My blog is being remodeled and rising from the ashes- like a Phoenix- hey it is a blog about Phoenix real estate.

There are some requirements in the mortgage and lending industry that buyers and sellers need to be aware of as it may impact close of escrow dates.

This information is from Amy Swaney of Peoples Mortgage.

As a part of the Housing and Economic Recovery Act of 2008 (HERA – The law that did away with Seller-Funded Down Payment Assistance) there were significant changes made to the Truth-in-Lending Act.  These changes were called the Mortgage Disclosure Improvement Act (MDIA) of 2008. The application of these changes began yesterday, July 30, 2009.

WHAT ARE THE CHANGES?

Much like a recession period on a refinance, MDIA requires that a borrower must be given a certain amount of time to review the ACCURATE fees and program that has been disclosed to them before they can close on ANY loan transaction.  These are FEDERAL changes, thus all lenders (bank or broker) must comply.

There are 4 specific areas where the change will affect the close of escrow date on a loan transaction.

1.      Closing MAY NOT OCCUR until 7 business days after the initial disclosures (loan application and Truth-in-Lending (TIL)                 Disclosure) are sent to the borrower. Business days include Monday through Saturday and exclude Sundays and federal holidays.

Examples of how this may affect your client

§ If your client changes lenders, the loan cannot close for a minimum of 7 business days.

§ Your borrower is totally prepared and thus gets a contract accepted based upon a RUSH closing.  The closing MAY NOT OCCUR prior to 7 business days of initial disclosures.

2. Any change in the Annual Percentage Rate (APR) by more than 0.125% requires the Truth-in-Lending Disclosure to be revised          and delivered to the borrower 3 business days before the loan can sign.  For example, if the loan amount is $100,000, any change in fees over $125 would change the APR by .125%. The 3 day waiting period cannot start before the disclosure is delivered.

The delivered date is determined by the method of delivery, if TIL is delivered by…

Face to Face the TIL is considered delivered the same day.

Email or FAX the TIL is considered delivered the next day.

Mail the TIL is considered delivered in 3 days.

          *Please Note: Changes to certain title fees can trigger the re-disclosure requirement especially on bank owned transactions!

Examples of how this may affect your client

§ At initial application the borrower is given a Good Faith and TIL before a property is found.  Once a property is found, the sales price is different thus the origination fee is different, a new disclosure is required and signing cannot occur for a minimum of 3 business days. 

§ The initial disclosure shows a 5.5% interest rate but when a property is found the borrower decides not to lock in the interest rate.  The interest rates drop to 5.25% and borrower decides to lock in, a new TIL must be delivered and signing cannot occur for a minimum of 3 business days.

§ The revised TIL is delivered to borrower when loan is locked.  Repairs are required on the appraisal and the seller takes 30 days to complete and your client’s lock is about to expire which will require a lock extension fee.  A new TIL will be required to be delivered and signing cannot occur for a minimum of 3 business days.

3.     The Good Faith Estimate and TIL disclosure must be re-disclosed and delivered to the borrower 3 days prior to signing when…

§ The loan program changes between a Fixed and Balloon

§ The loan program changes between a Fixed and ARM

§ The loan program changes between types of ARMs (i.e. 3/1 to 5/1, interest only to amortized)

§ The loan program changes between conventional with MI and conventional without MI

§ The loan program changes between conventional and government

§ The loan program changes between FHA and VA

4.     Upfront fees for appraisal CANNOT be collected until the initial disclosures are delivered to the borrower.

These changes are important to understand as a very small mistake can create a delay in the COE.  Obviously the borrower’s choice of what lender to use will become even more important as changes will also create more delays!  Please let me know if you have specific questions.

If you have additional questions Amy can be reached via email .

There have been several positive articles and reports that indicate that maybe the we are on our way to better times in the Phoenix Real Estate Market.

Additionally, mortgage rates dropped for the third week in a row.

The 30-year fixed-rate mortgage averaged 5.14 percent for the week ending July 16, down from 5.20 percent for the previous week. One year ago, the 30- year rate averaged 6.26 percent.

Fifteen-year fixed rate loans averaged 4.63 percent, down from last week when it was 4.69 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent.

Here are some recent articles with good news for a change:
July 17.2009  Fulton Homes sees burst of sales in recession

July 17, 2009-Housing starts surge from CNN Money

July 8, 2009- Valley homes Sales up in June

April 29, 2009-Blandford Homes buys Gilbert lots after Randall Martin Homes defaults-Good news when half built subdivisions are being completed.

Here is a snapshot of Phoenix Home Sales for June. The was an increase in the price/sqft for homes sold in June. 

Inventory continues to decline with only a 2.8 month supply of homes.

Phoenix Foreclosures

Foreclosures are being snapped up quickly, leaving only a 1 month supply of foreclosed homes.  There is talk of another wave of foreclosures later this summer- only time will tell. 

25 offers, 19 offers, rude buyers agents barging in on agents currently showing the property.  Listing agents that do not return calls, list with no lockbox- and it was 110 today- and most homes have no power.

Great prices- sure- be prepared to make multiple offers on multiple properties- week after week.  If you are obtaining financing- you will be bidding against cash buyers.

If you want to offer below list price, you might as well stay home and enjoy the air conditioning.

Inventory continues to decline- thus the rule of supply and demand takes shape.  With inventory declining, prices will start to increase.

So if you think you are going to come to Phoenix and buy a 1500 sqft home for $60K that is move in ready- think again.

Here is a snapshot of Phoenix Foreclosures

Summer is in full swing, and temperatures are rising in the Phoenix area.

With the hot weather come reports of children being pulled from pools.

Remember to lock your pool gates, fence your pools, hide the phone and WATCH you kids around the pool and learn CPR. 

Who will get the house? 

Arizona has $121 million to hand out to potential home owners, that qualify, to buy foreclosed homes in the Phoenix Real Estate Market.

azcentral.com reports:

"Two months into the program, no one in Arizona has closed on a home yet. Several have qualified, however, and hundreds more have applied"

One of the stipulations of this program is that HUD requires lenders who took homes back through foreclosure to give buyers a 15 percent discount on the price.  This could be a problem when you have investors, paying cash, are will to pay market value of the already deeply discounted price.

Inventory continues to decline, multiple bids on foreclosures is the norm, with many being sold over list price. 

Additionally, just this weekend, hundreds of people bought foreclosures at the REDC Auction- these homes will never be available to those that meet the qualifications of the Stabilzation Program.

The money is apart of the governments Recovery Program and must be spent by 2011.  They may want to re-think asking the bank for an additional 15% price reduction.

The chart below shows the current trend in inventory of foreclosures in the great Phoenix Area.

Sales are strong, pending sales are increasing and inventory continues to decline. The sales price seem to be leveling off.  Are we at the bottom?  Time will tell.  Distressed sales (Foreclosures and short sales) continue to dominate sales.  The last chart shows the percentage of homes that are distressed for each Phoenix area city.

Tables and charts from The Cromford Report using data from public records and  data licensed from the Arizona Multiple Listing Service (ARMLS).

Long story short-I submit an offer on beautiful custom home in Gilbert.  Full price offer, solid buyer.  Fast forward 2 months, still waiting for an answer from the seller’s lender.  “The lender thinks that the buyer and seller are in “cahoots” together to get a deal together.

Really- buyer lives across the country looking to relocate, loves the house, submits full price offer, does not know the seller, not even by name.

Now the seller’s lender wants, Name, Address, Date of Birth, and Social Security Number, and most likely will ask for the first born in coming weeks from the buyer.   Seller’s lender-think again.

Hey lender-do you want to sell, if not foreclose and reap the benefits-what ever they are.

Time to move on!!  Hey lender, I understand you love maintaining your foreclosed properties and by they way-you suck at homeownership. Maybe you should have qualified your buyers in 2005 and 2006.  Did you give loans on stated income?  Did you wink at the buyer and give them a loan.  Maybe it is time to take responsibility of your past actions, instead of punishing the very qualified buyer that you now have

It is no secret the buyers have arrived to the Phoenix Real Estate market- and we are seeing a new home buying boom in Phoenix.”  So who is buying?  In an article today at azcentral.com:

“In April, about 19 percent of all Valley homes were purchased by investors, according to real-estate analyst Mike Orr.

He works with the Arizona Regional Multiple Listing Service and the Information Market to analyze real-estate data daily for the Cromford Report.

During the boom, investor purchases accounted for 35 percent to 40 percent of metro Phoenix’s record home sales.

Now, first-timers are the Valley’s fastest growing group of home buyers. One housing-market watcher believes first-time buyers soon will account for half of the area’s home sales.”

As you may well know- first time home buyers are in a prime position: Record low prices, record low interest rates and a sweet government incentive-the $8000 tax credit.

Here is an up-to-date look at statistics for single family homes in Phoenix.

Tables and charts from The Cromford Report using data from public records and  data licensed from the Arizona Multiple Listing Service (ARMLS).