Posts Tagged Real Estate
The National Association of Independent Housing Professionals has repeatedly requested the public comments that the Home Valuation Code of Conduct was supposedly based-on. Fannie Mae and Freddie Mac have yet to comply. I would bet because what is contained in the letters is much different than what Fannie and Freddie told Congress and the public in regards to HVCC, which was little more than Fannie and Freddie making a plea bargain with New York Attorney General Andrew Cuomo.
NAIHP is vigorously pursuing copies of the tens of thousands of public comment letters received by the GSE’s and the FHFA, with respect to the HVCC. NAIHP has made numerous requests for these letters, all of which have been denied. A formal request through the Freedom of Information Act (FOIA) is being prepared.
In a May 19, 2010 letter to Andrew Cuomo, FHFA Acting Director Edward DeMarco stated, “The Home Valuation Code of Conduct deployed by Fannie Mae and Freddie Mac was implemented after taking extensive market place comments.” “Refusing to release the comment letters after admitting they relied upon them when implementing the HVCC suggests the letters fail to support the code’s implementation and the FHFA is deliberately withholding this information from the public and Congress,” said Savitt.
Salt Lake City, UT
While walking this morning I noticed the house two doors down had a notice on the door: This home is owned by Fannie Mae.
I know, it’s all over these days. I’m sure many of you have had a neighbor lose their home recently, also. It’s sad. He and his family have lived there since 2004. This house is very cute and was cared for and loved by my neighbor. It was built in 1938 and has been thoroughly remodeled and the landscaping updated.
Like so many others though, he’s not losing his home because he bought more house than he could afford – living there for seven years is a testament to that – but because due to the economy he is earning much less than he even last year and he can no longer afford to pay his bills.
And he’s not becoming a renter. He, his wife and kids are all moving-in with other family and sharing expenses.
I guess I’m from a different school of thought about this recession. I am not from the school of “real estate and mortgage fraud brought down the country”. I’m from the school of thought of “Yeah, there was some fraud in the real estate industry, but the biggest cause of the bubble burst was the economy already being on a downward spiral causing loss of jobs which lead to people losing their homes and cars and other things.”
I feel my position is supported by the fact that it wasn’t only the mortgage industry that saw late payments and defaults. All sectors of the credit industry did: homes, autos, credit cards, etc.
Why did this happen? Well I’m no economist, but I can guarantee that the people really responsible for the mess we’re in have shifted the blame to those without the money and the microphone and are walking away scott-free and richer than they were in 2007.
Typically real estate agents will negotiate for the seller of a home to contribute up to 3% of the purchase price of the home towards the buyer’s closing costs. What many don’t know though is that this really is the minimum amount that can be contributed. This is especially important when purchasing a home under $150,000 because closing costs can many times exceed the 3% and the buyer will have to come to the closing table with money above their down payment.
The reason this happens is that there are both fixed and variable closing costs. Some fees are fixed regardless of the loan amount (such as underwriting, processing, tax fees, appraisal, etc.) and others are based on a percentage of the loan amount or purchase price (origination fee, points paid to buy down the rate, title insurance, property taxes, per diem interest, etc.). Those fixed costs represent a larger percentage of a smaller loan than they do a larger loan.
So to that end, here are the guidelines for allowable seller contributions toward closing costs:
- Primary residence
- 3% for LTV/CLTV > 90%
- 6% for LTV/CLTV > 75% to 89.99%
- 9% for LTV/CLTV < 74.99%
- Investment properties
- Seller can pay 100% of discount points and borrower’s non-recurring closing costs.
- Seller can provide an additional amount not to exceed 4% of the estimated reasonable value to assist the borrower’s payment of buydown points, prepaid expenses and funding fee.
Be sure your Realtor talks with your loan officer prior to putting an offer on a house. You want to make sure that enough seller concessions are negotiated to cover all your closing costs so that you don’t have to pay anything more than your down payment.