A couple of weeks ago I was asked to speak at the Columbia Apartment Association, with a resounding yes I accepted their invitation. It seems recently I have been asked to give several interviews/opinions on the current state of the housing and mortgage market both from a national and local perspective. Below is an outline of what will be addressed or commented on at this meeting.
Since late 2006' over 161 lenders are out of business including 5 out of the top ten. Below is a small list on some of the larger players no longer originating or funding loans.
1) Wells Fargo (Wholesale sub-prime division)
2) New Century Mortgage
3) First Magnus
4) Decision One (A division of HSBC)
5) American Home Mortgage
6) NovaStar Mortgage
7) Ameriquest Mortgage
8) H&R Block Mortgage
Foreclosures & Delinquency:
- .65% of 1-4 unit properties have entered into foreclosure according
to MBA that is a record high since it started keeping track 55 years ago.
- Foreclosures for August are up 115% from a year ago 244,947 v. 113,300
- WAMU reported an income reduction approaching 75%
- HELOC delinquency is at a 5 1/2 year high
- The delinquency rate is currently at 5.12% as of the second quarter 2007'
up 73 basis points from last year
Home Sales:
- Existing home sales are down 12.8% nationally from a year ago
- Inventory is up 14% over last year and 77% from August of 2004'
- Inventory of new homes is at 8.2 months or 180,000 down from
182,000 seen as a record in May of 2007'
- Sales of new homes are down 21.2% from a year ago.
- National Association of Realtors was expecting a 2.1% decrease and
received a decline of 6.5%
Home Prices:
- Just 2.6% appreciation nationally
- California, Nevada, New York, Florida, New England and the Mid-west
showed price declines
- Median price of new homes fell 7.4% to $225,700
Key Rates:
- Federal Funds Rate: 5.25% 1 Year ago, 5.25% 1 Mos ago, 4.75% this week
- Discount Rate: 6.25% 1 Year ago, 5.75% 1 Mos ago, 5.25% this week
- 10 Yr T-Bill: 4.638 (close of business Monday 10/8/2007)
- Prime Rate: 8.25% 1 Year ago, 8.25% 1 Mos ago, 7.75% this week
Miscellaneous:
- 2007' will see anywhere from 400-500 Billion ARM resets
- 2008' could potentially see over 1.5 Trillion Arm resets
- In 1994' $35B in sub-prime origination's took place vs. $640 Billion in
2006' a ridiculous 185% increase
- Sub-prime mortgages make up anywhere from 10-14% of mortgage
origination's
- Mortgage Brokers make up 50% of all mortgage ordinations and 70% of
all sub-prime loans
- The peak ARM resets will be seen between March and June
2008'
WHAT DOES ALL OF THIS MEAN FOR A LANDLORD / MANAGEMENT COMPANY?
- More people will rent and for a longer period of time!!!!!
Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker
Monday, October 8, 2007
Friday, October 5, 2007
New Featured Listing 502 Mustang Drive, Ashland MO
This week's featured listing comes from Kristi Collins with Plaza Real Estate. Call her for a showing today at (573) 268-8505.
502 Mustang Drive
Ashland, MO 65010
Currently listing for $210,000 MLS#304689
*BUYER TO VERIFY ALL DATA*
Beautiful Basement Home with lots of room to expand. Large lot with tons of natural light throughout. Check out the unique stone and stucco front!
Property Details
Style: Ranch
Bedrooms: 3 bed
Full Baths: 2 bath
Square footage: 1,750 sqft
Garage: 2 car(s)
Age: New-Never Occupied
Acreage: 0
Lot Size: 88X233
Individual Room Information:
Kitchen: Main 23.9 x 11.6
Dining Room: Main 10 x 12
Living Room: Main 17.3 x 18.9
Master Bedroom: Main 15 x 13
Bedroom 2: Main 11.3 x 11.5
Bedroom 3: Main 11.4 x 11
Property Features:
Exterior Finish: Stone Veneer, Synthetic Stucco, Vinyl
Exterior Features: Driveway-Paved, Windows-Vinyl
Roof: ArchitecturalShingle
Foundation: Walkout, Full Bsmt Unfinished
Heat: Natural Gas, Forced Air
Cooling: Central Electric
Flooring: Carpet, Ceramic
Deck: Back
Interior/Features:
Ceiling/PaddleFan(s), Garage Dr Opener(s), Laundry-Main Floor, Smoke Detector(s), Stand AloneShwr/MBR, Tub/Built In Jetted, Walk in Closet(s), Washer/DryerConnectn
Kitchen/Features:
Cabinets-Wood, Counter-Laminate, Dishwasher-Built In, Garbage Disposal, Microwave Oven, Range-Electric, Vent Fan
Fireplace:
Gas, In Living Room
Utilities:
Electric-City, Gas-Natural, Sewage-City, Trash-City, Water-City
Listed By: Kristi Collins - Plaza Real Estate Services
Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, and misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.
Wednesday, October 3, 2007
The Industry Professionals
We all know that there are many of mortgage companies to choose from in Columbia. What does Professional Mortgage Group offer that the competition does not?One thing is true about our competition and that is they do not care about your business!! Ask yourself when the last time your mortgage broker helped you sell a home? That is why we are different.
1.
We are committed to helping you develop your business. 2. We help you establish that you are a professional who only works with other professionals.
3. Our marketing materials promote you and your listings and educate your clients on how a
real estate transaction works.
4. We help your clients set realistic expectations from day one so there are no surprises along
the way.
5. We meet your closing deadlines.
6. We provide you with 24/7 access to your client’s underwriting status on our secure website.
7. We link to your website on our Partners page to direct traffic to your listings.
If you want to work with the "Industry Professionals" call us today!!
Check out our website for other happy clients at http://www.pmg-inc.net/.
Brought to you by Professional Mortgage Group Columbia Missouri.
573-777-1198
Tuesday, October 2, 2007
Homeowner's Insurance. What Coverage's are Worth Buying?
I'm sure we all can remember the process we went through to buy our first home. It was an exciting time for me, but I bet we can all agree that securing an insurance policy on our new home was not a memorable occasion! Actually, nothing about insurance is exciting. In a perfect world you buy a good policy, pay over time, and never have to use it. To most people this is a big waste of money! Deep down we really know this isn't the case. Insurance is very critical to your family's financial well-being. We all take for granted that if we lost everything, "the insurance company will pay for it". Just imagine the family that doesn't have this luxury. They just lost a $150,000 home and all of their belongings! What a nightmare! All because they let their policy lapse! The reason that I feel strongly about this is because I was an insurance agent for 5 years. I saw how having or not having insurance affected many people. I have compiled a few tips and coverage explanations to look for when looking for your home insurance policy.
Dwelling with Expanded Replacement Cost- If every insurance agent and computer property evaluator was perfect, we wouldn't need this endorsement. However, we know this isn't the case. When writing an insurance policy some agents do better than others in estimating how much to insure your home. You do not want to be held to the amount they come up with. Many times people only look at price and not what their home is actually being covered for. Poor agents will also cut coverage to get the premium to look good and land a sale. This can really put a customer in a world of hurt. Just look at the fires in California. $700,000 homes were burnt to the ground and they were only insured for $500,000. That is a $200,000 burden left up to the customer. With expanded replacement cost, the policy will pay up to 120-125% of your homes value. This gives you an extra cushion in the event your home was under insured! (Keep in mind it only pays out if you need it).
Inflation Protection - Most good policies have this. This adjusts your policy each year for inflation. I am sure you have seen your $150,000 insurance policy jump to $154,500 in its second year. This increase is due to inflation protection. This is needed because it will cost more to re-build your home in the years to come than it will today.
Other Structures - This is coverage for any detached structures. If you don't have any, it will stay at 10% of your dwelling amount. If you have more detached structures to cover than the 10% allowed, you will want to make sure it is increased.
Personal Property Replacement Cost - We all know what this is, but believe it or not there are still policies out there that have limited replacement cost or actual cash value! Stay away from these. Full replacement cost is the only way to go! Also look at the amount you are covered for. Some companies cover 75% of your dwelling amount. Others offer less. Just get the most bang for your buck!
Loss of use - If you are unable to live in your home due to a loss, your policy will pay for the expenses you incur while living elsewhere until your home is repaired. Some policies cap the amount here. Make sure you feel the limit is sufficient. Good policies will state "Actual Loss"
Liability - The minimum amount is $100,000. This is too low. $300,000 is the minimum you should have. You can of course have more. If you have an umbrella policy you can keep your liability at $100,000, but if not make sure it is increased. There are too many sue happy people out there and you want to be protected!
Medical Payments - This is not like your car insurance med-pay. This is only for others on your property. Not many people go with more than $1000. Just make sure your liability is high and you should be fine. Make people file suit if they are on YOUR property and try to collect money off of your policy!
Deductible - Your deductible is up to you. Go with an amount that makes you feel comfortable. $1000 is most popular today and makes the most sense. This reduces your premium and will also help ward off small piddly claims that will raise your rates. What good is a $500 deductible if you claim something that is $700? You save $200 and your rate goes up $20 a month. Then if you would happen to have a 2nd loss, you would have 2 claims and are in danger of non-renewal or a huge rate hike!
Earthquake Endorsement - Some people have this and others don't. Make your own decision,but realize that if your home is damaged due to an earthquake or earth movement, you are out of luck! This isn't too expensive so weigh the pros and cons. Earthquake deductibles are typically 10% or so. This equates to $15,000 on a $150,000 home. This may also factor into your decision.
Water or Sewer Backup Endorsement - This is something many people think is included in a policy and it is not! Water damage is covered, but not sewer! Your can purchase specified amounts of protection. Be sure to look into this and ask your agent.
Identity Theft Endorsement - This is a newer item, but is gaining in popularity. If someone steals your identity and causes you harm, it can cost some time and money to clean things up. This will pay for it and provide a representative to help facilitate the process!
Scheduling Items - The most common item to schedule is jewelry. Your policy has low limits for specific items. You will want to schedule valuable or priceless items. This is a quick summary of the parts of a home insurance policy. Keep all of these points in mind when deciding who you are using and what coverages to include. Just remember you are buying piece of mind and financial security when you pick your coverages. Don't focus solely on price and find an agent that will work hard for you. I hope this helps.
Here are a few links to some of the larger insurance companies.
State Farm Insurance - http://www.statefarm.com/
Liberty Mutual Insurance - http://www.libertymutual.com/
Allstate - http://www.allstate.com/
Shelter Insurance - http://www.shelterinsurance.com/
American Family Insurance- http://www.amfam.com/
Farmers Insurance - http://www.farmersagent.com/emiller2/
Your comments are welcomed!
Brought to you by:
Professional Mortgage Group Inc.
"Your Columbia, MO Mortgage Broker"
Dwelling with Expanded Replacement Cost- If every insurance agent and computer property evaluator was perfect, we wouldn't need this endorsement. However, we know this isn't the case. When writing an insurance policy some agents do better than others in estimating how much to insure your home. You do not want to be held to the amount they come up with. Many times people only look at price and not what their home is actually being covered for. Poor agents will also cut coverage to get the premium to look good and land a sale. This can really put a customer in a world of hurt. Just look at the fires in California. $700,000 homes were burnt to the ground and they were only insured for $500,000. That is a $200,000 burden left up to the customer. With expanded replacement cost, the policy will pay up to 120-125% of your homes value. This gives you an extra cushion in the event your home was under insured! (Keep in mind it only pays out if you need it).
Inflation Protection - Most good policies have this. This adjusts your policy each year for inflation. I am sure you have seen your $150,000 insurance policy jump to $154,500 in its second year. This increase is due to inflation protection. This is needed because it will cost more to re-build your home in the years to come than it will today.
Other Structures - This is coverage for any detached structures. If you don't have any, it will stay at 10% of your dwelling amount. If you have more detached structures to cover than the 10% allowed, you will want to make sure it is increased.
Personal Property Replacement Cost - We all know what this is, but believe it or not there are still policies out there that have limited replacement cost or actual cash value! Stay away from these. Full replacement cost is the only way to go! Also look at the amount you are covered for. Some companies cover 75% of your dwelling amount. Others offer less. Just get the most bang for your buck!
Loss of use - If you are unable to live in your home due to a loss, your policy will pay for the expenses you incur while living elsewhere until your home is repaired. Some policies cap the amount here. Make sure you feel the limit is sufficient. Good policies will state "Actual Loss"
Liability - The minimum amount is $100,000. This is too low. $300,000 is the minimum you should have. You can of course have more. If you have an umbrella policy you can keep your liability at $100,000, but if not make sure it is increased. There are too many sue happy people out there and you want to be protected!
Medical Payments - This is not like your car insurance med-pay. This is only for others on your property. Not many people go with more than $1000. Just make sure your liability is high and you should be fine. Make people file suit if they are on YOUR property and try to collect money off of your policy!
Deductible - Your deductible is up to you. Go with an amount that makes you feel comfortable. $1000 is most popular today and makes the most sense. This reduces your premium and will also help ward off small piddly claims that will raise your rates. What good is a $500 deductible if you claim something that is $700? You save $200 and your rate goes up $20 a month. Then if you would happen to have a 2nd loss, you would have 2 claims and are in danger of non-renewal or a huge rate hike!
Earthquake Endorsement - Some people have this and others don't. Make your own decision,but realize that if your home is damaged due to an earthquake or earth movement, you are out of luck! This isn't too expensive so weigh the pros and cons. Earthquake deductibles are typically 10% or so. This equates to $15,000 on a $150,000 home. This may also factor into your decision.
Water or Sewer Backup Endorsement - This is something many people think is included in a policy and it is not! Water damage is covered, but not sewer! Your can purchase specified amounts of protection. Be sure to look into this and ask your agent.
Identity Theft Endorsement - This is a newer item, but is gaining in popularity. If someone steals your identity and causes you harm, it can cost some time and money to clean things up. This will pay for it and provide a representative to help facilitate the process!
Scheduling Items - The most common item to schedule is jewelry. Your policy has low limits for specific items. You will want to schedule valuable or priceless items. This is a quick summary of the parts of a home insurance policy. Keep all of these points in mind when deciding who you are using and what coverages to include. Just remember you are buying piece of mind and financial security when you pick your coverages. Don't focus solely on price and find an agent that will work hard for you. I hope this helps.
Here are a few links to some of the larger insurance companies.
State Farm Insurance - http://www.statefarm.com/
Liberty Mutual Insurance - http://www.libertymutual.com/
Allstate - http://www.allstate.com/
Shelter Insurance - http://www.shelterinsurance.com/
American Family Insurance- http://www.amfam.com/
Farmers Insurance - http://www.farmersagent.com/emiller2/
Your comments are welcomed!
Brought to you by:
Professional Mortgage Group Inc.
"Your Columbia, MO Mortgage Broker"
Monday, October 1, 2007
Cash-Out Refinance
During the tough economic times of today many more Americans are tapping their home's equity, what's left of it, to try and obtain some sort of cash relief. Whether that is paying off credit cards, personal loans, auto loans or even cash to put in some sort of savings account. Americans are feeling the pinch of both the slumping housing market and rising commodity items like fuel, utilities and groceries. I thought I would shed some light on things you need to know should you be one of the thousands facing this dilemma.
First, conforming loans (those backed by Fannie and Freddie) typically only allow for a loan-to-value of 95% cash out. This means should you have a home that appraised for $100,000 the maximum loan you can receive, if you are taking cash out, is $95,000 or 95% of the homes value. This typically can be structured as one loan or two (80% first/15% second) for those of you who do not want to pay PMI (Private Mortgage Insurance).
Second, as a precautionary matter you need to make sure that the appraised value is "realistic". The last thing you want is to go and try to sell your residence in a couple of years and find out you owe more on your home than what you can sell it for; otherwise known as over-leveraged or negative equity. I have seen this way too many times over the years, mostly because of "shady" lending practices in connection with an over-valued appraisal. Be sure you deal with a lender who looks out for your best interests!
Third, you may be able to work the timing of the transaction that will allow you the benefit of skipping two mortgage payments. Many clients really like this perk as it frees up "extra" cash flow that they would ordinarily be without. Imagine consolidating credit cards and other personal loans saving $900.00 a month and pocketing $2,000 cash while at the same time remaining in a financially stable position on your home. Believe or not it can and does happen everyday!
Fourth, and perhaps the most important, the entire process normally takes only approximately two weeks to complete. No long waiting period or constant questioning going back and forth. The entire refinance process has become very streamlined and efficient.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
First, conforming loans (those backed by Fannie and Freddie) typically only allow for a loan-to-value of 95% cash out. This means should you have a home that appraised for $100,000 the maximum loan you can receive, if you are taking cash out, is $95,000 or 95% of the homes value. This typically can be structured as one loan or two (80% first/15% second) for those of you who do not want to pay PMI (Private Mortgage Insurance).
Second, as a precautionary matter you need to make sure that the appraised value is "realistic". The last thing you want is to go and try to sell your residence in a couple of years and find out you owe more on your home than what you can sell it for; otherwise known as over-leveraged or negative equity. I have seen this way too many times over the years, mostly because of "shady" lending practices in connection with an over-valued appraisal. Be sure you deal with a lender who looks out for your best interests!
Third, you may be able to work the timing of the transaction that will allow you the benefit of skipping two mortgage payments. Many clients really like this perk as it frees up "extra" cash flow that they would ordinarily be without. Imagine consolidating credit cards and other personal loans saving $900.00 a month and pocketing $2,000 cash while at the same time remaining in a financially stable position on your home. Believe or not it can and does happen everyday!
Fourth, and perhaps the most important, the entire process normally takes only approximately two weeks to complete. No long waiting period or constant questioning going back and forth. The entire refinance process has become very streamlined and efficient.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Thursday, September 27, 2007
New Home Sales News
First the bad news: New home sales have hit a 7 year low last month. This is not great but was not totally unexpected given the current state of real estate.
There is some good news out there that bodes well for the future of the market, however. First, the yield curve is steepening indicating less of a risk of a recession. Next, lenders are going through with some big mergers and acquisitions which is another positive sign for the economy in general. And finally, the Federal Reserve reported that there are no outstanding loans to lenders at the discount window.
These three things are positive because they show that the Fed's moves have helped the market finally start digesting the bad subprime situation, recession isn't as big a worry to increase the housing problem, and if people are still employed they will eventually get around to buying real estate again. So, today was a good day as far as news goes.
Your comments are always welcome!
Brought to you by Professional Mortgage Group, Inc. in Columbia, Missouri.
There is some good news out there that bodes well for the future of the market, however. First, the yield curve is steepening indicating less of a risk of a recession. Next, lenders are going through with some big mergers and acquisitions which is another positive sign for the economy in general. And finally, the Federal Reserve reported that there are no outstanding loans to lenders at the discount window.
These three things are positive because they show that the Fed's moves have helped the market finally start digesting the bad subprime situation, recession isn't as big a worry to increase the housing problem, and if people are still employed they will eventually get around to buying real estate again. So, today was a good day as far as news goes.
Your comments are always welcome!
Brought to you by Professional Mortgage Group, Inc. in Columbia, Missouri.
Tuesday, September 25, 2007
Market News
I have had several discussions with people lately regarding the market and the recent rate cuts the FED made. Many thought rates would immediately drop when news hit the wire that the FED cut the Federal Funds rate and discount rate. Well this obviously that not happened and people are wondering why! Keep in mind the rates that were cut are ones that affect the mortgage market, but are not directly the rates offered to customers. It will take a little time to see what actually happens and we can only hope more will be done.
On another note, new reports came out today regarding the August market and in summary here is what was reported:
1. Existing home sales fell for the sixth month in a row and are now at a 5 year low!
2. Inventories rose to an 18 year high!
3. Home prices in 10 major cities are falling at the fastest rate in 16 years!
4. Sales of existing homes in the Mid-West fell 5.2%.
They did note that mortgages have become a little more affordable and available than they were in the worst days of August. This means that the coming months numbers could fair a little better. Apparently numerous sales contracts fell through in August due to the mortgage market turmoil and guideline changes.
On the local front an article ran in the Columbia Tribune covering local building permits.
According to county records, permits for single-family homes rose from 331 in 2002 to a peak of 378 in 2004. By 2006, however, the number had fallen to 232. Mid-year permit numbers are down in the county about 30 percent compared with last year.
City records reflect similar trends, with a peak of 1,239 single-family home permits in 2005 dipping to 675 last year
This shows that builders and lenders are pulling back, but as you can see the surplus of homes on the market must be taken care of before things return to normal.
You can read more about these 2 topics at
http://www.marketwatch.com/news/story/glut-unsold-homes-rises-18-year/story.aspx?guid=%7BC02E6F86%2D2D23%2D4D45%2DA83D%2DBF973D6432B9%7D
and
http://www.showmenews.com/2007/Sep/20070925News002.asp
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
On another note, new reports came out today regarding the August market and in summary here is what was reported:
1. Existing home sales fell for the sixth month in a row and are now at a 5 year low!
2. Inventories rose to an 18 year high!
3. Home prices in 10 major cities are falling at the fastest rate in 16 years!
4. Sales of existing homes in the Mid-West fell 5.2%.
They did note that mortgages have become a little more affordable and available than they were in the worst days of August. This means that the coming months numbers could fair a little better. Apparently numerous sales contracts fell through in August due to the mortgage market turmoil and guideline changes.
On the local front an article ran in the Columbia Tribune covering local building permits.
According to county records, permits for single-family homes rose from 331 in 2002 to a peak of 378 in 2004. By 2006, however, the number had fallen to 232. Mid-year permit numbers are down in the county about 30 percent compared with last year.
City records reflect similar trends, with a peak of 1,239 single-family home permits in 2005 dipping to 675 last year
This shows that builders and lenders are pulling back, but as you can see the surplus of homes on the market must be taken care of before things return to normal.
You can read more about these 2 topics at
http://www.marketwatch.com/news/story/glut-unsold-homes-rises-18-year/story.aspx?guid=%7BC02E6F86%2D2D23%2D4D45%2DA83D%2DBF973D6432B9%7D
and
http://www.showmenews.com/2007/Sep/20070925News002.asp
Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"
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