Mortgage | Laura Clark

2018 Real Estate Market Forecast

2017 was certainly an interesting year! We had more buyers, and looser mortgage guidelines, qualifying more people for a home loan. We still maintained incredibly low interest rates with noisy politics and uncertainty contributing a great deal to that. As supply and demand would have it, we saw an increase in demand for home ownership but a shortage of supply as low inventory was the only thing holding the housing market back from a sure explosion. That led to home values increasing and a shift from a buyers- market; to a sellers- market.

So here we are its 2018 and we are seeing incredible economic growth. The Dow Jones Industrial average is soaring to record levels, unemployment rates are at a 17-year low and job growth predictions are all leading to signs of a very healthy America in 2018; from an economic perspective.

So what does all of this mean to you? Well it’s always important to know what is going on in the real estate market because if you are a home owner, you should always know the current market value of your home. If you are considering selling, you of course want to know how much cash you can get out of your sale. And if you’re looking to own a home, you want to know what the interest rates are, what they are projecting to be and what the inventory situation looks like to make better, more informed decision.

It’s expected that historically low interest rates, still baffling to even the most seasoned analysts, will gradually rise to an average of 4.5% percent over the next 12 months. Inventory is expected to increase, but moderately; making 2018 thus far, a sellers- market.

“This will be the first of many years to come in which it’s all about the millennial first-time homebuyer,” said Mark Flemming, chief economist at First American Financial Corp, a title insurance company. “ Find ways to appeal to those buyers, and it’s likely to be a successful year.”

Millennials, first time home buyers and self-employed individuals finally have access to options they really didn’t have after the mortgage meltdown. Let’s face it, most rentals today aren’t as desirable and they are more expensive as sellers of nicer properties have opted to “cash out” and sell once the market recovered. What I have recommended to interested buyers in our community is define where you are at financially and what your credit score is; then learn what products exist today that will get you qualified. For my sellers or potential sellers, get a free market analysis and know the market value of your home; you might be pleasantly surprised.

Do you have old debt you’re not sure how to handle?

So many good people experience times in their lives where they face financial adversity. The 2008 recession in particular impacted millions of people. Throughout the course of my career I’ve had to set many people straight on the topic of old debt that I thought I would blog on the topic in hopes to help more people understand their rights and how to make educated decisions.

Step 1: Obtain your credit report. You can do this for free once per year simply by going to www.annualcreditreport.com

Here you will have what is on the three big credit bureau’s: Equifax, Transunion and Experian.

Go thru your entire report with a highlighter and highlight anything derogatory and all “old debt” items you see. Now, you may be surprised on some of the dates you see. For example, let’s say you had a credit card debt of $10,000 dating back to 2008 and the credit card company turned your account off in 2009 and began their collection process. Now you see that same “old debt” but the date says it’s a debt where they stared collections in 2013. How can that be right? Read on.

Step 2: Find your state’s Statute of Limitations. In short, what this means is how long your creditors have to collect on your debt. So go back to the $10,000 credit card debt from 2009. If your state has a statute of limitations of 6 years, they can only go after you until 2015. But now it’s 2017 and you’re still getting collection calls and/or threatening letters in the mail. So many people ask me, “how can they just adjust the date beyond the statute of limitations”? The answer is they can’t, but in the next point I’ll explain what happens.

Step 3: Find out if a law office or attorney bought your debt! It doesn’t have to be a law firm; in fact, many of these companies are nothing more than sales organizations/credit collection companies that simply try to scare people into paying on a debt the original company sold off to them! These are companies that use in many cases, very aggressive, somewhat shady business practices to scare the lights out of you in an effort to collect. They purchased your debt for pennies on the dollar and set up very aggressive campaigns to frighten you into one of a few things: 1. Admitting you owe the debt. When you do this, they “re-age” or what’s called “park” your debt. This is a big reason people see old debt “within the statute of limitations….again…and again…and again”. An illegal practice, especially when the creditor did not notify you in writing that they intend on re-aging your old debt. 2. Say or may any notion that you intend on paying. This can take you backwards and resurface even the oldest of debts. The easiest way to handle these people is to “hang up” on them.

Should you find yourself fighting an old debt, here is my recommendation:

Do research on the company coming after you. Are they really a legit law firm or posturing themselves as such?
Write back to them within 35 days of their initial contact. Request verification of the debt. They legally must show proof that you owe them, proof of the actual sum and proof that they are entitled to collect.
If they are harassing your cell phone, home phone or mailbox, write them a letter to cease all communications with you. They must comply with the Fair Debt Collection Practices Act.
Dispute any “re-aged” actions you see on your credit report directly with them; and not acknowledging in your letter that you owe the money.
If you don’t see the date removed on your credit report, you can write directly to the three main credit bureaus directly. They legally must remove it if they do not written confirmation.

Over the years, so many people in these situations simply are not educated on their rights as a consumer. As a result, “old debt” prevents many people from moving forward with their plans to get a mortgage and own the home they wish to live in.

If you need help or advice on this matter, I would be happy to help. Thanks for taking the time to read my blog.

The information on this website is designed to inform and educate only. The views and opinions expressed herein are simply those of the author and do not reflect the policy of my company.

Generation Rent is Ready for Home Ownership!

Millenials ready to purchase Millennials are ready to purchase homes finally; after 10 years of declining numbers according to a University of Southern California study. This is fantastic news for the housing market and fantastic news for millennials as they shift from renting to owning. A certain shift from 2014 when Pew research reported that for the first time in 130 years, individuals between the ages of 25-44 were more likely to be living with their parents vs. owning a home.

One of the stunning statistics I came across reading a Bank of America study was total lack of understanding of what is actually available to millennials; their perceptions of what it took to own a home was incredible; here’s what it showed:

-30% of millennials believed they need 20% down to get a mortgage

-31% believed they needed 10% down

-Only 5% believed they needed 5%

-6% were simply unsure

That represents 72% of all millennials! Yet most millennials that do in fact obtain a mortgage pay around 3%!

Until recent times, the factors that contributed to both the realities as well as poor perceptions of one’s ability to own a home were:

Increase in Debt
Unemployment rate
Increase in rental costs leading to decrease in ability to save for a down payment
Credit requirements after the mortgage meltdown
Lower inventory of starter homes
Getting married later- lack of dual incomes to go on mortgage

As I wrote in a prior blog, times are changing for the good. It’s amazing what a positive outlook does for politicians, investors/Wallstreet, business owners and of course, the stock market. Low down and no down payment mortgages are truly helping millennials obtain their goals

My advice to the millennials is simple: roll up your sleeves, get with someone that truly knows what they are talking about and define your point “A”. Meaning, if you want to own a home, don’t be embarrassed about anything: what your bank account says, what your credit score is or what limitations you think you might have. It’s important to get it all out on paper; some may find themselves in their own home right away, some very soon and for the rest, they are left with a clear path to point “B”, an exact game plan.

Next week I will reviewing interest rates and inventory; thanks for reading!

Tax Liens and Judgements to Come Off Credit Reports

Tax Liens and Judgements to come off many consumer’s credit report

Effective July 1st, 2017, Transunion, Equifax and Experian will be excluding tax liens and some civil debts/judgements from consumer’s credit reports. The Consumer Data Industry Organization has stated that this initiative is to ensure consumer identifications are accurate and current.

In a move that will boost many consumers credit scores, the three main credit reporting agencies will remove tax liens and civil debts if reports on those particular obligations do not include: names, addresses, and social security numbers and/or date of birth according to the CDIA.

Federal law requires that accurate information is provided to ensure accurate credit reporting. Consumers have complained that paid debts are still appearing on their credit report. The National Consumer Assistance Plan will help consumers with prior challenges to obtain loans they otherwise may have been declined.

This is really good news for the housing market obviously, as this news will have an immediate impact on about 10% of Americans. Couple this information with my prior blog on low down/no down payment mortgages and you end up with great news for many people. With the Dow over 20,000, looser credit guidelines and this recent news on credit reporting; times are looking pretty good.

Mortgage Guidelines Are Loosening

In the fourth quarter of 2016 we witnessed a great number of mortgage lenders loosen their approval standards. We also saw a spike in interest rates, but if history is an indicator of where interest rates are going for the remainder of 2017, rates should flatten or even perhaps show a slow decrease.

Recently sworn in Treasure Secretary Steven Mnuchin stated out of the gate that mortgage rates are likely to stay low for some time. Statements from high ranking officials such as Mr. Mnuchin often keep rates in check. Add historical data to that, when interest rates spike up quickly (which they went up 80 basis points from November to January…which by the way, is one of the largest spikes in a short amount of time we’ve seen) history shows a long, slow decline in rates. Most people are assuming a continual increase in interest rates, but that very well may not be the case.

The housing market rise and surging stock market has created optimism amongst lenders. Minimum credit scores have been reduced, documentation for the self-employed reduced and maximum loan to values have been increased. Banks have also made concessions with individuals with less than perfect credit and have low and no down payment mortgages (VA, USDA, FHA). Today, very few banking institutions create their own lending models. Most will follow the lending guidelines set forth by Fannie Mae and Freddie Mac, in addition to FHA, VA and USDA. What’s loosening are the investor overlays. Meaning, if FHA says a minimum FICO score is 525, a banking institution may insert an overlay, bringing the credit guideline to 580.

To support this trend, mortgage processing software firm Ellie Mae has approved 77% of the almost 4 million mortgages they processed last year. The end result is cautious optimism in the US Housing Market.

So what does this mean to you? It means if you’ve been turned down getting a mortgage, you should consider trying again. If you are self-employed and went through a few struggling years after the mortgage meltdown, time has passed and banks seem to be prepared to start lending to you again. Whether you’re in the market for a new home or an investment property, 2017 could be a very optimal time for you to act.

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2018 Real Estate Market Forecast

Do you have old debt you’re not sure how to handle?

Generation Rent is Ready for Home Ownership!

Tax Liens and Judgements to Come Off Credit Reports

Mortgage Guidelines Are Loosening

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