Living In Tucson Blog

Many people are wary about getting back into the housing market. They are concerned about declining values and challenging mortgage requirements. Despite these negatives, it may be a great time to get back into residential real estate. In the past few months, we have seen an increase in the median price of homes in Tucson, however, a third of the homes sold here in 2011 were under $100,000. The affordability index has never been better! Interest rates have hit record lows according to a recent Freddie Mac’s weekly survey and it’s not quite as arduous to obtain a mortgage as you may have thought.
 
Will 2012 be The Road to Recovery?
 
Predictions are that there will be new foreclosures hitting the market in 2012.  The good news is delinquency rates are declining quite a bit. The bad news is these foreclosures continue to slow down the housing recovery. Interest rates should remain historically low for the first half of 2012 while housing prices will find their bottom. You can expect to see modest increase in prices of homes in the second half of 2012. Pent up demand for housing is increasing.  Rental properties and foreign investors are ready to soak up deals and refinance programs such as HARP (Home Affordable Refinance Program) will also help the housing market recover its equilibrium.
 
Wild cards:
 
Eurozone, Employment, Election Year!
 
Call me, David Wolsky, for any mortgage related questions. I can be reached at (520) 275-2536 or david@davidwolsky.com. 

This gentleman is an inspiration! I hope to be retired long before I turn 106, if I am lucky enough to live that long. Maybe I will have my house paid off by then. In the meantime, enjoy this brief video and Happy Holidays from me.

From CNN last week:

106 Year Old Stockbroker

• Freddie Mac reports that a 30 Year fixed rate mortgage at record low of 3.91% with 0.7 points.
• Forclosures jumped 21% in the 3rd quarter but 11.8% lass than a year ago.
• Unemployment rates fell in 43 states in November. The most states to report delcines in 8 years.
• Housing starts rise 9.3% in November. Building Permits up 5.7%.
• Existing Home Sales for November jumped 4% over last year.
• Existing Home Sales for 2007 through 2010 were revised lower by 14%.

On November 15th, Fannie Mae and Freddie Mac will release the updated guidelines for the Home Affordable Refinance Program (HARP) to help more homeowners refinance. So far, 900,000 borrowers have been able to take advantage of the program. Those homeowners will not be able to refinance with another HARP loan a second time. The program is open to borrowers for mortgages originated prior to June of 2009. As of now, you are able to finance up to 125% of the property’s value. We can expect the loan-to-value ratio to increase above 125% also known as “being underwater”.                            

54% of the homes in and around Phoenix are underwater. It’s the second worse market in the country behind Las Vegas where 64% is underwater! About a third of the homes in Tucson are underwater.

The Fed is determined to keep rates low so borrowers can take advantage of the savings and Fannie Mae and Freddie Mac are removing restrictions to the program helping more homeowners stave off foreclosure.

HARP stands for Home Affordable Refinance Program. Eligible borrowers obtained their original mortgages prior to July of 2009. You can borrow up to 125% of the current value. Some loans will require an appraisal and others do not. It was designed to help millions of borrowers get relief though, unfortunately, the program has only helped a few hundred thousand homeowners. I have had mixed success with my customers with this program. The first thing to do is determine if Fannie Mae or Freddie Mac owns your loan. They have search engines on their websites, www.fanniemae.com or www.freddiemac.com. Remember, you don’t make your payments to Fannie or Freddie. They are investors, not loan servicers (collecting the payments). That means they buy the loans and pay a premium to lenders to service the loans. The best bet is going back to the lender who is servicing your loan and find out if they can refinance your home.

Currently, there is no relief for underwater homeowners with mortgages not owned by Fannie or Freddie. Proposals are being considered to help. President Obama was selling refinancing in his recent jobs speech. I have noticed a bigger effort from my company, PHH Home Loans and Coldwell Banker Home Loans to originate HARP refinances. If you had bought your house prior to July 2009 with a mortgage from PHH or CBHL, get in touch with me to see if we can save you some money! Those borrowers I have helped have saved an average of more than $125 per month! I’m David Wolsky and can be reached at (520) 275-2536 or david@davidwolsky.com.

Here’s an interesting article I ran across online yesterday. It is the story of a homeowner’s decision to walk away from their home loan. My job is to originate mortgages and I don’t advocate walking away from a mortgage, but I certainly can empathize with this homeowner’s plight. I hear all kinds of misery and housing horror stories almost every day.

By Ryan J. Downey:

I made my last mortgage payment on November 1, 2009.

Bank Of America changed the locks on my house on September 29, 2011.

I realize that my results may not be typical and that every situation is unique. But I’d like to provide people in a similar spot with something that wasn’t readily available to me when I realized I had to walk away from my house: answers.

What happens when you walk away? Are you arrested? Are you shunned? Do your kids decide they hate you?

READ MORE

I office at Coldwell Banker Residential Broker in the Tucson Foothills location and the managers Greg & Patty love to show videos during their sales meetings. Here’s a cute one they showed recently. Enjoy!

Contact me for a great REALTOR referral or a free home loan pre-approval. I’m David Wolsky at (520) 275-2536 or david@davidwolsky.com!

Finally some good news for borrowers buying a home with VA loans. Effective October 1st, the VA funding fees are going down! With a down payment of less than 5% for a first time user of VA benefits, the fee is 1.4% down from 2.15%. (Reservist/Nation Guard borrowers pay 1.65% – currently it’s 2.4%). Second or subsequent users of VA loans will have a funding fee of 2.8% (currently 3.3%) until October 1, 2012. From October 2011 to October 2012, the fee will be 2.15% and after October 1, 2013, it will be 1.25%.

The funding fee  for refinances will continue to be .5%.

VA loans are a great deal for those that qualify! Active military or qualifying veterans can buy a house with a zero down payment and no mortgage insurance. If you already have a VA loan with a rate of 5% or higher, you might consider a refinance. Remember, in most cases, a VA refinance does not require an appraisal.

My company, PHH Home Loans (and our sister company, Coldwell Banker Home Loans) offers a discount for active military borrowers for purchase loans or refinances. To find out more details, call me, David Wolsky at (520) 275-2536 or email me at david@davidwolsky.com.

My dad always advised me to buy low and sell high! You would be hard pressed to find a better market for mortgage rates and real estate pricing. Have you heard that the affordability index has measured that home buying is at it’s most affordable level in since the 60′s?  Tucson is a great market for buying real estate and it’s no secret that housing values have plummeted in Arizona. There are lots of foreclosures and short sales offering  very low home prices. Check out www.homepath.com for Fannie Mae owned properties. My company, PHH Mortgage offers special financing terms for a Home Path Mortgage (we are not currently offering the Home Path Renovation Mortgage at this time). Home Path Mortgages can be obtained with a 3% down payment (or more), there is no mortgage insurance and they do not require an appraisal. Fannie Mae often pays for the buyers closing costs too.

If you already own your house, have you thought about a refi? Here’s an article from yesterday’s USA today: Mortgage Rates Reach Record Lows, Sparking Refinancings.

The article indicates 63% of residential mortgages have rates above 5% and 46% of homeowners have 20% or less equity in their home. It is harder to refinance your home without sufficient equity. It can be hard to refinance your home with equity too as underwriting guidelines continue to get tighter. However if you qualify, now is the time. 5/1 ARMs are currently below 3% APR. According to this week’s Freddie Mac survey, 15 year fixed rates are at 3.5% and 30 year fixed rates are at 4.32% which is very near the record low. Freddie Mac has been tracking rates for over 40 years.

What if you don’t have equity and you still want to refinance?  You might qualify for the HASP (Home Affordability and Stability Plan) program that can enable you to refinance your loan even if the current mortgage is up to 125% of the home’s value. You had to have purchased your home before June of 2009 and the existing mortgage is with Fannie Mae (www.fanniemae.com) or Freddie Mac (www.freddiemac.com). Go to the Look Up tool to see if Fannie Mae or Freddie Mac owns your mortgage. They do not service the loans, but they are the investors.

Call me to review your options. David wolsky at 520-275-2536 or david@davidwolsky.com.

It’s been a while since my last post. I think I have some readers out there! (Hope so.) The past few months have been very intense with personal stuff and the Tucson real estate market has been keeping me very busy as well.

As an originator, I am involved from the start to the finish of every transaction. Although I am part of a team that consists of loan processors, underwriters, management and more, I am the one on the front lines. It is a lot of responsibility in this market when it comes to conventional and government loan processing. Verification is the key to getting a mortgage approved in 2011 including a thorough verification of the borrower’s income, assets and credit. For example, if you are self employed, two years of tax returns and a profit and loss statement will be necessary. If you receive a bonus, a written verification of employment sent to your employer will help us determine a track record of the bonus income and the likelihood of continuation. Part time income is only accepted if you have a two year track record of receiving it. Hourly wages will be reviewed to see if there are unpaid furloughs or excessive time away from work.

Underwriters are reviewing every deposit on your bank statements. Be prepared to provide a ”paper trail” to explain yourselves. If you sold some gold or a car for your down payment, you will have to prove you owned the asset, the current market value and the proof of sale. There is no doubt about it…credit is tight! Another area of scrutiny is the debt ratio. First the income analysis is determined. Then we look at your credit report and other monthly obligations such as house payments on retained properties and alimony or child support payments. The formula is keeping the new house payments and other monthly debt obligations to 45% or below your gross income (before taxes). In some cases, a 50% debt ratio is acceptable, but there are requirements for credit scores and additional assets besides the down payment. If you have mortgage insurance on a conventional loan because your are borrowing more than 80% of the sales price, the maximum debt ratio is 41%. FHA and VA mortgages go up to 45% in most cases. When considering a home purchase, remember to look at the real estate taxes, insurance and homeowners association fees to get a true picture of your new total house payment. I have seen loans get adjusted or even declined at the last minute because inaccurate taxes, insurance and HOA fees were higher than originally anticipated on the initial application.

It is not enough to have great credit and a down payment to get your loan approved. At times, it has been easier for me to get a young couple approved with a FHA loan and a 3.5% down payment than a couple of executives borrowing $400,000 with a 60% down payment! Underwriters were afraid to say no to loans in 2005 and 2006 and they are afraid to say yes in 2011! I am here for my customers to make sure that the underwriters say yes to your deals! Call me, David Wolsky, for a free loan pre-approval at 520-275-2536. You can write me at david@davidwolsky.com. Thanks for stopping by my blog.