How the New Mortgage Rules will Impact You, the Buyer

How the New Mortgage Rules Impact You

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Imagine that you're playing a game where the rules constantly change, and everybody is always confused about them  (including the rule makers).  Welcome to the 2016 mortgage industry!  Here are three ways the new mortgage rules impact your business as a real estate professional.

#1 - TILA/RESPA Integrated Disclosures (TRID)

Closing delays are one of the many unintended consequenses of recent government regulation.  Since October, 2015, mortgage lenders are required to prepare a new "Closing Disclosure" and adhere to new timelines (see illustration below).  Any last-minute changes to your deal structure could cause delays of up to a week on purchase transactions, and up to two weeks on refinance transactions. Delays can be even longer if your transaction takes place anytime close to a federal holiday.

Here are five things you and your clients can do in order to avoid unecessary delays:

1. Write a longer timeline into your purchase agreement so that you don't have to amend the purchase agreement later on.
2. Make sure your purchase agreement is properly worded if you have seller concessions or seller-paid closing costs (last-minute changes will re-set the timelines back to the beginning).
3. Lock your interest rate for a longer period of time because rate lock extensions are likely to trigger new disclosures and re-set the timelines back to the beginning.
4. Schedule the inspection and the appraisal as early in the process as possible in order to give the buyer and seller enough time to make adjustements if necessary.
5. Turn in your paperwork ASAP so that unforeseen issues don’t cause more delays.

• Existing-Home Sales

  Latest News

  Existing-home sales rose strongly in                                                                                     September, propelled by first-time buyer                                                                                     sales, reaching a 34 percent share, a                                                                                       high not seen in over four years.

  • Read the full news release.
  • View supplemental market data (Excel: 40 KB)
  • September 2016 Existing Home Sales Statistics (PPT: 2.13 MB)

  The Existing-Home Sales data measures sales                                                                         and prices of existing single-family homes for the                                                                       nation overall, and gives breakdowns for the                                                                               West, Midwest, South, and Northeast regions                                                                            of the country. These figures include condos and co-ops,                                                                  in addition to single-family homes.

Keeping You Informed

New home sales rose to 512,000 units at a seasonally adjusted annual rate in February 2016, up 2.0% over January. That compares to an average sales pace of almost 395,000 units annually during the previous six years, and a rate of just over 900,000 units between 2000 and 2009.1   The median price of new homes sold in February was $301,400, a 2.6% gain over the median price in February 2015.1

Existing home sales dropped 7.1% in February to an annualized sales pace of 5.08 million units. That's below 2015's sales rate of 5.23 million units. By comparison, the annual sales rate averaged almost 5.6 million units during 2000-09, and just over 4.7 million units over the last six years.2   The median price of existing homes sold in February was $210,800, a 4.4% gain over the median price in February 2015.2

The Consumer Price Index dropped 0.2% in February, but the CPI less food and energy – known as the core CPI – rose 0.3% for the second consecutive month. That's the biggest two-month increase in the core CPI in almost ten years. Since February 2015, the CPI is up 1.0% while the core CPI is up 2.3%.3

The net worth of US households grew by 3.1% in 2015, a slowdown from the 6.0% gain posted over 2014.4   Owners' equity in real estate rose 10.2% in 2015, decelerating from 2014's 10.7% gain. As a percentage of real estate owned, owners' equity stands at 56.9%, the highest share since mid-2006. Its recessionary low of 37.1% came in early 2009.4   Industrial production dropped 0.5% in February. The index, which measures output at the nation's factories, mines, and electric and gas utilities, has increased in only two of the past 14 months.5   The average rate on 30-year fixed-rate mortgages in Freddie Mac's survey was 3.71% during the week ending March 24, down two basis points from the previous week. The February average of 3.66% was 21 basis points below January's 3.87% average. All rates quoted have fees and points averaging 0.5% to 0.6% of the loan amount.6 "New Residential Sales in February 2016", Census Bureau, March 23, 2016.www.census.gov/construction/nrs/pdf/newressales_201602.pdf "Existing-Home Sales Fizzle in February", National Association of Realtors®, March 21, 2016.www.realtor.org/news-releases/2016/03/existing-home-sales-fizzle-in-february. "Consumer Price Index - February 2016", Bureau of Labor Statistics, March 19, 2016.www.bls.gov/news.release/archives/cpi_03162016.pdf "Financial Accounts of the United States: Flow of Funds, Balance Sheets, and Integrated Macroeconomic Accounts", Release Z.1, Table B.101: Balance Sheet of Households and Nonprofit Organizations, Lines 41, 52 and 53. Federal Reserve Board of Governors. March 10, 2016. www.federalreserve.gov/releases/z1/current/z1r-5.pdf.  "Industrial Production and Capacity Utilization", Release G.17, Federal Reserve Board of Governors, March 16, 2016. www.federalreserve.gov/releases/g17/Current/g17.pdf. Freddie Mac Primary Mortgage Market Survey, Mar 24, 2016. www.freddiemac.com/pmms/ The Federal Reserve Bank of St Louis Economic Data system (FRED) was used to collect data on new home sales and prices, existing home sales and prices, CPI, household net worth and owners' equity, and industrial production.

Getting Your home Ready for an Open House

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​​Getting Your Home Ready to Hold an Open House?  Or to Put on the Market. Have you prepared your home for an open house? Do you know how to get their home ready? Here, we take a look at some essential open house tips—whether it’s winter or summer—that are sure to help your sellers make their home look the best it can. Tour Your Home. Critique your house: examine it inside and out, and smell for offensive odors. Ask a trusted friend to join you. Make note of any quick fixes to be made. Declutter and De-Personalize. To make rooms feel more spacious, remove excess and oversized furniture. Consider rearranging remaining furniture to visually expand rooms. Clean out and organize your closets, garage, cabinets and pantry. Also, remove or hide items like family photographs, knick-knacks and toiletries. Let potential buyers imagine the space as their own. Bring in More Light. The brighter your home is, the larger it will seem. Wash your windows and screens to let in more light. Repair or replace dingy, torn or sagging screens. Use higher wattage light bulbs to make rooms brighter, especially in basements. When you hold your open house, be sure all lights are on, and all curtains are open. Get Rid of Odors. Steam clean your carpeting and drapes to eliminate smoke and pet odors. Change your bed linens and towels regularly. Keep the windows open, and keep pets outside as much as possible. On the day of your open house, light a scented candle. You can also simmer apples, cloves and cinnamon on the stove an hour before prospective buyers arrive. Clean, Clean, Clean. A house that is extra clean makes a powerful first impression. Don't forget to look in places you might otherwise ignore: smudges on light-switch plates or dust on baseboards. And give extra attention to your kitchen and bathrooms, since these are the most important rooms to buyers. Expose Desirable Features. Show off your house's best qualities: beautiful hardwood floors, custom windows or an amazing view. Sell with Neutral Colors. Neutral colors like beige or cream help sell your house, even though they may not fit your aesthetic sensibilities. Paint to sell. Give the Exterior a Facelift. Boost curb appeal with clean gutters, mown lawn and swept walkway. Power wash siding, sidewalks, deck and driveway. Add potted plants – suitable to the season – to your entryway, deck or patio. Let us recommend the right plants for your project. Summer Open House TipsWhen preparing for a summertime open house, you'll want to go that extra mile with your home's exterior: Accent Your Entryway. Buy a new light fixture, install a new lockset and kickplate, and buy new house numbers. Keep Your Lawn Impeccable. This is no time for dandelions, brown patches or bare spots. Get your lawn looking its best. Also, add a fresh layer of mulch. Try our Mulch Calculator to see how much you'll need. Install a New Mailbox. If your mailbox is old and faded, take the time to replace it. Refresh Your Deck. Rejuvenate your deck furnishings, and add playful items like a bright umbrella or potted plants. Winter Open House TipsWith its inclement weather and shorter days, winter isn't the ideal time for house hunting. Create a warm, inviting atmosphere to sell during the more frigid months. Check the Heating System. Replace furnace filters, fill oil or propane tanks, clean registers and air ducts, check your home's ventilation, and arrange a chimney inspection. Improve Energy Efficiency. Caulk windows and pipes. Add weather stripping around doors, and insulate your water heater and attic. Consider using heavier drapes or insulated shades to block drafts. Winterize Your Home. Put away summer patio furnishings, grills and garden houses. Close your pool (if applicable), and shut off the outside water. Keep Up with the Weather. Clear snow, mud and puddles from all walkways and driveways. Warm Up Your Home. Schedule your open house for high-daylight hours. Set the temperature at a comfortable level. If you have a fireplace, light a fire. Add cinnamon sticks or cloves to the fire for a soothing aroma. Note: Never leave a burning fire unattended. Adding That Finishing TouchAfter making the necessary preparations for your open house, seal the deal with a few finishing touches. Outdoors. Add a wind chime, birdbath or doormat to make your outdoor space more enticing. Living Areas. Place fresh flowers in the living room and bedrooms, and softly play relaxing music during the open house. Kitchen/Dining Room. In the kitchen, put out a bowl of citrus fruit. Run a sliced fresh lemon through the garbage disposal before the open house for a clean scent. Set the dining table with your favorite tablecloth and best china and crystal. And leave bottled water for your potential buyers. Bed/Bath. Replace shower curtains and liners for a fresh look and that “new smell”. Put car wax on sinks and tubs to get a glossy sheen. There are many things that can make an open house successful. Don't worry, your hard work will be noticed. Remember, it pays to help buyers envision the house as their home.