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Gabriel Libutti

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Fast FHA Closings, just in time to get your clients the $8,000 tax credit!

11-02-09
Gabriel Libutti
Home sales contracts rise for 8th straight month Real estate rally attributed to first-time homebuyer tax credit that expires at the end of November. NEW YORK (CNNMoney.com) -- The number of signed sales contracts to buy homes rose in September for the eighth straight month, according to a real estate industry report released Monday. The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was the index's highest level since December 2006, when it stood at 112.8. The leap was far better than expected. A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise. Analysts, including Lawrence Yun, NAR's chief economist, have traced much of the improvement to the government's first-time homebuyer tax credit program, which gives an up to $8,000 tax break to new homebuyers. It's estimated that between 200,000 and 400,000 additional sales will have been made because of the credit. "What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," said Yun. The credit lapses after Nov. 30, and the housing industry is bracing for a major turndown in sales if Congress fails to pass some kind of extension. "Clearly, buyers were eager to get business done before the credit's November expiration," said Mike Larson, a real estate analyst for Weiss Research. "So I wouldn't be surprised to see some give back in pending sales over the next month or two." Favorable long-term prospects Any fall-off should only be temporary, however, according to Yun. Market conditions are just so favorable for buyers right now that sales should rebound quickly should they suffer through a hangover following the tax credit demise. With home prices well off their highs and mortgage rates still extremely low, the cost of homeownership is well within the range for many Americans who are not homeowners today. There are, Yun estimates, about 3 million renters who are now financially well-qualified to buy a median-priced home. "As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers," he said. That will not translate into a new boom, however, according to Larson. "No explosion of pent-up demand will send markets to new heights," he said. "The economy is still not in fantastic shape." Housing markets certainly do not seem to be out of the woods, but this latest release added to a modest winning streak of positive recent reports. Prices appear to have stabilized, with the S&P/Case-Shiller Home Price index up four months in a row and completed sales of existing homes at their highest level in two years. Foreclosures, however, continue to plague many markets, adding to supplies on homes for sale, according to Yun. "An excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline." Increased pending sales are a forward-looking indicator since contract signings precede actual closings; they typically take place two to three months later. Although some contract signings fall through, a jump in signings in September usually means NAR statistics on December existing home sales will improve.
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96.5% ltv Construction Lending Nationwide with 620 Credit Score! Gabe Libutti at American Home Bank

10-29-09
Gabriel Libutti
Millions of homes to get smart meters Government announces $3.4 billion in grants to help pay for 18 million meters as part of stimulus plan. NEW YORK (CNNMoney.com) -- Some 18 million smart meters are set to make their way into American homes as part of the economic stimulus plan focusing on energy efficiency, Energy Department officials said Tuesday. The meters, which are designed to more effectively communicate with utilities and appliances, and help consumers manage their electricity more efficiently, are being distributed by utilities around the country with partial funding from the federal government that was allocated under the stimulus plan. The 18 million meters represent roughly 13% of all electricity meters nationwide. Ultimately, the administration hopes to distribute 40 million smart meters over the next few years. The smart meters are part of a wider government effort to upgrade the nation's aging utility grid. The government announced $3.4 billion in funding Tuesday to help move the country toward a so-called smart grid. Utilities are putting in another $4.7 billion in matching funds. According to the White House, these investments could reduce U.S. electricity use by 4% a year. 0:00 /1:37Energy Star label under scrutiny The money is part of nearly $100 billion in spending and tax cuts the government authorized under the stimulus plan for a variety of energy projects. Other projects announced Tuesday include the modernization of electric substations and transmission centers. All told, 100 projects were announced Tuesday in 49 states that are expected to create tens of thousand of jobs across the country. The White House billed it as the largest single energy grid modernization effort in the country's history. Experts have long said the country needs to update its electricity grid, much of which was built during the early part of last century, if it is to deliver power more efficiently and handle electricity generated from sources such as wind and solar. The funding announced Tuesday is just a fraction of what experts say is needed to build new transmission lines, computerize substations and meters, and build storage devices for a modern utility grid
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96.5% ltv Construction Lending Nationwide with 620 Credit Score!

10-28-09
Gabriel Libutti
Surprise drop in new home sales Sales of newly constructed homes fell 3.6% in September, after five months of gains, according to a government report. NEW YORK (CNNMoney.com) -- Sales of newly built homes fell unexpectedly in September after rising for five straight months, according to government figures released Wednesday. The Commerce Department said new home sales fell 3.6% to a seasonally-adjusted annual rate of 402,000 last month, from a downwardly revised rate of 417,000 in August. It was the first time new home sales declined since March. Economists surveyed by Briefing.com had expected September new home sales to rise to a rate of 440,000 units. "We're attributing most of the decline to the potential expiration of the new home-buyer tax credit," said Adam York, an economist at Wells Fargo. "It's getting harder to buy a house and no one wants to close after the credit expires," he added. In addition to relatively low prices and attractive mortgage rates, the housing market has been supported in recent months by a temporary government tax credit for first-time homebuyers. The tax break. The credit can be worth up to $8,000 for eligible buyers,but is set to expire at the end of November. Congress is expected to extend the credit, but the terms are still being debated. 0:00 /2:24'Beautiful' homes for under $20K Most economists believe that the drop in September's new home sales was driven primarily by the tax credit's timetable -- but not all of them agree. Mark Zandi, chief economist at Moody's Economy.com, contends that first-time homebuyers are more likely to buy an existing home than a new home, which suggests that the tax credit is less of an issue for new home sales. Zandi attributed the increase in new home sales over the past five months to low interest rates and more aggressive FHA lending. And he adds that these recent increases haven't been spectacular. "All we can say is the new home market is stabilized." Foreclosures still loom. Wednesday's report highlighted concerns about the long-term outlook for the housing market, which remains challenged by rising unemployment and a glut of foreclosed properties on the market. A separate report showed Wednesday that applications for home loans, considered a leading indicator of sales, fell for the third week in a row last week. The Commerce Department report showed the median sales price jumped to $204,800 in September from $195,200 the month before. The average sales price rose to $282,600. The price increase echoed an industry report released Tuesday that showed home prices in 20 major markets rose for the fourth month in a row during August. Meanwhile, the estimated number of new homes for sale at the end of last month fell to 251,000 units on a seasonally adjusted basis. That's down from 262,000 unsold homes last month and was the lowest level since November 1982. Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the drop in housing inventory means the market is moving towards a better balance of supply and demand. "But the tax credit story is the key element right now," he added. He said that the credit's looming expiration will probably mean that home sales will fall again in October and, depending upon where the legislation stands, in November as well. At the current sales pace, it would take 7.5 months to sell through existing inventory, according to the report. That's up from the previous month, when the there was about 7.3 months of inventory on the market.
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96.5% Construction to Perm-203 K Alternative from Gabriel Libutti and American Home Bank

10-28-09
Gabriel Libutti
Foreclosures: 'Worst three months of all time' Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter - a sign the plague is still spreading. NEW YORK (CNNMoney.com) -- Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday. "They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes. During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008. Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state -- the best record in the country. The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders. That deluge contributed significantly to the quarter's record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes. "REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties," James Saccacio, RealtyTrac's CEO, said in a statement. Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. Not only has the Obama administration's Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work. And in some low-price markets, lenders simply aren't following through on foreclosures, according to Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland. "They'll even set the date for the sheriff's sale, but they don't file the final papers," he said. "They hold it in abeyance and let the residents stay in the house." In ever more frequent cases, delinquent borrowers want out of the mortgage worse than the lenders. There are no firm statistics for it, but many industry watchers claim the percentage of REOs caused by borrowers voluntarily walking away from their homes is skyrocketing. A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When "negative equity" approaches 50%, 17% of households default, even when they can still afford their mortgage payments. No end in sight The foreclosure crisis may not diminish anytime soon. "The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers," Sharga said. "It's going to be a lingering problem." Plus, the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly. And because there are so many delinquent borrowers, Sharga predicts the banks will be slow to take back their properties and put the repossessed homes back on the market. "It's hard to envision [the banks] putting millions on properties up for sale and cratering prices," he said. "Recovery will be slow and gradual. I don't see home prices getting much better until 2013."
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Renovation Loans with a 620 Credit Score up to 96.5% LTV!

10-26-09
Gabriel Libutti
Pick the right pro at the right price To keep a lid on home-improvement costs, hire only the expertise you really need. (Money Magazine) -- For anything from a small upgrade to a major remodeling job, perhaps the most important decision you'll make is whom to hire. You'll seek out a top-notch worker with a stellar reputation, of course, but first you'll have to decide what kind of expert you're looking for. That choice can have a dramatic effect on the cost of your project. Whether you're wondering if you really need an architect to design your new den or debating whether a handyman can handle your wiring job, here's how to figure out which pro to call. Specialist or handyman? The difference: Electricians, plumbers, and other specialists have the know-how to tackle any project in their area of expertise, but they cost at least $75 to $100 an hour. A handyman doesn't have that depth of experience but has the advantage of breadth: He'll not only hang your ceiling fan but repaint the ceiling too. You'll typically pay just $25 to $50 an hour for an independent handyman. Franchises such as MrHandyman.com and HouseDoctors.com will charge you more -- $50 to $100 an hour -- but are likelier to insure and bond their crews. (Both handymen and specialists may tack on an extra fee for small jobs.) How to decide: For jobs that involve inside-the-wall changes to electricity, plumbing, or heating or cooling systems, go with a licensed specialist. General contractor or several tradesmen? The difference: A general contractor will handle a renovation, addition, or remodeling job from soup to nuts, bringing in whatever subcontractors he needs -- plumber, tiler, roofer, and so on. In exchange he'll mark up the subs' fees by 10% to 20%. Or you could hire those same contractors yourself and save thousands. How to decide: If you need only one or two subs -- perhaps a plumber and a granite guy for those new counters -- and you're a veteran home improver, go for it on your own. Otherwise, a GC will spare you the hassle of getting referrals and doing due diligence on a host of pros as well as the delays and cost overruns you'll encounter by juggling multiple tradesmen yourself. Architect or contractor? The difference: When a contractor designs a project, he looks for efficient, cost-effective ways to achieve your goals: A family room addition is likely to be a boxy appendage off the kitchen, for example. An architect is trained to design the new space around your family's lifestyle and to weave it seamlessly into the existing house. But his fees will also add at least 5% to 10% to your project cost -- and his design will probably cost quite a bit more to build than a general contractor's. How to decide: Bring in an architect for any project that involves a significant alteration to your floor plan or exterior or will entail spending more than 10% of your home's value. You'll stand a better chance of coming away with a design that adds charm and value to your house.
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