Tag Archives: mortgage lending history

Air Date 6/8/13: Chief Economist, CoreLogic Case-Shiller

Share

Special Guest: Dr. David Stiff, Chief Economist, CoreLogic Case-Shiller

Home Prices Rise by 12.1 Percent Year Over Year in April

Chief Economist, CoreLogic Case-Shiller, Dr. David Stiff – CoreLogic, joins us in studio to talk about the state of the economy and its effects on housing and prices. Dr. Stiff is the chief economist for CoreLogic’s nationally known Case-Shiller Home Price Index.

Home Prices Rise by 12.1 Percent Year Over Year in April!

CoreLogic, a leading residential property information, analytics and services provider, today released its April CoreLogic HPI™ report. Home prices nationwide, including distressed sales, increased 12.1 percent on a year-over-year basis in April 2013 compared to April 2012. This change represents the biggest year-over-year increase since February 2006 and the 14th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 3.2 percent in April 2013 compared to March 2013.

Highlights as of April 2013:  Full Report click: News Release

  • Including distressed sales, the five states with the highest home price appreciation were:  Nevada (+24.6 percent), California (+19.4 percent), Arizona (+17.3 percent), Hawaii (+17 percent) and Oregon (+15.5 percent).
  • Including distressed sales, this month only two states posted home price depreciation:  Mississippi (-1.7) and Alabama (-1.6 percent).
  • Excluding distressed sales, the five states with the highest home price appreciation were: Nevada (+22.6 percent), California (+18.3 percent), Idaho (+16.4 percent), Arizona (+15.3 percent) and Washington (+13.9 percent).
  • Excluding distressed sales, no states posted home price depreciation in April.
  • Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to April 2013) was -22.4 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -16.3 percent.
  • The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-47.3 percent), Florida (-40.5 percent), Michigan (-36.1 percent), Arizona (-36 percent) and Rhode Island (-34.7 percent).
  • Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 94 were showing year-over-year increases in April, the same as in March 2013.

Full-month April 2013 national data can be found at http://www.corelogic.com/HPIApril2013

Economic reports strengthening economy!

Share

Things are humming in regards to news from the economic front. Consider this good news:

  • Jobless claims decreased
  • Jobs are increasing
  • New home sales posted gains
  • Existing home sales rise
  • Pending home sales rise
  • February and April reported some of the fastest home sales months since 2008
  • Home values continue increasing
  • Home sales rose 29% higher than last year
  • Building permits rise in April
  • Durable goods rose in April(a very good housing indicator)
  • 1st Q economy grew at 2.5%
  • Consumer spending faster rise in 2 years
  • Consumer confidence at a 5 year high

    The US Economy continues to get stronger. Mortgage rates are up but they are still at historic lows.

    Here’s the bottom line, expanding economy + rising home prices + rising mortgage interest rates = time to buy.

    Timings everything, now’s the time.

    Mortgage Investors Group understands there are a lot of choices when it comes to financing the purchase of a new home or refinancing an existing one. Our licensed and experienced loan officers are here to help you gain a better understanding of those options and answer your questions about the loan process, qualifying and the different features of each loan program. We offer everything from conventional mortgages to government loans.

    Call us today and take advantage of these incredible market conditions!

Steps to Winning the House Bidding War!

Share

Why is there a bidding war?

Answer is simple there are not enough homes for sale to handle the recent explosion of buyers onto the market.  Mortgage Investors Group Loan Officers are being told by customers and agents that multiple contracts on homes are occurring within a very short period of time of one another. Also, market data is revealing that the percentage of sales price to list price  are increasing. Typically markets trend to run about 92% to 95%, but some markets across the country are seeing percentages in excess of 98% with some areas over 100%. In Tennessee, Nashville-Davidson-Murfreesboro-Franklin are at or near the 98% range as far as the ratio of sale prices to list price, putting them in the number one ranked position in the Core Based Statistical Area for May. Nashville area is presently considered one of the most affordable markets in the United Stated and one of the best places to get a job.

The Bidding War largeThese are  great signs for our economy, but these conditions create challenges for all parties. There are things you can do to prepare for the bidding war:

Steps to winning the house Bidding War:

1.  Get a professional Real Estate Agent.

They will be able to alert you with the latest homes that hit the listing market. Timing is everything, and fast reaction increases your chances to submit a winning bid. Plus a Realtor knows the art of negotiation and all the complexities that are involved in a transaction. Don’t go it alone.

2. Get pre-approved by a Mortgage Investors Group NMLS licensed Loan Officer.

The Realtor will insist you get pre-approved but make sure you keep the LO updated on all your financial changes. Good piece of advice don’t do anything that will affect your credit during the process. That ‘must have’ car, TV or whatever, can wait. No one like surprises, focus on one thing, finding that perfect house and winning the bid.

3. Keep the offers simple and sale conditions to a minimum.

Remember, the bidding war is due to more buyers than sellers. You are going to have to offer more than the list price. Also, the less complicated the offer the more likely the contract will be considered by the seller. Too many demands may put you at a significant disadvantage. Listen to your agent;  don’t try to get creative, keep it simple.

4. Earnest Money Deposit.

Follow the advice of your Realtor, but a large earnest money deposit may have a psychological effect on a seller. Small deposits may not appear sincere or worse it may look like you may not be able to afford the home. If this is the house of your dreams, don’t be afraid of stepping up that deposit.

5. If your bid gets rejected act fast.

You may have thought your offer was perfect, but things happen. If your agent calls you late at night and says you need to re-submit the bid, don’t delay; it may be more convenient to wait until morning, but it also may be too late.

6. Winning or losing.

Winning is the goal but losing is a possibility. Don’t lose heart. Get ready for the next call from your Realtor and start the process all over, you will eventually win!

Mortgage Investors Group understands there are a lot of choices when it comes to financing the purchase of a new home or refinancing an existing one. Our licensed and experienced loan officers are here to help you gain a better understanding of those options and answer your questions about the loan process, qualifying and the different features of each loan program. We offer everything from conventional mortgages to government loans.

Call us today and let us help you find the best loan that fits your family’s need!

Special Interview: Magic Mulch

Share

Download our new Mobile App!

Special Guest: Chris McComas

Chris@magicmulch.net

865-603-4494

Magic Mulch

What is Magic Mulch?

Magic Mulch is a 100% recycled product made from used tires. The tires are removed of all metal and wire, and then de-oiled to prevent dry rotting. It is finely shredded to mimic the look of wood mulch.

 

How long does it last?

Magic Mulch rubber does not break down, disintegrate, erode or biodegrade. The natural black uncoated mulch, which mimics the look of midnight black wood mulch, is likely to last forever (guaranteed for 10 years). The brown and red mulch is coated with a polyurethane organic dye and is guaranteed to hold its color for 10 years. The dye will not wash or rub off.

 

How is it installed?

We sell our mulch in 40lb, 60lb and 2,000lb Bags. We recommend laying a fabric weed blocker down before installing the mulch. This will not only help prevent weeds from growing, but will also protect the mulch from sinking into loose soil over the 10+ duration. If you chose to use a fabric, however, make sure you secure it very well with fabric pins to ensure it does not ride up and show. We also recommend some sort of edging or border to prevent wash away due to flooding.

 

Is it hard to maintain?

Magic Mulch is a very low maintenance product. Once you lay it down, it will not change for 10+ years. If you get leaves in the mulch you must use a leaf blower on the lowest setting to remove them. Keep the leaf blower approximately 2 feet away from the mulch and never use a higher blower setting.

Air Date 5/25/13: America’s 10 City Challenge

Share

Download our new Mobile App!

Are You Ready For America’s 10 City Challenge?

Special Guest: Shauna Bryan, CEO

America’s 10 City Challenge

We are initially challenging the nation’s 10 fattest states to lose a total of 1 million pounds. Think this sounds impossible? Not so! With the help of America’s Ten City Challenge trained coaches and partnerships with state and local government officials, professional athletes and celebrities, and nation-wide and local sponsors, this aspiration will become a reality. This is only the beginning. Our goal is to extend this challenge nationally to every state in the country.

Who We Are

America’s 10 City Challenge is a dynamically evolving, highly creative, health and wellness company that develops innovative programs that are tailor made for individuals and corporations.

Through nutrition and smart choices we are dedicated to eradicating obesity and creating a healthy mindset and lifestyle that will build and maintain a reality of wellness in every client we encounter.

How It Works

First, you will need to register.

After registration, your account will be created and you will receive an e-mail with information on how to login and download the required forms need for the challenge.

Beyond the Challenge

America’s 10 City Challenge will continue, through this website, to encourage, educate and support participants in maintenance with their new healthy lifestyle.

What Sets Us Apart

We understand that nutrition is the foundation for optimal health. For this reason, the initial month of America’s 10 City Challenge focuses mostly on healthy eating. We are confident that every participant will see improvements in their overall health. Weight loss will simply be a bonus! Through our proprietary program and the guidance of trained health coaches, participants will truly experience the positive impact that healthy eating has on their lives.

After the initial 30 day program is complete, we will encourage participants to continue their journey of health through continued guidance with health coaches and America’s 10 City Challenge wellness programs. Our goal, through education and mentorship is to provide our participants with a set of tools that will allow them to become their own health advocate as they strive for total well-being and optimal health.

Download our New Mobile APP!!

by

History of Sears Kit Homes

Share

William Levitt was not the first person or business to use a prefabricated method of home construction. He certainly took the science to the next level when he was building almost 30 homes per day in the late ’40′s in Levittown.  But, the prefabricated business of home construction was 50 years old by that time. In the late 1800′s, Sears and Roebuck was the leading retailer in the home mail order business. Almost every rural community in America relied on their highly anticipated thick catalog full of every gadget known to man. The catalog contained every necessary item for the house and barn, and when  no longer needed, it supplied the outhouse. Sears was known for reliability, quality and, convenience.

Around the turn of the century, Sears was entering the catalog Home building business. They would design, cut, package and ship, by rail, more than 70,000 homes between 1908 and 1940. Sears created hundreds of different floor plans and exteriors. They were also able to take any individual customer’s design and pre-package the order with all the required items. This style of construction was extremely efficient and affordable. Traditional forms of home building required creating, fashioning, forging or milling the necessary materials to complete the home at considerable expense and time.

The construction techniques designed by Sears were clearly ahead of its time. The builder was occasionally the home buyer with help from willing neighbors but most of the time carpenters were hired. Unskilled labor was not an issue due to the simplistic construction design.  One of  the newer building techniques, for example, consisted of the interior walls being constructed from nailed framing of 2×4 pine studs extending from the floor sill plate to the rafters, instead of the heavy timbers that had typically been used which required hand hued mortised tongue and groove connections. This new style of construction was called ‘balloon’ studded framing; it made possible for fewer, less skilled workers to erect a single wall section. This design was used into the 50′s and modified techniques continue today. There are other examples of cost saving and simplistic design methods, like inexpensive sheets of dry wall nailed  over the balloon framing of the interior walls instead of the labor intensive plaster over lattice and wire mesh that was normal for the day. Asphalt shingles for the roof were relatively new to construction but much more efficient than the typically, labor intensive, split shingle (shake) system or a Tin roof covering, both requiring extensive labor and skill.

Modern conveniences were continuously being incorporated into plans and the catalog was full of add on options. Kitchens had the latest appliances and homes were outfitted with central heat and in some cases, central air.

Detailed in her book entitled, The Houses That Sears Built,  Rosemary Thornton writes: “Between 1908 – 1940, more than 75,000 Sears’s homes were built. Sears kit homes contained 30,000 pieces, including 750 pounds of nails, 27 gallons of paint, and a 75-page instruction book. Sears estimated that the average carpenter would charge $450 to assemble those 30,000 pieces of the house. The painter’s fee – $34.50. Other estimated skilled labor would cost $1.00 an hour. Prices for these build-it-yourself houses ranged from $147.00 to $6,000.00. After selecting a house design from the Sears Modern Homes catalog, customers were asked to send in $1.00. By return mail, they received a bill of materials list and blueprints. When the buyer placed the actual order for the home building materials, the $1.00 sent in earlier was credited toward the purchase.”

Sears catalog orders were robust until the Great Depression gripped the nation, stripping over 30 billion dollars of her wealth in the first week. The continued effects were devastating as businesses, and home owners lost everything they had. Home foreclosure rates soared to approximate 1,000 per day. Sears catalog orders certainly were affected by the Depression as their business started to slow. Although, The Great Depression never stopped the Sears Home catalog business, changing housing codes would bring an end to it. Sears could no longer adapt to the changing local building codes in municipalities and states. By the 1940′s,  Sears had dropped their catalog home mail order business.

Special Guest:  Rosemary Thornton Author and Authority on Sears Catalog Homes

Do you live in a Sears Home? Learn how to identify a Sears home! We want to hear from You! Mark.Griffith@migonline.c

*Click to buy book!

 Sears Catalog Homes:

For more than 10 years, Rose Thornton has traveled throughout the country, seeking and finding Sears Homes. In that time, she’s written countless newspaper and magazine articles, in addition to several books.

Rose is the author of The Houses That Sears Built (2002,) Finding the Houses That Sears Built (2004) and she’s the co-author of California’s Kit Homes (2004) and Montgomery Wards Mail-Order Homes (2010). Rose’s newest book – The Sears Homes of Illinois – was published in December 2010.

Rosemary Thornton

Order your copy today!

Tennessee Home Values Rise!

Share

Nashville Housing Market is taking off!

Nashville Housing Market is taking off with home values soaring by over 7% in the last 12 months. Nashville home values bottomed out in October of 2011 when they dropped to $133,000 price average, but since 2011 the values have risen an amazing 7% or $143,000 price average.  The historic home values peaked in August of 2007 when they reached $154,000 which means today average values are only off  a little over 7% from those historic highs! Also, the average list prices of homes on the market are up over 11% in the last 12 months, pushed up by a bidding war and strong buying activity.

Nashville, TNNashville recently  has been in the news for making the Forbes list for the number 2 best place to get a job, but there is other great news for the surrounding markets too:

Homes Values are up the last 12 months for Oak Hill over 8.5%, Brentwood over 7%,  Belle Meade over 6%, Lakewood over 6%.

Knoxville Home Prices are up!

Knoxville Home Prices were up close to 4% in the last 13 months when compared to the bottom that was reached in February of 2012. According to Zillow.com, Knoxville home values hit a low of 103,000 in February 2012 due to the pop of the great bubble, but in just over a year, the market has climbed back to almost 4%  or $107,000 by the end of March. Appreciation rate of anything over 3 % per year is considered excellent. Knoxville home prices hit a historic high in November of 2009 when it reached $114,000, but by the end of March 2013, the values are only off 6%  from that historic high.

Monthly rental prices peeked in July of 2011 at $830 but since that peak, they have  dropped over 15%,  indicating a move from temporary housing to a more permanent home buying opportunity.

Farragut area has seen a little more volatility in its values since hitting its lows 2011, but in the last 12 months their values  have soared to a  little over 7%. Not surprisingly, the average list price of homes have increased almost 10% in the last month, and sales prices overall  are up over 5% since January.

These are great signs, but it gets even better for Tennessee.

Mortgage Investors Group

Areas around Tennessee with MIG offices:

Selected areas around Tennessee with MIG offices:

Cookeville home values are up over 7% in the last year.

Johnson City home values have risen over 7% in the last year.

Nashville home values have risen over 7% in the last year. (Forbes picks Nashville #2 best place to get a job.)

Sevierville home values are up over 6% in the last 12 months.

Pickwick home values are up over 5.5% in last years.

Memphis home values have risen over 1% in the last year.

Crossville home values are up over 5% in last month.

Kingsport home values are up over 3% in last month.

Greeneville home values are over 2% since the beginning of this year.

Chattanooga home values are up over 1%  since December 2012.

Maryville is also just now starting to see home values increase, in the last month their values are up .7%

Data from Zillow

Read our blog:

Timings everything, now’s the time!

timing

Knoxville Home Prices are up!

Share

Knoxville Home Prices were up close to 4% in the last 13 months when compared to the bottom that was reached in February of 2012. According to Zillow.com, Knoxville home values hit a low of 103,000 in February 2012 due to the pop of the great bubble, but in just over a year, the market has climbed back to almost 4%  or $107,000 by the end of March. Appreciation rate of anything over 3 % per year is considered excellent. Knoxville home prices hit a historic high in November of 2009 when it reached $114,000, but by the end of March 2013, the values are only off 6%  from that historic high.

Monthly rental prices peeked in July of 2011 at $830 but since that peak, they have  dropped over 15%,  indicating a move from temporary housing to a more permanent home buying opportunity.

Farragut area has seen a little more volatility in its values since hitting its lows 2011, but in the last 12 months their values  have soared to a  little over 7%. Not surprisingly, the average list price of homes have increased almost 10% in the last month, and sales prices overall  are up over 5% since January.

These are great signs, but it gets even better.

Mortgage Investors GroupSelected areas around Tennessee with MIG offices:

Cookeville home values are up over 7% in the last year.

Johnson City home values have risen over 7% in the last year.

Nashville home values have risen over 7% in the last year. (Forbes picks Nashville #2 best place to get a job.)

Sevierville home values are up over 6% in the last 12 months.

Pickwick home values are up over 5.5% in last years.

Memphis home values have risen over 1% in the last year.

Crossville home values are up over 5% in last month.

Kingsport home values are up over 3% in last month.

Greeneville home values are over 2% since the beginning of this year.

Chattanooga home values are up over 1%  since December 2012.

Maryville is also just now starting to see home values increase, in the last month their values are up .7%

Data from Zillow

Read our blog:

Timings everything, now’s the time!

timing

The Liquidity Factor: The Rise of the GSEs, Part IV

Share

Mortgage Lending: The Liquidity Factor, Part IV

Part I Part II Part III

By Mark Griffith
Mortgage Investors Group
Branch Manager- Oak Ridge
Co-Host of The Housing Hour

The Rise of the GSEs

When the smoke finally cleared from the destruction of the S&L’s in the late 80’s early 90’s, FNMA and Freddie Mac were solidly in place. It took 36 years for Roosevelt’s national liquidity vision to be realized. The ’90s brought the hope of a new mortgage lending era with cutting edge technologies and an internet system that connected the world.  FNMA and Freddie Mac incorporated the national credit scoring system along with property valuation models into their automated underwriting systems (AUS)  to produce a streamlined approval process. This total automated system was intended to take all the guesswork out of analyzing risk, which in turn, would reduce costs of originating and selling loans. These cost savings could be passed through to the consumer in the form of cheaper interest rates and closing costs, as well as eventually finding their way into the profits of lenders, FNMA/Freddie Mac, bond traders and ultimately the end investor. The other important feature was the complete automated nature of the system with its ability to expand or contract its guideline through simple tweaking of the computer models. In the early ’90s, pressure from the Clinton administration for a National Home Ownership Strategy was developed. This complete housing overhaul consisted of over 100 action items and over 50 industry-wide corporate partnerships signing their support.  The new initiative was known as the American Dream Commitment. By 2004, continued expansion of the commitment was evident in FNMA mission statement, “We at Fannie Mae are in the American Dream business. Our mission is to tear down barriers, lower costs, and increase the opportunities for homeownership and affordable rental housing for all Americans”. With this new mantra and fresh momentum, backed by policymakers and trillions of dollars, the housing bubble years were inflating. The most aggressive part of the mission statement from FNMA was, ‘…tear down barriers…’ and ‘…for all Americans.’. The barriers could be easily torn down by simple manipulation of the automated systems resulting in achieving the second point, more Americans becoming eligible for mortgage loans almost overnight.

In the past, FNMA/Freddie Mac were always known as the world supplier of ‘AAA rated’ Mortgage Backed Securities meaning the best loans available for securitization, the cream of the crop. They were referred to in the vernacular as: ‘A’ paper or prime paper. By Y2K,  FNMA/Freddie Mac entered the less than prime business called Alt-A or A minus.  Alt-A is defined as not A paper but better than C through D paper. There were private lenders who did specialize in loans referred to as: non-traditional, ‘C/D’ paper or the popular term, sub-prime, but these loans were considered high risk, niche products. The sub-prime market could charge higher interest rates and more closing costs depending on the degree of risk to the lender.  However, by the late ’90s, credit scoring models gave the sub-prime lenders an easier ability to analyze risk. These lenders were able to expand their origination numbers by creating automated underwriting systems, similar to FNMA/Freddie Mac, based on their own sub-prime risk criteria.

The sub-prime loans were traded much like the prime loans but through Private-Label Mortgage-backed securities (PL-MBS) as created by the 1984  Secondary Mortgage Market Security Act(SMMSA). The SMMSA was a loosely government created policy allowing private institutional investors more freedom to compete in the Government dominated MBS markets. The SMMSA was basically an attempt to supply private liquidity to investors for the national liquidity markets.  In a similar sense, the Private-Label -MBS were what the S&Ls were to the liquidity market before their fall, except for the fact the Private -Label MBS were securitized and traded worldwide. Investors with large appetites for higher interest returns flocked to the sub-prime markets. In 2001, the Private-Label MBS market had a small 20% market share but by 2006 their market share soared to 56%, suggesting the sub-prime primordial world was strongly competing for investment dollars with the conforming loan markets. Pressure for profits and from government policies propelled FNMA/Freddie Mac to review its policy on the purchase of  Private-Label MBS bonds.

As early as 2001, FNMA/Freddie Mac were purchasing sub-prime mortgages from the Private-Label MBS pools. But according to The Financial Crisis Inquiry Report, FNMA’s purchase of sub-prime loans only represented a relatively small  10.5% of total sub-prime loans originated. By 2004, FNMA exposure rose to a 40% high before dropping back to 28% by 2008.


However, between 2001 and 2008 FNMA/Freddie Mac significantly dropped their guidelines to allow riskier loans to be purchased and securitized by the GSEs. In a 2 year span between 2005 and 2007, FNMA/Freddie Mac had purchased close to a trillion dollars in Alt-A and sub-prime loans; a level that could not be sustained.  Private-Label MBS had decreased to less than 10% market share in 2008 but by that time, the worlds financial markets were flooded with assets that would soon turn toxic.

As reported in the Inquiry, FNMA and Freddie Mac were motivated by a need, “to meet stock market analysts’ and investors’ expectations for growth, to regain market share, and to ensure generous compensation for their executives and employees—justifying their activities on the broad and sustained public policy support for homeownership.”

By 2008, the GSEs and the Private-Labels MBS were collapsing.

Part V: The Fall of Fannie and Freddie and the Private Labels

Click:  The Liquidity Factor Series

Forbes picks Nashville #2: Best place to get a job!

Share

Forbes picks Nashville #2 best place to get a job!

Nicole Kidman described Nashville this way, “It’s the warmest, loveliest community I’ve ever set foot in. For me, it’s the perfect place to live. It’s the best part of America.”

Now the ‘best part of America’ is the second best place to get a job according to a recent report from Forbes magazine. Their calculation methods are somewhat complex, but the bottom line is simple:

Downtown Nashville

“Affordab ility + Quality of Life = Success”

Some other cities that are growing stronger, since the Great Recession, have Technology and Energy to help push the forward but according to Forbes, “… you don’t have to be a huge tech hub or energy capital to generate new jobs. The No. 2-ranked place in our big metro ranking, Nashville-Davidson-Murfreesboro-Franklin, Tenn., reflects the power of economic diversity coupled with ample cultural amenities, pro-business policies and a mild climate. Nashville’s 3.8% expansion in employment last year, and 7% growth since 2008, has been propelled by business services, education and health. There’s also been a recent recovery in manufacturing, up over 9% last year, as well as retail and wholesale trade. Like the Texas cities, Nashville has registered long-term growth as well, with 112,000 jobs added since 2001, a nice 16.6% increase.”

Nashville has it all with a seemingly never ending supply of restaurants, music, theaters, shopping and streams of celebrities walking freely around town. Sport fans can get their fill with Nashville’s professional teams in football and hockey not to mention great college sport venues from Vanderbilt, Belmont and Tennessee State. Also, a financial attraction to Nashville has to be what the great state of Tennessee always boast about, no state tax!

There are many reasons to visit and consider moving to Nashville, but once you experience their great Southern Hospitality, you will understand exactly what Nichole Kidman meant when she said, “…For me, it’s the perfect place to live.