Fixed Mortgage Rates Hold Near Record Lows

In Freddie Mac's results of its Primary Mortgage Market Survey®, average fixed mortgage rates were down slightly and hovering just above their record lows as markets waited for the Federal Reserve's monetary policy announcement. The 30-year fixed-rate mortgage averaged 3.88 percent and has been below 4 percent all but one week in 2012. The 15-year fixed, a popular refinancing choice, averaged 3.12 percent.

30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.7 point for the week ending April 26, 2012, down from last week when it averaged 3.90 percent. Last year at this time, the 30-year FRM averaged 4.78 percent.

15-year FRM this week averaged 3.12 percent with an average 0.6 point, down from last week when it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 3.97 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week, with an average 0.6 point, up from last week when it averaged 2.78 percent. A year ago, the 5-year ARM averaged 3.51 percent.

1-year Treasury-indexed ARM averaged 2.74 percent this week with an average 0.6 point, down from last week when it averaged 2.81 percent. At this time last year, the 1-year ARM averaged 3.15 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Fixed mortgage rates held near record lows this week as the markets waited for the Federal Reserve's (Fed) April 25th monetary policy announcement following two days of deliberations. The Fed stated that it expects economic growth to remain moderate and then pick up gradually. In addition, it noted that labor market conditions have improved in recent months and it anticipates the unemployment rate will decline gradually.

"The housing market has also shown some improvement as well. The Federal Housing Finance Agency's purchase-only house price index rose at a monthly rate of 0.3 percent in February. Moreover, 12 out of 20 metropolitan areas experienced increases over the month, according to the S&P/Case-Shiller® 20-city indexes, led by a 2.1 percent gain in Phoenix. New home sales in March were stronger than the consensus market forecast and February's sales were revised upwards to the strongest pace in almost two years. However, the Fed's statement warned that despite some signs of improvement, the housing sector still remains depressed."


April 27, 2012, Published by Realty Times

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Which Housing Style Is Right For You?

Shopping for a home is an exciting experience but there are many things to consider, starting with the fundamental question: which housing style is right for you?

You might be thinking, I want to own my own home which translates in your mind to a single- or double- story house. However, your finances, where you live, affordability, and practicality may factor in and cause you to consider other options. So let’s explore some of them.

Single-Family Housing. When many people think of owning their own house, the single-family residence first comes to mind. This type of home is the most independent. The walls are typically not joined together with any other homes. The heating and plumbing systems are separate. And, while, the house may be in a planned community that has covenants, conditions, and restrictions (CC&Rs) regarding what you can do to your home on the outside, there is generally the most freedom with this type of home. Some of these homes have additional fees (Mello-Roos fee) to pay for schools in the area.

These residences are usually detached houses and have land surrounding them unless, it’s a zero-lot-line house. Then the house sits on or very close to the property line. These houses are packed into areas and may offer extra space inside but at the compromise for little land outside.

Row houses are often situated this way. However, while the single-family home can have a little different look, the row houses are generally identical and lined up side-by-side, thus the term: row houses. Sometimes there is a small backyard area behind the row house. The row houses also usually share a wall or two with the other houses. This also makes them more affordable than the detached, single-family house.

The Duplex. This type of house shares a roof and one wall but the other side is separate from other homes. You can also choose from triplexes and quadruplexes. Some buyers decide to go for this style of housing because they can live in one of the units and rent out the others to help pay for their mortgage. This allows them to save to and, later, if they choose, to purchase another home and rent out all of the units.

Townhouse. This style of house shares a wall and common areas such as parking lots, and walkways.

Condominiums. These units often look a lot like apartments. In fact, some apartments have been part of a condominium conversion. The individual unit is owned by a homeowner. Often the homeowner purchases the unit and rents it out. Homeowners have an ownership interest in the common elements which can include halls, stairways, elevators, parking lots, open areas, and other amenities.

As with townhouses and even single-family homes that are in planned communities, there is a fee for the care of the common areas.

The Microhouse. They may be small as the name states but they can be plenty big especially for those who are living alone or traveling frequently and simply want an easy-to-care-for home.

These micro or mini houses can be just a few hundred square feet to a thousand. Often they are vertically built and they have more living space by the use of lofts and smaller- than-usual furniture and appliances. Some have unique features such as a deck on the roof.

So whether you’re shopping for a single-family, detached home or a minihouse, having a basic understanding about what you can expect with each housing style is an optimal way to begin your search. Then let your experienced real estate agent guide you to the suitable options that can best meet your specific needs.


Written by Phoebe Chongchua
April 26, 2012

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Euro Zone Troubles Continue to Help Low Mortgage Rates Remain Firm

It was a mixed week for investors who dealt with corporate earnings here in the U.S. and more disappointing news coming from Europe. Many corporate earnings were better than expected and had investors optimistic, as least for a little while. Euro zone troubles are continuing to help low mortgage rates remain firm as more countries in Europe are having difficulty with austerity plans. Freerateupdate.com's survey of wholesale and direct lenders shows that all mortgage rates were unchanged over the week even after stocks rose for several days on earning's reports.

Current 30 year fixed mortgage rates are at 3.750%, 15 year fixed mortgage rates are at 3.000% and 5/1 adjustable mortgage rates are at 2.375%. For these low mortgage rates, which are available with 0.7 to 1% origination fee, borrowers must have a history of good credit. According to the U.S. Census Bureau and the Department of Housing and Urban Development, Housing Starts for the month of March dropped 5.8 percent from February, but Building Permits increased 4.5 percent and are at the highest level since September, 2008. Existing Home Sales were down in March 2.6 percent lower than February according to the National Association of Realtors.

On the positive side, this number was still 5.2 percent higher than a year ago. The Refinance Index rose by 13.5 percent for the week ending April 13th according to the Mortgage Banker's Association. Most of these refinances, 32 percent, were for the Harp 2.0 refinance program which is turning out to be probably the most successful program introduced so far. With Harp 2.0, many borrowers who are underwater can refinance without the need of an appraisal and very little documentation. Since this program has become very competitive with lenders, borrowers are urged to compare several mortgage rates that are available to them in their area. Doing this online provides borrowers and easy and efficient way to do this at their convenience any time day or night.

Current FHA 30 year fixed mortgage rates are at 3.375%, FHA 15 year fixed mortgage rates are at 2.875% and FHA 5/1 adjustable mortgage rates are at 2.875%. The increase in the FHA mortgage upfront and annual mortgage insurance premiums may be having some impact on home purchases, at least for awhile. The effects of these increases usually last for just a short time until consumers are used to the changes. Still, having lower down payment requirements than conforming mortgages, first time home buyers will continue to use FHA mortgages for financing. Even though the upfront mortgage insurance premium and other FHA fees make FHA closing costs higher than conforming mortgages, FHA allows these costs to be added to the loan amount in most circumstances. Coming July, the FHA streamine refinance will be available for existing FHA borrowers with reduced upfront and annual premiums which will, undoubtedly, bring another wave of refinances.

Jumbo mortgage rates all remained the same this week. Current jumbo 30 year fixed mortgage rates are at 4.250%, jumbo 15 year fixed mortgage rates are at 3.375% and jumbo 5/1 adjustable mortgage rates are at 2.500%. These are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee for borrowers who have excellent credit and qualifications. Jumbo mortgages are needed for financing above the conforming and FHA loan limits and, since FHA increased the mortgage premiums, more borrowers who meet the qualifications will be looking for regular jumbo mortgages. Full documentation for employment, income and assets is required as lenders are very careful with approvals for these loans because they are not government insured or sold to Fannie Mae or Freddie Mac.

MBS prices (mortgage backed securities) did not move too much this week. Mortgage rates are affected by MBS prices but move in the opposite direction. Mixed reports came out this week with The Philly Fed Index falling and the Index of Leading Indicators rising. IBM and Intel earnings were not as impressive as what investors expected. Stocks increased for several days, but Euro zone problems are still driving markets. German business confidence rose in April while Spanish bond yields have been both up and down over the week. Further issues include austerity plans in Holland which collapsed. In France, the Presidential election is causing a stir with the French opposition candidate who is not an austerity supporter, Francois Hollande, moving to the second round. In China, manufacturing activity continued to contract in April. With a global economy, investors will continue to watch these developments closely.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.


Written by Ed Ferrara
April 25, 2012

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Nevada gaming win sees big gain in February — expect at North Tahoe

CARSON CITY, Nev. — Welcome back, Joe Six Pack.

Resorts across the state are hailing February's gaming numbers as growing evidence that the average tour ist is returning to Ne vada casinos.

In both December and February, the total gaming “win” — the casinos' take from gaming, excluding food, drinks, lodgings or other revenue — increased despite decreases in baccarat.

Gaming Control Board analyst Mike Lawton said that hasn't happened since May 2007.

The total win of $932.2 million was up 5.7 percent despite the fact that the game and table win (which excludes slots) was down nearly 1 percent compared with a year ago.

Table games brought in $360.6 million for resorts statewide.

Slot win totaled $571.5 million, 10.3 percent higher than the previous year and the largest percentage increase since September 2007.

Carson Valley casinos reported a 3.5 percent increase to $7.86 million. But it was an easy comparison, since win was down 2.9 percent in February 2011.

For the seven months of the fiscal year to date, that still leaves Carson, which includes portions of Doug las County, down 1.2 percent.

“The core customer really came through heavy this month,” Lawton said.

For much of the past two years, monthly casino win has depended largely on the high rollers.

February also was the fifth straight month of year-over-year increases — the first time that's happened since 2006. That increase came despite the fact that Chinese New Year was in January this year. That event — a major draw, particularly for high rollers — was in February a year ago.

Every reporting area in the state except North Lake Tahoe and parts of Elko and Laughlin counties was up in February.

Baccarat was down 14.3 percent to $408 million as both the play and the win percentage fell.

Minus baccarat, total statewide win would have been up 10.4 percent over last year.

North Shore casinos at Tahoe suffered a 7.5 percent decrease after a 15.5 percent decrease a year ago. The major culprit was the blackjack tables, which saw a $242,000 decrease in win — nearly all of the area's $249,000 decrease. That dragged game and table win down almost 40 percent.

South Shore casinos at Tahoe had a banner month. Total win of $15.1 million is 10.25 percent above last February. That is the third consecutive month of increases at Stateline and puts those casinos 6.44 percent ahead of where they were at this point last fiscal year. Both slot win and game and table win were up more than 10 percent. Slot play was up nearly 14 percent.

The amount wagered on games was actually down 15.5 percent, but the hold percentage — what the casinos kept — was up from 13 percent a year ago to 17.2 percent this February.

Washoe County casinos as a whole did very well, posting an 8.1 percent increase to $60.3 million.

Churchill County casinos, like South Shore, had an excellent month. Total win increased 15 percent to $1.97 million. Blackjack win jumped 110 percent, but that only accounts for $34,000 or so of the total. Total slot win was $1.89 million, a 14.5 percent increase.

The Las Vegas Strip was up just 3.3 percent to $530.7 million. But with the local markets in Clark County posting 12.4 percent gain overall, the county finished February 5.55 percent up.

Area February Win Percentage Change

Statewide $932.27 million 5.7%

Carson Valley $7.86 million 3.51%

South Shore $15.1 million 10.25%

North Shore $1.62 million -7.49%

Washoe County $60.26 million 8.16%

Reno $43.97 million 8.18%

Clark County $812.1 million 5.55%

Las Vegas Strip $530.69 million 3.31%

Published by North Lake Tahoe Bonanza

Written By Geoff Dornan
Nevada Appeal

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Real Estate Outlook: Vacation Sales Surge

According to the National Association of Realtors' 2012 Investment and Vacation Home Buyers Survey, there was a surge in sales of both investment in vacation homes in 2011.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. "During the past year investors have been swooping into the market to take advantage of bargain home prices," he said. "Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property."

Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market.

Increased investor purchases are partly responsible for the large percentage of all-cash purchases seen in the last year. They make up around one-third of all purchases. Forty-nine percent of investors paid cash in 2011.

"Clearly we're looking at investors with financial resources who see real estate as a good investment and who aren't hesitant to use cash," Yun said. Of the buyers who didn't use all cash they paid a hefty average 27 percent downpayment.

As opposed to investment purchases, which were made out of the desire for rental income, vacation homes were driven by lifestyle factors and were purchased by households making an average of $88,000 a year.

What portion of the market are these vacation sales? They accounted for 11 percent of all sales in the market.

Overall mortgage applications increased 4.8 percent from last week, according to the Mortgage Bankers Association (MBA). The refinance share of the market decreased again to 71.2 percent. Just a few months back it was over 80 percent.

"Applications to buy a home picked up last week, and are running more than two percent above the level reported at this time last year. Home purchase applications for conventional loans are now about 10 percent above last year's level," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Applications for government loans increased by more than 10 percent over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April."


Written by Carla Hill
April 9, 2012

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It's Buying Time Again, Big Time

If you've got the income. If you've got plenty of tenure on the job. If your credit is solid. If you can otherwise past muster at the mortgage loan desk. If it's cheaper for you to buy than it is to rent.

Yes, there are lots of "ifs," but it's one of the best times in America to buy a home. And it won't last forever.

To wit

• Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 34 percent of February sales, according to the National Association of Realtors (NAR). The bargain basement is open for business.

• Investors know a party when they see one. They snatched up 64.5 percent more homes in 2011 than in 2010 and now account for nearly one in every four homes sold, NAR reported.

• The second home market is back with a vengeance. Both investors and playhouse buyers are jumping on this bandwagon. They pushed vacation/second home sales up 7.0 percent in 2011.

• Meanwhile, owner-occupied purchases fell 15.5 percent last year.

Numbers talk

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, which means you may have already missed rock-bottom in this sector.

The median sales prices for vacation properties was $121,300 in 2011, down 19 percent from 2010, which means you may still have a shot at the basement here.

Likewise, NAR reported the median price of all single-family homes dropped 4 percent from $170,600 to $163,500 in the fourth quarter 2010 to 2011 and, during the same period, condo prices fell almost 2 percent $163,500 to $160,800.

Housing market forecasts for a recovery remain mixed, but it's about when, not if. If this isn't the Year of the Dragon for the housing market, it could begin to breathe fire next year.

But consider many of those forecasts are based on lagging information. One study by John Burns Consulting says many are lagging by a full quarter and prices have been rising in many markets for a full quarter.

And then there are those record low interest rates.

Don't get behind the curve and wait until a line forms and multiple offers are the norm, rather than the exception.

"Mortgage rates are near record lows and home prices may be within reach of many consumers who want to buy in today's market," said NeighborWorks America Director of Homeownership and Lending Marietta Rodriguez.

"But there are more things to consider than low mortgage rates and home prices when your plan is to be a successful long-term homeowner," Rodriguez added.

NeighborWorks' advice

• Be mortgage ready. If you haven't already, check your credit reports from the only federally-sanctioned source of free reports, AnnualCreditReport.com, to make sure your credit is mortgage worthy. Don't get taken by sound-alike websites that offer you "free" credit reports that are only "free" after you buy a credit monitoring service.

Looking for a mortgage with weak credit could result in a higher than anticipated mortgage cost or no mortgage at all. Work with a homeownership advisor at aNeighborWorks HomeOwnership Center or other NeighborWorks organization to start the homeownership process.

• Know all your costs. More than just a mortgage payment, homeownership comes with insurance, tax, utility, maintenance and transportation costs, among others. Include them in your budget to determine what is truly affordable.

• Know your mortgage. Fixed-rate mortgages (FRMs) offer payment certainty, while adjustable rate mortgages (ARMs) frequently provide lower initial monthly payments, but those low rates could rise considerably over time. Work with a trained homeownership advisor to help get the right mortgage loan.

• Hire good help. Get a licensed real estate agent who knows the market. It's easy to go digital and browse for housing. Actually going through the process and closing on a home without professional assistance is something else. Ask anyFSBO (for sale by owner).

• Take your time. There may be some pressure to get in the market at today's affordable prices and low interest rates, but if you move too quickly that could be a mistake. Take the time to obtain a home inspection, learn the neighborhood, investigate the school district and buy only what you can truly afford, not a home based on the largest loan the lender will lend.


Written by Broderick Perkins
April 12, 2012

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What's happening in our community

INCLINE VILLAGE, Nev. — Sure, now the snow decides to come to Incline — well forget it for this season. We are over the snow thing and have moved into beach days. Don't get all worried about Friday the 13th tomorrow — with the predicted snow just stay inside and away from black cats.

Monday, April 16 features two unpleasant events. Yes, taxes are due on April 15, but since it is a Sunday you can still file on Monday. And starting Monday, dogs are no longer allowed at Ski Beach. Just one more important reminder about dogs. It is the responsibility of each owner to clean up the doggy do-do; just putting it in a plastic bag and leaving it behind for someone else to throw away is really disgusting. Please be responsible pet owners.

Be sure to go see Twain on Taxes at 7 p.m. Saturday, April 21 at the Toccata Performing Arts Theater in the Village Center. Hear Mark Twain (McAvoy Layne) divulge humorous differences between the taxidermist and the tax collector. Tax collectors, beware! For information and to purchase tickets go to www.toccatatahoe.com.

Star Follies tickets are now on sale at the Potlatch. Be sure to attend this annual fundraiser for our schools. Star Follies is on April 27 and 28 at the Cal Neva.

Another event to attend is the Tahoe Family Solutions annual campaign dinner on Thursday, May 3 at Big Water Grille. Call TFS at 775-298-0004 for information. Limited seating is available so make reservations early.

Unfortunately the bowling trophy will not be at Incline Bowl. Our team gave it a valiant effort though and definitely had fun. Thanks bowlers!

Happy anniversary to Jim Glazier and Millie Szerman on April 15.

Celebrating birthdays this week: Mary Patterson on April 12; Gerry Eick on April 13; John Paganelli on April 14; Julius Mastro, Sandford Neville and Cyndi Shuey on April 15; Justin Kaamasee on April 16, Allen Ferris on April 17; Aga Dabrowska on April 18. Also, a special shout-out to the extremely hard-working Pat Greenlaw, officer manager and circulation director for the Bonanza and Sierra Sun, whose birthday is April 12.

The best deal or steal in the village is to attend the Empty Bowls event on Thursday, April 19. From 5:30-7:30 p.m. at Incline Middle School in the Forum. For only $10 pick out a hand made ceramic bowl created by an art student and enjoy a bowl of soup. Plus proceeds from this will help our local food shelf, Project MANA.

Published by the North Lake Tahoe Bonanza

By Jean Eick
Special to the Bonanza

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15-Year Fixed-Rate Mortgage Hits New All-Time Record Low

In Freddie Mac's results of its Primary Mortgage Market Survey®, average fixed mortgage rates declined for the third consecutive week on the heels of a weaker than expected employment report. The 30-year fixed averaged just above its record low while the 15-year fixed averaged a new all-time record low of 3.11 percent breaking its previous low of 3.13 percent on March 8, 2012.

30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.7 point for the week ending April 12, 2012, down from last week when it averaged 3.98 percent. Last year at this time, the 30-year FRM averaged 4.91 percent.

15-year FRM this week averaged 3.11 percent with an average 0.7 point, down from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.78 percent.

1-year Treasury-indexed ARM averaged 2.80 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.25 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac: "Fixed mortgage rates eased for the third consecutive week following long-term Treasury bond yields lower after a weaker than expected employment report for March. Although the unemployment rate fell to the lowest reading since January 2009, the overall economy added just 120,000 new jobs in March, nearly half that of the market consensus forecast. On a more positive note, the Federal Reserve reported hiring was steady, or showed a modest increase, across many of its Districts in its April 11th Beige Book of regional economic conditions."


April 13, 2012, Published by Realty Times

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Saving for a Home

With home affordability at the highest rate seen in decades, now is prime time to make a purchase.

Many renters are wanting to turn over a new leaf by investing in a starter home. Current homeowners are wanting to take advantage of low prices and buy the home of their dreams.

The key to buying in today's market is having the funds and financial stability needed. How can you go about saving to buy a home?

Financial wiz Suze Orman tells her readers and viewers all the time about the benefits of homeownership, but also the importance of being financially ready for this move. She writes, "Never buy a home or piece of real estate if you do not have at least 10% to 20% to put down. While buying a home is a great investment, if you do not have at least 10% to 20% of the purchase price to put down, then you can't afford the home and are buying before you have demonstrated the ability to save, which is a bad idea in the current market."

How do you get to that point? The first and most important step is to commit to the goal of homeownership. This requires a change in habits. Many households today spend every penny that they make each month. Instead of saving 10, 20, or 30 percent of their monthly income like they should, they strategically make minimum payments. Still others spend further beyond their means and slip further into debt with each purchase.

Both of these habits are incredibly risky in an economy that sees a near 9 percent unemployment rate and slowed growth in most cities. In order to change old habits you must replace them with new habits.

Start by working out a budget. It can be very sobering to see the real numbers on your spending. Keep track of your spending for a month. See how much you are truly spending on dining out, entertainment, household spending, clothes, and all those little extras that add up. This goes double for cash purchases. Be sure to keep every single receipt.

Now that you have the facts, it's time to come up with a new budget. Set aside money for all of the necessities first (rent, mortgage, car payment, food, medical, etc).

Cut out the unnecessary items. Do you have to have cable? Perhaps you can change over to a smaller package that costs less each month. Do you need to go out to dinner multiple times a week? Instead choose to cook at home as a family.

Now that you've cut out the unnecessary and refocused your spending (or not spending) towards buying a home, it's time to funnel those extra funds into a savings account. Some people new to the savings game find it easiest to set up an automatic savings transfer each month that transfers a set amount. This keeps you obligated to your goal.

You'll have some wants that will be part of this budget. Some people like to dine out, shop for clothes, see movies, or go to concerts. This is fine if you can afford it, but in a real down and dirty savings game you might want to consider alternatives.

Rent movies instead of taking the whole family out for new releases. Play staycations in your own city instead of paying traveling and hotel costs. Finally, pack that daily lunch instead of dining out.

When you go shopping, including the grocery store, always go armed with a list. This will help reduce impulse shopping. Only buy items that are truly needed, not that simply catch your eye. Give bigger purchases some time and thought. Do you need that new TV? Wait a week or two and do comparison shopping and decide on what you really can afford.

Ultimately, learning to save is about learning to follow your own instincts. Our gut tells us when we're making an impulsive buy or spending more than we should. It tells us when we could easily bring lunch from home instead of going out to eat. It just takes listening.

Published by Realty Times 4/11/12

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Why Own My Home?

A soft real estate market that is ripe with all the conditions that should entice people to purchase a home still has some renters asking, "Why own my own home?"

Low interest rates, lower home prices and an improving job market still have some buyers sitting on the fence fearful of an uncertain real estate market. Real estate agents and even sellers are finding that prospective buyers (current renters) may need a little more "emotional" attention in these market conditions. They may need a little more explanation to ensure that they understand the benefits of purchasing your home rather than renting another.

While deciding to own a home or rent one is very personal, many tend to let fear of the unknown be the driving force in making their decision and that can later create an unhappy decision.

Here are five top reasons to at least consider owning your own home.

No more landlords: This may be a highly influential factor depending on a potential buyer's experiences. Many renters have poured a ton of money into a home that they're living in to keep it at the standard of living they enjoy, only to find that their landlord is soon planning to sell the home. Their hard-earned cash and money invested into their rented home will then only benefit the seller.

Making a home your style: This is much more difficult to do in a rental. Yes, as I just mentioned, you can make some modifications, but many things that can be done to a home you own can't be done to one you're renting. Taking into consideration Homeowner's Associations or planned community development restrictions, owning still provides more control and flexibility over renting.

Weighing the costs of homeownership: Of course, with homeownership you won't be calling the landlord to come fix your toilet or dishwasher. So, having a financial reserve is important to carry you through the months when you run into unexpected troubles. Websites such as GinnieMae.gov offer price charts that help you compare how much you'll save by buying or renting. It's a helpful tool that allows you to analyze factors such as how much tax savings you're likely to receive, how much possibly equity you'll gain, and how much you're rent may increase.

Long-term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said, "For people with long-term plans, the rent vs. buy equation is tilting heavily toward buying because housing affordability is at record highs dating back to 1970," he explains. "Homes are undervalued in many areas—selling for less than the cost of replacement construction—and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation."

Low interest rates and affordable homes will not last forever: If you're not ready to buy or simply can't afford to own a home, even the historically low interest rates and exceedingly affordable, home prices might not move you to take the leap into homeownership. However, understanding that these conditions won't last forever is important. Sometimes when conditions persist, we tend to think they'll always be this way.

Distressed sales will begin falling in 2013 and that would then cause home prices to creep upward, predicts Moody's Analytics. With little activity on the homebuilding front, and still a heavy supply, it's not expected to increase much more. Also, the number of new households each year is rising, which is expected to help alleviate the oversupply in the coming years.


Written by Phoebe Chongchua
Published by Realty Times

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Banks Upbeat About Mortgage Performance, Looser Credit Looms

Mortgage lenders aren't rolling out the red carpet on home loans just yet, but with fewer delinquencies and defaults, there's optimism looser credit for home loans has become a topic of board room chatter.

FICO's first quarter survey of bank risk professionals found sentiments about loan repayment and credit availability more upbeat than in the last quarter.

The survey, conducted for FICO by the Professional Risk Managers' International Association (PRMIA), found fewer lenders expecting a rise in delinquencies on home loans, as well as car loans and small business loans, than at any time since FICO launched its survey in early 2010. The survey also examined sentiments on student loans and credit cards.

"As unemployment falls, even modestly, and four years of de-leveraging begin to pay dividends, bankers are allowing themselves to feel some optimism," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. FICO is a leader in credit scoring systems.

The survey found the number of respondents expecting mortgage delinquencies to rise during the next six months was 12 percentage points lower than last quarter – dropping from 47 to 35 percent. Similarly, only 33.1 percent expect increases in home equity line delinquencies, compared to 44.3 percent last quarter. The overall trend in both categories has been trending more optimistic for the past eight quarters, FICO reported. Viewed another way, the number of respondents who believe mortgage and home equity line delinquencies will decrease hit an all time high, 26 percent and 23.1 percent respectively.

Optimistic reports

Another recent survey indicates lenders' expectations are on track. Home loan performance is already improving.

Lender Processing Service's (LPS) Mortgage Monitor report for February revealed the mortgage delinquency rate was down 5 percent month-over-month and 14 percent since last year. The 90-plus delinquency rate saw a monthly and yearly decline at 1.8 and 8 percent, respectively. LPS also found, while foreclosure inventories are still high, foreclosure starts were down 15.2 percent since January and 8.4 percent since February last year.

Lenders do, however, expect to see more strategic defaults, as consumers throw up their hands and walk away from their mortgage, even if they can afford it.

FICO found that 45.5 percent of lenders believe they will see an increase in strategic defaults in 2012 over 2011. Only 35.5 percent believe fewer homeowners will walk away, 19.2 percent of lenders were undecided on the issue.

Many homeowners are actually driving away from their homes.

Nearly half (49.2 percent) of lenders in the FICO study believe that the current generation of homeowners no longer considers their mortgages to be their most important credit obligation. Indeed, TransUnion recently found, among credit delinquent consumers, 39.1 were delinquent on a mortgage while current on their auto loans and credit cards. Far fewer were delinquent on credit cards (17.3 percent) or auto loans (9.5 percent) while current on their mortgages.

Lenders remain tight fisted

Even with refinance mortgage rates at record lows, some of that walk-away or drive-away behavior stems from the inability to draw equity, refinance the mortgage or obtain some kind of home loan workout.

Lenders aren't completely sold on the idea that a housing recovery is afoot. Mortgage credit remains too tight. In the FICO survey, the majority, 56 percent, believe the credit supply will not meet demand for residential mortgages over the next six months. However, the other 44 percent said the credit supply will either match or exceed mortgage demand.

"As lending risk - both perceived and real - declines, the natural reaction by lenders is to loosen the purse strings and extend more credit. This should be welcome news to consumers and businesses alike, because increased access to credit is a key driver of economic growth," Jennings said.

Mortgages could use some help with growth. LPS said new mortgage originations in January to February fell hard, dropping 16.9 percent, the year-to-year drop in mortgage starts was identical, down 16.9 percent.

There's hope.

In the FICO survey of lenders, a majority, 53.1 percent, believe that the housing market will be stronger at the end of the year than it is now.

"Of course, we're not out of the woods. Foreclosures continue to put pressure on home prices, and jobs are coming back slowly. But we seem to be headed in the right direction," said Jennings.


Written by Broderick Perkins
April 6, 2012

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Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

With IVGID, it must be in the water

INCLINE VILLAGE, Nev. — The Incline Village General Improvement District was recently awarded “Best Tasting Water 2012” by the Nevada Rural Water Association at the association's annual conference, which took place March 19-23 in Reno.

IVGID's drinking water will be entered in the National Rural Water Association's “Best Tasting Water Competition” later this year, according to a press release.

The best tasting water is determined by a panel of judges who taste each sample and rate its clarity, bouquet and purity. IVGID beat out 8 opponents in its bid for best tasting water.

Sourced directly from Lake Tahoe, IVGID's water exemplifies the outstanding drinking water provided by IVGID and other members of the Tahoe Water Suppliers Association, who encourage residents and visitors to “Drink Tahoe Tap!”

According to the press release, the association represents rural water agencies throughout Nevada providing on-site technical assistance and specialized training for rural water and wastewater systems. Each year, it hosts an annual conference addressing current water and wastewater issues and recognizing agencies and people in the industry.

The Nevada Rural Water Association, an affiliate of the National Rural Water Association, is a nonprofit membership organization that provides water, wastewater and solid waste training and technical assistance programs statewide; an aggressive training calendar that provides classroom instruction with practical application, and valuable networking assistance with other systems and vendors.

Published by Staff Reports

North Lake Tahoe Bonanza

April 3, 2012

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Call Alvin's Team Today! 877-651-7810
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Home Builders Offer Housing Finance Reform

The National Association of Home Builders (NAHB) isn't waiting for politicos in Washington D.C. to revamp the federal government's housing finance system.

It has its own idea for transitioning Fannie Mae and Freddie Mac to a new mortgage securitization system for single-family and multifamily conventional mortgages.

The aim is to keep the tap open on affordable housing credit.

NAHB Chairman Barry Rutenberg, a home builder from Gainesville, FL says that means a system of private, federal and state sources of housing capital to generate affordable fixed-rate mortgages, a menu of mortgage products for both single-family and multifamily housing, prudent underwriting standards and adequate oversight and regulation.

NAHB says during a phase-in period Fannie Mae and Freddie Mac would continue to operate but be phased out by private housing finance entities (HFEs) chartered to purchase single-family and multifamily mortgages from loan originators and package the loans into securities for sale to investors worldwide.

NAHB believes the 12 regional Federal Home Loan Banks could serve as HFE and the federal government would guarantee well-packaged, low-risk securities, rather than the mortgages.

Federal conventional mortgage support would consist of a privately funded insurance fund where the government would guarantee its solvency in a manner similar to the Federal Deposit Insurance Corporation's backing of the fund that insures savings deposits.

Under this system, mortgage originators would pay premiums to capitalize the insurance fund, which would cover losses and ensure full payment to investors. The federal government would be required to pay investors only if the insurance fund was depleted.

"The intent is for the government to be in a secondary position and to be the insurer of last resort in order to reduce the risk to taxpayers," said Rutenberg.

Other provisions in the NAHB housing finance plan include:

• NAHB believes reforms are needed in the system for rating mortgage-backed securities and is supporting the development of new securities ratings agencies that would use criteria developed by securities investors to assure objective evaluations and avoid conflicts of interest.

• The housing finance support roles of federal agencies, including Department of Housing and Urban Development, Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Government National Mortgage Association (Ginnie Mae) would be preserved.

• State and local housing finance agencies (HFAs), as a source of housing funds, should have a more prominent housing finance role through the development of original programs for new homes and multifamily rental units involving partnering with federal and private providers of housing capital.

• Federal Home Loan Banks (FHLBanks) should continue their current activities to serve as an ongoing liquidity source for institutions providing housing credit. FHLBanks' mortgage purchase programs should be enhanced by allowing the banks to move beyond portfolio purchases to securitization.

• Continue and complete steps to close the gaps in standards and oversight that allowed and facilitated the improper and illegal activities in financial and mortgage markets.


Written by Broderick Perkins
April 2, 2012

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Call Alvin's Team Today! 877-651-7810
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