Changes you need to know that can affect your Sale or Purchase of a home

I provided some information a week ago on the changes in Mortgage Disclosure laws of August 2015 that finally took effect October 3, 2015 (and we hear of extra dispensations for Lender's conformity). These changes affect you whether you are buying or selling property.

Buyers/Borrowers are affected because they must receive notice of loan costs within 3 days of application for loan and they must be in the new required format. If there are any changes during the loan approval process, the Buyers/Borrowers must be newly apprised of the loan costs which must be in the new required format. Depending on the changes and acceptability to the Buyers/Borrowers, a new 3 day waiting period starts. During this period, several things may occur including but not limited to the escrow not closing on time per the contract or the Buyers/Borrowers could refuse the loan if it does not fit in with the parameters set forth in the contract. Having said this, these two things are how Sellers are affected also. If escrow does not close on time, many things can be affected: Payoff can be late resulting in an additional charge, insurance policies might expire, acquisition of a replacement property may be delayed, etc.; and obviously everything stops with a cancellation.

These are the changes would trigger a new 3-day waiting period. They are:

1. A change which renders the APR inaccurate;
2. A loan product change causing the disclosed information to become inaccurate; or
3. The addition of a prepayment penalty to the loan.

This is pretty straightforward, but there is some confusion surrounding a change in the APR - tbd.
 
So this sounds horrible right? Understand that it is unlikely that you might find yourself in of these situations but it could happen. The best thing in your arsenal is to select not an experienced agent but an experienced Realtor to stay on top of developments in a contractual period to ensure a smooth closing.

Americans Think Homeownership is a Sound Investment

WASHINGTON (October 14, 2015) — A vast majority of Americans believe that buying a home is a solid financial decision, and most believe they could sell their home for at least its initial purchase price, according to a new survey from the National Association of Realtors®. The 2015 National Housing Pulse Survey also found that a preponderance of Americans think that now is a good time to buy a home.
The survey, which measures consumers' attitudes and concerns about housing issues in the nation's 50 largest metropolitan statistical areas, found that more than eight in 10 Americans believe that purchasing a home is a good financial decision, and 68 percent believe that now is a good time to buy a home. Seventy-one percent believe they could sell their house for what they paid for it, a jump of 16 percentage points from 2013.
When asked for reasons about why homeownership matters to them, respondents’ answers did not change significantly from past years. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top three reasons to own a home.
"Homeownership is part of the American Dream, and this survey proves that dream is alive and thriving in our communities," said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. "Realtors® believe that anyone who is able and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream in a safe, responsible way, which is why NAR advocates homeownership issues and educating potential buyers about achieving their property investment goals."
The number of renters who are now thinking about purchasing a home has increased since the last survey in 2013, up from 36 percent to 39 percent. Sixty-one percent of renters stated that owning a home is a priority for their future.  According to the survey, 80 percent of respondents believe that pre-purchase counseling programs and classes are very or somewhat important. Forty-five percent of homeowners who said they did not take a counseling program, reported they would have taken part in one had it been easily available to them.
Attitudes about the housing market have improved in recent years. Forty-nine percent of respondents indicated that they feel activity in the housing market has increased in the past year, compared to 44 percent in 2013 and 12 percent in 2011. Eighty-nine percent expect home sales in their area to either increase or remain the same. Concern about foreclosures has also declined, with only 15 percent of respondents indicating that foreclosure is a major concern.
In addition to improved attitudes about the housing market, survey participants also showed an improved outlook regarding the economy. Only 36 percent think that job layoffs and unemployment are a big problem, a substantial drop from 45 percent in 2013.
Perceived obstacles to homeownership have remained mostly unchanged compared to recent years; 78 percent of respondents point to college debt and student loans as the main obstacle to making a home purchase affordable. Seventy-six percent of participants said they have a full-time job but still did not make enough money to purchase a home. Seventy-four percent believe they do not have enough money for a down payment and closing costs.
As the market has improved, concern about the cost of housing has increased. Two-thirds of survey participants said that home prices are more expensive than they were a year ago. There is additional concern over the lack of available housing; 41 percent said the lack of affordable homes is either a very big or fairly big problem in their area, an increase of 9 percent points from 2013.
For adult millennials under the age of 35, the burden of student debt is their chief concern, with 86 percent of respondents naming college debt as an obstacle to homeownership. Over half reported that their housing costs are a financial strain on their budget, 65 percent are concerned about high rental prices, and 60 percent are concerned about high home prices. However, millennials tend to have a more upbeat and positive view about the future of the nation than older Americans, with 42 percent of millennials saying that the country is headed in the right direction compared to only 20 percent among those aged 50 and older.
The 2015 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program. The telephone survey polled 1,000 adults nationwide in the 50 most populous metropolitan statistical areas. An additional 250 interviews were conducted with millennial adults (born after 1981) from the same geography. The study has a margin of error of plus or minus 3.1 percentage points.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries. (Jane Dollinger)

2015 Mortgage disclosure laws have changed ...

Getting a mortgage may take longer under new rules ...
Source: CNBC


Borrowers are being advised to prepare for delays, have all paperwork ready before even starting the mortgage process, and possibly consider spending the extra money upfront for a longer lock term due to new rules for lenders that went into effect this past Saturday. The goal of the new “Know Before You Owe” process is to make the mortgage process much easier for consumers to understand. This has resulted in all-new paperwork and disclosure rules for lenders. The rules are designed to hold lenders accountable and protect consumers against what happened during the last housing boom.
Read the full story

Where are we headed in 2016? Inman says "...

California housing market won’t slow down in 2016
Source: Inman




California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 California Housing Market Forecast.”
Making sense of the story

• The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold.

• Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.

• C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.7 percent in 2016, after a projected gain of 2.4 percent in 2015.

• The state’s unemployment rate should decrease to 5.5 percent in 2016 from 6.3 percent in 2015 and 7.5 percent in 2014.

• The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

• The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300.  This is the slowest rate of price appreciation in five years.

• C.A.R. Vice President and Chief Economist Leslie Appleton-Young commented, “The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth.”