In the past year the government has enacted several new rules to protect consumers and stop appraisal coercion by evil bankers and brokers.

HVCC (the appraisal code of conduct) has already forced many experienced and qualified appraisers out of the business.  It has also helped to propel home values lower by allowing Appraisal Management Companies to seek out the cheapest appraiser (inexperienced, out of area appraisers who have no knowledge of the local market) so they can fatten their profits.

The new Good Faith Estimate has certainly helped to confuse more consumers when they try to compare financing charges for purchasing or refinancing a home.

Of course, the lenders and regulatory agencies (Fannie, Freddie, FHA) have helped too by tightening up on their financial requirements to purchase or refinance.

All this consumer assistance hasn’t been totally successful.  Consumers are still slipping through the cracks.

WILY, CUNNING AND DETERMINED CONSUMERS ARE STILL MANAGING TO PURCHASE OR REFINANCE HOMES AT EXTREMELY LOW MORTGAGE RATES!  THIS IS TOTALLY UNACCEPTABLE!

If the government really wants to help consumers, they could force everyone who wants to purchase or refinance a home to take a two month training course so that the consumer clearly understands how the government has helped them.  Consumers should have to pay for this training and a final test.  The training and test money could be used as a much needed income stream for further government housing assistance.

The government could get Homeland Security involved as well.  By requiring all consumers to provide fingerprints and hair follicle samples we might well prevent a covert terrorist cell from purchasing a safe house. And if Homeland Security coordinated with the local DMVs to collect unpaid traffic/parking tickets from consumers attempting to purchase or refinance, another income stream would be generated so that local politicians could go on more Global Warming junkets to exotic places.

Lenders and regulatory agencies could also assist consumers by demanding more skin in the game.  Instead of a 20% down payment, how about a 50% down payment?

I’m confident that, working together, we can force all of the greedy and diabolical loan officers, appraisers, inspectors, real estate attorneys, homeowners insurance agents, etc, out of the financing business once and for all.  We can shut down the housing industry altogether.  All we need is a little more “HELP”.

Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

http://forecasts.org/fha.htm

-Gary Schoenholz (864)979-1111.  15+ Years of mortgage experience. Website:  www.GarytheMortgageExpert.com

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.

For Gus Faucher, the director of macroeconomics for Moody’s Economy.com, the huge number of foreclosures that remain in the pipeline is the big problem.

Moody’s upped its estimate of defaults recently because of shortcomings of the government-led mortgage modification programs. Trial workouts are not being made permanent and completed modifications are redefaulting at high rates.

“There are going to be fewer [successful] modifications than we thought,” said Faucher.

Even so, he added, much of the price decline has already occurred and Moody’s forecast is for only another 8% drop. The worst-hit markets will be the ones suffering the most foreclosures, places like Arizona, California, Florida and Nevada. (See 7 tips for buying foreclosures)

Resetting option ARMs (adjustable rate mortgages) will also aggravate the foreclosure problem. These mortgages allow borrowers to pick their own payments, which can be so low they don’t even cover the interest. Balances swell.

For many of the more than 350,000 option-ARM borrowers, it’s time to pay the piper. Their loans will change into fully amortizing mortgages that will carry much higher monthly payments. A very large percentage of these homeowners will default, according to Shari Olefson, author of “Foreclosure Nation: Mortgaging the American Dream.”

“We’ve still only seen the tip of the foreclosure iceberg,” she said.

She also predicts more strategic defaults, people deliberately walking away from even fixed-rate mortgages as the value of their homes dips well below the amount they owe.

Olefson’s forecast is for price declines of 5% to 15%, depending on the area, with a national median price drop of about 10% for 2010.

Also affecting prices will be higher interest rates. Some analysts, according to Newport, think rates for a 30-year mortgage will pass 6% next year as the government curtails housing market support.

The Federal Reserve has helped keep rates low through purchases of mortgage-backed securities. But that program is winding down and will end in March.

“The government is throwing everything at the market but the kitchen sink,” said Peter Schiff, president of Euro pacific Capital. “It can’t prop up housing markets forever.”

Schiff is among the bigger bears. Though he gave no specific prediction, he thinks prices — already down 29% from the peak — are only halfway to the bottom.

As a tool for supporting housing markets and prices, the tax credit for homebuyers is a two-edged sword. It reduces taxes dollar-for-dollar by up to $8,000 for new homebuyers and $6,500 for buyers who already own a home and should support home prices. But it ends at the end of April.

Many buyers will push their deals forward to get in before the deadline and then demand for homes could sink afterward.

One of the few bulls out there is NAR, whose chief economist, Lawrence Yun, is counting on the tax credit to provide temporary support for housing markets until the economy recovers enough to start fueling sales. He predicts price improvement in 2010 of more than 3%.

“The headwind we face is rising mortgage interest rates,” Yun said, “but the compensating factors will be the homebuyers tax credit in the first half of the year and increased job creation in the second half.”

All of this means, now is the time to buy!  To talk to a mortgage manager, call 864-979-1111 and ask for Gary Schoenholz (15 years of mortgage experience) or go to my website: www.GaryTheMortgageExpert.com.

Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

Mortgage rates are near an all time low, but with many indicators pointing toward future inflation (a interest rate killer that always increases mortgage rates), now is the time for the mortgage rate fence sitters to lock a rate.  It’s only a matter of time (a few more weeks, maybe a few more months) and rates will approach the more normal 6% to 7% range that is the typical average for the last 10 or 20 years.  Right now, rates under 5% are still available, which is amazing.  Lock in today, before it’s too late.

-Gary Schoenholz – Manager- 864-979-1111,

 Website: www.GaryTheMortgageExpert.com

No, that’s not a picture of the interest rate Bogeyman.  But it may well be the expression on your face if you wait much longer to refinance or purchase a home.  Some consumers are still holding out, hoping for mortgage rates to go lower.

The interest rate Bogeyman is inflation.  Inflation is the bogeyman, the monster at the ball, the uninvited party crasher that will bring an abrupt end to the abnormally low mortgage interest rates we have experienced for the last year.

One of the most frequently asked questions of me is, “Do you think interest rates will go lower?”  To answer that honestly, I look at the latest inflation information from the United States and other countries.

Let’s see…In the U.S., energy prices up 4.1%, food prices up .1%, air fare up, medical care up, new cars up.  U.S. producer prices surge 1.8% in November.  Core inflation flat last month after ten straight monthly increases.

Around the world…food prices in India surge 20%, the Central Bank of the Philippines sees inflation inching up, the Central Bank of Thailand prepared to raise interest rates in 2010, Canada’s annual inflation rate higher than expected in November.

The Fed has helped keep mortgage rates down by spending 1.25 trillion dollars to buy Mortgage Backed Securities but these purchases are expected to be completed by Spring.

The Office of Management and Budget is trying desperately to reconcile massive government spending and a gargantuan deficit while holding interest rates and inflation at bay.  These are some of the same brilliant people who in 2002 concluded, “On the basis of historical experience, the risk to the government from a potential default on Government-Sponsored Enterprise (Fannie Mae and Freddie Mac) debt is effectively zero”.  Oops!  Fannie Mae and Freddie Mac went into conservatorship in 2008 and are rumored to soon go begging to the government for billions more to stay afloat.

 So, do I think that interest rates are going to go up or down?

 Up…and soon!

 Posted by Terry Brunner.  Terry is a Senior Loan Officer with Horizon Financial.  Terry can be reached toll free @ (877) 627-9211 x150 or email TBrunner@HorizonFinancial.org.  Visit Horizon’s website at www.horizonfinancial.org

Greenville SC:   There has been a -6.3% decline this past year in the Zillow Home Value Index and the Index has shown a pretty consistant 0.5% approximate drop each month, which is a little concerning, but on the positive side, there has been better news with the Total homes sold this year.  Though the last full month on record in October 2009 the number of homes sold in the city of Greenville was only 63 (not a great number and close to the 5 year low back in February 2009), the numbers really have been better for most of the last few months.   In July and September, we almost hit 100 houses sold in Greenville (96 and 98, respectively).  Overall, the last 6 months have shown improvement compared to the previous 6 months.  Perhaps because of the Home Buyer’s Tax Credits being offered by the IRS.

Anderson SC:  Anderson has shown similar trends as Greenville.  Anderson’s one year change of the Zillow Home Value Index has been -4.6%, not very good.  On the otherhand, the total homes sold in Anderson has shown some signs of life the last few months.  The last month in October fell to an unimpressive 23 homes sold, but the 2 previous months hit a yearly high of 30 and 32 in August and September and overall has shown some promise of recovery.

Spartanburg SC:  The city of Spartanburg SC has actually shown the most promise of the bigger Upstate SC cities as far as its housing numbers are concerned.  The Zillow Home Value Index has actually increased (+8.6%) the last year.  Also the number of homes sold has recovered from it’s low point early this year (January, only 23 homes sold) to double on several occasions (it sits at 46 in the last October 2009 report and hit 52 in July).  All good signs.

Other smaller cities showing promise:  Greer SC: (+2.7% Zillow Home Value Index for the last year) and got to a 1 year high in homes sold in July at 46 homes, but has shown some recent sluggishness (dropped to the 30’s the last 3 months, 31 in October 2009).   Pickens SC: Pickens, though small, has shown some growth through our statistics.  The ZHV Index has gone up +11.5% the last year (very strong).

Overall, compared to many housing markets across the United States, the Upstate of South Carolina looks relatively strong.  Hopefully these trends of “acceptable losses” or some slight increases of home values can continue into the new year.  Let’s hope 2010 starts a general housing recovery, but that, of course, remains to be seen.

-Gary Schoenholz – Loan Officer Manager – www.GaryTheMortgageExpert.com 864-979-1111 cell phone, call for free mortgage rate quotes.

Cities from McAllen, Texas (No. 7), to Greenville, S.C. (No. 20), and Chattanooga, Tenn. (No. 8), that have faced a host of economic problems, are now seeing a silver lining: Housing speculation stayed in check in these areas because there was little to draw buyers in the first place. As a result, housing is relatively stable, affordable, and positive employment trends hold promise for the future              .

“These are sleepy little markets that have fallen under the radar screen in terms of turbulence in housing,” says Kermit Baker, a senior researcher at Harvard University’s Joint Center for Housing Studies. “They didn’t go through much of a boom or bust.”

In some Southeastern metros, buying and living there is affordable. South Carolina cities Columbia (No. 12) and Greenville (No. 20) make the top 20, as does Augusta, Ga. (No. 5). The home price speculators that ran up prices in nearby resort towns Hilton Head and Myrtle Beach largely stayed away from these metros, says William Harrison, a developer and professor of real estate at the University of South Carolina.

“Smart speculators are going to seek out places with a highly sought-after amenity, like an ocean or lake; or barriers to growth,” he says. “There was hardly any speculation here.”

Greenville is one of the few places that have been helped, not hurt, by an economic dependence on the auto industry. Luxury automaker BMW, whose plant is in the nearby city of Greer, generates jobs and helps keep its median household income at a healthy $56,820. Living there is manageable too–real estate taxes are only $771 per year. Government jobs and the Fort Jackson military base help prop up state capital Columbia’s economy, and in Augusta, the promise of jobs from nearby Fort Gordon military base and its state university contribute to a comparatively decent three-year job growth outlook: .03%.               

To find the cities that offer the most bang for the buck, we looked at the country’s 100 largest Metropolitan Statistical Areas–geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics–across these measures: foreclosures as a percentage of home prices; vacancies; unemployment rates; a three-year job growth forecast; a three-year home price forecast; housing affordability; median real estate taxes; and median travel time to work.

To locate healthy housing markets, we looked at metros where foreclosures had most been flushed out of the market, allowing home values to increase and signaling a potential bottoming out. We also sought areas with low home vacancies, a sign of a stable supply of inventory. We examined the number of October foreclosures as a percentage of total housing units, using data from RealtyTrac, and the number of 2008 vacancies in each metro, using data from the U.S. Census.

To further indicate which markets were standing up best, we looked at cities with low unemployment rates relative to the rest of the country with data from the Bureau of Labor Statistics. We ranked September unemployment rates (the most recent available by metro). We then included in our analysis the three-year job growth forecast, from 2009 to 2012, from Moody’s Economy.com, and ranked them by metro.

For affordability and convenience, we included the Housing Affordability Index compiled by Moody’s for the second quarter of 2009, and the annual median real estate taxes paid and weekly travel time to work in 2008, using United States Census data. Finally, we looked at the markets economists thought would improve most in the near future, using the three-year forecast for the Case-Shiller Home Price Index from 2009 to 2012, created by Moody’s. We ranked metros in each of these measures, then averaged these scores to arrive at a final ranking.

posted by: Mike Owens  Partner/Mortgage Planner with Horizon Financial, Inc.    Mike can be reached at (864) 907 2678 or via e-mail at  MOwens@HorizonFinancial.org

On Thursday, the House and Senate passed an extension of the popular homebuyer program that would allow people who have owned their homes for at least five years to buy a new home and get up to $6,500 off their tax bill. Why the switch?

The move may be aimed at luring higher-end buyers into the real estate market, says Kevin Cottrell, a principal and cofounder of Kelsey Cottrell Realty in St. Louis. During the initial incentive program, which ends Nov. 30, over 70 percent of the contracts his firm inked were under $300,000, and 90 percent were under $400,000, the lower end of the real-estate spectrum. By extending the credit to current homeowners, the federal government is aiming to move a more upscale segment of the market into “a more normal cycle of buying and selling,” where people might move to a better home every seven or eight years, Mr. Cottrell says. The five-year ownership requirement discourages people from flipping houses the way they did during the real estate bubble.

President Obama is expected to sign the bill.  Here’s what it means for you:

– First-time homebuyers still qualify for up to $8,000 in tax credits; those who have owned their homes at least five years qualify for up to $6,500 in credits.

– Purchases must be secured by April 30, 2010 and closings finalized by June 30.

– Single taxpayers with an adjusted gross income under $125,000 (under $225,000 for joint filers) are eligible for the credit’s full benefits. Those with incomes up to $145,000 (single) or $245,000 (joint) may receive partial credits.

– Homes worth $800,000 and under are eligible for the program.

– Members of the military serving outside the United States for more than 90 days will have until June 30, 2011, to qualify for he incentive.

Posted by Gary Schoenholz- Loan Officer Manager- 864-979-1111 www.GaryTheMortgageExpert.com

Foreclosures:

The quickest way to end up underwater is to live in a neighborhood that’s plagued by foreclosures.

When one home on your block goes into foreclosure, your home’s value drops approximately by 1%. But that isn’t a one-to-one relationship. If two homes on a block go into foreclosure, your home’s value can drop more than 2%. As homes go into foreclosure, they create a domino effect, lowering home values throughout a neighborhood in a cascade beyond homeowners’ control. 

Homes staying for sale on the market:

When “For Sale” signs linger in a neighborhood for three or more months, that may mean buyers and sellers can’t agree on a price. In that environment, homes are unlikely to sell unless the sellers lower their asking prices. Compare the time it took for homes to sell in your neighborhood three years ago versus today; if it’s taking weeks or months longer to sell, the prices homes can fetch are dropping.

Unemployment:

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.  Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries.

Homes not being maintained:

Dented siding, peeling paint, etc. could be signs that neighbors are having trouble making ends meet and can no longer pay to take care of their homes. Or they may have gotten an appraisal and discovered their homes have dropped in value and are no longer worth the cost of repairs. As the condition of homes in your neighborhood worsens, home values almost inevitably drop.

-For any mortgage questions call the mortgage expert: Gary Schoenholz at 864-979-1111, website www.GaryTheMortgageExpert.com – over 15 years of mortgage experience and over a 1000 mortgages closed