Rebekah Littlefield

I am getting a little nervous about what is happening with the lending industry. It is getting increasingly difficult for buyers to get loans. The rules and standards change everyday! I have seen so many deals fall through this year! What happened to the validity of Pre-Approval?? I understand the importance of responsibility in the lending industry- that lack of responsibility is what helped to get us into this predicament in the first place, but now it seems that they have taken it to a whole new level. The banks were given all this money to keep them afloat... so what has happened to it? They don't seem to be willing to lend it to the people who are actually qualified! So frustrating. Along with all the extensions I've had to write this year- in comes the "back up" offer. Pending doesn't mean anything in this market! Makes me worried about what is in store for us next year.....

Buyers- if you are able to buy a house this year- DO IT! Stop hesitating, because it may be impossible for you next year.

I recently recieved this email from Gary Bracht with Western Mortgage in Ephrata, WA. It is compelling and interesting information..... read on....

HVCC CALL TO ACTION

To: All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From: Marc Savitt, President- National Association of Mortgage Brokers

After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, Director of FHFA (GSE Regulator) James Lockhart, and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.

In order for this “Call to Action” to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing everyday, until advised to stop by NAMB. This will NOT be a one day action!

We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC has created delays and additional costs to consumers. NAMB has categorized and compiled a report of the examples received, which was sent to FHFA Director James Lockhart. Please use your own examples in your conversations with legislators, regulators, or their staff. Also, please visit the NAMB HVCC Resource Center for additional information and documents on the HVCC.

Who will you be contacting?

NY Attorney General Andrew Cuomo’s Office: (212) 416-8000, Internet Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
Freddie Mac: (703) 903-2000, Internet Complaint
Senators, Representatives and Governors: Click here for contact information.
Also, please contact your local TV and Newspaper outlets.

Below are talking points and background information to assist in your conversations. Please remember we are all professionals and should conduct ourselves accordingly in any communication with the above parties. For the most successful and influential calls, it is important to concisely quantify how the HVCC is affecting your consumer and your business.

Talking Points:

1) NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.

2) Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.

3) AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.

4) HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.

5) No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

Background:

I. Lack of Portability
A. Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.
B. Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.
C. In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.

II. Lack of Quality
A. AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.
i. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.
B. Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.

III. Increased Cost of Appraisals
A. The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.
B. $150.00 - minimum increase per appraisal
$561.95 - average loan amount of $224,778 at .25% for extended lock period
$711.95 - average total increase per transaction
x 3,870,552* - 2007 HMDA report of residential real estate loans originated
$2,755,639,496 - $2.8BILLION in increased fees to consumers!

IV. Articles Illustrating the Effects of the HVCC
A. The Appraisal Bubble – The Center for Public Integrity
B. The Cure is Worse than the Disease – Appraisal Press
C. Appraisals Roil Real Estate Deals – The Wall Street Journal
i. Feel free to forward these articles and/or reference them in your conversations.

Your neighborhood has a big impact on your lifestyle. Follow these steps to find the perfect community to call home.

1.) Is it close to your favorite spots? Make a list of all the activities - movies, health club, church etc. - you engage in regularly and stores you visit frequently. See how far you would have to drive to travel from each neighborhood you're considering to engage in your most common activities.

2.) Check out the School District. This is especially important if you have children, but it also can affect re-sale value. The Department of Education in your town can probably provide information on test scores, class size, percent of students who attend college and special enrichment programs. Also, check out www. schoolmatters.com

3.) Find out if the neighborhood is safe. Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type - such as burglaries or armed robberies - and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area?

4.) Determine if the neighborhood is economically stable. Check with your local city economic development office to see if income and property values in the neighborhood are stable or rising. What is the percentage of homes to apartments? Apartments don't necessarily diminish value, but do mean a more transient population. Do you see vacant businesses or homes that have been for sale for months?

5.) See if you'll make money. Ask a local REALTOR or call the local REALTOR association to get information about price appreciation in the neighborhood. Although past performance is no guarantee of future results, this information may give you a sense of how good of an investment your home will be. A REALTOR or the government planning agency also may be able to tell you about planned developments or other changes in the neighborhood - like a new school or highway - that might affect value.

6.) Make personal observations. Once you've narrowed your focus to two or three neighborhoods, go there and walk around. Are the homes tidy and well maintained? Are streets quiet? How does it feel? Pick a warm day if you can and chat with people working or playing outside.

I hope this information helps your home buying process. Please feel free to contact me if you would like a Home Wish List worksheet!

5 COMMON FIRST TIME HOME BUYER MISTAKES!

1.) They don't ask enough questions of their lender and end up missing out on the deal.

2.) They don't act quickly enough to make a decision and someone else buys the house.

3.) They don't find the right agent who's willing to help them through the home buying process.

4.) They don't do enough to make their offer look appealing to the seller.

5.) They don't think about resale before they buy. The average first time buyer only stays in a home for four years.

I know I made a few (most) of these mistakes when I bought my first home, and I have also seen it with people who have bought a for the second time- I hope this helps any potential home buyer out there!

TAKE THE STRESS OUT OF BUYING A HOME!

1.) Find a real estate agent who you connect with. Home buying is not only s big financial commitment, but also an emotional one. It's critical that the REALTOR you choose is both highly skilled and a good fit with your personality.

2.) Remember, there's no "right" time to buy, just as there's no "perfect" time to sell. If you find a home now, don't try to second guess interest rates or the housing market by waiting longer- you risk losing out on the home of your dreams. The housing market usually doesn't change fast enough to make that much difference in price, and a good home won't stay long on the market.

3.) Don't ask for too many opinions. It's natural to want reassurance for such a big decision, but too many ideas from too many people will make it harder to make a decision. Focus on the wants and needs of your immediate family - the people who will be living in the home.

4.) Accept that no house is ever perfect. If it's in the right location, the yard may be a bit smaller than you hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities. And focus in on the the things that are most important to you you. Let the minor ones go.

5.) Don't try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to "win" by getting an extra low price or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take.

6.) Remember your home doesn't exist in a vacuum. Don't get so caught up in the physical aspects of the house itself - room size, kitchen, etc. - that you forget about important issues as noise level, location to amenities and other aspects that also have a big impact on your quality of life.

7.) Plan ahead. Don't wait until you've found a home and made an offer to get pre-approved for a mortgage, investigate home insurance, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8.) Factor in maintenance and repair costs in your post home buying budget. Even if you buy a new home, there will be costs. Don't leave yourself short and let your home deteriorate.

9.) Accept that a little buyer's remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But, it also yields big benefits. Don't lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.

10.) Choose a home first because you love it; then think about appreciation. While U.S homes have appreciated an average of 6.5% annually from 1972 - 2005, a home's most important role is to serve as a comfortable, safe place to live.