A New Mortgage Market?

The mortgage has changed significantly since the housing crash. The easy-to-obtain loans of the housing boom are long gone. But what can the growing number of regular buyers, who need a mortgage to purchase a home, expect in this market?

Jay Luber, president of Phoenix-based Galaxy Lending, is a veteran of Arizona’s mortgage market. His thoughts and advice for borrowers:

Question: Is it difficult for a first-time buyer to get a mortgage now?

Answer: The Federal Housing Authority is a popular loan with basic requirements for first-time home buyers. To adjust for lending risks, there have been some modest changes to mortgage insurance premiums. With lower FICO score requirements and low minimum down payments, FHA loans are the most popular program for those entering the housing market for the first time. In addition, 100 percent of the down payment can come from a gift.

Borrowers must furnish lenders with documentation of income and assets, including a pay stub, two months of bank statements and tax returns for those self-employed. The loan process is smoothest for those who are organized.

Q: What would you recommend for a buyer to do in order to get pre-approved for a mortgage?

A: Pre-approval for a mortgage begins with a potential borrower talking to a knowledgeable loan officer at a reputable mortgage lending company.

Potential borrowers should determine their financial comfort zone for a total monthly mortgage payment. Included are principal and interest, taxes, hazard insurance, FHA mortgage insurance premiums and HOA dues if applicable. In today’s market, principal and interest on a monthly payment is calculated at about $4.50 for every $1,000 of the total loan.

Borrowers should be prepared to talk openly with a loan officer, who will help them determine a maximum home-purchase price, looking at their desired monthly mortgage payment, income, credit history and other monthly obligations.

The loan officer will analyze the information provided, verify documentation and then issue a PQF (pre-qualification form) that a real-estate agent uses when presenting a purchase offer to a seller.

Pre-approved borrowers should not make any major purchases, such as buying a new car, without first consulting their lender.

Q: Are you seeing a lot of metro Phoenix homeowners able to refinance with the aid of government programs?

A: During the first nine months of 2012, the bulk of all refinances were Home Affordable Refinance Program (HARP) loans targeted to help homeowners underwater. Borrowers who financed their mortgages after June 2009 did not qualify. I believe the majority of borrowers who could refinance under HARP 2.0 have already done so.

Now, we are seeing most refinances are conventional. As home values continue to increase, even more borrowers will be eligible to refinance at today’s low rates. In addition, jumbo financing has become more attractive and available.

Q: Where are interest rates heading?

A: As the economy continues to improve, interest rates will continue to rise modestly. I would not be surprised if by the end of 2013, rates are well above 4 percent. But those are still very attractive to borrowers.

To speak with a great lending affiliate of ours, contact us at www.TheDanAdlerTeam.com


Mortgage Aid Reaches Arizona

More than 22,000 Arizona consumers received some sort of aid during the first year of the nation’s biggest settlement with mortgage firms.

The U.S.’s five biggest lenders have provided $1.68 billion in relief to mortgage borrowers across the state, according to a progress report released Thursday by independent settlement monitor Joseph Smith of the Office of Mortgage Settlement Oversight.

More than a half-million consumers have received a total of almost $46 billion, nearly double the original settlement amount, in help from Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial. Last year, the lenders agreed to a $25 billion mortgage settlement to resolve complaints of over bad practices and poor treatment of borrowers.

U.S. Department of Housing Urban Development Secretary Shaun Donovan said the landmark mortgage settlement has already surpassed the government’s initial expectations and is helping the housing market recover.

“The job’s not done,” he said. “We will continue to watch the banks like hawks to ensure they live up to their obligations as they complete their consumer relief requirements.

The moortgage settlement requires the lenders to provide $20 billion to consumers. Different programs under the settlement give lenders different amounts of credit toward their part of the overall settlement. The banks get less than a dollar’s worth of credit for each dollar in relief, so consumers have received more in relief. A separate $5 billion went to the 49 state prosecutors involved in the settlement, primarily for foreclosure-prevention programs.

More than $1 billion of the Arizona total went toward helping homeowners complete short sales, so most of the money hasn’t helped borrowers keep their homes.

Another $348 million helped Arizona borrowers get out from under second mortgages. The third highest amount of relief for the state was $139 million to complete principal reductions on loan modifications.

Other housing aid

The federal government have a couple of programs to help homeowners avoid foreclosure and stabilize the housing market since the crash.

In 2009, the Housing Affordable Modification Program was launched. So far, 33,791 Arizona homeowners have received permanent loan modifications to lower their monthly mortgage payments, according to the Arizona Housing Department.

HAMP had a rocky start. Lenders were slow to implement the program, and many homeowners paid for several months on temporary loan modifications that were not made permanent. Most of those borrowers lost their homes to foreclosure.

To help more homeowners, the federal government launched the Hardest Hit Housing program in 2010. Arizona has been allotted $268 million from this program.

So far about $33 million of the state’s hardest hit funds have been spent to help more than 1,200 borrowers.

Now that the nation’s five biggest lenders have met most of their obligations from the mortgage settlement, Arizona housing advocates are hopeful banks and servicers will work more with the state to spend its federal foreclosure-prevention funds to help homeowners still struggling.

For additional real estate information please contact us at www.TheDanAdlerTeam.com.


Real Estate Spikes To New Highs

Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.

According to the April Zillow Real Estate Market Reports, national home values rose 0.7 percent in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.

Zillow also reported that rents rose from March to April, increasing by 1.6 percent, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78 percent experienced a rise in rents.

The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7 percent.

“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”

Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March


Inventory of Available Homes Shrinking In Many Cities



The nationwide inventory of residential homes for-sale dropped 21 percent in March compared to a year ago, according to newly released housing data from Realtor.com, tracking 146 metro markets. In fact, all 146 markets posted a drop in their inventory, except for two — Hartford, Conn., and Philadelphia. The nationwide median list price in March also saw improvement, increasing more than 5 percent last month compared to last year at this time. The housing picture is much different than last year at this time, when inventory was up 26 percent and list prices were down 4.81 percent. 

“If the market continues to hold its own, 2012 could well mark the beginning of a broad-based housing recovery,” according to Realtor.com. 

The metros that posted the biggest drops in listings of for-sale homes in the last year are: 

1. Oakland, Calif.: -51.91 percent year-over-year drop in total listings

2. Bakersfield, Calif.: -50.35 percent

3. Phoenix-Mesa, Ariz.: -48 percent

4. Fresno, Calif.: -45.56 percent

5. Miami: -42.34 percent

6. Fort Lauderdale, Fla.: -39.66 percent

7. Seattle-Bellevue-Everett, Wash.: -39.38 percent

8. Atlanta: -39.26 percent

9. Orlando: -39 percent

10. Portland-Vancouver, Ore.-Wash.: -38.79 percent

11. Tampa-St. Petersburg-Clearwater, Fla.: -37.35 percent

12. Stockton-Lodi, Calif.: -36.18 percent

For more information about real estate anywhere in North America, contact The Dan Adler Team.


6 Tips For Choosing The Best Offer On Your Home

Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers.

Selling your home will go a lot smoother if you think of it as a business transaction and don’t let emotions get in the way. You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers.


1. Understand the process

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures—such as appliances, furniture, or window treatments—to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attached a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

For additional information, please contact The Dan Adler Team.


15 Year Fixed Drops Well Below 4%

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.”



Statistics Show: Homes Make People Happy

Are Homeowners Glad They Own?
It might come as a surprise but a whopping 72 percent of surveyed homeowners nationwide are satisfied with owning a home. The other 28 percent, not so. They say they’re dissatisfied and that’s likely due to the devaluation of their homes.

But surprisingly, of those who were satisfied with owning a home, only 24 percent said it was because of home appreciation. The majority, 76 percent, had many other reasons they were happy to own their own home including the one that proves the American Dream is alive and well: pride of homeownership. Following closely behind were the freedom to control their home improvements and upgrades. All this according to HomeGain’s 2012 National Home Ownership Satisfaction Survey.

Of those who were unsatisfied with owning their home, 63 percent blamed depreciation as the root of their dissatisfaction. However, the cost of owning a home, such as paying for property taxes, homeowner’s association fees, upkeep, and routine repairs, also sucked the joy out of homeownership and led this group of 37 percent to be unhappy about homeownership.

On the bright side, most – three out of four – are very happy with homeownership even in spite of such rocky real estate times where declines in home values have crippled some homeowners severely.

The survey polled homeowners all across the country. So you might be wondering is there a connection between where you live and how satisfied you are with owning a home?

The highest percentage of satisfied homeowners comes from the Northeast where there is 77-percent satisfaction, according to HomeGain. Pulling in at a close second is the Southeast at 73 percent satisfaction. The West and Midwest were at 71 percent and 68 percent, respectively.

Those who purchased their homes within a timeframe of the past three to eight years were the least satisfied. If they bought more than eight years ago, they tended to be more satisfied.

The higher-end market was the least satisfied with owning a home, especially if they paid more than $800,000 for it. This group’s dissatisfaction rate was 69 percent. But those who purchased homes for under $75,000 are cheering. This group’s satisfaction rate was 77 percent.

Of course, a lot of homes are sold through foreclosure and short sale, which, depending on the side of the sale you’re on, can leave you satisfied or very dissatisfied. Those purchasing a foreclosed or short sale had the highest satisfaction ratings; 79 percent and 83 percent, respectively.

New and existing homes didn’t fare so well with homeowners. They were fairly dissatisfied and showed it in a 73 percent and 71 percent rating, respectively. Most seemed to have expected an increase in the value of their home and when depreciation hit, this highly disappointed them, making this the primary reason for their dissatisfaction.

An interesting statistic may reflect the need for freedom from being tied down to a home and its maintenance as well as other costs. Homeowners ranging from 18 to 25 were the least satisfied (45 percent) with owning.

On the other end of the spectrum, those homeowners between 55 to 65, were the most satisfied with their homeownership. This group’s satisfaction rating was 76 percent.

HomeGain collected some comments from some of the surveyed homeowners. Here’s how one satisfied homeowner summarizes homeownership, “Just knowing I own it. I rented a house two times after owning a home for 16 years, and I do NOT like relying on, and dealing with, a landlord! I also feel pride in owning my home. I just bought a house 8 months ago and am very happy!”


Advise on Allergies and Homeownership!

Cleaning Maven: Keeping Allergens Out
Our bodies and homes are exposed to allergens at every turn. Each and every day our bodies fight an uphill battle to keep these invaders out. Give your body a break by taking a few precautionary steps.

The Mayo-Clinic explains why allergies are such a serious issue. “The Mayo-Clinic gives some great tips for homeowners.Your immune system produces substances known as antibodies. Some of these antibodies protect you from unwanted invaders that could make you sick or cause an infection. When you have allergies, your immune system makes antibodies that identify your particular allergen as something harmful, even though it isn’t.”

They continue, “When you come into contact with the allergen, your immune system’s reaction inflames your skin, sinuses, airways or digestive system. The severity of allergies varies from person to person and can range from minor irritation to anaphylaxis — a potentially life-threatening emergency. While allergies can’t be cured, a number of treatments can help relieve your allergy symptoms.”

One of the biggest culprits of allergens is fabric, including the carpets under your feet. If you are a true allergy sufferer you’d be served well by upgrading your home to hard surface floors such as hardwoods, laminate, polished or stained concrete, or tile.

Carpets have a way of holding on to dust, mites, and dander. Hard surfaces on the other hand can be wiped clean.

If you are committed to carpet it’s time to step up the cleaning routine! Use a vacuum with a HEPA filter and opt for natural fiber carpets, such as wool.

For the rest of your fabrics, choose washable curtains, blankets, and throws. If you have a front-loading washer or dryer you may even have a “allergen” setting. This particular setting uses very hot water that removes 99.9 percent of allergens, such as pet dander.

For those bedding items that can’t be washed on a regular basis arm them with dust-mite covers. These pillow and mattress covers can be bought online or at your local bedding store.

Allergens also circulate through your air. If you need proof just shake out a blanket that is backlit by sunlight and watch for all those lovely floating particles. Air filtration systems can be godsends when it comes to allergy. Be sure to change filters (in your regular system as well) and use HEPA filters when possible.

To keep extra allergens out, be sure to close all of your windows during high pollen days and season. Finally, be on watch for moisture.

Kitchen and baths can be breeding grounds for mold, which is a top allergen for many people. Mold thrives in moisture rich environments, such as around tubs, sinks, and refrigerators. Clean your fridge regularly and dispose of old or moldy food. Keep water from standing around sinks and tubs and apply extra caulking where needed.

Allergens are all around us, but take a few easy steps to protect your arm and your pains will be eased this allergy season!


It’s Time to Buy!

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 a NeighborWorks 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. Hire The Dan Adler Team. 

• 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.


Always Use An Agent When Buying A Home!

Relying On An Agent


The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.


The latest figures show that 89 percent of buyers purchased their home with the help of a real estate agent or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.

Why do today’s buyers buyers choose to work with an agent? Let’s look at just a few of the many reasons an agent can be your biggest ally.

First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.

They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you’re interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.

Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.

They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.

Today’s market also presents challenges that simply weren’t present or didn’t dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.

According to the NAR, “More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process.”

Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.

The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today’s buyers are very cautious about getting into the market. While a dual agent isn’t supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, “60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer’s agent only represented the buyer and not the seller.”

Don’t buy a home without an agent! Contact the Dan Adler Team to find a Realtor anywhere in North America!