Category Archives: Finances

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.

What do you do if your lender cuts off your equity line?

I have a friend who used the bonus from his law firm to pay down his Home Equity Line of Credit (HELOC). He and his wife toasted their fiscal responsibility for taking the windfall of extra money and applying it all to debt, instead of squirrelling it away or spending it on a vacation to Tahiti. They felt confident with this decision knowing if they needed the extra dough they could pull the money back out of the house through their equity line.

At least it sounded like a good idea a the time. Little did they know their bank would almost immediately reduce their equity line limit to a number only slightly above their outstanding balance. Read on for some helpful advice on what to do if your lender cuts, or even worse, cuts off your HELOC.

Visit houselogic.com for more articles like this.

Copyright 2013 NATIONAL ASSOCIATION OF REALTORS®

Fairfax County Home Sales Surpass $1 Billion in June

Prices IncreaseHold on to your boot straps, it looks like the real estate market in Northern Virginia/Washington, DC is on the rise again!  At least inside the beltway in Fairfax County, Arlington County, Alexandria City, and Falls Church.

The Sun Gazette reports that in Fairfax County alone, Home Sales Surpass $1 Billion Across County in June . Sales for the month totaled 1,838, an increase of 18.8 percent from the 1,547 transactions reported in June 2012.  The average sales price was also up 7 percent.

Is this a good thing or too much of a good thing?

PenFed Announces 30-Year Fixed, Jumbo Loans

People oftentimes ask me what I like about being with Prudential PenFed Realty – being able to offer our clients awesome products like 3.625% on jumbo loans up to $4 Million is at the top of the list. Questions? Ask me! Want to know how to offer your clients these great programs? Call me!

For the full scoop visit https://www.penfed.org/30-Year-Fixed-Jumbo-Mortgage/

Seller Contributions and Non-Allowed Lender Fees

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

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

Did you know that FHA and VA loans both contain fees that a borrower cannot, by law,
pay?

Yep.  It is a fact.  In order to facilitate settlements you will find in most of our DC Metro Area contracts contain clauses in the VA and FHA Finance Addenda that state that the “sellers agree to pay any fees that the borrower cannot, by law, pay.”

If you have a contract with seller contributions, the fees the borrower cannot pay are first deducted by that same concession (i.e. If you have $500 in fees the buyer cannot pay and have
$1000 in seller contribution then the $1000 first pays the $500 for the buyer
and the remaining $500 is provided to offset other closing costs.)
Remember no closing costs assistance can EVER go towards a borrower’s down
payment.

But what if you have $0 seller contribution?  Again, as
most of our local contracts read, the seller will still be responsible for
paying those fees that the buyer cannot pay.  For Presidential Mortgage
Services, Prudential PenFed Realty’s affiliated lender, this amounts to $760 on a VA loan and
$85.00 on an FHA loan.  For other lenders it could be significantly more.

Please be aware that if you are a listing agent and you agree to an FHA or VA
contract that $0 seller contribution, does not necessarily mean $0 from your
seller.

On the Mortgage Horizon

I just got this from a lender we frequently do business with regarding the new Qualified Mortgage rule expected from the Consumer Financial Protection Bureau …it is an interesting read.

Mortgage questions?  Call us for answers! 703-836-1464

Mortgage questions? Call us for answers! 703-836-1464

This week CNN discussed the new Qualified Mortgage (QM) rule the Consumer Financial Protection Bureau (CFPB) is likely to release.  The new QM Rule is not expected to become effective until January 2014.

The new Qualified Mortgage (QM) rule is designed to establish new lending rules that will move us between the footloose times of no documentation loans and the current strict credit standards.  The QM proposes that borrower’s total debt to income ratios be capped at 43% of their monthly gross income.  It would also limit the risky products offered by lenders.  Such as, no more loan terms greater than 30 years, mortgage loans can’t have a balloon payment due, no loans in which the principle due increases over time, and interest only loans would go out the window as well.  Homebuyers who choose adjustable rate mortgages will no longer be qualified on low introductory teaser rates, but rather the fully indexed rate.

The QM rule is designed to help lenders determine the borrower’s ability to repay the loan by evaluating all aspects of their credit profile.  Such as current income and assets, employment history, credit history, the proposed mortgage payment to include insurance, real estate taxes, HOA dues, mortgage insurance and a borrower’s total monthly debt to income ratios.

This is not designed to alter the housing market’s recovery and assist consumers who can’t meet the 43% debt to income ratios, the agency said it was establishing a second, temporary category of qualified mortgages that meet most of the new guidelines and would qualify to be purchased or guaranteed by Fannie Mae or Freddie Mac.  Federal Reserve Chairman Ben Bernanke said, “The legitimate concern is that this will cement the tight mortgage underwriting standard that we currently have in place, and most people agree that they are too tight.”

Mary Ellen Podmolik of the Chicago Tribune reported:

Under the new rules, lenders who make qualified mortgages to well-qualified borrowers that carry a lesser chance of defaulting could be shielded from lawsuits from these prime borrowers who say the lender did not satisfy the ability-to-repay requirements.  Riskier, subprime borrowers could challenge the lender’s assessment of their ability to repay the loan but borrowers would have to prove that a lender didn’t adequately factor in the living expenses and other debts.

Diane Thompson, of counsel at the National Consumer Law center said, “They appear to favor lenders’ interest above consumers.  You have to prove what’s in the creditor’s records.  It may be that no homeowners are able to challenge it.  Otherwise, you’re relying on regulatory oversight, and we say how well that worked.”

In summary, the QM rule is designed to protect consumers from irresponsible mortgage lending and protect taxpayers from having to bail out Fannie Mae and Freddie Mac.  Lenders will be restricted from offering risky products to the consumer and charged with the task of responsible lending.  CFPB director Richard Cordray explained, the ability to repay rule is a common-sense answer to curb the borrowing and lending behavior that led to the financial crash.  Cordray says, “When consumers sit down at the closing table, they shouldn’t be set up to fail with mortgages they can’t afford.  Our ability to repay rule protects borrowers from the kinds of risky lending practices that resulted in so many families losing their homes.  This common-sense rule ensures responsible borrowers get responsible loans.”

ABCs of Closing Costs

You have found your dream home, the seller has accepted your offer, your loan has been approved and you are eager to move into your new home. But before you get the key, there’s one more step-the closing.

abcAlso called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering.

As a buyer, you will sign what seems like endless piles of documents and will have to present a sizeable check for the down payment and various closing costs.  It’s the fees associated with the closing that many times remains a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.

As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Although many of the fees may vary by locality, here are some common fees:

· Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.

· Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.

· Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage.

· Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.

· Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.

· PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure.  Once an owner with a conventional loan has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.

· Prepaid Interest Fee: This fee, also known as interim interest, covers the interest payment from the date you purchase the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.

· Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance. At least one year advance plus two months worth of homeowner’s insurance premium will be collected. In addition, taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If six months have passed, eight months of taxes will be collected.)

· Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property. Make sure you consult a real estate professional in your area to find out which fees-and how much-you will be expected to pay during the closing of you prospective home.

Also, keep in mind that depending on the market, you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay all of the settlement costs.

If you have any questions please do not hesitate to call or email your Alexandria Homes specialists and someone on our team of agents will be delighted to assist you!