Would you like to buy the Castle of Count Dracula, wha-ah-ah-aahhh!

Well of course, I'd love to sell it to you- Bran Castle, listed at a mere $75 million USD. The castle has been meticulously restored by the current owners.  As popularized by Bram Stoker in his literature, the castle is situated deep in the mountains of Transylvania, now known as Romania.  It was rumored in legend that the castle was once home to Count Dracula, AKA Vlad the Impaler AKA, Vlad Tepes. Sorry to disappoint but the actual residence of Vlad the Impaler was located a few miles from Bran Castle and is in ruins, which I discovered reading this Halloween appropriate article from the Florida Association of Realtors website.  Too cool!

Have a safe and happy Halloween!

Slow and steady, wins the race.

Let's face it folks, in the last few years there has been much speculation on market projections in housing. There always is, but since the mid 2000's market collapse, the subsequent bursting of "ye olde" bubble and housing market reconstruction, economists and analysts have widely debated the immediate and long term future of the market. Many changes in lending practices have been made at the Federal level to protect against mortgage fraud and indirectly, the formation of housing bubbles among other things. Though it's also debatable, most would consider the better part of 2011 to be the bottom of the market. Since 2012, most markets appear to have seen fairly steady levels of growth with occasional dips and spikes as expected. For all those pattern recognize-rs and bubble formation projectionists who were worried about annual growth levels higher than 10% in most of 2013 and early this year, the analysts in this article from the Florida Association of Realtors say you can relax for the time being.

 Now that we're well into the fourth quarter, all data shows that most markets are experiencing slowing but healthy growth percentages across the country. While real estate professionals, investors and current home owner's alike would prefer to see more rapid growth as was felt in the last 18 or so months, this slow and steady pace is much better for the housing market in the long term. This is also good news for buyers because the data shows that the the more stable property value growth will help attribute to a possible paradigm shift into more of a buyer's market. The logic is that buyer's will have more of a competitive edge because while sellers are much more comfortable listing their homes in the current market, the increase in inventory expected should make sellers more flexible in negotiations. These stable growth levels and the still historically low interest rates should keep housing rather affordable yet still enticing to sellers to list their homes.

FANNIE AND FREDDIE TO RETIRE?

In a bi-partisan effort, both Democrats and Republicans reached a deal on the future of Fannie Mae and Freddie mac. Members of the U.S. Senate Banking Committee are in the beginning stages and are currently outlining their plans to "wind down" Fannie and Freddie and replace these two financiers with another government reinsurer to change the face of the game. Democratic Committee Chairman Tim Johnson and Republican Senator Mike Crapo spearheaded talks that have been in the works for months. This agreement was based on a proposal some time ago by Democratic Senator Mike Warner and Republican Senator Bob Corker. Senators Johnson and Crapo say that they fine tuning the details of the bill which they plan to introduce "in the coming days." Senator Crapo stated "This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie, while protecting taxpayers with strong private capital, building the components for a stable secondary market." The new entity would mandate private financiers to take at least 10% or more of the hit on the first losses of mortgage debt. Then and only then, would the government provide assistance to these private lenders. Another component of the plan stipulate that is sure to be controversial is the strong underwriting standards which will require everyone except first time home buyers to put a minimum down payment of 5%. For obvious reasons, this will be difficult for a lot of home buyers out there who are otherwise, well qualified. There are a lot of hard working Americans with good credit who may have trouble coming up with a 5% down payment. This of course depends on the purchase price but if you factor in the typical closing costs, inspections and an appraisal, things start to get expensive. Take for example, an $80,000 home. The buyer will have to put $4000 down at closing, $300-500 for inspections, $300-$400 for appraisal and closing costs can run between $2500 and $7500. Sometimes more! That's a lot of money. "There is near unanimous agreement that our current housing finance system is not sustainable in the long-term and reform is necessary to help strengthen and stabilize the economy. This bipartisan effort will provide the market the certainty it needs, while preserving fair and affordable housing throughout the country." Senator Johnson said in a statement. The two Senators also remarked that their plan is to "eliminate affordable housing goals" and replace it with housing related funds. The Senators hope to ensure that housing is available to all types of borrowers and renters. Analysts and experts don't expect to see any reform take place until after the 2016 Presidential election. My prediction is that the uncertainty will be counterbalanced by temporarily lowered rates to ease concerns over the long term effects. There are so many variable though, who knows. I have a feeling that though there are obvious issues present, it is ultimately in the best interests of home buyers and tax payers alike. Not to mention that even if the bill is passed in the Democratic controlled Senate, it may reach opposition in the Republican controlled House of Representatives. Perhaps that will provide for some much needed further discussion and possible alterations of the bill.

ALL ABOUT THE NEW MORTGAGE RULES

As not many home buyers may know, the Consumer Finance Protection Bureau (CFPB), introduced new mortgage rules that began in mid January, 2014. The rules do make it difficult, or let's say even more difficult than recent years, to get financing on a new home.  Of course it seems unfair to make an already stringent process even worse but it really is all for good cause.  Like our parents used to say, "You may not understand now, but when you're older, you will realize that we do this because we love you."
I can't in all honesty go as far as to say that the cfpb instituted these regulations for those reasons, but they do care and hopefully what they're doing will have positive long term affects.

If you know much about the mortgage game at all, you know that it's been very challenging to get a mortgage since the bubble burst in the mid 2000's.  Any deposit $500 needs a paper trail, debt to income ratio could not exceed 43% (there are extenuating circumstances of course) and good documentation of income among other things, were and are scrutinized under the microscope.  The new rules are basically tightening the belt and enforcing the best practices that were already in place along with the addition of some new protections.
I have briefly outlined them below:

1) NO SURPRISES

• Ability to repay- mortgage lenders are now required to qualify borrowers ability to repay for many years as opposed to the first few months of a mortgage with lower introductory rates that don't provide and accurate analysis of a borrowers ability to pay.  Now lenders must consider more variables and factors- borrower's ability to repay including income,assets, debts and credit history.
• New class of mortgage products, Qualified Mortgages (QM)-  the cfpb instituted new rules for this new type of QM:  1) Borrower must be able to repay: 43% debt to income, now more strict. 2) The mortgage must be safer and easier to understand and cannot contain any detrimental features like interest only plans and negative amortization. 3) QM, a fair deal-  This means caps on points and fees lenders can charge to consumers.  A mortgage $100K or over cannot be a QM unless the points and fees are 3% or less of the loan amount.  

2) AIRBAG

• "Steering" as it's known in the mortgage business is not allowed- anyone who is paid to offer or assist a consumer in finding a loan product cannot receive more compensation by directing consumers to more costly loan products.  No double dipping!  If you pay someone directly for assistance in a mortgage, they generally, are not allowed to be compensated by another party for the same thing. 

3) THE TOURIST

• Qualified Mortgages will be easy to find.  
• Certain loan products, especially existing government programs will automatically fall into this category. 
• The cfpb doesn't necessarily ban certain non-conforming loan products that may help borrower's who are otherwise qualified but are having trouble documenting certain things like income from self employed borrowers. 

4) FITTER HAPPIER

• clearer monthly statements
• early notifications of adjustable rate increases.
• same day credit for payments
• fix errors promptly

5) PARANOID ANDROID

• borrowers who fall behind, now have more options and control.
• lenders must call borrower to collect no later than 36 days after non payment
• lenders cannot initiate foreclosure proceedings until 120 days after non payment.
• no more dual tracking, if a borrower applied to lender for help with the debt, the lender cannot begin harmful foreclosure proceedings while trying to work it out with the borrower.
• customer service reps in call centers must have the right answers to borrower's questions and have access to crucial documents.
• Servicers will have to provide borrowers with accurate information about the status of a foreclosure as long as the borrower requests the status in a timely manner.  
• Lenders must let borrowers who fall behind know ALL of the options available to them when requesting assistance.  This will help eliminate the need for borrowers to submit multiple applications for different assistance programs.  
• If the servicer denies a loss mitigation application from a buyer who submitted it in time, they must provide an accurate reason for denial.  Borrowers will also have the opportunity to appeal the decision. 

6) KARMA POLICE

• the cfpb will stand behind borrowers and homeowners to ensure they are treated properly by lenders.
• the cfpb will also accept complaints about lenders who mistreat borrowers or are not abiding by the rules. 
• though the cfpb does not counsel homeowners who are in trouble, they will point you in the right direction for help and hope.

I think that this is great for borrowers, if they don't qualify, there are things that they can do and lenders will be able to work with borrowers to figure out an action plan.  In my opinion, though quality and condition of the property are of utmost importance, they need to relax a little bit on the Q&C standards that are providing for the ever changing definition of the phrase "move in ready".  I understand some of it but other aspects are just silly.  They require heating in a home but no cooling....ummmmm..we kind of live in Florida and it's swampy out there.  I would also understand if an elevated home had flooring removed and it was just a plywood subfloor, they say you can't move in without some kind of floor covering.  What about homes with a concrete foundation in which a seller or foreclosing bank removed smelly/soiled carpets prior to sale?  Not move in ready!? Unfortunately, no.  This is ridiculous.  Apparently, a fair amount of underwriters will accepta coat of paint on a bare concrete floor as a "floor covering" but won't finance it otherwise?  Silly.  They need to ease up on some of these issues.  Agree?