Jude's Real Estate Rumblings

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A plan to jumpstart the mortgage market

An article from CNNMoney.com, reports that a group representing the buyers and sellers of mortgage backed securities unveiled a plan this week to recharge the mortgage market.  The American Securitization Forum hopes its plan, Project RESTART, will increase the supply of mortgage loans available to borrowers and lower their cost.  Jump starting the mortgage market could provide a needed boost to the struggling housing market.  Tom Deutsch, ASF Deputy Executive Director said, "Project RESTART's goal is to rebuild confidence in investors in these securities."  This plan aims to revive the segment of the secondary market that trades in mortgages that are not backed by Fannie Mae and Freddie Mac.  According to Deutsch, the plan calls for making the process of securitizing loans for investors more transparent, so that they can more clearly understand the nature of the mortgage pools they purchase.
http://money.cnn.com/2008/07/17/real_estate/jumpstarting_mortgage_markets/index.htm?postversion=2008071712

 

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Regional Council doubles FasTracks' federal funds

An article from The Denver Post, reports that the Denver Regional Council of Governments board has doubled the amount of federal transportation funds it plans to give to FasTracks, increasing the total to $120 million.  According to Steve Rudy, DRCOG director of transportation planning, each of the 11 corridors would receive a portion of the money based on costs each faces.  He said, "Some corridors are getting $13 million some are getting $700,000."  FasTracks is scheduled for completion in 2016 and plans for trains from central Denver to DIA, north to Adams County, Boulder/Longmont, Arvada/Wheat Ridge and Golden, as well as the extension of light rail in the Interstate 225 corridor.  Board Chair Nancy McNally, mayor of Westminster said, "This action reflects a long tradition of local governments coming together through DRCOG to support programs that will improve our quality of life.  The DRCOG Board believes FasTracks is vital to serving the region's needs in the future and we want to help ensure the voters get the product they expect."
http://www.denverpost.com/news/ci_9916202

South Broadway: Funky, not sketchy

An article from The Denver Post, reports that local merchants define the South Broadway neighborhood as the stretch of Broadway from south of Sixth Avenue to just north of the Interstate 25 interchange.  Many in the neighborhood refer to it as SoBo and the strip is in the midst of a major transition.  Projects like the revitalization of the former Gates Rubber plant will help to quicken the strip's renovations.  The project will add new homes, stores and a movie theater courtesy of Robert Redford's Sundance company.  According to Mary Beth Jenkins, president of the Laramie Co., a commercial real estate brokerage, South Broadway has historically been the main artery into downtown Denver.  She said, "Broadway, as a retail corridor, is linking downtown with residential neighborhoods.  It's really organic."  Brad Liber, a broker with the Bibeau Group in Denver, said the corridor has had to deal with some rougher surrounding areas in recent times, but in the past few years, residents have begun to feel safer.
http://www.denverpost.com/economy/ci_9929138


6 Ways to Building Strong Relationships with Clients

An article from RISMedia.com, reports that according to Simon Payn of Ready to Go Newsletters, it is strong relationships with past clients and their farm that is seeing the smartest Realtors though the housing crisis in the United States.  Payn says one way to build a strong relationship is to take time to consider the needs of clients and become their trusted adviser rather that someone hungry for a commission.  Another is to develop a unique selling position by deciding what makes you different from every other Realtor in your area and letting your market know.  Finally, people make several housing transactions over their lifetimes and it pays to maintain a relationship over years.  Invest now to build a relationship that will pay off many times in the future.
http://rismedia.com/wp/2008-07-18/6-ways-to-building-strong-relationships-with-clients/


Mortgage Tip

If your buyer is purchasing a house that has been fixed and is being flipped for a higher price than the seller's original purchase price, the seller should be prepared to document why the value of the property has increased so much in such a short period of time. 
 
Typically, the appraiser will explain the reason for the increase, based on conversations with the seller and the listing agent.  In some cases, however, an underwriter may ask for additional supporting documentation, such as receipts for materials and third-party labor. 



$2.6 million house will be auctioned

An article from the Rocky Mountain News, reports that head of Brookline Homes, Scott Carter, will auction the $2.6 million custom home his company is building for the 2008 Parade of Homes.  According to Carter, he isn't auctioning the 7,302-square-foot, energy-efficient home because of problems with last year's parade, which included at least one foreclosure.  Carter said, "We made the decision long before those problems came out.  We thought it was a great marketing opportunity.  Tens of thousand people will have gone through the home, including probably several people interested in buying it, so why not get them into one room and have them bid against each other?"  At least $25,000 of the sale price will go to a charity founded by the late John Denver, called Plan-It 2020.  Carter added, "We will use it to plant 25,000 trees in the beetle kill area of Colorado."

Clean up credit score to land a sweet mortgage rate

An article from USA Today, reports that most lenders will review your FICO score when you apply for a mortgage.  According to Mavel Vargas, manager of lending research for Informa Research Services, a few months ago, borrowers with a FICO score of 700 usually qualified for the lowest mortgage rates.  Now, though, most borrowers need a score of at least 720 to get the best rates.  It is common knowledge that falling behind on debts will hurt credit scores, but there are other issues that could hurt your score that may be less obvious.  One issue is a frozen home equity line of credit, even if you are current on payments.  Craig Watts, spokesman for Fair Isaac, said the company's scoring model tries to distinguish home-equity lines from other types of revolving debt, such as credit card accounts.  That's important, because revolving debt is considered riskier than installment debt, such as a car loan or a mortgage.  Watts added, "As far as your score goes, the best way to treat any account that's being reported as having a very high utilization rate is to pay down the account." 


Mortgage Tip

Many buyers need to raise their credit score to qualify for a loan these days.  Every credit report is different, but one of the main things that most people can do to raise their score is to pay down the balances on their revolving accounts (credit cards).  If you owe more than 70% of the available balance on a credit card, that counts against you the most.  If you owe between 50% and 70%, that counts against you a little bit less.  Between 30% and 50% doesn't hurt your score very much at all.  Below 30% will give you the best score. 
Very often, paying down the balance on a credit card from more than 50% to less than 50% can have a dramatic effect on the score.

Daily Rate Lock Advisory

 

 



Friday's bond market has opened well in negative territory as investors continue to shy away from inflation-threatened securities. The stock markets are mixed during morning trading with the Dow up 38 points and the Nasdaq down 23 points. The bond market is currently down 21/32, which will likely push this morning's mortgage rates higher by another .375 of a discount point.

There is no relevant economic data scheduled for release today, but this morning's bond losses don't come as a surprise. It appears that the sentiment in the bond market has turned more pessimistic than optimistic, partly due to inflation concerns. That has led to bonds and long-term securities becoming of less interest to investors. The result is bond prices falling as they are sold and mortgage rates rising. Unfortunately, I am not so sure that this is the end of the selling, so please be careful if still floating an interest rate.

There are a couple of reports scheduled for release next week that are relevant to mortgage related bonds and rates. However, none are considered to be of extremely high importance to the markets. The first comes Monday morning with the release of June's Leading Economic Indicators (LEI). This report is considered to be moderately important to the markets.

The rest of the week brings is insight to housing sales, manufacturing activity for big-ticket items and the Fed Beige Book that breaks down economic activity in the U.S. by region. Look for more details on these and the rest of the upcoming week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were fin ancing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2008

Jude Sandvall's Real Estate Advisor

Jude T. Sandvall


Realty Executives of Aurora

Featured Articles

Protecting Your Home:
Locks, Lights and Good Neighbors

One of the crimes most frequently reported to the police is residential burglary. It's also the most preventable. It doesn't take much or cost much to out-smart most burglars. They're usually not professionals, but rather people taking advantage of an easy target. Burglars may do more than steal things. If they're surprised by someone coming home or if they choose a home that's occupied, someone may get hurt.

Tips on Safeguarding Your Home

  • Make sure all exterior doors have good locks-at least dead-bolt locks with a 1" throw.
  • Always lock up when you go out, even if only for a few minutes.
  • Secure sliding glass doors with bars or locks, or put a broom handle in the door track.
  • Make sure your windows have good locks, especially those at ground level.
  • Make sure all porches, entrances, and outside areas are well lit.
  • Trim any bushes or trees that hide doors or windows.
  • Maintain your yard and keep ladders and tools inside when you're not using them.
  • Don't hide your keys under the doormat or in a flowerpot. That's the first place burglars look! It's much better to give an extra key to a trusted neighbor.
  • Mark your valuable property like TVs, VCRs, computers, cameras and stereos with your driver's license number.
  • Keep a record of your property in a safe place.
  • Install an alarm system for summoning emergency help.
  • If you park your car outside, never leave a garage door opener in the car.

When you go away

  • Ask a neighbor to collect your mail and newspapers, and offer to return the favor.
  • Put an automatic timer on at least two lights and a radio. Consider photoelectric sensors to turn outside lights on and off automatically.
  • Tell a trusted neighbor when you're leaving and when you'll return. Include an itinerary and phone numbers where you can be reached in an emergency.

Neighbors Helping Neighbors
There's more to crime prevention than locks and lighting. The fact is, concerned neighbors who watch out for each other are the front-line defenses against crime.

  • Get to know your neighbors and discuss your concerns about the neighborhood.
  • Be alert to things that invite crime like poor street lighting, boarded-up buildings, a lack of recreational activities or jobs for teens, vacant lots littered with debris and inadequate day-care and after-school programs. Work with law enforcement, civic groups, schools, churches and service clubs to solve the problems.
  • Alert law enforcement to suspicious activities and any crimes.
  • Report nonworking street lights, abandoned houses and other problems.
  • Join a Neighborhood Watch group. If there's no Watch organization in your neighborhood, start one with help from local law enforcement and community groups.

Joining a Neighborhood Watch

Neighborhood Watch, Block Watch, Town Watch, Crime Watch-whatever the name, it's one of the most effective and least costly ways to prevent crime and reduce fear. Neighborhood Watch fights the isolation that crime both creates and feeds upon. It forges bonds among area residents, helps reduce burglaries and robberies, and improves relations between police and the communities they serve.

A few concerned residents, a community organization or a law enforcement agency can spearhead the effort to organize a Watch. Members learn how to make their homes more secure, watch out for each other and the neighborhood, and report activities that raise their suspicions to the police or sheriff's office.

Watch groups are not vigilantes. They are extra eyes and ears for reporting crime and helping neighbors. Neighborhood Watch helps build pride and serves as a springboard for efforts that address community concerns such as recreation for youth, child care, and affordable housing.

Moving Thoughts

Whether moving takes you across town or across country, it can be a very busy time. The stresses of the move itself are usually compounded by worries of what life will be like in your new home or town; but, it can also be an exciting time of renewed opportunities and fresh experiences! Statistics show that each year one out of every five families moves. They survive the upheaval-and so can you!

Organization-not only physically, but mentally-is important to maintain. A good way to start is by sorting through your "stuff." Pare down your belongings by having a garage sale or by donating items you no longer need to charity. Then decide whether to move yourself or hire professionals. Each method has pros and cons, and both require comparison shopping.

The Trivia Block

On average, dwellings in Japan have about 989 square feet of floor space per household.

 
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Realty Executives of Aurora | 14901 E. Hampden Avenue Suite 320 | Aurora | CO | 80014