Monthly Archives: December 2013


FANNIE AND FREDDIE.  Important for first-time home buyers who are competing with investors with deep pockets.  The first-time home buyer has 20 days to look and make an offer on one of the 2 lenders’  FORECLOSURES as it goes on the market.  Just have to MOVE QUICKLY  and remember both Fannie Mae and Freddie Mac want a pre-approval letter from the buyers’ lender BEFORE the offer can be submitted and needs to be fairly recent.



The Internet has made house hunting convenient for potential buyers, but a recent study indicates that hasn’t harmed the business for real estate agents.  After searching on line, the buyers contact a real estate agent.  92% searched using the Internet, then 90% purchased a home through a licensed agent.  When buyers asked where they first learned about the home they purchased, 43% said the Internet, 33% from agent, 9% yard sign or open house, 6% friend, 5% home builders, 2% from seller and 1% from print from newspaper ad.  This survey done by NAR (National Association of Realtors).



We at the Fed should begin tapering back our bond purchases at the earliest opportunity ….. to consider this strategy desirable on it own merit:  feel more comfortable were we need to remove ourselves as soon as possible from interfering with the normal price-setting functions of financial markets.  If you are thinking about purchasing a home, buying before the tapering will probably mean a LOWER MORTGAGE INTEREST RATE THAN IF YOU WAITED.  Both opinions from Federal Reserve Bank of Dallas, Richard Fisher and Jeffrey Lacker of Richmond.

the YOUNG and WEALTHY ………..

The top of their wish list are a swimming pool, outdoor kitchen, home gym, home theater, wine cellar and 4+ garages.  More younger buyers value green or LEED-certified residential properties.  Wealthy consumers of all ages want a home with an open floor plan that is fully automated and wired for technology.  Staff quarters, tennis court and separate catering kitchens are less important.  Most are going to stay put for the next 12 months.


Many homeowners who previously allowed a home to fall into foreclosure are ready to re-enter the housing market.  Nearly 80% of consumers who lost their homes during the financial crisis want to buy again.  41% will buy higher and most have higher incomes now.  Also their debt obligations are less and 30% have “significantly lower” debt.  The study from says boomerang buyers are willing to invest more into a purchase, with 50% making a down payment of 10% or more.  NOW COMMITTED TO AVOID FIRST MISTAKE!


“ME” or “I” — Always use “me” following a proposition, as in:  “for me”.  Extra words trip us up, such as “for my company and I” and should be “for my company and me”.  “NAUSEOUS” or ” NAUSEATED”.  First is something sickening to contemplate and 2nd is how you feel.  COMMAS FOR CLARITY.  An example:  “let’s eat my friend” is not the same invitation as “Let’s eat, my friend”.  “AFFECT” or “EFFECT”  Think using these words as verbs and you’ll use them correctly as nouns.  To “affect” means to influence it and “effect” is to cause it.  If the result of something, it’s an “effect”.  Many many more!  From Margie Fisher, PrimeLending in Tyler.


NEW YEAR, NEW RULES on loans …….PART 2

Part 1 talks about QM or Qualified Mortgage loans and now we are into QRM or QUALIFIED RESIDENTIAL MORTGAGE standards.  The rules are stringent enough to protect consumers from unscrupulous lending practices while still creating new opportunities for private capital to re-establish itself as part of a robust  and competitive mortgage market.  NO 20-30% down payments that were going to take place in 2011.  NAR or National Association of Realtors have pushed for lenders to make QM and QRM loans to qualified buyers with a lesser down payment.  VA loans are often made with little or no down payment and small number of foreclosures.  THESE GUIDELINES SHOULD PRODUCE SOLID LOANS!


NEW YEAR, NEW RULES on loans ………………….PART 1

QM – QUALIFIED MORTGAGE LOANS AND ABILITY TO REPAY.  (1)  3% points and fees cap for loan amounts greater than $100,000.  (2)  maximum debt-to-income ratio of 43%.  (3)  no negatives features such as negative amortization, balloon payments & interest only.  (4)  maximum 30-year loan term.  WHAT IS ABILITY TO REPAY?  (a)  income and asset verification, (b)  employment, (c)  monthly mortgage payments, including subordinate liens, (d)  all monthly mortgage-related debt, such as taxes, insurance, etc., (e)  verification of all monthly debts and liabilities, including alimony and child support, (f) DTI or residual income, (g)  credit history.  MORE IN A DAY OR SO!



Home prices nationally increased 8.4% during the same period, but easy to explain.  Texas did not have the severe slump that other states had.  These figures are from the Federal Housing Finance Agency and their latest Price Index (HPI).  OUR GROWTH IS FROM A STRONGER BASE according to Dr. Jim Gaines, economist at the Real Estate Center at A&M.  Houston-The Woodland-Sugar Land had the largest one-year increase at 10.31%, following by Austin-Round Rock at 10.08% and Dallas-Plano-Irving at 9.73%.


this index assumes a 20% down payment and a 25% ratio of principle and interest payment to income.  So if you gross $4,000 per month, then your monthly payment should not EXCEED $1,000 per month.  The rise in loan rates from a year ago mean roughly $12 extra in a monthly mortgage payment from a month ago and $79 more than a year ago.  While incomes continue to rise, they are not keeping pace with home price gains & mortgage rate increases from a year ago.  This slight easing of affordability is welcomed for potential buyers, but uncertainly remains.  The Federal Reserve has committed to pushing rates higher as needed to stanch inflation as the economy improves.  The Fed has a tricky balancing act ahead!!