Going Green: Does It Make Cents?

With Earth Day just a week behind us, we've heard a lot of talks on the importance of going green. Washington is even pushing the trend on homeowners through tax credits and incentives. However, homeowners need to understand if it is in their best interest and realtors should advise accordingly.

The issue is pretty simple. Homeowners can save money on the upgrades due to the tax credits and incentives but they can only save a portion of the costs and most of the upgrades savings stop at $2,000. That is a drop in the bucket for a green upgrade. But the real problem is that many appraisers across the country are not on board. The majority of appraisers are not including green upgrades in the value of the home because markets are not looking for them. Unless buyers want these upgrades for the sake of having them, many homeowners won't act unless they can recover the majority of the costs in the sale of their home.

DC has removed the $2,000 cap for "qualified solar expenditures" so markets in which solar panels are worthwhile can take full advantage of the tax incentives. However, there are few markets in which solar panels are worthwhile and socially acceptable. There are even fewer where appraisers are adding value of the panels to the value of the home. In markets such as these (many of which are in California), it would be relevant to urge your clients to upgrade their homes. At the end of the day, as it is with any upgrade, it is important that the upgrade is analyzed from a financial perspective and not simply from a social awareness perspective.

Big Changes For Nevada Mortgage Licensees

Nevada mortgage brokers and lenders alike are preparing to hop onto the NMLS roller coaster. Many states have already integrated their systems with the Nationwide Mortgage Lending System but Nevada is one of the last states to get on board.

Originally the Nevada mortgage commission was slow to align with the NMLS. There were even talks of whether or not Nevada would ever join the NMLS. However, Nevada conceded and is now just another car on the roller coaster and Nevada mortgage brokers and lenders should expect nothing short of a roller coaster of changes. Many of the proposed changes will be up for public comment this Friday. If you can attend either of the two Nevada meetings, it would be a great time to go out and show your support.

Meetings will be held at 9 am on Friday, April 30, 2010 at the Las Vegas Grant Sawyer Office Building 555 East Washington Avenue Room 4500 Las Vegas & Carson City Office of the Attorney General 100 North Carson Street Mock Courtroom Carson City. Please attend!

New Home Sales Up 27% - That's Good For Everyone

New Home Sales were up last month 27%. It was the fastest single-month jump in 47 years. Many skeptics are saying that it was just the market trying to do a last minute reaction to the new homebuyer tax credit that ends next week. Others are predicting sales later in the summer will drop. Others are saying that it is the economy recovering and people feel more secure about their jobs and are restoring their faith in the real estate economy.

My wisdom points me to believe that the future is difficult to predict. But I will say that people are getting loans and they are buying homes. Transactions are being closed and deals are being done. That is a huge improvement from where we were just one year ago when even large lenders were making program changes on an almost weekly basis. Sometimes this industry has to weather the storm. My thoughts are that things are getting better and that is a good thing. If you or someone you know wants to get into the real estate or mortgage industry, it's a good time to turn to the experts at the Praedo Institute. We will help you hit the ground running. Mortgage brokers and real estate agents who need continuing education can also take advantage of our summer discounts.

Life

Whether things are good or not so good, good ratings from news rarely come from coverage on a couple's first home, puppies, or a local 10 month-old's first steps. What gives good ratings is news material that stirs emotions, feelings, and intrigues the reader or listener to give up their full attention and give them something to talk about at the water cooler at work or in the line at Starbucks. I am one who advocates staying on top of world events, staying up on cutting technology, participating and being active in your neighborhood associations, and being a loyal and active contributor to local, state, and federal politics. I agree and stand beside Thomas Jefferson when he said that "all that is necessary for evil to triumph is for good men to do nothing."

It goes without saying that life is a balancing act where one must choose between a variety of good things. But as the world swirls around us, it is my hope that we can cherish life around us. Most problems will pass and if they don't pass quickly, adjustments will be made, but to the best of my knowledge no problem on this planet has ever meant the end of the world. Shouldn't we be a little bit wiser, if for no other reason to keep stress levels down, and consider the clouds of life to be temporary shade rather than an absence of sunshine. I fear that we are missing too many things. We are missing the couple's first home in the neighborhood and the puppies and the new-born babies. I especially fear that it may be our first home or our toddler or our puppies who are getting swept by the wayside.

While this is not Thanksgiving, we do have so much to be grateful for, even in April. I also stand beside Thomas Jefferson when he commented "and thanks to a benevolent arrangement the greater part of life is sunshine." Problems will pass by you occasionally, but may our happiness take up a permanent residence.

Things Are Getting More Lenient

For better or worse, banks and lenders are becoming more lenient with what they are requiring from borrowers. It was only a year ago that most borrowers felt like they were being vetted to become a presidential candidate as they applied for home ownership. Instructors at the Praedo Institute have been joking with loan originators that they should learn how to draw blood, as that is certainly going to be the next required step in the application process and how they could expedite the process if they could draw blood themselves. However, the wind is starting to change direction in the market.

Fannie Mae is easing up on its requirements from borrowers to make home ownership easier in these difficult times. If you have been given the deed to your house back to the bank or done a short sale on a home, Fannie Mae regulations stated that you could not apply for a loan for four years. Fannie Mae is shortening that period to two two years. Cutting this length of time in half allows more borrowers to get back in the housing market.

The sentiment of such a change brings mixed feelings. Should forgiveness of such a magnitude be expedited or do we need more borrowers in the country in order to take up excess inventory? There are arguments that could be made on both sides. Certainly lenders are conscious of the fragile state of the housing market but executives at Fannie Mae feel that this is a move in the right direction. This expedited forgiveness also comes at a steep price, borrowers who wish to take advantage of the policy must put down a 20% down payment.

For better or worse, no one can argue that these types of changes coming form Fannie Mae are a positive thing for the housing market and urges us to be optimistic for the future of the housing market.

Principal Forgiveness: The Battle Rages On

After President Obama announced changes to the Home Affordable Modification Program several weeks ago, many banks have ran to the defensive line in order to defend their position. The Obama administration has urged lenders to consider principal forgiveness when trying to work with borrowers who are underwater in their homes. However, many big bank executives testified to the House Financial Services Committee on April 13 of the harsh reality of the new changes.

One argument against principal reduction was that of costs. David Lowman of JP Morgan Chase said that this could cost the industry between $700 and $900 billion. He went on to say that "Broad-based principal reduction could result in decreased access to credit and higher cost to consumers because lenders will price for principal forgiveness risk."

Yet one must wonder how accurate these costs are. I would argue that these costs may cover the principal reductions of current borrowers, but how about the majority of the country who are willing and able to make their payments, but start missing payments to qualify under the HAMP program? There is also a deeper morale issue that is raising questions of fairness both to this aforementioned majority and to the banks themselves.

I stand behind Mike Heid of Wells Fargo who said "while very difficult to achieve, the needs and interests of homeowners in financial distress must be balanced with those who've remained current in their mortgage payments."

Unless we choose to change our economic system (which I am against with every fiber of my being), we need to stick to the rules of our current market and let the market balance itself out without any large government hand ordering banks what to do. How unconstitutional it is for a government to stand between two parties who have bound themselves in contract. But I guess that discussion is for another day.

"I Made It Through My Trial Period, Now I'm Getting Foreclosed On"

With the federal government pushing banks to perform loan modifications on behalf of their distressed borrowers, many banks have followed suite. With hefty incentives that are paid for by the American tax-payer lingering in front of their faces, banks are taking the bait and moving monumentally quicker than they did just a year ago. To the credit of new programs and the government's incentives, what once took 10-12 months can now take just a few weeks.

However, if you have tried performing a loan modification or know somebody who has, you know that submitting a loan modification request is no reason to pop the cork off the champagne. On the contrary, many people are finding that there are still a lot of holes in the system. One overwhelming problem for most borrowers is the trial period. Once a loan modification is made, banks will require the borrower to make the payments that the loan modification has outlined. Most borrowers are under the impression that if they make their payments during the trial period that the loan modification is official. Things couldn't be further from the truth. Many borrowers find themselves meeting all the requirements that the banks have outlined and than being turned down for the modification. This has left many borrowers confused and homeless.

Nonetheless, many analysts and economists are 'cautiously optimistic,' the new phrase coined during this recession. But housing numbers are looking better and those who have lost their homes are taking up inventory in rental properties across the country. The moral of the story is simple, if you're submitting a loan modification package to your lender, I would advise you to be 'cautiously optimistic.'

Preado Email Blasts Now in a Theatre Near You

With all of the changes that have affected the mortgage industry over the last year we are rolling out our Praedo Email Blast program. Each week we will send out an email that will contain a host of regulatory updates and changes that will help you stay on top of all of these changes. Our first email blast update was sent out earlier this week and we've already got a great response.

Our email blasts will soon include YouTube videos that can be a great tool to use in training meetings and for your own improvement. Please email us if you did not receive an email this week and we will get you on the list. Praedo Institute. Your source for mortgage education.

Praedo: Your Source For SAFE Information

Mortgage brokers across the country are just trying to keep their heads above water. The bursting of the housing bubble delivered a tough blow to loan originators last year. And now with Congress pointing the cause of the bubble burst on mortgage brokers and lenders, and the deputizing of the NMLS (Nationwide Mortgage Licensing System) to police the mortgage industry, there is more red tape and a lot more restrictions that loan officers must abide by. Staying on top of all of these state and federal laws can be agonizing, so who best to turn to for up-to-date SAFE questions than the Praedo Institute. Between blogging, YouTube, Twitter, Facebook, email blasts, our informative website, and our knowledgeable staff, we can help you stay on top of everything you need and more.

Need Mortgage Brokers? Praedo Can Help

Are you trying to recruit mortgage brokers? Whether you're starting a new venture or trying to expand your company, we can help. Managers and owners alike can contact us order to join our third party employment page. Here you and your company can have access to thousands of SAFE licensed loan originators who are looking for work. Owners should also be aware that Praedo offers corporate discounts to our already competitive pricing for qualified companies. If you are interested in participating in our third party employment pages, please contact us at support@praedo.com.

Have other ideas on how we can help your company, let us know!!

Utah Real Estate Deadline Has Past

On January 1, 2010 The Utah Department of Real Estate increased the number of hours of pre-licensing education that new agents must obtain. Hours were increased from 90 to 120. The Division allowed real estate agents who had purchased a course prior to January 1, 2010 to complete all of their education and have all documentation into the Division by March 31. However, that date has passed and the Division has a no-exception-rule on changes such as this. Do not let your 90 hours of education go to waste!! You can purchase the additional 30 hours of education for a limited-time offer of only $80! You can access the course through Praedo's website or by clicking here.