Heather Morris Realtor Expert for Cedar Rapids, Marion, Hiawatha & Robins

          Two new federal lending regulations effective July 30, 2009 will tighten the belts on banks, brokers, and credit unions. In an attempt to protect home buyers from predatory lending practices, the HERA and HOEPA laws were passed.  HERA, the Housing and Economic Recovery Act and HOEPA, the Home Ownership and Equity Protection Act will provide more information to home buyers prior to signing a mortgage.

 

          When interviewing lenders for a mortgage, have them provide a GFE, Good Faith Estimate and a TIL, Truth in Lending Disclosure.  The Good Faith breaks down the out of pocket cost and monthly payment for the home.  The Truth in Lending Disclosure provides the actual cost of borrowing the money over the term.  The Final Truth in Lending Disclosure and costs must be given to home buyers 4 business days before closing or sooner.  The APR, annual percentage rate will now requires the lender to disclose their fees and all third party costs placed on the closing statement.

 

          The appraisal process has also been modified to protect you.  The lender you choose will not have knowledge to who will be selected to verify the value of your house purchase.  The appraiser will review the last six months of similar closed properties to establish value.  Any appraisal required repairs must be negotiated between buyer and seller, work completed, and re-inspected prior to closing. 

 

          The new lending regulations are designed to help you avoid surprises at the closing table.  Comparing lenders payment options with the Good Faith Estimate, determining the true cost of money with the Truth in Lending Disclosure, and tightening the appraisal process to determine a more accurate value, and providing the final numbers before closing all make you a smart home buyer.  The state of Iowa is a leader in consumer protection.  Originating your new mortgage in Iowa through a local lender you trust is another smart buyer decision. 

Green grass and sunny days are amongst us!  It’s time to get moving again.  Spring boom is how I usually describe the real estate market this time of year.  2009 lends a new tag phrase I’ve been using for the market shift we are experiencing, HOT, HOT, HOT!

 

            A cooperating effort between the Federal government, NAR (National Association of Realtor) and increased FHA loan limits gives people the tools they need to buy today.  The Federal government provided a needed stimulus for real estate sales for the bread and butter market; the market recognized as the median home values.  The $8,000 first time buyer tax credit paired with historic low mortgage rates have created numerous new homeowners and move up buyers.  The trickle-up of home sales in the median sale price have converted sellers into buyers for more expensive homes.

 

            The Cedar Rapids Area Association of Realtors sales statistics reflect amazing home movement under a $150,000 sales price.  A seller’s list to sales price ratio has increased and the average days on market has dropped.  The housing shortage created by our recent flood has also increased the demand for this price range of home.

 

            The stimulated market activity for homes under $150,000 has helped the move up market.  The move up market has struggled with a decrease of relocating home buyers.  Increased FHA loan limits with a low mortgage interest rate has allowed buyers to afford more home price for less monthly payment.  Buying a better home for less money equals market stimulus!

 

            If you have ever considered building or moving up to a luxury home, it is your time.  The deflated financial markets remind us that real estate is a good option for your dollar.  The tax savings from the mortgage interest and property tax deduction also create tax relief for you.  Home builders welcome the opportunity to build the home of your dreams for a fair price in today’s market. 

 

            To view homes for sale in the Cedar Rapids, Robins, Hiawatha, Marion, and Corridor area, visit www.heathermorrisrealtor.com.

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate/ Skogman Realty

 

            Owning a home with a septic has a few additional responsibilities then a city sewer line.  As of July 1, 2009, a new DNR Time of Transfer inspection has been implemented called Senate File 261.  Septic homeowners will want to be aware of the new regulations if they are considering selling the real estate.  Vacant properties and homes sold when weather does not permit the inspection will be affected financially.

 

            The new regulation is called Time of Transfer because the recorder will not record the deed until the septic inspection has been done with repairs that may be needed completed or escrowed.  The septic inspection must be completed by a certified inspector with a DNR certificate.  Once completed, the inspection will be valid for two years.

 

            For real estate transfers when weather does not permit the septic inspection, a DNR recorded escrow agreement can be recorded with the groundwater hazard statement.  The buyer must have a binding contract with the seller to have the inspection and any repairs if needed completed within a reasonable time. If you are the seller, an escrow agreement for the septic inspection and possible replacement may take away or diminish the proceeds of your sale.  To protect your proceeds at closing, have the Time of Transfer required inspection before winter arrives or the property becomes vacant. 

 

If the property has not been occupied for thirty days, additional procedures to test the septic are required to inspect the distribution box and leach lines.  This will cost the seller more money.  After sixty days of vacancy, a septic meeting the Time of Transfer will not be accepted until a resident occupies the property for thirty days prior to the testing. 

 

Exclusions to the Time of Transfer septic regulations are real estate sales by court order, foreclosure, estate, transfer from marriage or divorce, and transfer between joint tenants in title.

 

Senate File 261 will be implemented on July 1, 2009 to bring current septic and leach fields protecting our groundwater.  For additional information on this new septic regulations or references of DNR certified inspectors email heather@skogman.com or call 319-350-7653. 

 

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate to Skogman Realty 

 

          To be stimulated is defined as a rouse to activity or heightened action, creating excitement.  This is the plan to better our economy with the American Recovery and Reinvestment Act of 2009 passed in February. This consumer benefit encourages us to move money by purchasing real estate, updating our home with energy efficient components, and is assistance to many distressed neighborhoods and home owners.  Will you be stimulated by any of these opportunities? 

 

          First time home buyers benefit with either 10% of their home purchase or $8,000 tax credit (refund) for homes purchased January 1, 2009 through December 1, 2009.  Buyers are using the tax credit in many ways.  Paying student loans, auto loans, and credit cards to lowering monthly debt.  Another option amongst new home owners is to build up savings or replace the down payment they spent to buy their new house.  

 

          Could a remodel or energy efficiency update be a consideration in the new future?  To promote green and energy independence, 30% tax credit on new furnaces, windows, insulation, weatherization, and other efficiency updates.  You must verify the components you agree to put in your house meet the requirements of the energy bill.  This benefit for updates in your home is available through 2010.  Energy efficient updates will save you monthly utility costs and be a benefit when you decide to sell. 

 

          The stimulus bill also increases FHA loan limits to $271,050.  FHA loans are government backed mortgages allowing fewer down payments, a low fixed rate term, more flexibility with your credit score for qualifying.

Neighborhood stabilization for depressed markets, foreclosure assistance, and low income housing grants are available to balance home values.

 

          Our local real estate market will benefit due to the increase of buyers purchasing homes.  For a summary of “The Recovery and Reinvestment Act of 2009” visit our e-newsletter at www.heathermorrisrealtor.com.

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate/ Skogman Realty

 

             A more recent concern to all homeowners is the vacant homes popping up in our neighborhoods.  The market shift has made us very aware that the house we live next to or kids walk by, could be abandoned.  Abandon houses raise red flags to potential buyers and neighbors.

 

            There are more concerns when buying a vacant house.  A whole house inspection should be completed to help you avoid owning the money pit.  Prior to all inspections, make sure all the utilities are turned on.  De-winterize the property if purchasing in cold months.  Hire a wood destroying insect report to learn if there have ever been termites, carpenter ants, or other pests that cause structural damage.  If there has been a lot of damage, require the seller to provide a structural inspection.  Always test for radon gas. Radon is the second largest cause of lung cancer.  You may not be concerned about the radon level, however when you sell it is most likely your buyer will want a radon test.  If the level is above EPA standards, it’s now your mitigation expense. 

 

            Neighboring a vacant home also has concerns.  I never thought this would happen, however I was recently called to one of my sale pending listings to find a squatter living in the house.  I understand neighbors are not outside due to the cold weather but didn’t anyone notice?  When you learn of a vacant house in your neighborhood, find out why?  Communicate with the owners or the neighbors about safety of the house.  You may want to alert the police if you see unusual activity.  Vacant homes are also targets for illegal activities.  If the property has a real estate sign, call or stay in touch with the listing agent.  Foreclosed homes are traditionally vacant for one year allowing the owner to redeem the property.  Neighbors beware is the best policy.

 

            Legal and clear title is usually stronger possibilities with a vacant house.  Estates, foreclosures, short sales may delay the closing for legal reasons.  The CR Board of Realtors listing and purchase agreements require the seller to release all liens and title concerns so the buyer has a CLEAN deed.  Use a professional Realtor or attorney in preparing the purchase contracts for vacant houses. 

 

            As vacant homes become more prevalent with the market shift, let’s be AWARE for our own personal safety. 

 

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate/ Skogman Realty

 

 Summary for Home Owners

       

            We have all heard the buzz about economic recovery and would like to know, how does it affect me?  A brief summary of this new legislation regulating Fannie Mae, Freddie Mac, and the Federal Home Loan Banks may answer a few of your questions.

 

            A new regulator for these three government sponsored entities has been established to ensure safe and sound lending practices. The mission of the new police force is to enhance affordable housing, raise loan limits on FHA mortgage loans in high cost areas creating more buyers, and tighten qualifying guidelines for safer financial decisions.  Eligible candidates must be home owners, not investors.  FHA borrowers will need 3.5% down payment and all mortgages will be a fixed rate for 30 years. Enhanced mortgage disclosures provide buyers the maximum monthly payment possible with their loan and all cost associated, the Truth in Lending Act. 

 

            First time home buyers benefit from this legislation with a tax credit of 10% of the cost of the home, not to exceed $7,500.  The maximum income for the buyer would be $75,000 or $150,000 for a joint tax return.  Home purchases must be after April9, 2008 and prior to July 1, 2009.

 

            Military veterans benefit from the new legislations.  For returning soldiers, the bill lengthens the pre-foreclosure process to nine months.  Counseling programs for veterans are available for financial assistance; VA loan limits have been increased; and financial improvement and structural alterations for homes of veterans with service related disabilities have been created. 

 

            Relating to foreclosure properties, legislation “Hope for Homeowners Act of 2008” was created to help FHA insurance mortgages from default.  Lenders that volunteer to help distressed buyers can refinance their loans at a significant discount if an owner is at risk of losing their home.  Financial and legal services are available for distressed borrowers that qualify. 

 

            This brief summary of the “Housing and Economic Recovery Act of 2008” only answers a few concerns facing our Cedar Rapids, Marion, Robins, and national real estate markets.  Email or call for a copy of the legislation or any concerns affecting your personal real estate needs. 

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate/ Skogman Realty

 

A Message from Tim Lamb, Mortgage Consultant

 

The current conventional conforming mortgage limit will remain at $417,000.  This is not change from 2008.  Any mortgage balances above $417,000 is considered a jumbo mortgage and falls into a different group.  Just so you know there are NO investors currently buying Jumbo mortgages.  So Jumbo loans are being held by large banks such as Wells Fargo and your borrowers will pay an increased interest rate for these jumbo products. 

 

The temporary FHA limits announced last year will be come permanent in 2009.  The maximum FHA mortgage is $271,050.  This again is not a change from the temporary limits announced last year.

 

The VA limits are a little different.  In most cases a borrower can borrow $417,000 with no down payment as long as he or she has $36,000 worth of VA Eligibility and qualify under the VA guidelines.. 

 

The most significant of these is the FHA limit becoming permanent.  The FHA mortgage product is projected to be 40% of our market in 2009 and currently has the best underwriting guidelines and lowest PMI rates available.  We will be doing more and more of these FHA loans. 

 

I hope you find this information useful!

 

Timothy A. Lamb
Mortgage Consultant
Skogman Mortgage Company
MAC M2623-011
341 8th Avenue
Marion, IA 52302
(319)368-1240 Tel
(866) 867-7183 Fax
timothy.a.lamb@skogmanmortgage.com

 

Visit my site at www.HeatherMorrisRealtor.com to view featured properties and all listings avaiable in the Cedar Rapids area! If you are interested in buyer or selling call me anytime. I offer a free buyer counseling appointment and a no risk hassel free listing agreement. 

Tell me what you think! I look forward to hearing from you!

Heather Morris

For years we’ve heard the term "buyer beware." With the latest trends in real estate technology, on-line information, and virtual tours there are new concerns for seller safety. Ghost buyers can walk through your home whenever they want without you knowing. Technology has increased efficiency in real estate; however there are a few precausions you should take when you put your house on the market.

No more pop tarts! A pop tart is when someone calls to view your home and you or your realtor agrees immediately without qualifying the buyer. You should outline expectations for your listing agent that you want only financially qualified buyers in your home. When you receive a call to show your house, make sure you know who is coming, their company, phone number, and what time. Preparing your home for a showing takes time and effort. What if you pack up, remove the pets, stage the house for someone who KNOWS they can’t buy?

Sellers must protect their personal property when the house is being shown to a buyer. Remove, pack, and secure the items in your house of value to you. Remember, when the buyer arrives at your door, they have probably already "ghost toured" your property from the internet. Point out to your listing agent any concerns you have when showing the property. You should also ask if the agent or broker has errors and omissions insurance to cover any damages.

Sellers should declare their expectations for access to their home. Larger real estate markets have created more seller safety by not hosting the house open. ANYONE can enter your home at an open house making you a target. Safety concerns may be unlocked windows and doors or stolen personal property. Seller’s can also ask their realtor if they will secure their home key with a Supra E-Key lockbox. The Cedar Rapids Association of Realtors provides a lockbox system that can identify the realtor who unlocked the door and when. This is an excellent security system when you are out of town or have a vacant house.

A professional real estate agent will help protect you and your home in a successful sale.

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate/ Skogman Realty