Dodd-Frank … The gift that keeps on giving

The Dodd-Frank Financial Reform act was a joke. And like any bad joke, it just keeps on getting recycled, over and over and over again. Now come TRID. The new financial “reforms” to the tune of hundreds of millions in taxpayer dollars to accomplish exactly nothing. How politicians in DC can allow this to happen simply defies reality.

What is TRID?  Basically, it’s a new set of guidelines, enacted in the name of consumerism, to confound, confuse and protract the entire mortgage and settlement process. The time, effort and resources required to close a real estate transaction today far exceed that of a year ago. Buyers can expect regulatory delays as the “30 day closing” has now gone the way of the dodo.

If anything contained within the new TRID guidelines serves to benefit any consumer in any way, I cannot find one person who knows what it is. I would welcome any comments that could illustrate any TRID-related consumer benefit.

Big Changes for Home Buyers Coming October 3rd!

Thanks to now-retired U.S. Senators Chris Dodd and Barney Frank, aggravating changes will take effect on October 3rd, 2015 which will make home buying more difficult for those who are obtaining a home loan to make their purchase. Ten things consumers should know:

1. A new closing statement form called the Closing Disclosure or CD will be used for most loan applications taken for new mortgages, effective on October 3, 2015. This replaces the HUD-1 that is in place today. And now, the lender, not the closing agent, may be preparing and delivering the CD.

2. The CD must be delivered to the buyer/consumer at least three business days prior to the scheduled closing date.

3. Closing agent must get information to the lender approximately 10 to 14 days prior to the closing date for completion of CD to meet the delivery requirement. The closing agent must know about ALL buyer paid charges 10 to 14 days prior to the closing date.

4. The closing agent will need the real estate company’s state license number and the individual real estate license number for the new CD.

5. The CD sent to the buyer/consumer won’t include the “seller’s side” of the transaction. The closing agent (not the lender) is responsible for completing and delivering the seller’s side of the CD. The closing agent may decide to prepare a separate CD for the seller.

6. Although responsible for its accuracy, the agent/broker may or may not receive an advance copy of the CD before it’s delivered to the buyer/consumer. The lender will likely send the CD to the closing agent when it’s sent to the buyer/consumer. The settlement agent will not automatically be permitted to send a copy to real estate agents. The agent/broker may have to obtain a copy from the buyer or seller.

7. Changes to the CD after delivery to the buyer/consumer MAY trigger a new three-day waiting period if changes cause the Annual Percentage Rate to be inaccurate, the buyer changes loan product or a prepayment penalty is added. Changes and adjustments affecting the value of the property (as determined by the lender) may trigger additional disclosure and review periods under the Equal Credit Opportunity Act (ECOA) controlling the delivery of the appraisals. Buyers should consider two pre-closing inspections (walk-throughs) in addition to a home inspection.

8. The CD refers to Owner’s Title Insurance as “optional” in some circumstances. Lenders will require a mortgagee policy, but the addition of a simultaneous owner’s policy to protect the buyer’s equity may be optional. Without owner’s insurance, only the lender’s interests are insured. Buyers should obtain appropriate professional advice before before declining this coverage.

9. The new TRID rules may affect the actual contract terms between buyers and sellers. As an example, a closing date to occur within 30 days may no longer be a realistic expectation if a mortgage is involved. The consensus is that an additional 15 days should be added to any otherwise realistic projected closing date.

10. And remember … If a closing date is breached, a seller in a strong seller’s market may very well decide to put a property back on the market rather than sign an extension to further protract the closing. Buyers must understand the urgency in responding to lender requests for information and documentation. Buyers must have past three year’s tax returns, current pay stubs, brokerage and bank account information available at the onset.

I own my home that is in a flood zone. Are flood insurance issues going to make it difficult to sell now?

At least in terms of the astronomical rate increases that you have been reading about lately, probably not.

The U.S. Senate just passed the Homeowner Flood Insurance Affordability Act which had already been passed by the House this month. Once signed by the President, this Act will negate the majority of the devastating changes that were enacted by the House and Senate last year. More on this at: http://rem.ax/1fXPi7o

For information on this or other real estate topics, please visit www.DestinFloridaRealEstate.com or email us at smith@realtor.com

Are flood insurance premiums still supposed to go up?

Flood insurance (NFIP) premiums have already gone up astronomically in the case of pre-FIRM homes, the result of the Biggert Waters Act. In this area, pre-FIRM generally refers to homes that were built before 1974.  Our elected politicians in D.C. are going through the motions but making little progress in the re-writing of this very bad legislation.
Our salvation may lie in the fact that FEMA failed to follow the rules and did not conduct the required cost studies before enacting. Therefore, a now pending lawsuit in federal court may provide our best option for relief.

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com

 

We want to sell our condo after the rental season ends this year. How far in advance should we put it on the market to sell it by then?

According to local MLS statistics, you will on average, spend six months on the market before a sale is consummated. This assumes that you are priced within normal market parameters.

By contrast, those properties that are overpriced by more than 7 percent tend to stay on the market for an average of 10 months before expiring and dropping off the market altogether.

25 years ago or today, good markets or bad, if you want it sold, price it right!

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com

Ed & Terri Smith, Broker Owners
RE/MAX Coastal Properties
850-837-5500 x1

 

 

Is Foreclosure Activity on the Rise?

According to RealtyTrac, January foreclosure filings nationwide increased by 8% over December, one of the largest month-over-month increases in recent history. For purposes of RealtyTrac’s report, the term “monthly foreclosure filings” includes lis pendens filings,  default notices, foreclosure auctions and bank repossessions. A total of 124,419 such events occurred in January.

At least in part, the increase was the result of the “holiday lull”, which is the period during the fourth quarter during which lenders typically forgo foreclosure actions, only to start making up for lost time in January. Yet and still, January marked the 40th consecutive month in which foreclosure activity declined on an annual basis, with filings down 18%.

“California foreclosure starts jumped 57 percent from a year ago, following 17 consecutive months of annual decreases,” according to RealtyTrac’s vice president Daren Blomquist.

On the one hand, actual scheduled foreclosure auctions jumped 13% in January compared with December. On the other, that specific activity remains 8% down from one year ago. This equates to 38 consecutive months in which scheduled foreclosure auctions nationwide have decreased on an annual basis.

And, the foreclosure process was initiated in the case of 57,259 properties in the U.S. in January, which represents a 10% increase over December, yet remains 12% less than last year.

Before Closing a Loan

Do's and Don'ts before closing_Blossman

Are flood insurance premiums still supposed to go up?

Flood insurance (NFIP) premiums have already gone up astronomically in the case of pre-FIRM homes, the result of the Biggert Waters Act. In this area, pre-FIRM generally refers to homes that were built before 1974.  Our elected politicians in D.C. are going through the motions but making little progress in the re-writing of this very bad legislation.

Our salvation may lie in the fact that FEMA failed to follow the rules and did not conduct the required cost studies before enacting. Therefore, a now pending lawsuit in federal court may provide our best option for relief.

More on this at: http://rem.ax/1fnwewZ

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com

Ed & Terri Smith, Broker Owners
RE/MAX Coastal Properties
850-837-5500 x1

 

My partner and I are being foreclosed on. Why did I get served with papers when I am not on the note, just on the deed?

The note is the obligation to pay, so it sounds like your partner may have to wage that battle alone. However, everyone that may have an interest in the disposition of the property will typically be served when the lis pendens is filed. That would include all of the parties on the deed, the HOA or condo association, second lien holders, etc.

It is not too late to structure a short sale just because you were served with foreclosure documents. In most cases, a short sale is the best option for the owner and lender. Please call us direct for more details.

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com

 

Did I miss the opportunity to buy with really cheap interest rates? Are rates going to come back down?

The scaling back of QE is expected to increase mortgage interest rates by 50 basis points over the course of the year. Some believe that the recent increase in rates pre-absorbed that anticipated impact.

However, to put it all in perspective, 2001 marked only the second time in Freddie Mac’s history (1971) that rates averaged below 7%. 2010 marked the first year that rates averaged below 5%. So by comparison, at 4.5%, today’s rates are still very cheap and it is a great time to buy!

As always, please visit us at www.Ed-Terri.com or for questions, email us at smith@realtor.com