1) Some Interesting Updates on the Portland Area Market:
– (According to RMLS)
- Home sales in the Portland area showed marked improvement when compared with the same period (December) a year prior. “Closed” sales were up 52.6%, “Pending” sales rose 40.9%, and “New Listings” rose 11.9%.
- In addition, the average sale price was down 2.5% compared to Dec. 08.
- The average sales price for the 12-month period of 2009 was down 12.1% from the previous year.
2) Tax Credits: The “First Time Home Buyers” tax credit was extended to this Spring (yikes… getting close) and there has been an additional tax credit extended to those “Buying Up” who have lived in their current home for five years and are buying a property of less than $800,000. Both of these tax credits expire in April: The contract must be inked by April 30th, and the closing must be by June 30th. If you or someone you care about are considering taking advantage of this amazing opportunity, you really must start looking for a home now to make the timeline.
3) Interest Rates to Rise: According to Carrie Bay of DSNews.com (among many others), interest are projected to begin rising, and have risen .25% already within the past month.
4) F.H.A to Raise Standards for Mortgage Insurance: No date has been set yet, but the word is “summer”. (ANOTHER reason to put your home-buying plan in motion now…)
– (excerpted From David Streitfeld of the NY Times)
- Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent.
- Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.
- Left largely untouched by the changes is the most controversial aspect of the agency’s program: a provision allowing buyers to make a down payment as low as 3.5 percent. Private lenders these days require at least 15 percent.
- Borrowers who want to put the minimum down will now be required to have credit scores of at least 580. Previously, there was no minimum score. (This is a relatively decent bar though, so this rule may have little effect.)
5) Attention Investors: Yay! HUD has decided to waive the 90 day seasoning financing contingency for buyers!
-(From Pat Goodell of Academy Mortgage ~ 503 380 0953)
Effective February 1st, 2010, there will no longer be a requirement for a seller of a property to be on title for 90 days or more in order for approval of an FHA backed loan. This is incredible news, since the majority of buyers in today’s market are FHA buyers! The 90 day seasoning issue has long been an issue for investors and agents when working with short sales. This is changing on Feb 1st. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”
– ***Linda’s note: There are a few minor restrictions on this. Let me know if you’re interested & I’ll send you the entire document with more detail.
6)Credit Card Companies Get Slapped w/Restrictions: We all know how hard the new mortgage guidelines have hit some potential home-buyers. Sometimes it seems like every time you turn around the consumer is facing yet another hurdle from the banking industry. Well, this time the consumer is being offered protections that should make it easier, less expensive, and less confusing to do business with, or work to pay off credit card companies. Here’s an excerpt from the Federal Reserve’s Announcement:
The Federal Reserve Board on Tuesday approved a final rule amending Regulation Z (Truth in Lending) to protect consumers who use credit cards from a number of costly practices. Credit card issuers must comply with most aspects of the rule beginning on February 22.
“This rule marks an important milestone in the Federal Reserve’s efforts to ensure that consumers who rely on credit cards are treated fairly,” said Federal Reserve Governor Elizabeth A. Duke. “The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts.”
Among other things, the rule will:
- Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance.
- Prohibit creditors from issuing a credit card to a consumer who is younger than the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so.
- Require creditors to obtain a consumer’s consent before charging fees for transactions that exceed the credit limit.
- Limit the high fees associated with subprime credit cards.
- Ban creditors from using the “two-cycle” billing method to impose interest charges.
- Prohibit creditors from allocating payments in ways that maximize interest charges.
Consumers can learn more about changes to their credit card accounts by accessing a new online publication. “What You Need to Know: New Credit Card Rules.” It explains key changes consumers can expect from their credit card companies as a result of the new rules. The Board plans to release additional “What You Need to Know” publications in conjunction with other major rulemakings