories: Real Estate

House Hunters Get in the Black Friday Mentality With Holiday Home-Buying

November 19, 2017 - 1:07pm

The holiday season is here, and with it the mass amounts of consumer shopping tied to gift-giving, or just personal spending at a discounted price. While terms like Black Friday and Cyber Monday are synonymous with post-Thanksgiving consumer spending sparked by widespread sales, real estate shoppers are no strangers to home-buying during the holiday season, regardless of their location.

With seasonal real estate transactions come serious buyers and sellers who are ultra-motivated to spend their money and close quickly.

“Many times, when you have clients who are looking during the holidays, they are really serious buyers. After all, most people are out shopping or preparing for the family feast,” says Nancy Lulejian Starczyk, president of the Southland Regional Association of REALTORS® in Van Nuys, Calif. “Additionally, the buyer may need to buy before the year is out, or they want to be in their new home to bring in the new year.”

Sarah Gustafson, president of the REALTOR® Association of Central Massachusetts, agrees with motivation being the underlying factor for those who stick around in a winter market.

“You have less inventory, but the inventory that you have is more motivated,” says Gustafson. “With snow and muddy boots coming through a home, sellers won’t put their home on the market unless they are motivated. And the same goes for buyers—if they are out at this time of year, they are very motivated.”

Often, the motivation stems from buyers who just want to get into a home before Thanksgiving, Hanukkah, Christmas or other holidays. And sellers want it done and closed by end of year, which is especially true for luxury or distressed properties, according to Bruce Elliot, president of the Orlando Regional REALTOR® Association.

In some instances, the added motivation of sellers and buyers leads to smoother and faster closings during the holiday season.

“Sellers who are willing to be in ‘show condition’ during the holidays are just as serious as the buyers who are looking. It’s a great time for both parties to be open to negotiating a mutually acceptable and timely sale,” says Lulejian Starczyk.

During this time of year, many markets are also dealing with tight inventory, which adds a competitive twist for buyers that have to deal with multiple offer situations. The impetus for selling can also be heightened in states that experience a noticeable drop in temperature during the winter months.

“The one thing that is really driving the market is the lack of inventory,” says Matt Akers, owner and managing broker of Rainbow Realty and president of the Lafayette Regional Association of REALTORS® in Indiana. “I think the people that are going ahead and putting their homes on the market [are] trying to get through the winter.”

Holiday homebuyers, just like the swarms of Black Friday midnight shoppers, tend to be part of the younger generations, although sources say all types of homebuyers are looking for similar things, regardless of time of year.

“Millennials now outnumber the baby boomers. And interestingly enough, they are both looking for the same features in the home. Both are looking for walkability to shopping, entertainment, restaurants, transit and medical facilities,” says Lulejian Starczyk.

Of course, this can differ by location. In Florida, for instance, the baby boomer generation is flocking toward warmer weather during the winter months in search of retirement properties.

“In some areas outside of Orlando, it’s a seasonal spike in the retirement areas. The snowbirds are coming down and their activity is picking up. Seasonal rent literally doubles,” says Elliot.

Holiday home-buying also puts consumers in a different state of mind. Akers believes reverse psychology comes into play, stating that winter buyers come up with opposing views of summer buyers to find reasons to buy and tough it out in a slow market.

Since the home-buying and -selling is happening during such a sale-centric time of year, both sides are looking for a good deal. And according to real estate professionals, that doesn’t always mean the best price.

“A great deal is when you walk away from closing and you’re thrilled,” says Akers, clarifying that today’s buyers and sellers have more than enough information to determine whether they are getting a fair deal because of the available technology and internet sources. “There are a lot of educated buyers and sellers out there. They know more than they’ve ever have,” he adds.

Lulejian Starczyk, on the other hand, says being aware of comps and working with an agent is essential to getting a good deal.

“Knowing the market and paying a ‘fair market value’ is always advisable,” she says, emphasizing that hiring a REALTOR® is the only way to ensure that consumers have the data necessary for making an informed purchasing or selling decision.

Meanwhile, Elliot believes a good deal is tied to a positive emotional response. “The emotion and the excitement is long forgotten when buying the wrong home. [Real estate] is an emotional process, and as long as it’s the right home for the client, and meets the family’s needs, there is no perfect everything.”

While homes don’t necessarily have reduced price tags on them during the holidays like electronics do on Black Friday or Cyber Monday, there is a heightened sense of urgency and an impact on a transaction’s dynamics when buying or selling during this time of year. Many agents look forward to the holiday season because of the opportunities afforded by less inventory and the added drive.

“It’s my favorite time of the year to do business because everyone is so motivated,” says Gustafson.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post House Hunters Get in the Black Friday Mentality With Holiday Home-Buying appeared first on RISMedia.

Categories: Real Estate

Consumer Trust at Risk Amid Equifax Breach and CFPB Arbitration Rule Repeal

November 6, 2017 - 4:36pm

The real estate world lies within a network of sensitive contact information, financial records, identifying paperwork and the team of experts that keeps these things secure. So, what happens when this information isn’t properly safeguarded? Or when companies use information to take advantage of consumers? Between financial corporation scandals, like the cyber attacks on Equifax, and the recent repeal of the Consumer Financial Protection Bureau (CFPB) arbitration rule, consumers are having trouble trusting financial institutions with their personal information.

Equifax
In September, Equifax—one of the three major consumer credit reporting agencies— announced a massive cyber breach that may have affected 143 million people in the U.S. The company is being criticized for its security practices, especially since this is the third major cybersecurity threat on Equifax since 2015.

It took Equifax nearly four months to identify the intrusion after hackers stole personal information through a simple website vulnerability. Along with 209,000 credit card numbers, hackers got their hands on Social Security numbers, driver’s license numbers, names, birthdates and addresses. It is one of the largest hacks on record.

Equifax hired cybersecurity firm Mandiant to perform an in-depth investigation of the cyber attack to find out how many consumers are at risk. Results are in and estimated totals for impacted individuals has risen by 2.5 million to a total of 145.5 million at risk. Even the U.K.’s Financial Conduct Authority is investigating the incident, as nearly 700,000 U.K consumers were also affected.

“I want to apologize again to all impacted consumers,” said Paulino do Rego Barros, Jr., CEO of Equifax, following the Mandiant results.”As this important phase of our work is now completed, we continue to take numerous steps to review and enhance our cybersecurity practices. We also continue to work closely with our internal team and outside advisors to implement and accelerate long-term security improvements.”

Impact on Real Estate
Credit plays a major role in lending and the real estate industry. The cyber attack could not only weaken consumer confidence, but may add some challenges if the hacked information is used fraudulently.

Compromised personal information can be used in a variety of damaging ways. Borrowers may have to deal with stalled or rejected loans if hackers purchase expensive items using the stolen credit card numbers. Additionally, new accounts could be opened up in borrowers’ names using their Social Security numbers. Not only are loans at risk, but hackers also have the potential to demolish credit scores via identity theft—an infinitely harder problem to fix.

Equifax’s cyber attack may also lead to a spike in illegal mortgage and refinance applications. According to National Mortgage News, the mortgage industry widely uses The Work Number for employment verification during the underwriting process. The service is also the designated third-party provider of income and employment data for Fannie Mae’s Day 1 Certainty™ program. The cyber security breach leaked the information collected by the Work Number, leaving financial institutions unsure of whether the source has been corrupted.

Overall, loan processors may delay closings to ensure that employment data has not been affected by the breach. Fannie Mae is keeping an eye on its dealings with Equifax, as well.

CFPB Arbitration Rule
The repeal of the CFPB arbitration rule comes at a time when consumers are searching for ways to protect themselves against dishonest business practices. The rule was created over the span of five years and was set to go into effect in 2019. It would have allowed millions of U.S. consumers to pool resources in class-action lawsuits against financial corporations.

The rule was widely approved by Democrats, but Senate Republicans overturned it, with Vice President Mike Pence breaking a 50-50 tie. According to supporters, the ruling would have protected consumers, and, at the same time, held financial institutions responsible for upholding ethical business practices.

“[This] vote is a giant setback for every consumer in this country,” said Richard Cordray, director of the CFPB, in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”

Those opposed believed the rule would have a negative impact on lawsuit payouts for consumers.

“This is good news for the American consumer,” said Senator Tom Cotton (R-Ark.) in a statement.” A ban on arbitration clauses would very likely have resulted in lower reward payments for wronged customers and higher credit costs for everybody. There’s little evidence to suggest that class-action lawsuits actually stop the behavior they seek to punish, and there’s plenty of evidence to show they give the lion’s share of money to the lawyers who file them.”

As a result of the repeal, financial corporations will be able to continue using arbitration clauses in their fine print as a way to protect themselves against the courts. Since consumers will not be able to use class action lawsuits as a catalyst for changing a company’s business practices, they will have to familiarize themselves on what to look for so they don’t fall victim to malpractice.

How Consumers Can Protect Themselves
Unfortunately, data breaches and business practices are not just tied to credit reporting agencies. Everyone remembers the Target hack, various large banks like Bank of America have had their share of financial scandals and global accounting firm Deloitte recently announced that it fell victim to a cyber attack, as well.

While these companies are working toward regaining the trust of their consumers, the damage has been done. These business mistakes happen often, especially with companies that are intertwined with the real estate industry. According to a survey by the Economist Intelligence Unit and Deutsche Bank, the real estate industry features one of the lowest percentages of authentication testing. Don’t wait for the next data breach to protect yourself. Here’s what you can do to ensure you don’t fall victim to flawed business practices or cyber attacks:

Check in with Equifax. Find out, if you haven’t already, if you were exposed during the Equifax data breach.

Keep an eye on your credit. Watch out for any sudden changes in your score. If you really want to make sure you’re not at risk, sign up for a credit monitoring service.

Freeze your accounts. If you are vulnerable, go online or call the three major consumer credit reporting agencies to put a freeze on your account. This will keep hackers from checking your credit score or using your personal information. Once you are certain the risk has been taken care of, you may unfreeze your account.

Equifax: 800-349-9960
Experian: 888‑397‑3742
TransUnion: 888-909-8872.

Read the fine print. Don’t sign up for any services, even if they advocate privacy and security, without reading the terms first. Make sure your information isn’t being released to third-party vendors.

Before you apply for a loan, ask for a breakdown of all fees. Get everything in writing so you have evidence of malpractice or fee discrepancies should a conflict arise during the lending process.

Ask how your information is being protected. Any time you need to submit sensitive information that can leave you vulnerable if in the wrong hands, inquire about the company’s cyber security practices. Due diligence before forming a business relationship with any type of financial institution and being a savvy consumer is your best defense against flawed business practices.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

The post Consumer Trust at Risk Amid Equifax Breach and CFPB Arbitration Rule Repeal appeared first on RISMedia.

Categories: Real Estate

Suburban Realty Professionals  ♦  Princeton Office  ♦  96 Wall Street  ♦  Princeton, NJ 08540  ♦  877-221-8787