Real Estate Blog

Administration Undecided about Another Home Buyer Tax Credit:
Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN’s “State of the Union” that the administration would “do everything we can” to stabilize the U.S. housing market.

Whether it will resurrect the first-time home buyer tax credit is up in the air. Donovan said that the drop in home sales in July was worse than the administration expected.

Donovan also said that the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance.

After that several Congressional candidates in Florida threw their voices behind the possibility, and Florida Gov. Charlie Crist then chimed in on the same show, saying that another tax credit, "would stimulate the economy. It would increase home sales in Florida." He finished with: "I would absolutely encourage the president to support that because it would certainly help my fellow Floridians."

So of course then I went the official route and followed up with a HUD spokesperson who responded:  "No news here...there are no discussions underway to revive the credit."

Is it all political? And is another tax credit the answer?  "I don't think it's all political," says housing consultant Howard Glaser. "I think they are panicked that the economy/housing got away from them." Glaser doesn't sound convinced the tax credit is really on the table.  "They can do a lot off budget with the GSE's and FHA with no Congress."

I know a lot of you out there would argue that a housing market correction, as painful as it is, is necessary for housing to truly find its footing again and recover for the long term. Another artificial stimulus could just prolong the agony and set us up for the same drop off in sales and prices that we're seeing right now. 

But it could also move some inventory quickly. With inventories of new and existing homes dangerously high, and the shadow supply of foreclosures pushing that volume even higher, more stimulus could be a necessary evil.

On July 2, Pres. Obama signed into law HR 5623, the Homebuyers Assistance and Improvement Act of 2010, which extends the homebuyer tax credit closing date to Sept. 30, 2010, for qualified buyers with a purchase contract that was signed by April 30, 2010. He also signed HR 5569, which retroactively reauthorizes the Federal Emergency Management Agency (FEMA) to enter into new contracts for flood insurance under the National Flood Insurance Program through Sept. 30, 2010.

 An estimated 14,830 Florida home buyers missed Wednesday’s deadline to receive an up to $8,000 tax credit on their purchase.

Good thing for them Congress extended the cut off date late Wednesday to Sept. 30. The bill now goes to President Obama.

Homebuyers still had to sign contracts for their purchase by April 30, but now have an additional three months to close the deal.

Nationally, the extension is expected to give about 180,000 homebuyers who signed by April 30 a chance to earn the federal stimulus.

Short sale purchases, which can take several months to close, were hampering many closings.

Buyers “didn’t know when they signed the contract it was going to take the bank four months to close the deal,” said John Sebree, vice president of public policy for the Florida Realtors.

Another problem was the failure of Congress to reauthorize the National Flood Insurance Program, which put the brakes on lender approvals for some loans. That program was also temporarily extended late Wednesday until Sept. 30.

Realtors are lobbying Congress to approve another bill extending the program for five years.

The tax credit was initially for new homebuyers only and expired Nov. 30. It was extended to the April 30 and June 30 deadlines, and also expanded so that some current homeowners could earn up to a $6,500 credit.

Mortgage Rates Close in on Record Lows.

Home buyers unable to tap into a federal tax credit before it expired on April 30 are finding a consolation prize in mortgage rates, which dropped again this week to near-record lows.

According to Freddie Mac, interest on 30-year fixed loans averaged 4.78 percent compared to 4.84 percent last week, while the 15-year rate slipped to a new low of 4.21 percent from 4.24 percent.

Mortgage rates have fallen to the lowest level of the year as investors poured money into the safe haven of U.S. government securities.

The average rate on a 30-year fixed rate mortgage dipped to 4.78 percent this week from 4.84 percent a week earlier, mortgage company Freddie Mac said Thursday. It was the lowest level since early December, when rates fell to a record low of 4.71 percent.

The average rate on a 15-year fixed-rate mortgage fell this week to 4.21 percent – the lowest level in nearly two decades.

Concerns over the European debt crisis have sent yields for 10-year and 30-year Treasury bonds to their lowest levels of 2010. Rates on 30-year home loans often rise and fall in line with the 10-year note.

Analysts say the opportunity may not last. If Europe’s woes subside and the U.S. economic recovery stays on track, rates are likely to move higher. That’s because traders will move their money back into riskier investments.

“Strike now,” said Greg McBride, senior financial analyst at Bankrate.com. “If they move quickly against you, it just takes money right out of your pocket.”

Homeowners appear to be taking notice. Applications to refinance surged this week to the highest level since October 2009, the Mortgage Bankers Association said Wednesday.

The favorable borrowing costs will improve affordability and soften the impact of the tax credit program ending, says Freddie Mac chief economist Frank Nothaft.

• After a 30-day delinquency, the 680 score drops to somewhere between 620 and 640; the 780 score declines to 670 to 690.
• After a 90-day delinquency, the 680 score falls somewhere between 595 and 610; the 780 score goes to 645 to 665.
• After a foreclosure, short sale or deed-in-lieu, the 680 goes somewhere between 575 and 595 and 780 drops to 620 to 640.
• After a bankruptcy, the 680 drops somewhere between 530 and 550; the 780 declines to 540 to 560.

Buyers responding to the home buyer tax credit and favorable affordability conditions boosted existing-home sales in March 2010, marking the beginning of an expected spring surge, according to the National Association of Realtors.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 6.8% to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1% above the 4.61 million-unit level in March 2009.

Lawrence Yun, NAR chief economist, said it is encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends. “Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running,” he said. “The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle class housing wealth that may have been wiped out without the housing stimulus measure.”

Total housing inventory at the end of March rose 1.5% to 3.58 million existing homes available for sale, which represents an 8.0-month supply at the current sales pace, down from an 8.5-month supply in February. Raw unsold inventory is 1.8% below a year ago, and is 21.7% below the record of 4.58 million in July 2008.

“Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably,” Yun said. “In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers.”

A parallel NAR practitioner survey shows first-time buyers purchased 44% of homes in March, up from 42% in February. Investors accounted for 19% of transactions in March, unchanged from February; the remaining sales were to repeat buyers. All-cash sales remain elevated at 27% in March, the same as in February.

The national median existing-home price for all housing types was $170,700 in March, up 0.4% from March 2009. Distressed homes, typically sold at a 15% discount, accounted for 35% of sales last month – unchanged from February.

“With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears,” Yun said.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said buying conditions are in near-perfect alignment. “Even with tougher loan standards, historically low mortgage interest rates with affordable prices and a sense that the market is turning have created optimal conditions in much of the country,” she said.

“With the fast approaching April 30 deadline to get a contract in place for the tax credit, Realtors are working harder than ever to negotiate transactions, arrange services and complete paperwork,” Golder said. “Because many repeat buyers need to sell their current home first, many will be purchasing later without the tax credit but now have the benefit of a more buoyant housing market.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dipped to 4.97% in March from 4.99% in February; the rate was 5.00% in March 2009.

Single-family home sales rose 7.3% to a seasonally adjusted annual rate of 4.68 million in March from a level of 4.36 million in February, and are 13.3% above the 4.13 million level a year ago. The median existing single-family home price was $170,700 in March, up 0.6% from March 2009.

Single-family median prices rose in 14 out of 20 metropolitan statistical areas reported in March in comparison with a year earlier. Five metro areas experienced double-digit increases, including San Diego, St. Louis and Boston.

Existing condominium and co-op sales increased 3.1% to a seasonally adjusted annual rate of 670,000 in March from 650,000 in February, and are 39.3% higher than the 481,000-unit level in March 2009. The median existing condo price was $170,600 in March, which is 0.7% below a year ago.

Northeast
Regionally, existing-home sales in the Northeast increased 6.0% to an annual level of 890,000 in March and are 25.4% higher than a year ago. The median price in the Northeast was $249,800, up 8.9% from March 2009.

Midwest
Existing-home sales in the Midwest rose 7.2% in March to a pace of 1.19 million and are 15.5% above March 2009. The median price in the Midwest was $139,300, up 0.2% from a year ago.

South
In the South, existing-home sales increased 7.1% to an annual level of 1.97 million in March and are 13.9% higher than a year ago. The median price in the South was $154,800, up 5.2% from March 2009.

West
Existing-home sales in the West rose 6.6% to an annual rate of 1.30 million in March and are 14.0% above March 2009. The median price in the West was $209,400, down 7.9% from a year ago.

For more information, visit www.realtor.org.

New U.S. home sales jump from record low

WASHINGTON (AP) – April 23, 2010 – Sales of new U.S. homes surged 27 percent last month, bouncing off the previous month's record low and blowing past expectations as better weather and government incentives boosted sales.

The Commerce Department said Friday that new home sales rose in March to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July and the biggest monthly increase in 47 years.

Economists surveyed by Thomson Reuters had expected a sales pace of 330,000. February's results were revised upward to 324,000 but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country.

The median sales price was $214,000, up more than 4 percent from a year earlier but down more than 3 percent from February.

The new home sales report reflects signed contracts to purchase homes rather than completed sales and thus gives economists a feel for how many buyers were out shopping for new homes in a given month.

It is likely capturing consumers who are trying to qualify for federal tax credits that will expire at the end of this month. The government is offering an $8,000 credit for first-time buyers and $6,500 for current homeowners who buy and move into another property.

To qualify, buyers must have a signed contract complete by the end of next week and must complete the transaction by the end of June. Nearly 1.8 million households have used the credit at a cost of $12.6 billion, according to the Internal Revenue Service.

The rise in new home sales was seen nationwide. Sales grew a whopping 44 percent in the South and 36 percent in the Northeast. They also rose about 6 percent in the West and 3 percent in the Midwest.

The number of new homes up for sale in March fell 2 percent to 228,000. At the current sales pace, it would take nearly 7 months to exhaust that supply.

Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.

Florida’s existing home sales rose in March, which means that sales activity has increased in the year-to-year comparison for 19 months, according to the latest housing data released by Florida Realtors®.

Existing home sales increased 24 percent last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009, according to Florida Realtors. Statewide existing home sales last month increased 37 percent over statewide sales activity in February. Also noteworthy: While March’s statewide existing-home median price of $137,000 was down from the same time a year ago, it was 4.3 percent higher than February’s statewide existing-home median price.

Florida Realtors also reported a 63 percent increase in statewide sales of existing condos in March compared to the previous year’s sales figure; statewide existing condo sales last month rose 40.6 percent over the total units sold in February. Though March’s statewide existing-condo median price of $96,900 was down compared to the year-ago figure, it was 5.1 percent higher than February’s statewide existing-condo median price.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in March while all MSAs had higher condo sales. A majority of the state’s MSAs have reported increased sales for 21 consecutive months.

Florida’s median sales price for existing homes last month was $137,000; a year ago, it was $141,300 for a 3 percent decrease. Industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

Thenational median sales price for existing single-family homes in February 2010 was $164,300, down 2.1 percent from a year earlier, according to NAR. In California, the statewide median resales price was $279,840 in February; in Massachusetts, it was $271,950; in Maryland, it was $237,446; and in New York, it was $225,000.

NAR’s latest outlook anticipates a rise in home sales in late spring, which should help to absorb inventory. Increased pending sales is a positive sign for home prices, which are continuing to stabilize, according to NAR Chief Economist Lawrence Yun.

In Florida’s year-to-year comparison for condos, 7,148 units sold statewide last month compared to 4,387 units in March 2009 for an increase of 63 percent. The statewide existing condo median sales price last month was $96,900; in March 2009 it was $108,500 for an 11 percent decrease. The national median existing condo price was $170,200 in February, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.97 percent last month, down from the average rate of 5 percent in March 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Sarasota-Bradenton MSA reported a total of 1,055 homes sold in March compared to 765 homes a year earlier for a 38 percent increase. The market’s existing home median sales price last month was $163,800; a year earlier it was $150,000 for an increase of 9 percent. A total of 382 condos sold in the MSA in March compared to 226 units sold the same month a year earlier for an increase of 69 percent. The existing condo median price last month was $146,400; a year earlier, it was $129,000 for a gain of 13 percent.

Related: NAR: Existing-home sales rise on buyer tax credit, favorable market conditions

© 2010 Florida Realtors®

“Out of Reach 2010? paints a gloomy picture for the nation’s nearly 38 million renters, who make up a third of U.S. households.

On average, a family must earn $38,355 a year, $18.44 an hour, to afford a simple two-bedroom apartment at the 2010 national average fair market rent of $959.

However, the average wage for U.S. renters is $14.44 an hour, down from $14.69 last year. Further, more than 60% of U.S. renters live in counties where even the average one-bedroom fair market rent of $805 isn’t affordable for average wage earners, the study found.

Minimum wage earners are at the greatest disadvantage. Under the standard measure of affordability—housing costs should account for no more than 30% of income—full-time minimum wage earners can’t afford one-bedroom apartments in any county in the country, even though Congress hiked the minimum wage from $6.55 an hour to $7.25 last year.

When adjusted for inflation, though, the average hourly wage fell by half a percentage point last year and probably will stagnate for the next few years, said economist Dean Baker, the co-director of the Center for Economic Policy and Research. “So the ability of people to be able to afford decent housing is not likely to get any better” in the next few years, Baker said. “It’s more likely to be worse than better. We aren’t on a good path.”

The findings help explain why the number of renters who moved in with family and friends, or “doubled up,” increased by 25% from 2005 to 2009. So-called affordable housing is becoming harder to find. Harvard’s Joint Center for Housing Studies has estimated that 200,000 such apartments, for which tenants pay less than 30% of their income for rent and utilities, are lost each year in the U.S.

For every new affordable-housing unit that’s constructed, two are demolished, abandoned or converted to condominiums or expensive rentals, according to the John D. and Catherine T. MacArthur Foundation.

With the number of renters growing because of foreclosures and the deflated housing market, the Low Income Housing Coalition says it’s time for policymakers to put more money into rental assistance and affordable housing.

Throughout the housing crisis and recession, lawmakers have focused resources and attention mainly on helping troubled homeowners avoid foreclosure, but roughly 40% of foreclosures also displace renter households, according to the report.

The coalition wants Congress to fund the National Housing Trust Fund, which establishes a permanent funding source to construct, renovate and preserve 1.5 million units of rental housing for low-income families over a 10-year period. The trust fund legislation passed in 2008, but because of the economic downturn, Congress hasn’t funded it.

The fund wouldn’t increase government spending or taxes because it was supposed to be funded through contributions from mortgage giants Fannie Mae, Freddie Mac and the Federal Housing Administration.

Sheila Crowley, the president of the coalition, said now is the time to act.

“Providing $1 billion for the National Housing Trust Fund will help address the growing shortage of affordable housing, which is one of the most serious economic problems facing the country,” she said.

Crowley said she expects the House of Representatives to begin floor debate on the Section 8 Voucher Reform Act, which passed the House Financial Services Committee last July. “We are very much hoping that the Senate will take it up as well,” she said.

The bill would provide rent subsidies for 150,000 low-income families, Crowley said, and the coalition is seeking another 2 million Section 8 housing vouchers over the next 10 years, which would double the current number.

In a statement, House Speaker Nancy Pelosi, D-Calif., said the coalition report showed the urgency of the hardship that low-income renters faced. “We are grateful for the NLIHC’s efforts, and we will continue our partnership to ensure that more Americans have better access to decent and affordable rental housing,” Pelosi said.

(c) 2010, McClatchy-Tribune Information Services.

Please come by to see my participating listing located at 831 65th St N in St Petersburg. This home is an exceptional value and a very unique property. It will be held open on Saturday and Sunday from Noon-5pm. Thanks for taken part in this first ever Nationwide Open House event!

The energy-efficient appliance rebate fast facts:

What is it?

20 percent mail-in rebates on six types of major appliances that earned a federal Energy Star rating.

Anything more?

A $75-per-appliance rebate for properly disposing of the appliances being replaced.

Which appliances qualify?

Energy Star-rated refrigerators, freezers, tankless gas water heaters, dishwashers, washing machines and room air conditioners.

Which appliances do not qualify?

Ovens, dryers, central air-conditioning units.

Who qualifies?

Buyers of appliances bought for personal use. First-come, first-served mail-in rebates until all $17.6 million is claimed, an estimated 66,000 appliances in Florida.

What does not qualify?

Appliances bought for commercial use, including landlords and condo associations. Any appliance purchased online.

What limits apply?

The limit on the total rebates one household may claim is $1,500.

Can I get a rebate for an Energy Saver appliance I already purchased?

No. The purchase must be made April 16 through 25.

Where can I find more information?

myfloridaclimate.com

Sources: Florida Energy and Climate Commission, U.S. Department of Energy

Rebates, step by step

•Shop appliance retailers ahead of time and write down the exact type of appliance, model and price.

•Starting at 11 a.m. Friday, April 16, register what you are buying online at the state priority rebate Web site (the address has not been revealed and the site not yet activated) in hopes of being among the expected first roughly 66,000 appliance sales to qualify for a piece of the $17.6 million rebate cash. The state suggests you buy first. A priority reservation number is not required to get a rebate. But people who secure them go to the head of the line until the rebate money is gone when processing claims.

•Execute the purchase April 16 through April 25. The states says buy first, then apply for a priority number.

•Secure written confirmation that the replaced appliance was disposed of properly.

•Submit all the rebate paperwork by May 10.

•Wait several weeks for an American Express debit card to be mailed with your rebate payment.

 WASHINGTON – April 5, 2010 – Effective yesterday, the short sale process is simplified. The only problem: Many lenders don’t know it, and Realtors may have to convince them.

The Home Affordable Foreclosure Alternatives (HAFA) program gives $3,000 to borrowers for relocation assistance, $1,500 to servicers for administrative and processing costs, and up to $2,000 to investors who allow up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. The program was created to help stabilize distressed inventory such as underwater homes.

Some lenders have already adopted HAFA rules, but April 5 was the deadline for participating servicers to implement HAFA. The program reportedly covers servicers handling more than 90 percent of all mortgages.

However, the National Association of Realtors (NAR) says that it’s already hearing complaints from members. Many servicers say they haven’t even heard about the program, Realtors claim, so it’s clear that they won’t “hit the ground running.”

NAR says it will carefully monitor HAFA implementation and report delays and other program problems to the Treasury Department. However, “patience will be needed.” Realtors can negotiate faster short sales by urging lenders to comply with the new procedures and deadlines.

NAR offers a webpage with information on how HAFA works at: www.realtor.org/shortsales.

NAR also offers other short-sale info (including links to a 45 minute Webinar and a 15 minute video on a separate webpage: http://www.realtor.org/realtors/basics_short_sales?wt.mc_id=rd0041.  

NAR also produced a four-page HAFA informational brochure.


U.S. Treasury Department guidelines and forms (updated March 26, 2010):
https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html.

© 2010 Florida Realtors®

The increase activities in the luxury real estate markets could indicate a turn around for the overall markets.

Anyone looking for a rebound in the housing market might want to look up—up in price that is. Sales of high end housing are returning with a near vengeance after two years of double digit declines.

Source: luxuryportfolio.com Greenwich, Connecticut home

"We're seeing a revival in the high-end housing market," says Lawrence Yun, chief economist at the National Association of Realtors (NAR). "It was so depressed, particularly last year, but it's really improved. There's much greater sales activity on upper end homes now."

While the mid-end of the housing market is still in the doldrums, high-end and low-end housing are the bright spots in what many predict will be a dismal spring season because of the end of the first time/ move-up home buyer tax credits. But like the move forward buyers for the cash for clunkers program last fall, many experts predicted a big dive in auto sales for the beginning of this year but instead we had one of the strongest returns and increase in the history of auto sales. We're hoping for the same pattern in the real estate market because as the economy and jobs improves the tax incentives will no longer be needed to keep the real estate market buoyant. People are willing to spend more when they feel secure and the fundamentals make sense.

In February this year, sales for homes priced at $1 million or more increased 38 percent nationwide from a year ago, according to the NAR. The Northeast is up 49 percent alone, while the West is up nearly 35 percent.

What's creating the high end 'boom' is a trifecta of lower interest rates, bank lending and consumer confidence.

"Rates are down for jumbo loans," says David Adamo, ceo of Luxury Mortgage, a mortgage banking firm based in Stamford, Connecticut. "Banks are seeing benefits in making these types of loans and are doing more re-financing now. I also think more people feel confident in the economy at the higher incomes."

Rates for jumbo loans—loans for mortgages that exceed $417,000—have shown a major decline in recent weeks.

A 30 year fixed jumbo is currently at 5.58 percent for a million dollar loan, while last year at this time it was almost 7 percent. Unlike conventional rates which are tied to treasurys, jumbo rates are a specialty product with rates set primarily by lenders.

Mortgages

30 yr fixed 5.16% 5.30% 30 yr fixed jumbo 5.85% 5.95% 15 yr fixed 4.39% 4.75% 15 yr fixed jumbo 5.38% 5.55% 5/1 ARM 3.96% 3.57% 5/1 jumbo ARM 4.50% 3.71%

Find personalized rates: Bankrate.com

"Banks are doing jumbo loans now at lower rates because they see it as a secure way to make a profit these days," says Bob Walters, chief economist at QuickenLoans.com. "Jumbo rates are always higher than conventional loans, but banks feel like they can have the lower rates now and still make money from those in the jumbo loan market as more home buyers take loans."

While banks are lending more these days, that hasn't stopped them from being extra cautious over who gets their money. Much like conventional loans, lenders want buyers to give a full bottom line when it comes to personal finances.

"Underwriting (assessing a buyer's eligibility for a loan) is still very tough," says Steve Habetz, president of Threshold Mortgage, a lending firm in Westport, Connecticut. "I had one buyer, who had enough money for a large downpayment, go through the loan process and he had to justify why his dividends were down one year while his investments were up. He got the loan but he had to go through hoops to get it."

"Jobs are on the line for these underwriters," adds Mary Cassidy, a licensed associate broker at Bronxville Ley Real Estate in Westchester County, New York. "I had one bank officer tell me that if everything wasn't just perfect on the loan application, someone could lose their job."

While interest rates for the bigger loans are falling, consumer confidence seems to be rising for those in the higher income brackets. It disappeared as the economy slumped—at least when it came to housing.

"People are not as uptight as they were a year ago," says Habetz. "It seems as if they are more comfortable in thinking the high end housing market is not collapsing. Home values have stabilized and it's been a matter of following the leader. One person sees others buy or sell and they join in. That's been happening."

And as Wall Street tickers move higher, so too do the number of potential buyers. "Sure, with bonuses and stocks going up lately, that's helped the upper housing market especially where I am," says Cassidy. "However, we're also seeing non-Wall Street types coming in as well."

However good the sales numbers may be, there are signs that high-end housing is not completely out of the woods yet.

Conventional rates are already making slight upticks as the Fed discontinued its mortgage backed securities buyback program—which helped keep rates lower. Banks could  raise rates for jumbo loans if they feel the market weakens and housing prices decline even more.

"There's improvement for sure but you still have to have a lot of money for a down payment to get a loan and it's not clear that prices have reached bottom," says Quicken's Walters. "Interest rate increases could slow things down. We probably need more time to tell if high end housing is really back."

More time is needed to say if any part of the housing market is really in a recovery. Sales for homes worth $500,000 or less are still in flux across the country as struggles grow over increasing foreclosures from job losses—and a slower but continuing fall in housing prices.

But for those who contend a high end housing rebound is here, expectations are that the upside will work its way down.

"I think the impact of high end housing will be broader for the whole economy and help at all levels," says Luxury Mortgage's Adamo. "Banks will benefit because they'll be seeing more cash and putting it to use and they'll be making more loans. Home buyers will need products and services so they'll be spending money. Call it trickle down, if you will, but I see it happening."

It will now be easier to find your free credit report but you may be curious about who else can see it and how it can be used.

Starting Friday, a new Federal Trade Commission rule will require Web sites advertising free reports to direct consumers to the government-approved www.annualcreditreport.com. TV and radio ads must do the same starting Sept. 1.

The problem is that these ads typically don't disclose that the advertised free reports are part of a package of services that can cost as much as $14.95 a month. Consumers may not realize they can get free reports with no strings attached.

Once a report is in hand, however, it only raises a slew of other questions. Here's what you need to know about credit reports and scores.

THERE'S MORE THAN ONE FREEBIE A YEAR

Let's start by clarifying when you can get free credit reports.

You're entitled to a free copy every year from each of the credit reporting agencies - Equifax, Experian and TransUnion. Off the bat, that means you get three free reports a year.

On top of that, you can request free reports if you're the victim of identity fraud or unemployed and looking for work. In the latter case, the idea is that you should know what's on your report in case a potential employer wants to pull it. You're also entitled to free copies if you think your report has errors or if it's ever used against you.

So if a bank turns you down for a loan based on a report, it's required to disclose where it got the report so you can request a copy.

Reports from the three agencies should contain pretty much the same information, but differences can arise when lenders don't provide data to all three.

And despite the official-sounding names, credit reporting agencies, also known as credit bureaus, are for-profit companies.

KNOW WHO CAN PULL YOUR REPORT

Only banks, debt collectors, landlords or those with a valid interest can pull credit reports.

"Curiosity is not a permissible purpose," said Rebecca Kuehn of the Federal Trade Commission. "You can't just pull a report, not even on your husband."

Prospective employers also need to get written consent to run checks on job applicants. Hawaii and Washington ban the practice in most cases, however, and lawmakers in about a dozen states are debating whether to do the same.

The thinking is that companies shouldn't be able to use a person's credit history to make hiring decisions, especially at a time when so many are struggling financially.

That said, credit checks are typically only used for filling positions with access to sensitive financial information, said Mike Aitken of the Society for Human Resource Management. Even then, he said companies mainly want to see that there aren't any outstanding judgments or collections.

Credit reports sent to employers also don't include a date of birth or the names of spouses on joint accounts, since employers can't discriminate based on age or marital status.

A CREDIT SCORE DOESN'T DEFINE YOU - SEVERAL DO

By now, most people understand that credit reports are the foundation for credit scores. What you may not realize is that a person can have multiple scores.

A company called FICO develops the most widely used scores, but they're not the only ones on the market. VantageScore has gained popularity and all three credit bureaus now sell both to lenders.

The version you'll get depends on the credit bureau you go to.

TransUnion sells both to consumers. But Equifax only sells FICO scores, which range from 300 to 850. Experian sells VantageScores, which range from 501 to 990.

In case that isn't complicated enough, the FICO scores you get from credit bureaus can differ for a couple reasons. The first is that there may be slight differences in the credit reports each bureau has for you. Additionally, FICO develops a specific formula for each credit bureau. In most cases, the differences shouldn't amount to more than a few points, said Craig Watts, a FICO spokesman.

Then there are so-called educational scores, such as Experian's PLUS score. These are sometimes called "Fako" scores because they're sold to consumers, but lenders don't use them.

All that said, keep in mind that the basis for any credit score is a credit report. So one score should give you a good idea of where you stand with the others.

Credit scores aren't free, however. You can buy them from a credit bureau or from MyFico.com for $15.95.

THERE COULD BE OTHER REPORTS ON YOU

Credit reports are the most widely known, but they're not the only information available on consumers.

For example, banks and lenders are increasingly running additional checks on loan applicants, said Teresa Grove, a spokeswoman for Kroll Factual Data, a screening company.

"It used to be people could qualify for large transactions based on a credit score," she said. "Now more lenders want income verification too."

Other consumer reports provide records on check fraud, driving violations and rental histories. As long as there's a valid interest - say a landlord who wants to check an applicant's rental records - your permission isn't needed for those reports to be pulled.

Prospective employers, however, need permission to obtain any type of consumer report on a job applicant.

For example, it's not uncommon for companies to run background screenings on prospective hires to check for criminal histories. For a high-level position, a company might also request permission to verify past employment, salary or education, Grove said.

As with credit reports, companies are required to disclose if a consumer report was the basis for denying you a job, loan or other service.

And if so, you're entitled to a free copy of that report.

DISPUTING CREDIT REPORTS: HOW TO DO IT

You're entitled to a free credit report every year from each of the three credit reporting agencies, Equifax, Experian and TransUnion. You can get copies at www.annualcreditreport.com.

If you believe there's an error in a report, here's what you should know about disputes.

-You can submit disputes online at www.equifax.com, www.experian.com, www.transunion.com.

-If you want to submit a dispute by mail or phone, the address or number should be on your credit report.

-Once a dispute is received, the credit bureau contacts the lender that provided the information. The lender in turn must look into the matter.

-If a fix is ultimately made, the lender must alert all three credit bureaus of the error.

-Credit bureaus are required to respond to disputes within 30 days of receiving them.

-When the investigation is complete, the credit bureau must provide written results and a free copy of your report if the dispute results in a change. This report does not count as your free annual report.

-You can also contact lenders directly and ask that they update incorrect information with credit bureaus.

By CANDICE CHOI, AP Personal Finance Writer

NEW YORK -

For Marika Rose, a Sacramento communications consultant, it happened so stealthily that it took years before she noticed. In January, she spotted a couple of puzzling charges on her debit card statement. The amounts were small—$24.95—and she’d seen them before, but always assumed they were for purchases she or her husband had made. Curious, she started looking back through old statements and found dozens of similar charges. When she called the company listed on the statement, Rose was told the monthly charges—which had been quietly increasing since 2007—were for a “shopping membership” that she unknowingly signed up for while making an online purchase.

Digging deeper, she discovered her “membership” had sucked more than $1,100 out of her account in the past three years. “I was shocked that in little increments, a company could siphon off so much from my checking account,” Rose said. She assumes the membership fee got started from a pop-up window that she didn’t opt out of.

Ultimately, the company reversed all the charges and she canceled her debit card. She also filed a dispute report with her financial institution.

Technically, Rose’s experience isn’t identity theft, which is the illegal use of personal financial information to commit fraud. In 2009, identity theft jumped 12%, hitting 11.1 million U.S. consumers, according to an annual survey released last month by Javelin Strategy & Research. “It doesn’t seem to be going away and it’s getting more sophisticated and more organized by criminal rings,” said Joanne McNabb, chief of California’s Office of Privacy Protection.

On the heels of the Javelin findings, the Federal Deposit Insurance Corp. recently reminded consumers to take precautions. It even posted its own YouTube video, “Don’t Be an Online Victim.”

“Online fraud is an ongoing game of cat and mouse,” fraud specialist David Nelson said in the FDIC’s warning. “Crooks continuously hunt for security holes, banks and merchants plug those holes, and then the criminals find new ones to slink through.”

Consumers can keep the bad guys at bay, he says, by taking precautions and remaining vigilant. Among the FDIC’s tips:

-If you bank online, frequently check your accounts to spot errors or fraudulent transactions. The sooner you detect a problem, the easier it can be to fix.

-Don’t respond to “urgent” requests. Never give out your Social Security, credit or debit card numbers or pin in response to an unsolicited e-mail, text message or phone call. That “urgent” message purportedly from a bank, merchant or government agency (such as the IRS) could be a scam attempting to trick you into divulging personal and account information.

-Watch out for bogus text messages. Cell phone texts claiming that your bank account has been “blocked” and that you must call to fix the problem can be a scam. If you make the call, you’ll likely be asked for your account and pin, which can be used to create counterfeit debit cards.

-Don’t open attachments or click on links in unsolicited e-mails. Your computer could become infected with “spyware” that changes your security settings and records your keystrokes. It lets online thieves silently steal your passwords, bank or credit card numbers and obtain answers to security questions, like your mother’s maiden name.

In one recent example, the FDIC said, criminals sent out fake IRS e-mails warning recipients they were being investigated for unreported income and advising them to click on an attachment for more information. Doing so launched a program that allowed hackers to install spyware on personal computers, in order to access bank accounts.

McNabb said a lot of identity theft is “beyond the control of consumers to prevent,” things like data theft from businesses or hospitals. But in general, she said, consumers should keep their computer well protected with security software and avoid responding to any online “phishing” for personal financial information.

(c) 2010, The Sacramento Bee (Sacramento, Calif.).

RISMEDIA, March 31, 2010—A new analysis by the Center for Neighborhood Technology (CNT) shows that only two in five American communities—or 39%—are affordable for typical households when their transportation costs are considered along with housing costs.

The Housing + Transportation (H+T) Affordability Index examines 337 metro areas across the country—encompassing 161,000 neighborhoods and 80% of the U.S. population—and provides the only comprehensive snapshot of neighborhood affordability by accounting for combined housing and transportation costs associated with a community. The H+T Index and its accompanying report, Penny Wise, Pound Fuelish, illustrate the direct link between household transportation costs and the location and design of neighborhoods and transit options.

Under the traditional definition of housing affordability (30% or less of household income spent on housing), seven out of ten U.S. communities are considered “affordable” to the typical household. But in almost all metro regions of the country, when the definition of affordability includes both housing and transportation costs—at 45% of income—the number of communities affordable to households earning the area median income decreases significantly. Nationally, the number of affordable communities declines to 39%, resulting in a net loss of 48,000 neighborhoods with combined housing and transportation costs that stress the average family’s budget.

“Across the nation, families are dealing with the economic crisis and looking at their bottom lines to determine how they can save money and plan for the future,” said Congressman Earl Blumenauer (D-OR). “The H+T Index provides valuable information about the two biggest household expenses, housing and transportation. This index will help policymakers level the playing field to improve location efficiency, and it will help lenders educate consumers about the trade-offs and costs associated with their housing choices.”

For most families, transportation is the second largest household expense. The new analysis shows that for many families in “drive ‘til you qualify” zones, savings realized from lower cost housing are eliminated by unexpectedly high transportation costs. Yet it is difficult for consumers and policymakers to estimate the full costs of a location, including the cost of both housing and of transportation. This lack of information can lead families to unknowingly make housing decisions that cause them to live beyond their means as gas prices rise and commutes grow longer. A community’s average transportation costs can range from 12% of household income in efficient neighborhoods with walkable streets, access to transit, and a wide variety of stores and services to 32% in locations where driving long distances is the only way to reach essential services.

“The Rockefeller Foundation is proud to have funded the H+T Index as part of our initiative to promote equitable and sustainable transportation,” said Nick Turner, Managing Director at The Rockefeller Foundation. “This unique tool will give consumers the opportunity to make more informed decisions about where they can afford to live, and help provide policy makers with data to develop new policies and targeted investments that can reduce transportation costs. Transportation costs are often the second highest expense for working Americans–and the Rockefeller Foundation’s initiative is committed to helping Americans re-think our transportation future as a critical way to expand economic opportunity.”

The failure to provide Americans with affordable transportation and compact neighborhoods that support pedestrians and cyclists as well as drivers, increases the financial pressure on families, resulting in unstable household budgets, lack of savings, and even foreclosure, and places communities across the country, particularly those with inadequate transportation options, at greater risk.

“In recent years we have seen foreclosures increasing faster in outer suburbs than in central cities. When gas prices peaked in 2008, families in many regions saw their transportation costs soar by $3,000 per year or more. When communities have few transportation options and require driving long distances for basic necessities, already stressed household budgets are very vulnerable to spikes in gas prices and rising transportation costs,” said Scott Bernstein, president and founder of CNT. “The H+T Index gives a reliable estimate of each neighborhood’s average household transportation costs, a strong move toward a ‘no surprises, no sticker shock’ home buying or renting experience.”

For more information, visit www.cnt.org.

Real estate portal now ranks #2 across all major search engines

Myehomes.com teamed up with Homes.com, a division of Dominion Enterprises back in 2007 because we saw the huge internet growth potential of this well managed company. We have recently increase our stake and advertising campaigns with homes.com to insure our dominant coverage and strengthen our positions in the Florida markets. 

Homes.com announced today record-setting traffic and data results for 2009. In the face of the worst housing market in generations, Homes.com received nearly 700 million page views in 2009 and increased visitor traffic 36 percent over the previous year, setting all-time records in annual page views and traffic. Homes.com ranks #2 among all real estate Web sites for the search term “Homes for sale” across all major search engines according to Hitwise, and real estate search portal Web sites according to ComScore.

Powering this increase in traffic is a dramatic improvement to Homes.com listing searches, reducing the average search time in half, providing homebuyers an expedient yet content-rich method of finding agents through an enhanced agent directory and homes for sale in a nationwide listing inventory that grew by more than 2 million listings in 2009.

In 2009, Homes.com moved aggressively into the rental space and now provides the most comprehensive array of rental properties online. Also in 2009, Homes.com became the first real estate search Web site to reach all mobile consumers through its suite of mobile apps and Web sites including iPhone and Blackberry apps apps and a Web site optimized for mobile handsets. With More than 10 million page views in 2009, Homes.com mobile traffic quadrupled over the previous year.

Record traffic and technological improvements resulted in Homes.com referring more than 18.5 million visitors to its advertisers in 2009.

Jason Doyle, vice-president of Homes.com says: “As a result of our record-breaking traffic and coverage of virtually all mobile homebuyers in 2009, we have been able to attract some of the nation’s leading real estate franchises and advertisers, many of whom cite Homes.com as their leading source of inbound referral traffic.” Doyle adds, “We expect our growth to accelerate in 2010 as we add new consumer resources, make significant technological enhancements and continue expanding the Homes.com network in order to provide maximum value to our customers.”

About Homes.com
Homes.com, a division of Dominion Enterprises, is a leading provider of real estate marketing and media services, including brand advertising, property listing exposure and syndication, search engine marketing and instant response lead generation. More than 4 million homebuyers visit Homes.com each month to search more than 3 million homes for sale, locate real estate agents in their area and find useful homebuying tips. Homes.com provides premier advertising solutions for real estate professionals reaching active homebuyers. For more information, visit www.Homes.com.

About Dominion Enterprises
Dominion Enterprises is a leading marketing services company serving the automotive enthusiast and commercial vehicle, real estate, apartment rental, and employment industries. The company’s businesses provide a comprehensive suite of technology-based marketing solutions including Internet advertising, lead generation, CRM, Web site design and hosting, and data management services. The company has more than 45 market-leading Web sites reaching more than 16.7 million unique visitors, and more than 450 magazines with a weekly circulation of 4.3 million. Headquartered in Norfolk, Va., the company has 5,400 employees in more than 200 offices nationwide. For more information, visit http://www.DominionEnterprises.com.

• Fifty-one percent of respondents identify the U.S. as providing the best opportunity for capital appreciation;
• This compares to 37 percent in 2008, 26 percent in 2007, and 23 percent in 2006;
• The last time respondents’ perceptions for U.S. real estate were this strong was in 2003, when the percentage once again reached 51 percent;
• The U.K. emerges as the second-best country for capital appreciation, receiving 30 percent of respondents’ votes;
• In third place, China receives 10 percent of respondents’ votes.

• Two thirds of respondents plan to increase their investment in the U.S. in 2010 compared to 2009;
• Investors say they plan to increase U.S. allocations above 2009 levels by 62 percent for equity and 83 percent for debt; at least half the survey respondents report a stronger appetite for both debt and equity investments in the U.S. than in other countries;
• Plan for global equity investment in 2010 exceed plans for 2009 by 46 percent; 2010 plans for global debt are 20 percent lower than planned for 2009;
• By the middle of the fourth quarter of 2009, foreign investors placed only 62 percent of planned debt allocations and 43 percent of planned equity allocations globally; in the U.S. they placed only 35 percent of planned debt allocations and 23 percent of planned equity allocations;
• As a portion of global real estate, U.S. 2010 allocations for debt represent 80 percent of the global pool; allocations for equity represent 49 percent.

• In the June 2009 mid-year survey, half the respondents said they expected recovery by or before the second quarter of 2010;
• In the 2010 annual survey, half the respondents say they expect the recovery by or before the fourth quarter of 2010. But, optimism about the state of the U.S. real estate market remains strong:
• Thirty-three percent of survey respondents say they are more optimistic about the U.S. real estate market than they were in June 2009;
• Sixty-three percent say their perspective has not changed;
• Six percent say they are more pessimistic.

Modified loans on home can hurt your credit score but is better than the alternatives of a short sale and much better than a foreclosure.

The last thing many troubled homeowners want to hear is that they could be denied a car loan after they get a chance to modify their home loan.

But credit scores can get dinged after a home loan modification, making it more costly or tougher to get a loan or credit card.

Hundreds of thousands of homeowners find themselves in a financial squeeze, thanks to the recession and the meltdown in the housing market. Lenders have offered trial loan modifications to more than 700,000 eligible borrowers. As of late November, about 31,000 trial loans have been made permanent, which requires at least three on-time payments under the trial program and proof of income.

What these troubled homeowners don’t realize is that these attempts to avoid foreclosure may result in their credit scores taking a hit.

A potentially damaged credit score is one of those hidden costs of home loan modification – and it varies significantly depending on your lender, as well as when you received your loan modification, your credit history and how your loan was altered.

“They need to tell people up front that this could happen,” said James Sperr, 46, of Belleville, Mich.

Sperr and his wife, Carol, received a trial modification through Bank of America that cut their house payment, including taxes and insurance, to $957 a month from $1,140 a month.

But it came with a hit to the credit score.

“Our credit rating has gone from the 800s to 750,” Carol Sperr said.

“It’s punitive to a consumer who is already scared, frustrated, mad,” said John Ulzheimer, president of consumer education for Credit.com.

The Sperrs said they had never been late or missed a mortgage payment, but their bank had reported them as being behind on payments.

Their credit score took a hit, falling from the 800s to 750.

“They tell us that once the paperwork ‘catches up’ and the new loan is finalized, they will correct the credit reporting agencies,” Carol Sperr said.

No one saw this coming.

“I didn’t find out about our credit until they did a check on this van we bought,” James Sperr said.

He said his wife was able to provide more documentation that their mortgage was in compliance so they did not have to pay a higher rate or get shut out of a loan.

Others aren’t so lucky.

Loan modifications remain a good thing, but they often come with that consequence.

Homeowners who face hardships but cannot traditionally refinance their mortgages can try to get a loan modification. A modification temporarily reduces the monthly payment, which can be helpful if someone’s dealing with a pay cut. Typically, the principal amount owed on the loan is not reduced or changed and the amount of debt owed is not forgiven.

The federal government has programs, and banks and credit unions have proprietary programs as well.

Yet many homeowners feel blindsided when they discover that their credit score has dropped by 50 to 100 points or even more after they entered a trial modification.

“What’s the point of the additional credit damage? What have they just accomplished by doing that to the borrower?” asked John Ulzheimer, president of consumer education for Credit.com.

Good question.

In the first few months after receiving a trial modification, Ulzheimer said, it is possible that the initial payments would show up as a “partial payment plan” on a credit report, which turns into a negative hit to a credit score. This can be a problem even for homeowners who never have missed a mortgage payment.

“It really depends on how the mortgage company decides to report this to a credit agency,” said Julie Bos, group manager and certified credit counselor for GreenPath Inc. in Grand Rapids, Mich.

A homeowner who is behind on payments will see credit score damage, and that won’t change from a modification.

“If you’re already delinquent, your credit is already impacted,” said John Snyder, manager of foreclosure programs for NeighborWorks America.

But consumers who are making their mortgage payments are getting modifications, too, perhaps because wages were cut or jobs were lost. They may be struggling to stay current, but their credit may not be bad when they start a modification.

At Bank of America, consumers who are current on mortgage payments could show up as being delinquent in the bank’s system after a trial modification period begins because they’re paying less than the actual mortgage payment during that trial period.

At the end of the trial period, the bank said it brings its system up to date when the loan is converted to a permanent modification.

Some might argue that it’s not a wise move to take on more debt, such as a car loan, if a person saw a cut in pay and needed a home loan modification. But many consumers often cannot control when their car breaks down.

On top of that, lenders benefit from home loan modifications because potential foreclosures can be avoided.

Unknowingly though, many consumers discover themselves boxed in later when they try to get approved for credit.

“They’re concerned about the damage to their credit. They’re not happy about it,” said Bos.

“If you go out and try to purchase a car in two months, you could be denied,” she said.

Or you might have to get a co-signer or put down a bigger downpayment or accept a higher interest rate to get a loan.

What’s stranger is that not all home loan modifications will hit consumers in the same way on their credit reports.

Consumers who modify their mortgages under federal programs, such as the Making Home Affordable and the Home Affordable Modification Program, now can do so without hurting their credit scores since those modifications are listed as a “loan modified under a federal plan” as of Nov. 1.

Here’s the sticking point: If you are able to modify your loan through an individual bank or credit union’s program and not a government plan, it’s likely your credit score will be hurt.

To complicate matters further, eventually a “loan modified under a federal plan” on your credit report could hurt your score, too.

Ulzheimer noted that the only reason the new reporting guidelines do not damage your credit scores is because FICO, the company that created the FICO credit score, hasn’t had a chance to study the long-term predictive value of loan modifications to credit risk.

Still, homeowners who are in trouble must realize that a foreclosure or a short sale would be listed as a charge-off or settlement on a credit report and last seven years, Ulzheimer said, while a modification would typically last a few years.

If you do receive a loan modification, ask questions and be more careful about how you handle your credit elsewhere to try to combat any potential damage.

Before making any moves, talk to a nonprofit housing counselor. See www.findaforeclosurecounselor.org.

How to keep up your credit score

These days, a good score is around 720 points or higher. Here are some tips to help you maintain or improve your credit score:

• Do not apply for several credit cards. Applying for a store credit card could cut 10 points off the credit score of some consumers with good credit.

• Pay all bills on time – utilities, mortgage, credit cards, etc. Lenders customarily don’t report you as late to the credit bureaus until you have missed the original due date by at least 30 days. Being a month late with all payments, for example, might lower a credit score by from 60 to 110 points.

• Missing a payment on one account that wasn’t already late could slice 40 to 75 points from some credit scores.

• Keep your credit card balances low on all cards, much lower than half of the available limit on your credit cards. Maxing out can cut credit scores by 45 to 100 points.

• Negotiating a debt settlement with creditors can lower some credit scores by 45 to 125 points. A short sale on a home would be reported as a debt settlement.

• A loan modification to get a lower mortgage payment and stay in your home could impact your credit score. In some cases, consumers could see credit scores drop by 100 to 150 points.

• Having your home foreclosed on could knock 45 to 100 points off your credit score, depending on where your score started.

• Filing for bankruptcy will hurt some credit scores by 195 to 255 points.

© 2010 Detroit Free Press, Susan Tompor. Distributed by McClatchy-Tribune News Service.