New Appraisal Rules

 In Bergen County New Jersey as well as the rest of the country, new appraisal rules went into effect as of September 1, 2011.


The aim is to standardize the way appraisals are done and is being required by Fannie Mae and Freddie Mac. This most assuredly will cause massive confusion, delays and cost more.

Property conditions will be rated utilizing a number system. This is based on what the appraiser knows and sees in his experience. My question is, who is to say that all are qualified to make these judgments. In explanation, a wet spot on a ceiling could mean many things and may not be a negative for the home. Does this mean to say that we are all subject to something other then the numbers an appraiser may work with?

The above is not to say that appraisers are not adept and good at what they do, but now we bring into the fray more of an objective idea than a subjective numbers crunch and knowledge of the market. They say the reason for this is that real estate agents are not prepared for the market we are in at this time and that there is a need for standardization in that profession.

Just more stuff to deal with, more rules, regulations. When will it stop?

Let me know what you think! Please comment on this.

For the complete story as written on Boston.com, here is the link:  
Appraisers say new rules will cause confusion

Bergen County Housing to be weaker in the Fall of 2011? Can’t be!

 
According to a report by RISMedia on June 17, 2011, the NAHB is predicting that the cost of credit will increase. Beginning October 1, 2011 there will be a decrease in the GSE-Government Sponsored Enterprises such as Fannie Mae and Freddie Mac (Freddie?) or any loans insured by the FHA. This means that there will be tighter conditions for credit requiring higher down payments and higher interest rates.


Okay so the simple question is, how does this affect us in Bergen County? NAHB’s analysis of this will “…affect 204 counties, containing 1.38 million owner-occupied homes in the affected price ranges.” These affected price ranges and 204 counties affect 27% of the homes in the nation.

How does this affect Bergen County? While we are in a bad situation, it affects everyone, including Bergen County Home sales tremendously. While the County has remained stable in pricing, on average as compared to the rest of the state, it means nothing. Prices have not stabilized as yet. Realty Trac has stated that they expect prices to stabilize by the end of 2011 and then we can start moving forward.

Foreclosures are going to be released into the market shortly as all of the problems have finally been resolved here in New Jersey. This makes matters worse even worser (  :-)  ). Our friends at Realty Trac have confirmed that New Jersey is the worst state when it comes to litigating these foreclosures. That’s one reason, it will be harder than it should be or should have been. It can take 900 days to finalize a foreclosure in New Jersey

What this really means is that our government, you know the ones we elected, don’t get it. They are ignorant. Ignorant to the fact that the housing market, that is real estate and the purchase and sale thereof, makes the world go round! When will they start doing something that will help rather than tightening up restrictions, they should be figuring out what will help rather than hurt. How about get the bums out Washington and put some of these high priced executives and politicians in jail for getting fat over the last 10- years. Let’s get businessmen to run the country rather than pontificators. They broke the law, but we don’t see any of these people going to jail. Madoff went to jail, big deal!

Oh, I forgot, they gave us the tax credit thing last year. That hurt us more than helped us. How, you ask? Simple, it accelerated the buying decisions for the year of home buyers as well as incentivized sellers to sell faster than they normally would have. The effect was that the majority of home purchases happened before and in the first 2 quarters of 2010. No more homes were sold in 2010 because of the tax credit-NONE. It cost us, the taxpayers, a LARGE fortune.

Hey Washington, wake up and use the education your parents paid for!

Short Sale vs. Foreclosure in Bergen County?

 
You make the call!


I get the question from people all the time all around Bergen County, New Jersey: short sale or foreclosure, which is the better option? My knee-jerk reaction is always “Are you kidding? Short sale, of course!” This has been mostly because I was always under the impression that a short sale, although still a ding on your credit, was gentler on the score than a foreclosure.

But according to a recent blog post by FICO Banking Analytics, there is no real difference in the affect a short sale or a foreclosure has on your credit score. Both the impact in points and the time to fully recover is about the same for both events.

This put me in a precarious situation. All this time I had lauded the short sale as vastly superior to foreclosure, largely because of its less adverse affects on credit. So I was forced to do further research into which was the better option. In doing so I learned about benefits of a short sale I wasn’t even aware of, and found that the FICO blog was way off.

Each borrower’s credit situation is different, and the way that a creditor reports a short sale to bureaus is different. The reality is that hundreds of thousands of distressed homeowners who have chosen a short sale have experienced a lesser impact on their credit than those who have chosen foreclosure.

In a short sale, a distressed homeowner may be able to obtain another mortgage sooner than someone who has a foreclosure on his or her record. Also, more and more employers pull credit before hiring a potential employee, and a foreclosure can keep you from getting a job. Some employers pull credit reports on existing employees, and a foreclosure may not bode well in certain industries.



These benefits stacked against the negatives of foreclosure, including the embarrassment of public announcement and literally being kicked out of your home, make, in my opinion, short sale the reigning champion.

Now you make the call!

Bergen County Real Estate and what is going on in May, 2011

 
When it comes to Bergen County real estate, I ask everyone if they really care.  I know I care.  The ones that really understand what is going on in the economy, care!
Here is the thing:  When the politicians, worldwide, not just in the United States, finally figure out that housing makes the world go 'round, then life will be so much easier economically.  They just don't get it.
It just seems to me that the government officials just don't get it.  With this Dodd-Frank bill including the "Qualified Residential Mortgage" I want to say ARE YOU KDDING ME?
A lot of people will say I'm nuts for saying it's a bad thing.  Well think about it this way:  Not many people like the designated hitter in baseball, but now that it's here and has been here for so long, you ain't never getting rid of it.  It is to much ingrained in our baseball society, from little league on up to MLB.
Okay, so change the qualifications and make it tougher to get a mortgage.  I agree.  Everyone should have good credit, money and a job in order to buy a house.  Don't make such drastic changes.  The Dodd-Frank overhaul is like taking 10 steps back in what some are calling an economic recovery.
These two need to actually do some research rather than reading their own headlines and stay away from the mirror.
As far as Bergren County real estate is concerned, here is the latest information that has been compiled.  It is my monthly Bergen County market update:  http://budurl.com/j9ld

Bergen County Real Estate and the explanation of the situation.

 
Here in Bergen County New Jersey, we find a situation where the market, on average, has been stable. This is simply because we have such a broad price range in Bergen County real estate from lows of $50,000 a unit to highs of millions. We find that people with money are spending it for the higher priced homes and other people with money, a job and good credit are buying in the mid range. This doesn’t mean that the “stable” word is a good thing.


The word I use-stable- is simply the average is stable. There are towns doing well and there are towns doing poorly, which averages out to stable on the whole. Confused? Most are!

While we can not utilize many of the market statistics this writer usually uses to determine what is happening in the Bergen County real estate market, we can look at the overall factors. The reason for this is the great debacle known as the tax credit the government gave the country last year which ended on April 30 of 2010. This was a debacle simply because it did absolutely nothing for the housing market or the economy. All it did was accelerate the buyer’s decisions to buy sooner, than later in the year to get that 8 grand! It is then possible to look at the usual statistics to make a statement on the state of the market.

Core Logic says that January, 2011 was the 6th month in a row that showed a year over year decline in prices. Remember, Robert Shiller of Case/Shiller came out a couple of months ago and said he wouldn’t be surprised if prices dropped 25% this year. Enough of this guy!

Here are some true facts:

• 23% of American homeowners owe more on their homes than the mortgage amount;

• 11.1 million properties were in a negative equity position;

• 2.5 miilion homeowners have less than 55 equity in their homes.

So here it is. Home loans get harder to get because of tightening of funds and tightening of qualification rules. Inventory is up due to foreclosures and short sales. And the most important factor is that the equity position of homeowners, has limited the mobility of some because they simply can’t sell their homes and move up, down or laterally to a new home. The equity they had, they ain’t got no more.

These facts are no different in Bergen County as they are in the rest of the country. The bright side is coming. Jobs growth is happening and unemployment is down a little. While we need to beware of the shadow inventory(distressed properties yet on the market), we also need to be confident that things are happening in a positive direction.

If you are in one of these equity poor positions and need to do something or you need to avoid foreclosure or short sale, please make sure you utilize an expert that has been trained and has experience!

Excerpts taken from “DS News” April, 2011

3 Reasons the Term “Strategic Default” Is Misleading in Bergen County.

In a recent study, the Chicago Booth/Kellogg School Financial Trust Index found that a full 36% of Americans would consider “strategic default”—another term for walking away from your mortgage—if they were underwater (owed more on their home than what it was worth).


Avoiding foreclosure in Bergen County should be the goal of anyone with difficulty, especially now. Now that more than one in four American homeowners is “underwater,” I feel that it’s important for the community to know the truth about strategic default.

The truth is the foreclosure process carries with it credit issues, current and future employment challenges, issues with security clearance and possible debt collections.

That’s why it is vital to explain the 3 reasons why the term “strategic default” is misleading:

1. There’s nothing strategic about defaulting on purpose, especially when you have options like short sales, mortgage modifications, and refinance (just to name a few) that may keep you from foreclosure.

2. The waiting periods to apply for a new mortgage loan are at least five years less in a short sale vs. a foreclosure.

3. A foreclosure will show up on your credit report every time you apply for a home loan, car loan, new job, etc., and will affect your financial situation for many years to come.

While in the first quarter of 2011, more than 60% of the closed sales in Bergen County were distressed sales, that doesn’t meant they were sold foreclosures. Many short sales are included in this percentage. One should note that avoiding foreclosure is not only possible, it is probable depending on what stage you may be in. Short sales in Bergen County should be aided by an expert. A good point to remember here is that with time really isn’t on your side. While the Bergen County market is stable on the whole, one has to remember it’s a pocket game. Simply put, some towns are doing well and some towens are not doing well in Bergen County. See our market statistics on Bergen County and some local towns.

If you are underwater and can no longer afford your mortgage payments, you need to create a genuine strategy to avoid foreclosure, helping to provide stability for you and our community.

If you have any questions about what steps you or someone you care about should take next, contact me today!

Short Sales and Avoiding Foreclosure in Bergen County & all of New Jersey

 
Avoiding foreclosure and doing a short sales brings up a lot of questions.  It is always nice to have local media give out the correct information.  Well, on Sunday, April 17 The Record of Bergen County did it again! The headline: “Short Sales come with long waits” which I am sure invigorates a lot of people…NOT!


The truth is not as complicated as it seems and this newspaper continues to publish poorly documented information. To avoid foreclosure in Bergen County or anywhere, an option is a short sale. Simply put, a short sale occurs when your house is worth less than your loan/mortgage amount, you have a hardship and are having difficulty if you are paying the mortgage at all. The bank is asked to accept less than the mortgage amount as a final payoff, hence short sale. Another fact that is rarely explained properly is the many possibilities of how this can affect a credit score of the person short selling the home. It may not be a credit score nightmare.

First off, short sales stink for real estate agents. They require much time and much more effort. This article pointed out a real; estate agent that actually will “dissuade” her buyers from looking at short sales. The process can be long and tedious, no question, but for an agent to actually say this is inexcusable.  What this article doesn’t tell you or suggest to you is that there are trained agents that are actually certified in short sales in our communities. Yes, that’s right, trained and certified.

There are several designations out there, one is a Certified Distressed Property Expert CDPE(I have that)and the Short Sale and Foreclosure Resource Certification –SFR (A National Association of Realtor designation) .

Avoiding foreclosure and deciding to sell a home short is a very important decision. Should you love your home and can afford it, don’t sell it. Macro Markets forecasts that within a few years, there will actually be some appreciation. (This information is discussed at our monthly town hall Bergen County real estate market meetings). If one is in a situation where they need information, you need to talk to a certified professional and not just any real estate agent. Our company’s agents are certified and are available for a no obligation consultation. Selling a home short can take a long time, but you have a better shot at coming out of this faster and in better shape using someone who actually does this work and is certified!
To find out about the myths of short sales, click here.