Category Archives: Finances

BEWARE: Wire Fraud is on the Rise

In June 2017, cybercriminals stole more than $14 million from unsuspecting people. Real estate transactions are especially vulnerable to these wily larcenists.

Real estate purchases routinely involve sending large sums of money by wire. This method is convenient, fast, and generally secure. Still, sophisticated criminals have been able to exploit people’s lack of familiarity with the real estate and escrow process.

One of the most common scams has been to convince an unwary buyer that the instructions for wiring funds have changed at the last minute “for security reasons.” The email, which appears to come from the title company or other settlement service provider, asks the buyer to wire their funds to a different link than previously agreed. The unsuspecting buyer who falls for this deception will discover, too late, that their money has been diverted to the scammer’s offshore account and is gone forever, along with the scammer.

The obvious advice is to avoid getting taken in by this kind of chicanery. Never wire funds without personally verifying with the title company or real estate closing lawyer that any change is genuine. For those unfortunates who may fall prey to the scam, there are some immediate actions that may offer a slim chance to recover the misdirected funds.

  • Contact the bank or other financial institution the funds were sent from. They may be able to stop the transfer.
  • Contact all parties involved in the real estate transaction, including the title and escrow people, the seller and the agents.
  • Inform the FBI immediately. You can file a complaint at www.ic3.gov. This should be done as quickly as possible. Even waiting just 72 hours could be too late for any recovery.

There are few experiences in life that are more stressful, emotional and confusing as buying a home. Criminals are well aware of this and will do their utmost to leverage those aspects to separate unsuspecting people from their money.

Knowledge is key.

Source: Everyone’s favorite mortgage guy, Jason Banks and TBWS

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Top 5 Reasons the Mortgage Process Gets Bogged Down

Questions? Call Maxine for answers! 703-836-1464

Questions? Call Maxine for answers! 703-836-1464

Things are moving along at a nice pace and then BAM! out of no where come mortgage issues… how could this happen?!  Believe it or not, there are a few very common things that frequently are the sources of those bumpy roads. Read on for some tips from Jason Banks, with Presidential Mortgage.

1)         Internet banking – With the invent of internet banking, we find clients are very active with money transfer.  Each transfer has to be paper trailed and followed.  We once had a client with 23 different accounts that they would push money to every month.
2)         One day sale! – I get called a few times a month by the client that is at LOWES, HOME DEPOT, SEARS, etc. stating they have a fantastic sale on Washer Dryer.  Keep in mind, the mortgage process is like a recipe…change one ingredient and you may not end up with a house.
3)         Availability of Funds – any time a borrower is withdrawing funds from a 401k, IRA, TSP, or some other “non-cash” account, we recommend that the client withdraw the funds at least 2 weeks prior to settlement.  We have had clients try to wait to the last minute only to find out it is a 10 day process…
4)         Lack of Urgency – The mortgage process is many times a very tight time line.  I find that for some clients, they are not aware that every day counts.  I have sent loan papers out on a Monday to be told they can get them back to me within a week OR SO….  The quicker we get the loan package the quicker we can get everything ready to submit.  On every file we hope to have the loan ready to submit the minute we get the appraisal in hand.
5)         Appraisals – The timing of appraisals continues to be an issue.  We are now requesting the reports be turned into us with 15 days.  This is up from 10.  So please write your contracts accordingly as we cannot push appraisers for expedited service based on HVCC guidelines.

Everyone wants a smooth deal… taking these observations to heart will be a huge help in keeping the mortgage process moving smoothly along.

Homebuying Tips: Advice For First-time Home Buyers

Best Advice For First-time Home Buyers

If you are a first-time homebuyer, you’ll have a much easier time finding and financing your next home if you follow these tried and true tips:

  1. Hire an experienced real estate professional:  Buying a first home is a complex process. Your Berkshire Hathaway HomeServices professional will assist you through the hurdles of neighborhood searches, comparing homes, making an offer, inspections and appraisals, as well as help you identify the best values.
  2. Check and repair your credit: Banks use your credit scores to make lending decisions, so make sure your credit is accurate and deficiency-free. Order your credit reports and scores by visiting http://www.annualcreditreport.com so you can make repairs, if needed.
  3. Get pre-approved: To get pre-approval, you have to apply for a loan and share your income, work history, debts and other information. Your lender will confirm your down payment source, interest rate, type of loan and loan term. Only then will you know exactly how much home you can buy.
  4. Check out federal, state and local government incentives: To learn about first-time home buyer programs, see: http://www.grants.gov or http://www.hud.gov. Click on Housing Authorities to find out what’s being offered in your community.
  5. Prepare to compromise: There’s no perfect home, so you’ll have to prioritize your wish list. Older homes often need cosmetic work so expect to pay more for a home in pristine move-in condition.
  6. Make a long-term investment: Equity is built over time, so plan to occupy your home for several years or more. Your home is also an investment in happiness and that can be the best deal you ever make.

FINANCIAL TIPS: Four Ways to Build Equity

Four Ways to Build Home Equity

Equity is the percentage amount of your home that you actually own. You have three ways to build your ownership stake: through the purchase, through the reducing principal and through the passage of time.

  1. Down payment: You gain instant equity when you put down a down payment. If you put 20 percent down, your equity ownership is 20 percent.
  2. Purchase price: You can also gain instant equity by buying your home below the market. That’s difficult to do because homes don’t typically sell below market unless there is some sort of problem, such as poor condition, lack of updates or foreclosure. To build equity, invest in updates and repairs to bring your home up to neighborhood standards.
  3. Paying down principal: As you pay your mortgage, little goes toward reducing the principal while a lot goes to paying interest. The longer the term of your loan, the less quickly you’ll build equity. Work with your lender to choose an adjustable rate or fixed rate for the length of time you think you’ll be in your home.
  4. Time: Historically, home values tend to beat inflation by one or two percentage points, which means you can estimate a rise in your home’s value to average about three to five percent annually in a normal market.

It takes time to build equity this way, but when you combine principal reduction with buying wisely and caring for your home so that it retains its desirability, you’ll find that you build equity quickly and steadily.

DC Metro housing supply growth continues

Hot off the presses from RBIntel…

Sales down [MRIS-wide] from July 2013; Listing Activity up

OVERVIEW

The Washington, DC Metro Area continues to have lower levels of buyer activity than in 2013.  Closed sales have now decreased from their prior year during every month in 2014, and decreased 8.4 percent from last July.  New pending contracts have had year-over-year decreases for eight consecutive months.  In July, new pending contracts fell 4.8 percent, with decreases in each property segment.   Despite the lower buyer activity relative to 2013, closed sales and new pending contracts continue to be higher than in 2010, 2011 and 2012.  The median sales price increased modestly from last year, rising 0.7 percent.  This increase was driven by townhomes and condo properties, with condos reaching their highest July-level since 2007, and townhomes reaching their highest level on record, with data starting in 1997.

Inventory continues to rise and active listings reached their highest level of any month since November 2011.  However, the number of homes for sale remains low, at just 43.2 percent of its peak-level.  New listings continue to rise, and have now increased from the prior year for five consecutive months.

Click here to view PDF version of this report

CLOSED SALES

Seventh consecutive month of year-over-year declines; decreases in all property segments.  In July, there were 4,539 closed sales in the Washington DC Metro Area.  This is 8.4 percent, or 414, fewer sales than this time last year and marks the seventh consecutive month of year-over-year declines.  But closed sales remained higher than the July-levels in 2010 through 2012.  All property segments had fewer closed sales than July 2013.  Sales for single-family detached homes decreased 13.2 percent, or by 330 sales, from last year and had the sharpest decline of all property segments.  Sales for townhomes decreased 5.3 percent, or by 66 sales, while those for condo properties decreased 1.6 percent, or by 19 sales.  As compared to last month, the number of sales decreased 9.3 percent, which is a milder decrease the 10-year average June to July change of -10.5 percent.

PRICES

Modest increase in prices led by townhomes and condo properties.  At $428,000, the median sales price for the region increased 0.7 percent, or by $3,000, from last July.  This is the highest July-level for the region since 2007.  The median sales price for single-family detached homes fell 1.2 percent, or by $6,750, to $535,000 and was the only property segment to have a lower median sales price than last year.  At $418,000, the median sales price for townhomes increased by $19,000, or 4.8 percent, from last July.  The median sales price for condo properties increased 3.4 percent, or by $10,000, from July 2013 to $300,000.

Of the jurisdictions, the city of Alexandria had the highest growth in in median sale price, rising 9.3 percent.  The median sales price in Prince George’s County rose by nearly as much and increased 8.8 percent.  Three jurisdictions in the area had declines in median sales price from this time last year: the city of Fairfax (-9.2 percent), Montgomery County (-1.5 percent) and Fairfax County (-1.1 percent).

NEW CONTRACTS

Decreases in all property segments; eighth consecutive year-over-year decline.  The number of new contracts declined from last July, falling by 4.8 percent, or by 240 contracts, to 4,773 contracts.  This is the eighth consecutive month of year-over-year decreases.  But the number of contracts is above its July-levels in 2006 through 2012.  All property segments had fewer contracts than last July.  New contracts for townhomes fell the most, and decreased 7.6 percent, or by 100 contracts.  New contracts for condos declined 7.3 percent, or by 99 contracts, from last July, while those for single-family detached homes decreased 1.9 percent, or by 44 contracts.  New contracts decreased 7.4 percent from last month, which is a milder decline than the ten-year average June to July change of -8.5 percent.

INVENTORY

Highest number of active listings since November 2011; increases in new listings in all property segments. Active listings in the Washington, DC Metro Area increased 33.5 percent, or by 2,808 listings, from last July to 11,119 listings.  Active listings have now increased from the prior year for ten months in a row and have reached their highest level of any month in nearly three years.  Despite these gains, active listings are 56.8 percent lower than their 2007 peak.  Of the property segments, active listings for townhomes had the largest increase from last year, rising 45.3 percent.  Active listings for condo properties rose 37.7 percent.  There were 6,431 active listings for single-family detached homes, 28.3 percent more than this time last year.

For the fifth consecutive month, new listings were above their year-ago level.  There were 6,282 new listings in July, an increase of 8.1 percent, or 470 listings, from July 2013.  New listings for townhomes had the highest growth of the property segments and rose 9.3 percent, or by 137 listings from last year.  New listings of single-family detached homes rose 8.9 percent, or by 253 listings, from this time last year, and those for condo properties increased 5.2 percent or by 77 listings. Homes continue to sell quickly and the median days-on-market is 17.  While this is five days higher than last year, it is lower than the 10-year July-level average of 29 days.

Look for prices to rise more slowly in 2014 and home building to push ahead of the housing market’s recovery.

This was a great article in USA Today…worth reposting!

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. This year isn’t likely to be as exciting. Rising mortgage interest rates will price out some potential buyers. Instead of double-digit price gains, look for single-digit ones, economists say, while existing home sales remain at last year’s level.

Sound boring? “You want boring in the housing market,” says Svenja Gudell, Zillow director of economic research.

Here’s what’s ahead for:

• Home prices. They were the highlight of the 2013 housing market, up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, shows the Standard & Poor’s Case-Shiller index.

Economist John Burns looks for a 6% gain in 2014. Many others see smaller increases ahead. Zillow forecasts just a 3% rise.

Prices will likely rise more slowly as more homes come on the market, fewer investors bid for homes and higher ownership costs — including interest rates and home prices — take a bite out of housing affordability, housing experts say.

Still, U.S. housing remains 4% undervalued when compared with other economic fundamentals, such as consumer incomes and the cost to rent, says Jed Kolko, Trulia economist. At their 2006 peak, home prices were 39% overvalued based on the same metrics, Kolko says.

•Existing home sales. They’ve started to slow. In November, they were down year over year for the first time in 29 months, National Association of Realtor data show.

The dip was driven by higher interest rates and a tight supply of homes for sale. It doesn’t mean the housing recovery has come off the rails, because home prices and housing starts continue to improve, says Capital Economics economist Paul Ashworth.

Existing home sales, which came in at a 4.9 million seasonally adjusted pace in November, are expected to be about 10% higher in 2013 than 2012 and stay about the same at 5.1 million in 2014, NAR forecasts. That’s roughly back to 2007 levels but below the inflated levels preceding the housing crash.

New-home sales, which make up a smaller part of the market, have more room to grow. They hit an annual pace of 464,000 in November, up almost 17% from a year ago but still below the 700,000-a-year pace generally considered healthy.

The new year will be different for home buyers, though.

Look for fewer bidding wars and a less frantic market, says Glenn Kelman, CEO of brokerage Redfin. Its data show bidding wars recently falling to one of two offers handled by Redfin agents, down from three of four at the peak in March.

Homes are taking longer to sell, and more sellers are also reducing prices to win sales, Kelman says. At the same time, the supply of existing homes for sale edged up to 5.1 months from 4.9 months in October, NAR says. That’s still below the six-month supply that Realtors generally consider to be a balanced market for buyers and sellers.

Supply should get closer to that level in 2014, Kelman says.

Donaee and Jeff Reeve hope he’s right. The couple sold their Seattle-area home in just 10 days amid a hot June market. They’ve been renting as they search for a new home with a few acres. Meanwhile, prices have risen. The lack of suitable homes for sale is “discouraging,” says Donaee Reeve, 36, a dental hygienist.

• Housing construction. This part of the housing recovery has been a laggard.

November’s data showed an improvement, with housing starts topping 1 million on an annual basis, the Commerce Department says. That was up almost 30% from a year earlier, but it’s still far below the norm. Starts averaged 1.5 million a year before the mid-2000s housing boom.

Construction won’t return to normal this year, but it will strengthen enough to be the main driver of the housing recovery as home price gains shrink, says investment manager Goldman Sachs Asset Management.

It sees housing starts increasing 20% a year for the next several years as household formation picks up with the strengthening economy.

More home construction means more jobs for construction workers, plumbers, civil engineers and others in the building trades, as well as related industries such as furniture manufacturing, it says.

Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job base for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.

“The construction revival is primarily a matter of when, not if,” says Tom Teles, GSAM head of securitized and government investments.

• Mortgage rates. Sarah and Andrew Katz know home prices are going up, and mortgage interest rates, too. But they’re still convinced it’s a good time to buy a first home. They’ve set their sights on spring.

“We’re banking on interest rates staying under 5%, but they are what they are,” says Sarah, 29, who works in public relations in Manhattan.

The couple better not wait too long, economists warn.

Average rates for a fixed 30-year mortgage will rise to 5.5% by the end of 2014, says Lawrence Yun, NAR chief economist. Rates have already risen about 1 percentage point in the past year as the economy has strengthened. They’ll be pushed up further as the Federal Reserve winds down its $85 billion monthly bond-buying program.

Each percentage point increase in mortgage rates makes homes about 10% more expensive in terms of higher housing payments.

Another factor could weigh on borrowers. Starting in January, lenders must make home loans that meet new federal qualified mortgage standards or face greater liability from borrower lawsuits, should the loans go sour.

At least 5% of mortgages extended in 2013 wouldn’t meet the new standard, Yun says. More than that will likely face additional scrutiny from lenders as they implement all parts of the new rule, says Brian Koss, executive vice president of lender Mortgage Network.

He says the higher rates and tighter rules will likely drive some home buyers out of the market or into lower-priced homes than they could have afforded last year.

“People have gotten spoiled,” Koss says. Higher rates and home prices will test the strength of the housing recovery in 2014, he says.

Originally posted by, Julie Schmit, USA TODAY

Red Light District a Cash Cow for the District of Columbia

A New Kind Of Red Light District

If you are traveling to D.C. over the holidays, be forewarned. The District of Columbia has expanded its arsenal of automated traffic enforcement cameras throughout various corridors of the city.

Starting on Saturday November 23, the District activated 100 next-generation traffic cameras, according to AAA Mid-Atlantic. Motorists will now have to pass through stop-sign cameras, intersection speed cameras and crosswalk cameras.  And all drivers will be subject to red-light cameras.

“The city is now awash in automated traffic cameras, including red-light cameras and speed cameras,” John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs, said in a statement.  “The new cameras will nab drivers who fail to yield to pedestrians and cyclists. In addition, a battery of newfangled intersection speed cameras will ticket motorists who speed up to beat the traffic light.”

To prepare motorists, the MPD is publicizing the new camera enforcement locations around the city. The list includes:

  • 32 new portable stop-sign cameras located near schools.
  • 24 intersection speed camera units that target drivers speeding through an intersection to beat a traffic signal. The fines range from $50 to $300, depending on the clocked speed.
  • 20 gridlock camera units to identify vehicles that “block the box,” and fail to clear the intersection. The fine is $50.
  • 16 pedestrian right-of-way or crosswalk cameras to identify vehicles that fail to stop for a pedestrian. Failure to give the right of way brings a $75 fine.
  • Eight oversize vehicle cameras that ticket truck and bus drivers who drive vehicles on a residential street, such as the 1100 block of 4th Street NE or the 1300 block of Independence Ave. SE. Fine: $150.The fine for running a red light is $150.

    According to AAA Mid-Atlantic, the city generated $91 million from automated traffic camera tickets during fiscal year 2012.  During the year it issued 91,550 red-light camera tickets that generated $12.9 million in revenue.

    In its fiscal 2014 proposed budget, the mayor’s office announced policy initiatives designed to increase the city’s general fund revenue by $75.1 million, with more than a third of that total, $31.7 million, coming from additional automated traffic camera enforcement revenue the city hopes to get by expanding its network of cameras.