Latest Lending Rules

Here is the latest on the new lending rules enacted and in place as of 1 August:

In 2008, The Home Ownership and Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA) were passed by Congress and the Federal Reserve Board published the regulations under the Truth in Lending Act. These regulations were written to provide a more transparent, level and fair regulation of the real estate industry; to add additional steps to help prevent deceptive lending practices; and to protect consumers by making them more informed --and therefore more confident--in their home financing choices.
HERA - Amends the Truth in Lending Act (TIL) implemented through Regulation Z. Has a number of provisions including the Mortgage Disclosure Improvement Act which changes the Truth In Lending requirements surrounding early and final disclosures to home buyers and addresses the timing of when fees can be charged.
HERA applies to:
* ALL Loans registered on July 30, 2009 and thereafter
* ALL Primary Residence and Second Home Transactions
* ALL Purchase and Refinance Transactions
HERA changes:
*Collection of Fees - No fees, other than an actual and reasonable credit report fee, may be collected prior to the borrower’s receipt of the initial disclosure from the lender. Disclosures are considered “received” three full business days after mailing.
*The borrower must be provided a copy of the appraisal a minimum of three business days before closing. The appraisal is considered “received” three business days after mailing.
* Business days for HERA timing purposes include Saturdays and exclude Sundays and Federal Holidays.
*The absolute minimum number of days to be able to close a transaction once HERA is implemented is 7 business days from initial TIL Disclosure.
*An APR increase of more than .125% from the initial TIL requires re-disclosure of the new and final APR via the TIL disclosure a minimum of 6 business days prior to the closing date.

Homes are moving here!

I don't know what the details are, but since teh end of April, home showings have been through the roof. A lot of contracts are signed and June and July should be bonzo for closings! A couple of thoughts -

-Ft Sam and unit moves are beginning this summer. BRAC was devastating to some areas, but we are seeing a wonderful increase in military presence here in the San Antonio area
-UTSA continues to attract students, which equates to faculty and staff, and all the associated business that supports education
-The Central Texas Medical Center continues to grow, adding professional and support staff
-The First Time Home Buyer Tax Credit - up to $8,000 for qualifying individuals and families is certainly getting young folks out to look. Many are seeing the benefits and working to obtain financing

Tha above, combined with more people just looking to relocate for work or retirement, has kept our real estate market in good condition. Now we are seeing a nice increase in home sales which should keep our market resilient for this year at least.

If we have a soft spot in our market, it is that lenders are being excessively cautious in approving loans. Even folks with excellent credit (above 750 FICO score), good income, and low debt ratios are having to supply a ridiculous amount of support to get a loan finalized and closed. What was ridiculously easy a couple of years ago has taken the pendulum swing to the other side and making good buyers work too hard.

But, we are glad to be in Texas! Had a great dinner with a bunch of active duty and retired Air Force Combat Controllers last night at On the Border - a great time! Support your troops and respect what they are doing to keep this country safe!

Interest Rates At Historic Lows

As interest rates hover in historically low levels, there are certain things happening that will start to slow down some of the refinancing and purchases.
For openers, the lenders are trying to slow down the flow so they can keep their costs low. Underwriting is reviewing packages and taking weeks to finalize, often with last minute requirements that have even caused loans to be disapproved at the last minute.
Another is the use of many legal, but sometimes questionable, fees. These can add hundreds to thousands of dollars to the cost of obtaining a loan. The banks need this money to offset the low interest rates. They are not making a lot of money on the low rates, so they are not waiving or reducing the fees they charge.
Even our highly regarded Texas Veteran Loan program is keeping their rates higher than usual, and have reduced the Veterans with disability discount to 0.5%. This is to slow down the number of loans and keep their program funded through the rest of the year.
So, we may be at the lowest cost of obtaining a loan and may see more fees, higher interest rates, and longer times for approval as the economy starts to "recover" and the stimulus packages kick in.
I'll let you know if I see things changing anytime soon.
Sorry about the spelling earlier, I missed spell check!

Interest Rates Moving Up

This just in from the Wall Street journal --

30-Year Mortgage Rates Rise Again Freddie Mac reports a more than 0.25-percentage point gain in the 30-year fixed mortgage rate to 6.63 percent during the week ended July 24 from the prior week, marking the highest level since it reached 6.68 percent last August. The 15-year fixed mortgage rate also increased, climbing to 6.18 percent from 5.78 percent. Meanwhile, the five-year hybrid adjustable mortgage rate rose to 6.16 percent from 5.80 percent; and the one-year ARM surged to 5.49 percent from 5.10 percent. Freddie Mac chief economist Frank Nothaft attributes the jump to "market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve will raise short-term rates this year." Source: Wall Street Journal (07/25/08)

We may not see any more increases like this, but the trend is in place. If you are considering buying a home, now is the time! As interest rates increase, the less house you can afford comfortably.

Things going on!

Wow! The economy is sinking and we are running out of options!



Sorry, that is another place, not here! In fact the home sales business is picking up and we continue to see growth in the area. Even though AT&T announced the move of 700 executive postions to Dallas later this year, the word is that only about 300 or so will actually move because they don't want to leave San Antonio. Impact on the housing market will be an incease of some higher end homes in the $400,000+ range. Since our average house sale is more like $150,000, this won't affect many of us.



What we do see as an impact is the ever slightly increasing interest rates. See our previous posts on this subject (MArch 3, 2008) and you can see where we are headed...higher interest rates and rising home prices. This week's rates are closer to 6.75% than we have seen in months. In March we were thinking 6% all summer, but with energy prices up and bonds taking a bruising, it has been anything but stable.



Take stock of your housing situation. If you don't need to sell, sit tight for a while as prices continue to rise with the reduction of inventory available. If you are looking to buy, get the house you want now as the inventory is reducing and interest rates are rising.

Keep a positive outlook, we are still in Texas!

Home Buyer Workshop 17 Jan 08

It's on the books! We are excited to host a Home Buyer Workshop on 17 Jan 08 at the Schertz Civic Center from 7-9 PM. Sign in will start at 6:30, and we would really appreciate an RSVP so we can plan refreshements accordingly. Just drop an email to info@tanrealty.com or call us at 210-392-4070 with the number of attendees.

Presenters will include:
United Title of Texas
Supreme Mortgage Lending
First American Home Warranty
A Nu Home 4 U Home Inspection Service
Edward Jones Investments
Allstate Insurance
And of course, Realty Executives!!

This is for new and seasoned home buyers as we will have the experts on hand to address the local housing market and answer your questions. In fact, if you have specific questions, email me and we'll provide and answer at the Workshop.

This is a fantastic opportunity for anyone interested in local real estate. from a personal home to investing, we will be able to discuss the entire process and what you need to know before you start.

We are looking forward to this and hope you will enjoy it as well. Please let everyone that might need this information know.

Home Buyers Workshop Planned

It's on! A Home Buyers Workshop designed for you!

We are putting together the final details, but if you, or anyone you know are planning on purchasing a home in 2008, put the evening of 22 January 2008 on your calendar. Location will be the new Schertz Civic Center off Schertz Parkway. We are finalizing a list of presenters that will provide information and answer your questions about all aspects of home buying in our LOCAL market.

Planned participants include: Realty Executives (us of course!), United Title of Texas, Supreme Lending, First American Home Warranty, Edward Jones Investments, A New Home 4 U Home Inspection Service, Allstate Insurance, and Alamo Westar Survey.

These specialists will be on hand to give a short presentation on their area of expertise and how it affects a buyer, as well as being available for Q&A.

So, if you need to know about new loan policies, what a home warranty covers in Texas, do the new flood maps affect insurance, can you use your IRA to purchase a home, or any other questions, plan to attend.

This is not just for first time buyers - anyone interested in purchasing a home should be here and this includes investors as well.

Please drop us an email if you will attend so we can plan on refreshments.