First-time Buyers Become Reality Stars.

1st time buyers

Better Homes and Gardens Real Estate has launched a new online and TV reality series starring first-time home buyers on the house hunt.

The series, “Home, First Home,” launched online at YouTube this week. It will also air nationally on the syndicated show, “The Better Show,” in 150 markets across the country until June.

The series offers viewers an “opportunity to share in the joy of purchasing a home, while learning about the many steps involved in achieving this milestone,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate.

The show also weaves in tips from Better Homes and Gardens Real Estate agents about the buying and selling process.

You can watch some of the episodes at the company’s YouTube channel.

Source: Better Homes and Gardens Real Estate

Survey: Americans Upbeat About Home Values.

Survey: Americans Upbeat About Home Values

Seventy percent of Americans say they are confident that home values will rise within the next two years, according to the Prudential Real Estate Outlook Survey of more than 1,000 Americans in the market to buy or sell a home.

What’s more, 63 percent of respondents say that despite the recent volatility in the housing market, they still view real estate as a good investment.

“Home ownership remains integral to the dreams of most Americans and the consumers’ confidence in the housing market is returning,” says Earl Lee, president of Prudential Real Estate. “This is good news for home buyers and sellers, communities, and our economy as a whole. As more people look to take advantage of historic interest rates and prices, we believe the foundation for a sustainable recovery is in sight.”

Ninety-six percent of those surveyed say that now is a good time to purchase a home with interest rates at historically low levels.

Also, 60 percent say they have favorable views toward the real estate market, up 8 points from last year, according to the survey.

Still, while more people say they are optimistic about the real estate market, 93 percent said the housing crisis taught them to be more careful about buying and selling in the future.

Source: Prudential Real Estate Outlook Survey

More Details Emerge in $25B Mortgage Deal.

More Details Emerge in $25B Mortgage Deal

The government vows to closely monitor that the nation’s five largest banks fulfill the aid to home owners outlined in a $25 billion mortgage settlement over foreclosure allegations.

More details emerged in court filings on Monday of the landmark settlement among the nation’s five largest banks and state and federal government officials. The settlement, first announced last month, stems from allegations over banks’ foreclosure practices, although as part of the settlement the banks do not have to admit to any wrongdoing.

Among some of the aid outlined in the $25 billion settlement for home owners:

• Banks have agreed to pay about $20 billion to help home owners avoid foreclosure. The majority of that money will be allocated to reducing the mortgage principal and modifying loans for about 1 million underwater home owners.
• Banks have agreed to pay $5 billion to federal and state government officials, with a portion of that money going to compensate about 750,000 Americans who have been found to be wrongfully foreclosed upon from 2008 through 2011. Affected home owners will receive $2,000 checks.
• Banks will be required to adopt new processing standards for foreclosure. For example, banks will be unable to pursue a foreclosure when home owners are being considered for a loan modification.
• Banks must comply with the terms of the settlement or face stiff penalties. Banks are required to complete all loan relief requirements as part of the settlement within three years; 75 percent of it is to be fulfilled within two years. Any bank that violates the agreement will be fined $1 million for each violation, capped at $5 million for repeat violations.
• The settlement does not free banks from criminal action. Federal and state officials can still pursue criminal action action against banks for any wrongdoing over foreclosures.

The mortgage settlement only applies to mortgages held privately. It does not apply to mortgages held by Fannie Mae and Freddie Mac.

The banks part of the settlement are Bank of America, Citigroup, JPMorgan, Chase, Wells Fargo, and Ally Financial.

Some banks have negotiated separate requirements so they won’t have to pay as much in penalties to federal and state officials. For example, in return to a reduction in penalties, Ally Financial has agreed to cut the mortgage principal for struggling home owners by 105 percent of the home’s value. Bank of America says it will trim the mortgage principal of more than 200,000 struggling borrowers.

The settlement still must be approved by a judge to be final.

Source: “Feds Promise Tough Oversight in Mortgage Deal,” Reuters (March 12, 2012) and “Gov’t Files $25B Mortgage Settlement; Banks to Provide Relief Without Admitting Wrongdoing,” Associated Press (March 12, 2012)

Obama cuts refinance costs for some mortgages.

Obama cuts refinance costs for some mortgages

NEW YORK (CNNMoney) — Borrowers with some federally insured mortgages will be able to refinance into lower interest rate loans more easily and cheaply under a plan unveiled Tuesday by the Obama administration.

At a news conference, President Obama announced that the Federal Housing Administration will cut upfront fees for refinanced loans it already insures.

The new fees are for borrowers whose FHA loans were issued before June 1, 2009. An estimated 2 to 3 million borrowers could take advantage of the savings, which could reduce mortgage payments for the typical FHA borrower by about a thousand dollars a year, according to the administration.

“It’s like another tax cut in people’s pockets,” said President Obama.

Borrowers who refinance their existing FHA loans will pay an upfront insurance premium equal to 0.1%, the lowest allowable rate, of the mortgage amount — $100 for a $100,000 loan — plus an annual fee of 0.55%.

The new refinancing fees contrast sharply with the cost of obtaining a FHA loan, according to Jaret Seiberg, an analyst with the Washington Research Group. A borrower making a 3.5% down payment on a home purchase as of April 1 will pay a 1.75% upfront fee and a 1.25% annual fee. Those purchase fees were raised barely a week ago to improve the FHA’s capital reserve.

Has Obama’s housing policy failed?

Still, lowering refinancing fees “should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services,” Seiberg said.

The new policy will also make it easier for the banks to refinance loans because it directs the FHA not to count the loans toward the lender’s “compare ratio.” That calculates the performance of loans issued by the lenders and compares it to the performance of other lenders.

Some lenders have not wanted to refinance FHA loans because many of them were made during years of high default rates, according to Seiberg.

Knowing that the FHA will not hold refinanced loans against them should they fail to perform could make lenders more willing to refinance loans for borrowers at a higher credit risk, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association.