The government’s new, revamped HARP program is 6 weeks from release. Homeowners nationwide are gearing up to refinance.

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the government’s loan product for “underwater homeowners”. HARP makes current mortgage rates available to households which would otherwise be unable to refinance because the home lacks equity.

This is a big deal — especially today. Mortgage rates are at an all-time low and millions of U.S. homeowners have been unable to take advantage. HARP aims to change that.

HARP originally launched in 2009. Its first iteration failed to reach a meaningful percentage of U.S. homeowners, however, because costs were high and loans were high-risk. With its re-release, the government has removed the hurdles to HARP, putting refinancing within reach for millions of U.S. households.

To qualify for HARP, homeowners must first meet 3 qualifying criteria.

First, their current mortgage must be backed Fannie Mae or Freddie Mac. FHA- and VA-backed loans are HARP-ineligible, as are jumbo loans and loans backed by portfolio lenders.

• To check if your loan if Fannie Mae-backed, click here.
• To check if your loan if Freddie Mac-backed, click here.

Second, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior on, or before, May 31, 2009. If you bought your home or refinanced it after that date, you are HARP-ineligible.

There are no exceptions to this rule.

And, third, the existing mortgage must be accompanied by a strong repayment history. Mortgage payment must have been paid on-time for the last 6 months, at least, and there may not be more than one 30-day late payment in the last 12 months.

If these 3 qualifiers are met, HARP applicants should find the approval process straight-forward :

• Fixed rate mortgages allow unlimited loan-to-value
• The standard 7-year “waiting period” after a foreclosure is waived in full
• Except in rare cases, home appraisals aren’t required

Furthermore, HARP mortgage rates are expected to be on par with non-HARP rates, meaning that HARP homeowners will get the same rates and pay the same fees as everyone else. There’s no “penalty” for using HARP.

The revamped HARP is expected to be generally available beginning Monday, March 19, 2012.

To get a head-start on HARP, check with your loan officer for the complete list of HARP eligibility requirements.

Credit scores play a huge role in today’s mortgage market — larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.

Mortgage rates are at an all-time low. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting “the best rates” from your lender, and getting something worse.

The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics :

• Why you shouldn’t close a credit card after you pay off a large debt
• What is the maximize balance to leave on your credit cards, relative to your credit limit
• What types of credit checks harm your credit scores, and which ones don’t

You’ll also learn how to shop for a mortgage with multiple lenders without having your credit score “dinged”, as well as several proven methods to raise your credit score quickly.

In the end, good credit scores are the result of paying bills on time and staying with your means. Those with the best scores, get the best rates.

After a half-decade of tightening mortgage guidelines, banks are starting to “loosen up”.

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed’s survey and none said that mortgage guidelines “tightened considerably” or “tightened somewhat” between September and December 2011; 50 said that guidelines remained “basicaly unchanged”; 3 said that guidelines “eased somewhat”.

Mortgage applicants sometimes remark that the mortgage approval process can be challenging. Last quarter’s Fed survey hints that looser standards are coming.

Not since before the recession have banks lowered mortgage approval standards like this and it bodes well for this year’s Houston housing market. Real estate agents report that 1 in 3 home sale contracts fail with “declined mortgage applications” as a leading cause.

Looser mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. “Looser standards” should not be confused with “irresponsible standards”. It remains more difficult to meet bank standards as compared to 5 years. Today’s underwriters are more conservative with respect to household income, overall assets and credit scores.

Even as compared to one year ago:

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in Texas continue to fall, helping home affordability reach new highs.

If you’re in the market to buy a new home or refinance one, your timing is excellent.

    According to the Census Bureau, more than 3.2 million U.S. workers spend over 3 hours commuting to and from work each day.

Commutes exceeding 90 minutes in each direction are known as “extreme commutes” in Census Bureau parlance. As compared to typical commute times nationwide, they’re aptly named.

The national, average commute time is just 25.1 minutes. 

For home buyers in any U.S. city, make sure to make commute times a consideration before placing an offer on a property. The length of your daily commute will make an impact on your life.

Studies shows that shorter commutes are linked to higher levels of life satisfaction. Long commutes are linked to low levels of life satisfaction.

As ranked by the Census Bureau, here are the 10 cities with the longest average commute times, where commuting is defined as the total time to arrive at work, inclusive of all modes of transportation (i.e. automobile, train, subway, foot, or other) :

1. New York / North New Jersey / Long Island : 34.6 minutes
2. Washington, DC / Arlington / Alexandria : 33.4 minutes
3. Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutes
   Bremerton / Silverdale, WA : 30.8 minutes
   Chicago / Naperville / Joliet, IL : 30.7 minutes
   Winchester, VA : 30.3 minutes
   Atlanta / Sandy Springs / Marietta, GA 30.1 minutes
   Riverside / San Bernardino / Ontario, CA : 30.0 minutes
   Stockton, CA : 29.8 minutes
   Baltimore / Towson, MD : 29.7 minutes

   Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutes

4. Bremerton / Silverdale, WA : 30.8 minutes
5. Chicago / Naperville / Joliet, IL : 30.7 minutes
6. Winchester, VA : 30.3 minutes
7. Atlanta / Sandy Springs / Marietta, GA 30.1 minutes
8. Riverside / San Bernardino / Ontario, CA : 30.0 minutes
9. Stockton, CA : 29.8 minutes
10. Baltimore / Towson, MD : 29.7 minutes

By contrast, the shortest commute belongs to residents of Great Falls, Montana. The average commute for the city’s 58,000 residents is 14.2 minutes.

A long commute to work should not deter you from moving to a particular home or neighborhood, but your time-en-route should be a consideration. Before making an offer on a home , therefore, practice the rush hour commute from your potential new neighborhood in the morning, and back to it again that evening.

Then, imagine making the commute every day.

Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.  

It’s a money-saving time to buy a home — or to refinance one. Mortgage rates have never been this low in history.

According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed.

This represents an incredible value as compared to February of last year. 

It was exactly one year ago that mortgage rates begin their long slide lower. On February 11, 2011, the 30-year fixed rate mortgage reached its peak for the year, reading 5.05% in Freddie Mac’s nationwide survey. If you are among the many U.S. households that bought or refinanced a home around that time, you could choose to replace your current home loan with a new one and save close to 13% on your monthly mortgage payment.

13 percent saved on your mortgage is a noteworthy statistic.

Look at this 30-year fixed rate mortgage payment comparison over the last 12 months :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• February 2012 : $469.95 principal + interest per $100,000 borrowed

Because of falling mortgage rates, a homeowner with a $250,000 30-year fixed rate mortgage would save at least $175 per month just by refinancing into a new loan at today’s mortgage rates. That’s $2,100 in savings per year. 

Even after accounting for discount points and closing costs, the “break-even point” on a mortgage like that can come relatively quickly.

We can’t predict mortgage rates so there’s no promise rates will stay like this forever. If you’re planning to buy a home or refinance one, the best way to keep your monthly payments down is to lock your rate while rates are still low.

The market looks ripe for that now.

I would like to say off of the back I do not like doing open houses at all, but I guess this is part of this business and if I am planning to stay in this business I must to attend open houses and hold open houses. I usually forced to hold open houses if only are my own listing. Today I am holding an open house located at 926 8th ST NE Washington DC 20002. As this field has changed agent try different methods of open homes. I have seen some agent drag their open house hours all the way to 6:00 and some hold 2 or 3 open houses on Sunday. I have to admit I am one task person and i need to focus and if I can hold one successful open house I will be very happy.  I would like to hear from you agents how you guys make your open house fun and successful so I maybe I grab few ideas from you pro agents. Please read through this and tell me if I am doing anything wrong. Here is the way I hold Open House:

1- Dress well

2- Get early at least one hour early

3- drive around the blocks and place 4 open house signs

4- Go to my Open House and first thing I say I would sell this home today!!!

5- Think Positive and smile

6- Greet every one with smile and ask them to sign my open house sheet.

7- Try to engage in conversation not related to Sales of the home in hope of eventually the conversation lead to that.

8- Ask questions about where they come from and how soon they would like to move in and if it led to ask them how they want to buy this home as far as their financial concern.

9- After open House I follow up with people who I connect and who gave their information.

If you guys have any suggestion to make this better open house, please let me know.

I have found this link on the internet from FranklyRealty and I found it real interesting and i would like to share it with you. THis issue came up while i was at settlement and one of my client insisted not to purchase owner Title insurance and why title company do not disclose the optional feature of the owner Title insurace. Please let me know your tought on that :

Owner’s Title Insurance is OPTIONAL! That doesn’t mean “don’t get it”, it means, “know what you are buying before/if you buy it.”

There are two types of Title Insurance when buying a house in Virginia.

1. Lender’s Title Insurance. REQUIRED
   This is a fixed price by the state and is required by your lender, so stop thinking about it. It is paid once at closing, it is NOT monthly.
   For a $400k loan, this comes to about $1,000.
   This is to protect the bank’s investments (loan to you) from a problem with the title.
2. Owner’s Title Insurance. OPTIONAL
   This covers what the Lender’s policy does not cover. Also a one time payment.
   You have 3 options:
   a) No coverage (rarely do people know this is an option!!)
   b) “Standard” policy. $700 (reissue rates are less, more below about that)
   c) “Premium” or “Alta” Policy. $1,000 ($500k house, $400k loan)

The OWNER’S TITLE policy will be the focus of this blog. This policy is 100% OPTIONAL.

90% to 95% of buyers buy the Owner’s policy. I have no problem with this, however I would guess that 80% of people buying this have no idea what it is or that they even have an option. That I have a problem with.

Why do people buy Owner’s coverage?

1. It is snuck into the the closing documents (HUD1) by default with NO mention of it being Optional. Sometimes the “premium” policy is put in by default. That really bugs me.
2. It is sold as being a blanket coverage that protects you from everything and the fear of losing your house, and going bankrupt. I have yet to get any stats on how often this happens. 1 out of 100? 1 out of 10,000? Once in the USA every year? Or does the insurance cover the costs to cover the $500-$5,000 in legal fees to clear up the issue?
3. It isn’t disclosed that the title company selling you this insurance is making a 80% commission on selling you this policy.
4. Realtors do not get a bonus for pushing this (thank God), but if a Realtor doesn’t say “you must get it” they will be exposed to potential future liability. For example, if they sell 100 homes and they tell their client NOT to get it, and 1 has an issue, guess who they will sue? So it is easier for Realtors just to say “buy it.” It doesn’t cost them a dime. We like to say “Learn about it, and then decide.”

I don’t mind Title companies making money. What I don’t like is the lack of disclosure. It is not clear to the buyer that this is optional and that most of the profits of the closing come from this. Not the token $200 “fee” they charge. They make their money from Title insurance.

Again, I am not saying NOT to buy Owner’s Title Insurance.

I’m just saying:

• Know what it is.
• Who makes money if you buy it?
• Are you getting the basic or premium?
• Ask your Realtor or Title company for some statistics on how often these policies are engaged. (I’ve yet to get an answer for this one)

Examples to ponder:

1. The closing company pitches Owner’s insurance as a nearly 100% coverage if something goes wrong with your title. However I spoke to a woman that had to sue her title company to get them to perform on her insurance. She put it this way… “I paid $1,000 for a policy, $800 goes to the closing company as a commission, $200 goes to the policy writer. For $200, how likely are you going to be protected from a $500,000 loss?”
2. I was once at a closing in Falls Church. The buyer was a President of the Closing company. THE PRESIDENT OF A CLOSING COMPANY DID NOT BUY TITLE INSURANCE FOR HIS HOME. Keep in mind that he would effectively get a 80% discount and he STILL didn’t find it necessary for his personal home. I asked him why he wasn’t buying it and he said “I do the title search personally and I double checked and made sure there was nothing wrong with the Title history.” Then he had the nerve to say “But you should bring your buyer clients here and make sure they do buy the Owner’s policy.” This made no sense to me. Was he not going to double check my client’s Title history as well as his own personal search?
3. Remember that you are buying the Lender’s policy too. If something was hugely wrong with the title, wouldn’t the Lender’s policy kick in to clean things up (as in legal fees)? This part isn’t clear to me. If the house is $500k and you put down $25k 5%), are you really paying to insure against $500k, or is it more of an insurance to protect the $25k you have put down?

On the other hand…

1. I have spoken to a Realtor that has been in business for 20 years and she says you would be nuts to not get the policy. She has seen first hand one person that would have had major trouble if they didn’t buy the policy. Now does major trouble mean the loss of the house? All $500k or does it mean they would have had to pay $1,000 or $2,000 in legal fees. I would never pay $500 to insure against a 1 in XYZ chance of having to pay out $1,000. But I might pay $500 to cover $500,000 (if it really even covers you.)
2. One of my favorite closing companies in Alexandria says that they use the Owner’s title insurance all the time to clear up title problems that come up. So A buyer buys a house in 2002, and buys a policy. IN 2007 they sell th house but something pops up on the title. This company says that since the seller bought the policy, they were able to close. If they hadn’t bought it… (it isn’t clear if the alternative was a) losing the home (probably not), cover legal fees to clear it up c) ability to close immediately vs delaying closing weeks or maybe months (most likely)

Basic vs Premium
The Premium main feature is that it is supposed to protect you beyond your purchase price. So if your $500k house appreciates to $600k, the basic policy will protect your $500k while the premium protects $600k.

My wish list:
1) That Owner’s Title Insurance would be renamed to “Owner’s Title Insurance (Optional)”, so that consumers would know they have a choice.

2) That I could find actual data on how often these policies are engaged. Are we talking 10% of the time? Once in 100,000? And of those what did it actually protect against. Consumers deserve to have this data.

Dear Closing Companies, can somebody post a comment answering these few questions:

1. Out of your last 1,000 deals, how many times did an owner’s policy get engaged.
2. Take the last 5, what would have happened to them if they didn’t have a policy?
3. What actual real life “worst case” (because that is how policies are sold) examples do you have of somebody NOT having the policy and being adversely affected by this? What did they lose? $500 in legal bills or a $500k house?

Again, I’m not saying to get the Owner’s coverage or no
t. I don’t care if you do. If it makes you sleep better at night, great, I won’t be disappointed. I will be disappointed if you buy it blindly without understanding it.

Other little known tips:

1) Try and get a Reissue rate. If the former owner bought the property within the last 10 years, they probably have a policy. Track that down and save 20-30% on the Owner’s portion of the Title insurance. If lost, the former closing company can send a fax for $25 to prove the insurance was purchased. Take that $300 in savings and use $10 and donate it to StBernardProject.org.

Conclusion
I am in NO WAY saying not to buy Owner’s Title Insurance. I am not even implying it. I am just saying to make sure you know what you are getting. I prefer to give information instead of giving recommendations, but I can say that if you are at all uncomfortable waiving Owner’s Title insurance, then you SHOULD get it so you can sleep well at night. This is not one of those, “when in doubt, don’t get it” issues.

Here is a link comparing the standard policy versus the premium policy. I still don’t think this is enough information to make an informed decision. Click for link to Owner’s Title Policy Comparison chart. This sales sheet is obviously designed to make the premium policy look like it covers 5 times that of a standard policy.

75% of my clients end up getting the standard. Maybe a couple have bought the premium. I don’t personally buy any Owner’s title insurance, but that is just me, and NOT a recommendation.

Comments? Anybody use one of these policies?

- Written by Frank Borges LL0SA- Broker/Owner FranklyRealty

Buying and selling home one of the most important to home buyers and sellers. When I work with buyer I always recommend them to do Home inspection so when the time comes they always prepare for things that needs to be addressed in future. Owning a home is one of the most important things that buyer would do in their life time. No matter how many homes he or she bought but still going through transaction can get very overwhelming. I always tell buyer, when you hire home inspection do not expect the inspector to walk into a home and say positive thing about the house. They are there to find problem and because they telling you the entire problem that does not mean the house is bad, unless they tell you the house is about to crash. :) 

I always tell my client walk with home inspector and ask the questions you have concern about. Also, it is a great idea when the addressing an issue just ask proximate estimate for the repair or correction. No matter what people get overwhelmed.

Back in 2006 or some people call it boom market, people even would not do home inspection. They would buy the house AS IS, the way it is. In today’s market since we are in very healthy market and right people do the right practice it is required to do the home inspection and you as buyer want to know what is wrong with the house. I want my client feel comfortable about what they are buying and if they are not feeling it then this is the time to get out of it. The main point here is doing the home inspection and doing it right way. Plumbing, Electricity, roofing, Water damages, Mold, Radon and etc.. are most important things in the house that should make the buyer know bad be aware of it.

in recent weeks we had few issues and I thought about sharing . When the time comes to help clients buyer or seller getting what they want I am all about the job and dedication to get the job done and get the best value for my client in housing market. However, some times I realized that I need to draw a line and treat people the way they ask for to be treated. Let me rephrasie that little bit.  I can not help some one to get their home sold or purchase a home if they do not want my help or in other word they won't help me to help them. Some times I use this line to my client that I can not want you buy a home or sell a home more than you want it. Meaning if you really want to buy or sell homes lets get busy and get the job done. At the same time I realize that no matter what market we are in and how the housing play out in this case we need to chill out and do not allow any one , I mean any one to disrespect us. Yes, this is correct no matter what is it and what is involved there is no reason for any one to direspect me. I just do not allow that.

That also reflect to even my collegue who think because they got multiple offers or having a very hor property they can disrespect other agent. Just rigt then I stop them and tell them, listein, I totally understand you feel good about your self. but this is not about you and neitheir about me. Lets keep it porfessional and lets glue our seller and buyer and get the job done. Another issue , I am orginally from Iran and I am exteremly senstive when it comes to people they feel they can talk down to you because you are from other country, again, i would not allow that . No matter who you are and where you comming from respect your self in order to be respected. One very huge practice I always pratice in my buisness I treat people with respect and I want the same thing in return and if you are not respectfull enough to keep it porfessional , I am really sorry for you and you also will be sorry. So the people who out there they think they can talk down to people for any reason you better off stop it before some one like me let you know where your place is. Oh well, I just wanted to take that out of my chess because it was bothering me for quite bit some time. Now I can go sleep :)