Future of Housing Finance Will be Top Issue for Next President (www.horizonpropertiesguam.com)

Future of Housing Finance Will be Top Issue for Next President

Media Contact: Sara Wiskerchen / 202-383-1013 / Email

WASHINGTON (May 16, 2012) – The future of housing finance in the U.S. will be a key issue facing the winner of the upcoming presidential election. That’s what a panel of industry experts told several thousand Realtors® gathered at a symposium, Housing Policy in 2013: Challenges, Opportunities and Solutions, during the Realtors® Midyear Legislative Meetings & Trade Expo.

The National Association of Realtors® supports a comprehensive reform strategy for the secondary mortgage market to help maintain a level of certainty in the marketplace and not further disrupt the still fragile housing market recovery.

“As leading advocates for homeownership, Realtors® want to make sure that everyone who wants to own a home and is able to afford one can do so,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami.  “Without a secondary market, mortgage interest rates would be unnecessarily higher and unaffordable for many Americans, and products like the 30-year fixed-rate mortgage would likely be inaccessible for most borrowers.”

During the symposium, Federal Housing Finance Agency Acting Director Ed DeMarco noted progress made toward recovery, but cautioned that more remains to be done.

“We all are cautiously optimistic that the signs of stabilization, and in some places, strength, that have begun to emerge in various housing markets are true signals that a long-awaited recovery is taking place,” said DeMarco. “While FHFA will keep its focus on foreclosure alternatives, refinancing, and ongoing liquidity in the marketplace, it is time for policymakers to begin work in earnest on the future housing finance system.”

DeMarco outlined several public policy goals to ensure a more effective and efficient housing finance system, including building a new infrastructure for the secondary mortgage market; establishing standards that promote a safer and more efficient housing finance system; and increasing private capital while retracting government participation in the secondary mortgage market. FHFA assumed conservatorship of the government-sponsored enterprises Fannie Mae and Freddie Mac in 2008, and DeMarco said the entities have played a critical role in ensuring access to mortgage capital following the market downturn when private lenders left the market. Since 2008 the GSEs have bought or guaranteed approximately 75 percent of mortgages originated in the country.

DeMarco noted that FHFA has completed more than 1 million loan modifications since 2008 and helped millions more families avoid foreclosure through a short sale, deed-in-lieu or other alternative. He said changes to the agency’s refinancing program has created more opportunities for homeowners who current but underwater on their mortgages to take advantage of low interest rates and refinance into more affordable terms.

Also speaking at the symposium was Federal Housing Administration Commissioner and Assistant Secretary for Housing Carol Galante. “Future generations deserve the same home buying opportunities as past generations,” said Galante.

Toward that end, Galante noted that FHA helped ensure access to safe, affordable financing in the absence of private market involvement following the economic downturn. She said the agency is working to preserve its mission of providing liquidity while ensuring its continued viability, and has increased premiums to compensate for losses that resulted from increased foreclosures. Galante said the long-term financial health of the agency looks good and that loans originated in recent years are performing well.

Following Galante’s speech, a panel of industry experts debated the future of the GSEs and the government’s role in promoting the American dream of homeownership.

Moody’s Analytics Mark Zandi identified an uncertain regulatory environment as a key issue facing the industry. After rules like the Qualified Mortgage (QM) and the Qualified Residential Mortgage (QRM) are defined, private participation in the market might increase. Zandi warned however, that without a government backstop there would be no 30-year fixed-rate mortgage, which most consumers currently use to finance home purchases.

Wharton School of Business Professor Susan Watcher agreed that there is tremendous uncertainty in the market about the future of housing finance and suggested that policymakers lack a clear vision. She said that without the right system in place, the country could face a similar market downturn in the future.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab. The National Association of Realtors® supports public policies and policymakers who support the positions of Realtors® and their clients and customers on private property rights, housing issues and homeownership, regardless of political party affiliation.

 Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Price your house to sell quickly (www.horizonpropertiesguam.com)

Price your house to sell quickly

If home lacks features of recent comps, it's time to subtract value

BY DIAN HYMER, MONDAY, AUGUST 20, 2012.

Inman News®

A first-quarter survey of homebuyers and sellers done by HomeGain.com, a real estate services website, revealed that 76 percent of homeowners believe their home is worth more than the list price recommended by their real estate agent.

Homebuyers usually have a better grasp of current market value in the area where they're looking to buy than do sellers who own and live there. Buyers look at a lot of new listings. They make offers, know what sells quickly and for how much, and what doesn't and why. HomeGain reported that homebuyers still think sellers are overpricing their homes.

Your home is worth what a buyer will pay for it given current market conditions. This may not be the same as your opinion of what your home will sell for, or what you hope it's worth. Relying on emotion rather than logic when selecting a list price can lead to disappointing results.

The prime opportunity for selling a home is when it's new on the market. This is when it is most marketable. Buyers wait for the new listings. Usually, listings receive the most showings and have the busiest open houses during the first couple of weeks they are on the market.

This is the opportunity to show your house off to advantage with a list price that attracts buyers' attention. Listings that sell today are priced right for the market. Buyers need to feel comfortable that they are getting a good deal.

Buyers won't overpay if they feel home prices are still declining, and in some areas of the country, they still are. In areas of strong sales, buyers may shy away from multiple-offer situations if they feel the recovery is fragile and that prices may slide further before stabilizing. Even in areas where home sales have been strong in the first half of 2012, local practitioners wonder how long the uptick will last.

HOUSE HUNTING TIP: When selecting a list price, it helps to understand how real estate agents and appraisers establish an expected selling price or price range for your home. They research the recent listing inventory for homes similar to yours that sold. The most recent sales give the best indication of the direction of the market.

They analyze these comparable sales giving more value to your home for attributes that it has that the comparables don't, like a remodeled kitchen. Value is subtracted from your home for features it lacks when compared to the sold comparables, like an easily accessible, level backyard.

It's difficult for sellers to step back and take an attitude of detached interest in their home. But it's essential to do so if you want to sell successfully in this market. For example, your home could actually sell for less, not more, than a comparable sale because you added a swimming pool in an area where most homebuyers would rather have a yard with a generous lawn.

If the comparable sale information suggests that the value of homes like yours is declining, select a list price that undercuts the competition to drive buyers -- and hopefully offers -- to your home. You can take a more aggressive stance on pricing if the comparables show that prices are moving up.

If there is high demand for homes like yours, you may receive more than one offer. But don't list too high. It's better to stay in the range shown by the comparables and expose the house to the market before accepting offers. The market will drive the price up if it's warranted.

THE CLOSING: Don't rely on rumors circulating in the neighborhood about how high a home sold. Prices tend to get inflated when passed from one person to another. Select your list price based on hard facts.

Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

2 must-have contingencies in a home purchase offer (www.horizonpropertiesguam.com)

2 must-have contingencies in a home purchase offer Stand your ground even if agent advises against them By Benny Kass

DEAR BENNY: I am in the process of buying an older single-family home and found one I like. I wanted to have my contract contingent on obtaining a favorable home inspection, but my real estate agent has been discouraging me. She claims that I may lose the house if I insist on the inspection.  What do you think? –Terrie

DEAR TERRIE: You are about to engage in what may be the biggest purchase of your life. You kick the tires when you buy a car. You should get an inspection, and if the seller does not allow this, walk away as fast as you can.

Inspections help both buyers and sellers. The buyer gets an independent assessment of the condition of the house, from inside and outside, and top to bottom. There is a hidden benefit to an inspection, namely that if you buy the house, you will know where things are such as turning off the water in case of a leak.

But the seller benefits also. I have represented many sellers whose buyer (after taking title) threatened to (and actually did) sue the seller, claiming multiple problems in the house. My defense, which generally works, is, "Hey, you had an inspector and had an opportunity to walk away if you found problems."  So, submit your contract with the inspection contingency. If the seller rejects it, he may be trying to hide known defects.

Also, many states require sellers to disclose all known problems in a house to potential buyers. If your state has this requirement, show the disclosure statement to your inspector.

The bottom line: There are two important contingencies that must be included in every real estate offer being made to sellers.

·        First, a contingency on financing (assuming you need to obtain a mortgage and are not paying all cash).

·        Second, obtaining a home inspection report from an independent inspector selected by you, to your satisfaction.

Don't be pressured to sign a contract without these two provisions. In law school, we are taught that real estate is unique. In my many years of practicing law, however, I have learned that it "ain't necessarily so."

 Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Dear Benny (www.horizonpropertiesguam.com)

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Dear Benny….

It’s Important how you hold title to properties

DEAR BENNY: Years ago our dad built a cabin in Colorado and left it to the five children from two marriages. Since that time, four of us have split the expenses of maintenance, taxes and insurance. We have a large family reunion at the cabin every four years, and family members use the cabin annually. One brother has never contributed and is difficult to locate when needed.

The four of us are getting older and would like to keep the property in the family, as everyone enjoys the use of the cabin and the reunions. There are 12 children from the four of us plus two from the brother who does not participate. What is the best option for keeping the cabin in the family and splitting the costs involved? --R.J.

DEAR R.J.: The first question is how all five of you hold title to the cabin. There are two ways: first, each of you could hold title as "tenants in common," meaning that each has a one-fifth interest. While it may be difficult to find a buyer for that small portion, as a tenant in common you have the right to sell. In this arrangement, on the death of any one of the tenants in common, your share will be distributed accordingly to your last will and testament (which you should have). And in many states, probate will be necessary.

Alternatively, you all could hold title as "joint tenants with rights of survivorship." Here, if one of you dies, the remaining four siblings will then own the entire cabin. This is not fair to the spouses or to your children who may lose the right to have any ownership. (I am ignoring for this discussion spousal rights to claim an interest despite any provisions in the will.)

So, just for this issue alone, you should consult an attorney who will review the title and advise you the best way to deal with this. My suggestion: "Title is held by each of the children and their wives as joint tenants with rights of survivorship, but as to each of the other children, as tenants in common."

What does this accomplish? If one of you should die, your spouse will automatically inherit your one-fifth interest in the cabin. If your spouse predeceased you, you will be the sole owner of your share and can arrange to leave it to your children on your death. But since you own your one-fifth interest as tenants in common with your other siblings, they keep their interests and you do not lose yours.

But talk to your attorney. She may recommend that you create a limited liability company to hold title to the property.

As for the brother who does not make payments, you can ignore it from a family point of view, or you can demand that either he pay his fair share or sell his interest to the remaining four of you.

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Mortgage Interest Deduction Vital to Housing Market (www.horizonpropertiesguam.com)

The home mortgage interest deduction saves the average home owner thousands of dollars at tax time, supports home values at the community level, and helps American home buyers get into their firsthouse.

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Supporting the mortgage interest deduction means helping families afford homes. Image: Image Source/Getty Images.

Having a tax deduction for mortgage interest makes owning a home more affordable because the deduction lowers the amount of tax you pay. U.S. Census data shows 37% of home owners with mortgages spend more than 30% of their income for housing. Paying less for housing means having more disposable income for savings and other household expenses.

Increasing housing affordability increases the number of renters who can afford to buy a home of their own responsibly; increasing the number of home buyers helps keep home prices stable for those who already own homes by ensuring a steady stream of new buyers.

How the deduction works

In general, any home owners who pay U.S. taxes and who itemize their taxes can deduct mortgage interest attributable to primary residence and second-home debt totaling $1 million, and interest paid on home equity debt of as much as $100,000.

Mortgage interest deduction threatened

In recent years, the mortgage interest deduction has come under attack. Among the suggestions for cutting it back to deal with the deficit:

• Reduce the mortgage interest deduction for upper-income taxpayers—they’d only receive 28 cents on the dollar, even if they’re in a 33% or 35% tax bracket and can now deduct 33 or 35 cents on the dollar. 
  

• Reduce the $1 million cap by $100,000 a year.

• Change the mortgage interest deduction to a 15% tax credit.

In the past, members of Congress have suggested other mechanisms for eliminating or limiting the mortgage interest deduction. None of those has ever gained traction.

Arguments against mortgage interest deduction

Arguments against the mortgage interest deduction center on who benefits and whether the government should support home ownership. They say:

• It primarily helps the wealthy, since high-income taxpayers are more likely to itemize their deductions and to own homes. About 90% of taxpayers earning more than $100,000 itemize, while only 18% of those earning less than $50,000 follow suit, the Tax Foundation estimates.

• Taxpayers who don’t itemize deductions get to use the “standard deduction.” They do that because it gives them a bigger tax break than itemizing to use the mortgage interest deduction.

• Ending or reducing the mortgage interest deduction would create a deep source of money for reducing the budget deficit.

• In the aftermath of the mortgage crisis, the U.S. needs to rethink its favored tax treatment of home ownership.

Arguments for mortgage interest deduction

Those who favor keeping the mortgage interest deduction say it helps middle-income families, who already pay nearly all U.S. income taxes. Plus, getting rid of the mortgage interest deduction would hurt home prices.

• More than 60% of the families who claim the mortgage interest deduction have household incomes between $60,000 and $200,000, estimates the NATIONAL ASSOCIATION OF REALTORS®.

• A disproportionate number of those high-income taxpayers live in areas where housing is especially expensive, such as California and New York. In high-cost housing markets, lowering the $1 million cap would add a tax burden on families who already must pay high prices for homes.

• Home owners already pay 80% to 90% of the income tax in our country, and among those who claim the mortgage interest deduction, almost two-thirds are middle-income earners, says NAR Chief Economist Lawrence Yun. So home owners, who are the pillars of federal income tax revenue, would have to shoulder a bigger tax burden.

• Home values could fall 15%, says Yun, as buyers discount the value of the mortgage interest deduction in their purchase offers.

• It’s faulty to link the mortgage meltdown to the country’s support for home ownership. The meltdown is rooted in lax underwriting and faulty ratings by credit rating agencies of the securities backed by the mortgage, says Yun.

Protecting the deduction promotes housing. In supporting the mortgage interest deduction, you help ensure that tomorrow’s families can follow the same path to homeownership that so many of us have already traveled.

Read more: http://www.houselogic.com/home-advice/mortgage-interest-deduction/mortgage-interest-deduction-vital-housing-market/#ixzz1ikMCBBgh

Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

It Pays to Support Responsible Homeownership (www.horizonpropertiesguam.com)

Helping others become homeowners protects your home’s value and builds stronger communities.

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Support programs, such as housing counseling, that help people become responsible homeowners. Image: Antenna/Getty Images

Doing your part to help other Americans gain a foothold on the homeownership ladder doesn’t just help them. You’ll benefit both your community and your own pocketbook.

When people move from renting to owning a home, they’re more likely to vote, get involved in community groups, and care about their home’s appearance. The children of homeowners do 23% better in school, according to a 2001 study by Harvard’s Joint Center for Housing Studies. And a steady flow of first-time homebuyers makes it easier to sell your own starter home when you’re ready to move up to a larger property.

Makehousing affordable

One way to make more people homeowners is to make housing more affordable. All U.S. homeowners benefit from policies like the mortgage interest tax deduction. Many use government-backed mortgage insurance to lower loan costs. A variety of public and private programs offer low-cost loans and downpayment assistance to help Americans become homeowners. Help prospective homeowners save a downpayment by donating to sites like EARN, a non-profit that uses donations to match funds saved by low-wage earners.

Reduce foreclosures and preserve home value

Foreclosure matters because it hurts all homeowners. In 2009, foreclosures will cause property values to decline an average of $7,200 for about 70 million homeowners, resulting in a $502 billion loss in home equity, the Center for Responsible Lending estimates. Each foreclosure within 1/8th of a mile of your home lowers your property value about 0.744 percent, CRL says.

“One of the sad lessons of the [recent past] is that we aren’t alone,” says Nicolas P. Retsinas, director of the JCHS. “It’s clear that if the family next door loses their home to foreclosure, my home’s value will go down. Therefore, I have a vested interest in ensuring that people become homeowners and that homeownership is sustained over time.”

One effective tool against foreclosure is educating homeowners before they buy. The Joint Center found that loan delinquencies fell 13% with homeownership counseling. People who go through pre-purchase and post-purchase counseling and learn about mortgages, family budgeting, and home maintenance are less apt to face foreclosure, says Michael Berti, senior homeownership specialist at the Rural Ulster Preservation Company in Kingston, N.Y.

Support groups that help homeowners

One way to do your part to help other homeowners is by donating your time or money to some of the many non-profits that promote responsible homeownership.

Habitat for Humanity partners with new homeowners to build affordable housing. Habitat homes aren’t free. Homeowners work hundreds of hours, get homeownership counseling, and make mortgage payments.

The United Way supports many local programs that build affordable housing, help families build financial assets, and teach financial management skills. If you donate to United Way, you can direct your contribution to those causes.

Homeownership, in San Francisco, tries to intervene where people facing foreclosure have the resources to catch up on their loan. If “the home can’t be saved, we try to get a first-time homebuyer we’ve worked with into the home as quickly as possible to stabilize the neighborhood,” says Interim Director Christi Baker. 

Government programs support homeownership

Supporting federal state, and local programs that help create homeowners is another way you can expand responsible and affordable homeownership.

The U.S. Department of Veterans Affairs and the Federal Housing Authority provide mortgage loan insurance or guarantees that let people buy homes with only a small downpayment and borrow at lower interest rates. 

Government-sponsored groups Fannie Mae, Freddie Mac, and government-run Ginnie Mae buy and securitize mortgage loans made by banks, freeing up money, so banks can keep lending.

Sites like Govtrack and RollCall help you stay on top of laws that affect homeowners.

HUD’s HOME program provides financial support to state and local housing authorities to build and renovate for-sale and rental housing for lower-income Americans.

In U.S. cities of all sizes, the HOPE VI program has funded plans to replace deteriorating public housing with new low-rise, mixed-income homes. These developments sell most homes at market rates, but designate a percentage for use by low-income homeowners.

How to get involved

You can support responsible homeownership in many ways. Retired construction contractors France and Bill Moriarity travel the country in their RV managing Habitat construction projects. “We like it because it’s a hand up, not a hand out,” France Moriarity says. Habitat volunteers don’t need construction skills and can sign up to work as little as one day at a time. Groups can volunteer together. Organizations like Rebuilding Together and NeighborWorks America sponsor once yearly volunteer events that help lower-income homeowners repair their homes.

In San Francisco, Gregg Lynn convinced 150 people from his professional network to donate a percentage of their income to EARN. Follow his lead by asking your professional network, trade association, or social group to contribute.

Dona DeZube

Dona DeZube has been writing about real estate for more than two decades. She lives in a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.

Read more: http://www.houselogic.com/home-advice/why-home-ownership-matters/it-pays-to-support-responsible-homeownership/#ixzz1ikMeGi3D

 Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability.