May 23rd, 2007 10:03 AM by Ron Mastrodonato
NAR: Higher lending standards can curb abusive practicesWASHINGTON – May 8, 2007 – The National Association of Realtors® (NAR) is calling on bank regulators to adopt higher lending standards while giving lenders more flexibility in determining whether homebuyers can afford to meet their loan obligations.In a comment letter submitted to John Dugan, comptroller of the currency, NAR offered a number of suggestions to federal banking regulators and the National Credit Union Administration on their “Proposed Statement on Subprime Mortgage Lending,” published in the March 8 Federal Register. NAR agrees with many of the comments and principles of the statement, and also offered key features of its own newly adopted “Enhanced Subprime Lending Policy.” The policy offers solutions that could help the U.S. avoid the recent mistakes that led to an increase in foreclosures and the families they affect. “NAR stood ready during the boom years and continues to be ready during these difficult times to help people who want to buy a home and families trying to keep their home,” says NAR President, Pat V. Combs. “NAR provides Realtors with educational information, including a series of consumer brochures, designed to help homebuyers understand the complexities of buying and financing a home. Over the past few years, we produced a series of educational products in partnership with the Center for Responsible Lending and the Federal Housing Administration. One brochure focused exclusively on the dangers of many of the ‘exotic’ loans being offered.”NAR supports loan underwriting standards, including verification that the borrower can repay the loan based on all its terms, including higher payments based on interest rate increases, along with taxes and insurance. “We would also like to see subprime lenders reviewing and insisting on a reasonable debt-to-income ratio. Again, this transaction is not just about buying the house and being done with it. It is about ensuring that once a family has a home they have the ability to keep it,” Combs says.For subprime mortgages, NAR’s enhanced policy recommends that lenders require escrow amounts for taxes and insurance in the monthly payment. However, it also recommends flexibility for “life circumstances” displayed by borrowers, such as those who have demonstrated an ability to make monthly payments over the long term.Other recommendations from NAR’s enhanced policy include eliminating prepayment penalties for all mortgages, establishing an anti-mortgage-flipping rule and requiring mortgage originators to offer borrowers mortgage choices. To see NAR’s complete, policy visit: http://www.realtor.org/GAPublic.nsf/files/enhanced_subprime_lending_policy_summary.pdf/$FILE/enhanced_subprime_lending_policy_summary.pdf © 2007 FLORIDA ASSOCIATION OF REALTORS®
More South Florida homes on the market longerMIAMI – May 8, 2007 – The number of houses and condos sitting on the market with For Sale signs and lower prices continues to grow in South Florida, according to the latest survey by condovultures.com.The company, a real estate advisory firm in Bal Harbour, tracks homes for sale where the asking price has fallen 10 percent or $100,000, or has been on the market for at least 100 days. It follows properties east of Interstate 95 in Miami-Dade and Broward counties – areas with significant new construction.The report, tracking activity to April 30, found 1,744 properties with significant price dips or more than three months on the market in the two counties, up from 1,493 in March. The properties included 1,060 condos and 684 houses.Peter Zalewski, principal at condovultures.com, said the sluggish market is reaching a point where so-called vulture funds – investment groups looking to buy condos in bulk and at discounted prices – may start jumping in. “Big, bulk buyers are starting to come off the perch,” he said. “If we are not there yet, we are just around the corner.”Copyright © 2007 The Miami Herald, Matthew Haggman. Distributed by McClatchy-Tribune Information Services.
Before selling a home, test the plumbingWACO, Texas – May 8, 2007 –With today’s housing market in a slump, a homeowner should test the home’s plumbing to make sure the plumbing will pass the home inspection that comes with selling the house.“Most home buyers hire a professional home inspector to take a closer look at the house before they close,” says Mary Kennedy Thompson, president of the Mr. Rooter Corporation. “Taking care of any necessary repairs now could expedite the closing process.”Thompson offers these tips to keep a plumbing problem from throwing a wrench in the home-selling experience:• Examine all faucets to make sure none drip.• Open cabinet doors and check under sinks for leaks.• Turn water supply valves on and off to test for leaks.• Look for rust and corrosion on all plumbing features (sinks, pipes, etc.).• Flush the toilet. Does it continue running after the tank is full? Is all debris cleared from the bowl?• Inspect the base of the toilet for signs of water damage or soft floors.• Run the garbage disposal and dishwasher to make sure they work properly.• Check the first four digits of the water heater’s serial number (they are the month and year it was made) to make sure it isn’t more than 10 years old.• Fill up each sink and bathtub with water to verify good drain flow.• Inspect the water meter and observe a small dial which spins when any amount of water moves through the system. This will detect even small amounts of water loss.• If your home has a basement, look up at the ceiling above the bathroom to examine floor boards for plumbing leaks.• Hire a professional plumber to video inspect the sewer line to verify it is in good condition.© 2007 FLORIDA ASSOCIATION OF REALTORS®