INSPECTOR’S CORNER: FALL MAINTENANCE, TIP 1 OF 6

This column is the first of many from my friend Matt Steger at WIN Home Inspection, when one of my clients need an inspection, Matt is the man I call.  Matt’s Home Inspection Services are thorough, detailed and his reports are easy to read and understand.  Call Matt at 717-361-9467 for all of your home inspection needs.  Every Friday you can watch for Home Maintenance Advice from The Pulse of Lancaster right here, in the Inspector’s Corner!  Enjoy!

Autumn is here again. The leaves will soon be changing, baseball playoffs are under way, hockey season has started, and you are probably spending a little less time outside. This series of tips should help you maintain your home and get it ready for winter.

1. One of the most important things you should do this month is having your home’s heating system serviced. Whether your home is heated with a furnace, heat pump, or boiler, now is the time to make be sure it is ready for the cold months. You don’t want to wake up some January morning only to find that your heating system no longer functions. Regular preventive maintenance is key to ensuring safe and reliable service from your heating system as well as helping to prevent expensive unforeseen repairs down the road. If your home has upper and lower return louvers, now is the time to open the bottom return louvers and close the top return louvers. Just remember that warm air rises and during the cooler months, you want warm air to stay in the room. If you have a forced air system (furnace or heat pump), also make sure to replace or clean your air filter. A dirty air filter can put extra stress on your system and prevent proper filtering of your home’s air. Most air filters should be changed monthly (woven fiberglass type) or every 90 days (paper element type). Should your system use a large media type of filter (often 4”~7” thick and looking sort of like an accordion), this type of filter normally needs replacing every 12 months. Most heating contractors will change or clean the filter during their annual maintenance visit. Should your heating system vent into a chimney, make sure the metal exhaust pipe is fully sealed into the chimney. Furnace cement is used for this application. Should you have a heating system that is direct-vented (with PVC pipe, for example) make sure none of the exterior vents have vegetation blocking them.

If you have a programmable thermostat, you also want to change the settings to reflect the proper temperatures for heating season and adjusted times for standard time (when we change our clocks). If you don’t have a programmable thermostat, you may want to think about installing one to help lower energy bills. If you have a heat pump system with built-in auxiliary heat (sometimes called Backup heat or EMHeat), you will normally need a special heat pump programmable thermostat that has the backup heat capability.

If you have electric baseboard heaters, they often accumulate dust over the spring and summer and turning them on now, tends to cause a burning smell. You can use a vacuum cleaner’s hose attachment or a rag to clean off the dust so all you get is heat when you run these over the winter.

Matt Steger
 

I’d like you to be part of the conversation here, so please, comment, forward The Pulse of Lancaster to your friends, subscribe and as always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !

STRATEGIC DEFAULTS – RIGHT OR WRONG?

A recent article by Ken Harney at the LA Times cited a study done by Experian (one of the 3 major credit reporting bureaus) that highlighted some very interesting information about foreclosures.  Think foreclosures only happen to people with bad credit?  Think again!

Traditional thinking indicates that foreclosures happen to people who are “down on their luck”, maybe they lost a job, maybe they got sick or maybe they were careless, overspent and are getting foreclosed on because they are in over their heads.  There is typically a pattern that appears in their credit history, late  payments, missed payments delinquencies on other debts.  A growing trend over the last few years has been contrary to this pattern.  People with great credit scores and no other “warning signs” or “life changing events” such as a job loss are being foreclosed on in record numbers.

The study done by Experian looked for answers to that question and using data from 24 million credit that they were able to review over time to look for patterns, they found some interesting trends.  Here are some of the things they found:

  • The number of strategic defaults is far beyond most industry estimates — 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year’s fourth quarter.
  • Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast with most financially distressed borrowers, who try to keep paying on their mortgage even after they’ve fallen behind on other accounts.
  • Strategic defaults are heavily concentrated in negative-equity markets where home values zoomed during the boom and have cratered since 2006. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. In Florida it was 46 times higher. In most other parts of the country, defaults were about nine times higher in 2008 than in 2005.
  • Two-thirds of strategic defaulters have only one mortgage — the one they’re walking away from on their primary homes. Individuals who have mortgages on multiple houses also have a higher likelihood of strategic default, but researchers believe that many of these walkaways are from investment properties or second homes.
  • Homeowners with large mortgage balances generally are more likely to pull the plug than those with lower balances. Similarly, people with credit ratings in the two highest categories measured by VantageScore — a joint scoring venture created by Experian and the two other national credit bureaus, Equifax and TransUnion — are far more likely to default strategically than people in lower score categories.
  • People who default strategically and lose their houses appear to understand the consequences of what they’re doing. Piyush Tantia, an Oliver Wyman partner and a principal researcher on the study, said strategic defaulters “are clearly sophisticated,” based on the patterns of selective payments observable in their credit files. For example, they tend not to default on home equity lines of credit until after they bail out on their main mortgages, sometimes to draw down more cash on the equity line.

Also, the study found that people with high credit scores at the time of loan application are 50% more likely to strategically default than people with poor credit scores.

So what does it all mean, who is doing this?  Well, for starters, there are some people gaming the system.  They bought to high, they speculated, they bled out their equity and now rather than make good on the debt they are just walking away, kinda like stealing.  Then there are people who legitimately intended to make good on the debt, had wanted to build equity, own a home, live the dream.  These people, as the survey indicates, are typically in markets where there is a significant amount of negative equity.  They have no missed payments, no problems making payments, they just take a hard look at their situation, decide that they will never recover the loss in equity (buying a home for $400,000 and it being only sellable for $200,000 and yes, in California and Florida that really happened) and just walk away.  They know their credit will be damaged and here is the problem with this whole scenario, why walking away is more attractive than sticking it out and making good on their debt: in 3 years, if they treat their credit reports right and rebuild those scores, they could get a brand new mortgage on another home.

There are many legal implications here that I won’t go into since I am not a lawyer, walking away does not always make the debt go away. Let’s not forget either the ethical problems associated with taking a mortgage, promising to pay it back and then just breaking your word and walking, there by making the rest of us pay for it in higher interest rates and bail outs, but let me ask you, is a strategic default right or is it wrong?  If you were in this situation, what would you do?

I’d like you to be part of the conversation here, so please, comment, forward this to your friends, subscribe and as always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !

HANDS OFF THE TIL!

Recently, some changes were made to Regulation Z and RESPA that affect lenders and their requirements to disclose fees for their services and the total cost of the loan. The changes affect specifically how lenders are required to deliver the Truth in Lending (TIL) statement and what they are/are not able to change once they have quoted you/your client fees on the Good Faith Estimate (GFE).

Since I’m not a lender, I’m going to keep this simple and cover the basics as they apply to the average residential transactions.

· Lender must provide the initial TIL disclosures (GFE) no later than 3 business days after receiving a completed loan application.

· Until you receive the disclosures (GFE), lenders cannot collect any fees other than the appropriate fee for a credit check. This means in most cases the lender cannot collect application or appraisal fees until 3 days after application, assuming a GFE is issued. After a loan applicant receives the GFE and indicates that they wish to proceed with the loan, the lender may collect additional fees.

· A final TIL disclosure is due 3 days prior to closing.

· The lender must provide a copy of the appraisal to the borrower 3 days prior to closing.

· The lender cannot close the loan for at least 7 days after the borrower receives (or the lender has mailed) the initial TIL disclosure.

· If there is any change to the TIL disclosure that increases the APR beyond “allowable tolerances”, the lender must issue a new TIL disclosure reflecting the changes and allowing an additional 3 days for review prior to closing. Also, the regulation assumes a 3 day delivery period so that if the lender mails the new TIL disclosure, the lender must allow 3 days delivery time and 3 days review time for a total of 6 days.

· Lender must implement and use revised GFE and HUD 1 settlement forms effective January 1, 2010 (For details on the new forms go to this link:http://www.parealtor.org/content/upload/AssetMgmt/Publications%20News%20and%20Research/2009PARealtor/AprilREALTOR-4PageInsert_new.pdf)

· Failure to implement and use the new GFE and HUD1 forms as required is a violation of Section 5 of the real estate Settlement and Procedures Act (RESPA).

· Any and all charges typically paid by the borrower must be stated on the GFE. The new rules make it unlawful for lenders to add additional undisclosed charges. Items cannot be listed as POC in an effort to avoid stating the fees, all fees to be collected must be stated on the initial TIL disclosure (GFE).

· The GFE and its associated fees must be valid for at least 10 business days after issuance. If the borrower does not express intent to continue with the loan, the GFE is allowed to expire at the end of 10 business days. Until then the lender is bound to honor the offered terms.

· Fees stated in the initial TIL disclosure may not change beyond certain specific tolerance limits unless a “substantial change” has taken place, such as borrower qualifications changing, appraisal issues, etc. If the fees do change outside allowable limits, the lender must initiate a cure (as in correct the fees to match those originally stated or rebate the borrower accordingly within 30 days after settlement). It is considered a violation if the lender asks other settlement service providers to reduce fees so that total costs fall within the tolerance limits.

So, what does this all mean for you? Well, to start it’s a good thing; the regulations require lenders to proceed in such a way that buyers getting whacked with last minute fee and rate changes are a thing of the past. The not so good part? Well, it takes time. This process, providing no changes, lengthens the time required for an average settlement, which along with the new HVCC regulations regarding appraisals; pretty much makes 30 day closings a thing of the past to. Oh, and that last minute change that requires the re-disclosure and mandatory 3 day waiting period? Well, if lenders don’t get it right from the start, there will be delayed closings that no amount of yelling by unhappy clients or agents will fix. We’ll be stuck, waiting, if the lenders can’t keep their hands off the TIL.

As always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !

DOING YOUR PART TO HELP HOUSING RECOVERY

The National Association of REALTORS® (NAR) is asking its 1.2 million members to write to Congress to extend the successful homebuyer tax credit into next year.  NAR has a great system email system to reach all of it’s members allowing massive responses to these “Call to Actions”.  According to realtor.org, the $8,000 first time buyer tax credit has encouraged  350,000 people to realize the dream of home ownership, buyers who otherwise could not have bought.

“Now is the time for Congress to keep this recovery going by extending the tax credit through 2010 and making it available to more homebuyers. We have all seen how the credit has been a spur to bring homebuyers into the market, and have seen the beginnings of a real recovery in the housing market. Housing has always led this nation out of economic downturns, and can do so again,” said NAR President Charles McMillan, “The credit needs to be available for an additional period of time in order to sustain the progress that’s been made so we can continue to see our markets fully recover. Uncertainty about the future of the credit will dampen consumer demand. The only way we can assure that the progress we’ve made can continue is to extend the credit and to do that now.”

How can you help? Write Congress Now. REALTORS® responding to the Call to Action will be doing this en masse and your letters will help.  Write to your Senators and Representatives to tell them of the successes with the tax credit thus far, and press them to extend and expand it now.  With the deadline of November 30, 2009 fast approaching, buyers are running out of time.  if you or someone you know wants to take advantage of the existing tax credit, you need to have a home under agreement in the next 20 days or you will risk losing your chance to claim the credit.

As always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !

PROTECTING TENANTS CAUGHT IN FORECLOSURE

This past May, a new law went into effect that did not capture much media attention at the time. The “Helping Families Save Their Homes Act of 2009” became effective May 20, 2009 and included some much needed protection for tenants caught in the crossfire of the foreclosure process. Here is the most common scenario: Landlord becomes delinquent in their mortgage, the foreclosure process begins and in an effort to keep collecting rents as long as possible, the landlord does not inform the tenant of the fact that foreclosure is taking place. The property is sold at Sheriff’s Sale, the bank takes possession and immediately, without notice, begins the tenant eviction process. This unfortunate situation placed numerous tenants, who paid on time and had a valid lease, on the street. This Federal law helps tenants avoid being unfairly evicted and in most cases will supersede state law.

Nothing in this article is intended to be legal advice and anyone who feels this new law is applicable to their situation should consult an attorney. Here are the basic points:

· All tenants, regardless of type of tenancy or existence of a lease, must be given 90 days notice by the “immediate successor in interest”, which could be either the bank or the new owner.

· If a tenant has a valid lease, the terms and conditions of that lease must be honored through the end of the lease. The tenant cannot be evicted prior to the end of the lease.

Here are the exceptions to the rule:

· If the new owner intends to occupy the property as their primary residence, the length of the lease does not have to be honored. The 90 day notice can be immediately served.

· If there is a month to month lease, or no lease or the state law allows the lease to be terminated at any time with proper notice, then a 90 day notice can be served immediately.

· The lease must have been entered into before the landlord received notice of foreclosure.

· The tenant cannot be a spouse, child or parent of the foreclosed owner.

· The tenants must not be paying substantially less than a fair market rent unless certain government subsidies are in place.

· Under any conditions, the tenants may be evicted if they violate the terms of the lease.

The rules are set to expire Dec 31, 2012 so until then, if you are listing a foreclosed property or a property recently purchased at a foreclosure sale that is tenant occupied, the tenant must always be give at least 90 days notice to vacate.

As always, if you have questions, need real estate advice or want to buy or sell a home, you can call or text me at 717-371-0557, email me at Jason@JasonsHomes.com or contact me at the office at 717-490-8999!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !

2009 HOUSING OPPORTUNITY PULSE SURVEY

Survey Reveals Downpayment, Closing Costs Still Greatest Obstacles to Homeownership, NAR Survey Shows

(article republished from www.Realtor.org)

NAR’s seventh pulse survey reveals that despite improved affordability conditions, eight in 10 Americans still consider having enough money for downpayment and closing costs to be the biggest obstacle to buying a home.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in seven years of sampling. Two-thirds of Americans think job layoffs and unemployment are a big problem; eight in 10 cite these issues as a barrier to homeownership.

The telephone survey of 1,250 urban and suburban adults in the top 25 metropolitan statistical areas was conducted for NAR by by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program.

Some key results include:

  • Eight in 10 Americans (82 percent) still consider having enough money for downpayment and closing costs to be the biggest obstacle to buying a home.
  • Two-thirds of Americans think job layoffs and unemployment are a big problem; 83 percent cite these issues as a barrier to homeownership.
  • 83 percent of Americans still believe buying a home is a good financial decision.
  • Three-fourths of those surveyed also believe now is a good time to buy a home, a number that has increased steadily the past two years.
  • The number of those who feel buying and selling activity has stabilized or stayed nearly the same has grown significantly, up more than 44 percent since last year.
  • The majority (58 percent) report that activity in their market has slowed.
  • Regarding home sales, nearly eight in 10 say it’s harder to sell a home in their area today than it was a year ago, despite the fact that nearly three-fourths of respondents say home prices are less expensive.
  • Foreclosures remain a real concern among survey respondents. Slightly more than half (51 percent) say foreclosures are a big to moderate problem in their area.
  • The rate of foreclosures is generally seen as stabilizing; 41 percent say the rate of foreclosures in their area is about the same as last year.
  • Ninety-two percent of respondents said neither they nor members of their immediate family have experienced a foreclosure in the past year, yet it is still a personal concern for many. One in five respondents said they are very or fairly worried that they will have difficulty making their mortgage payments over the next year.
  • Thirty-two percent say it’s a big or moderate worry that they, or a member of their family, may have their home repossessed or foreclosed because they are unable to pay rising monthly mortgage payments.
  • In 2008, more than half of respondents (54 percent) were open to the federal government taking a more active role in overseeing mortgage and lending practices – the number dropped this year to 47 percent.
  • Forty-two percent of Americans believe the country is back on the right track, more than double the number last year (16 percent).

Right now, buyers, first time buyers especially, have a tremendous opportunity to buy.  there are tons of programs available that can help with closing cost assistance, for information on those programs or with any other questions or comments, as always, you can call me Direct at 717-371-0557 or at the Office 717-490-8999, email me at Jason@JasonsHomes.com or send me a text message using the tool to the right of this page!

Your Friend in Real Estate,
Jason Burkholder

Search for Lancaster County Homes for sale by clicking here!

Want to see local real estate values and home prices?  Go to www.RealEstateCrystalBall.com !