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Ask These 4 Questions During the Home Inspection

by The Cope Real Estate Team

Buyer Tips: questions to Ask Your Home Inspector

When you make an offer on a home, your real estate agent will strongly recommend requesting a home inspection. About four in five home buyers decide to attend the home inspection and get the experience personally. If you are somewhat unfamiliar with the process, it may be a good idea to learn a little more about what goes on during this important part of buying a home.

Here are four questions you can ask during the home inspection to get a better understanding of what the inspection covers and how to interpret the results.

1. Is There Anything Not Covered in the Home Inspection?

A home inspection is quite necessary to ascertain the condition of a home you want to buy. Inspectors are trained and certified to look at many different aspects of the home and determine damage or the likelihood that you will need to replace something soon. However, the home inspection does not test for everything.

A home inspector looks at the structure and the home’s systems and equipment for their current condition. This may not include testing for the presence of toxic contaminants, such as mold, lead or radon. It may also not involve the inspection of other structures or systems on the property, e.g. a shed or swimming pool.

2. What Should I Be Looking For?

The best thing you can do is follow the inspector through the home during the inspection. This allows you to see what the inspector is looking at. You will have a better memory of problems that come up if you recall seeing them yourself. As a buyer, your eye may be distracted by cosmetic issues that are unrelated to the goals of the home inspection. Ask the inspector to show you the kinds of things you should focus on during the inspection, so you can stay on topic and not miss out on the important parts of the study.

3. Can You Point Out Problems You Identify?

Preparing a report for a home inspection takes time. The inspection itself calls for a few hours of time, and then the inspector must document the nature and extent of any concerns in a report that is given to both the seller and the prospective buyer.

Inquire if the inspector is willing to share issues as they are observed, so that you can see the problem at the same time. This will help you to make a mental list and visual image and estimated costs of future repairs. Your inspector may be happy to discuss the details of necessary fixes, or they may not. After the inspection, ask about referrals to repair services if needed.

4. How Do I Decide Which Items Are Most Important?

Once you get the home inspection report, you have to determine which repairs are important enough to you to bring up with the seller. Some issues may be so simple and inexpensive that you do not want to hold up the home buying process to get them resolved. Others could be more complicated, requiring negotiation with the seller. If it is not easy to make a distinction in repairs, raise the topic with the inspector and get their opinion about the bigger or more expensive problems. You do not have to follow the recommendation, but it may help you make a practical decision.

Buying a home is a big investment, making the home inspection so relevant for your future. With these four questions, you can follow through the inspection and look for the right things in each part of the property. At the end, you will know what to do with the report and have a better time prioritizing any necessary repairs.

The Costs of Homeownership & How to Save on Your Monthly Bills

When renters begin considering the possibility of buying a home, they often think about doing so as a way to get something back for the money they are spending each month on rent. While this idea is an important one, these prospective buyers may not be considering the total cost of home ownership.

What are the Additional Costs of Home Ownership? 

Along with the amount of the mortgage and interest payments, homeowners must also cover several other costs associated with owning a home. These include both monthly and annual costs, such as:

  • insurance premiums, including homeowners insurance, flood insurance (if applicable), and any specific coverage needed, such as liability coverage for a home-based business
  • additional costs related to the financing, such as private mortgage insurance premiums
  • monthly utility costs, including heat, air conditioning, electricity, water, and sewer service
  • routine maintenance costs to maintain systems in the home 
  • the costs of any repairs or renovations needed 
  • property taxes, including county and city taxes 
  • the costs for any special assessments or fees, such as homeowners' association fees, utility assessments, etc. 
  • the cost to maintain or replace necessary appliances, such as cooking and food storage appliances, laundry appliances, etc. 

Renters who decide to purchase a home without considering these additional costs often find themselves blindsided by emergency repair bills that would have previously been their landlord's responsibility. 

How can Prospective Buyers Avoid Purchasing an Unaffordable Home?

Home buyers who want to reduce or control many of the additional costs of owning have an excellent opportunity to do so during the home buying process. In most cases, many of these costs associated with a particular home can be researched prior to making an offer on the home, giving the prospective buyers the information they need to decide if the home will be affordable for them in their expected financial situation.

In order to find out about these costs for a particular home, prospective buyers should start by requesting seller disclosure documents, average utility costs, and recent tax and insurance information. 

Tips for an Affordable Experience

Making the recurring costs of homeownership more affordable begins with avoiding or eliminating those that are unnecessary. Buyers who want to enjoy the lowest possible recurring home ownership costs can do so by: 

  • eliminating any homes from consideration that require expensive flood insurance or have some type of unique feature or location that results in a higher than average homeowners insurance premium
  • looking for homes in areas where the tax rates are more reasonable 
  • avoiding homes covered by a homeowners' association 
  • saving up to put at least twenty percent down on the home purchase to avoid the need for private mortgage insurance premiums
  • choosing a home that is newer or has been well-maintained to avoid as many potential repair and maintenance costs as possible
  • making sure they have enough savings to cover unexpected home repairs or appliance failures
  • searching out homes that offer updated appliances 
  • searching for homes that feature high efficiency heating and air conditioning systems and optimal insulation values for more economical utility costs after the purchase

Prospective buyers who want to enjoy an affordable living experience after their purchase should always begin by discussing their situation with their real estate professional. Their agent can use their knowledge of the market area to help them streamline their search and more easily locate the best possible homes for them to consider. In addition, the agent will be able to help them locate specific information about each home so that they can feel comfortable that they have made the best possible choice. 

Fed Will Proceed With Caution on Future Rate Increases

by The Cope Real Estate Team

[1]Boston Fed [2] President Eric Rosengren stated in an address [3] at the Greater Boston Chamber of Commerce that the Fed’s recent raising of the federal funds target rate was a milestone, but at the same time, he indicated that future rate increases were likely to be gradual and that it will be important to carefully manage risks to the economy. Rosengren noted that he hopes further normalization is appropriate, but at the same time the “gradual” approach to raising the rates reflects the current economic landscape. Inflation remains well below the Fed’s 2 percent target rate, stock markets have been weak in other parts of the world, oil and commodity prices have been weak, and GDP growth for the U.S. in the fourth quarter has been slow. On the positive side, Rosengren noted the monthly average of 284,000 jobs added in the last quarter of 2015, including the 292,000 added in December. Further rate increases will be determined by incoming economic data and how policymakers view that data, he said. “While monetary policy should not overreact to short­term, temporary fluctuations in financial markets, policy makers should take seriously the potential downside risks to their economic forecasts,” Rosengren said. Rosengren called the economic recovery “painfully slow” since the recession while noting that improvements to the economy in the last year provided the conditions necessary for the Fed to remove some of the “extraordinary monetary policy accommodation” put in place as a necessary, appropriate, and effective response to the crisis and recession. The Fed’s raising of the rates in December was the first short­term rate increase since the Great Recession. Rates remain well below their pre­crisis levels, however; Rosengren stated that the Federal Open Market Committee “expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.” Click here to read the full text of Rosengren’s speech [3] . Article printed from DSNews: http://www.dsnews.com URL to article: http://www.dsnews.com/news/01­14­2016/fed­will­proceed­withcaution­on­future­rate­increases URLs in this post: [1] Image: http://www.dsnews.com/wp­content/uploads/2015/02/ups­anddowns­graph1­300x198.jpg [2] Boston Fed: http://www.bostonfed.org/ [3] stated in an address: http://www.bostonfed.org/news/speeches/rosengren/2016/011316/011316text. pdf

Why Did Nearly One-Third of House Democrats Vote to Oppose the CFPB?

by The Cope Real Estate Team

[1]When it comes to the Consumer Financial Protection Bureau (CFPB [2]), Democratic and Republican lawmakers are generally sharply divided with Democrats vigorously defending the Bureau or any action it takes.

So why did 64 Democrats—about a third of the 188 Democrats in the U.S. House of Representatives—vote in favor of H.R. 3192 [3], the Homebuyers Assistance Act, on Wednesday to implement a formal grace period until February 1, 2016, for compliance with the CFPB's TILA-RESPA Integrated Disclosure (TRID) rule? Even the White House issued a statement saying that the President was advised to veto the bill if it reaches his desk.

Perhaps the amount of consternation and even "angst," as CFPB Director Richard Cordray put it in his testimony before Congress on September 29 [4], expressed by those who work in the mortgage industry over whether they could be fully compliant with TRID in time for the October 3 effective date generated some sympathy among Democratic lawmakers and motivated them to vote in favor of the formal grace period. That was the case with Rep. Brad Sherman [5] (D-California), co-sponsor of H.R. 3192 along with Rep. French Hill (R-Arkansas).

"These new forms and regulations are complicated," Sherman said. "Smaller lenders and title companies are complying in good faith with a 1,888 page regulation that is only now being tested in real life home closings. The Hill-Sherman bill tells these smaller lenders, title and escrow companies to implement the new forms immediately. However, if they act in good faith but make unintentional mistakes, they will not be subject to retribution for those mistakes made prior to February 1, 2016."

The Obama Administration, which created the CFPB out of the Dodd-Frank Act four years ago, has been fiercely protective of the Bureau and has fought repeated efforts by Republicans to reform the CFPB. The White House issued a statement saying they believe that it was unnecessary to announce a formal grace period for TRID.

"The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders," the White House wrote. "The Administration strongly opposes H.R. 3192, as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the Nation’s financial stability."

Both Sherman and Rep. John Garamendi (D-California), who voted in favor of the bill, noted that smaller lenders generally do not have the resources in place to quickly comply with the new regulations. A spokesperson for Garamendi told DS News that the Congressman voted in favor of H.R. 3192 "because the bill simply codifies the CFPB’s announced policy regarding enforcement. Secondly, while bigger servicers may have the capability to make such an immediate transition, smaller servicers may not have the resources. He believed the bill provides an adequate grace period, and Congressman Garamendi had them in mind when making his decision."

"This bill says there is no retribution for good faith efforts. This is especially important for smaller companies that do not have the resources to quickly comply with new government regulations."

Sherman questioned Cordray on the issue of a possible grace period, or "hold harmless" period, for TRID compliance during the director's testimony before Congress in late September.  In that hearing, Sherman Sherman likened the TRID rule to a building a new ship, saying that no matter how much time is spent at the dock, the builder is not finished building the ship until it's taken on a" shakedown cruise," or a test run. The shakedown cruise began on October 3, however, since the new regulations and integrated forms could not be applied prior to the TRID effective date.

Cordray has said on multiple occasions that the CFPB would be lenient with those making a good faith effort to comply with TRID, though he steadfastly refused to say for how long after the rule took effect the grace period would last. In that Congressional hearing on September 29, Sherman asked the director if he would be willing to announce a three-month hold harmless period for those making a good faith effort to comply; Cordray responded that he was "pushing hard" to make announcement along the lines of what Sherman was asking for before October 3.

When no such announcement came, Congress took the matter into its own hands, fueled by House Majority Leader Kevin McCarthy (R-California) and quickly voted to pass H.R. 3192. The bill passed by a vote of 303 to 121 with bipartisan support—239 Republicans and 64 Democrats voted in favor. All 121 who voted nay were Democrats. Ten representatives (seven Republicans, three Democrats) did not vote; every Republican who voted chose to vote in favor of the bill's passage.

Foreclosure Inventory Drops to Lowest Monthly Total in Eight Years

by Posted By Brian Honea On August 21, 2015 @ 1:01 am

Foreclosure inventory dropped to its lowest level since 2007 while the share of non-current residential loans (30 days or more delinquent but not in foreclosure) also substantially declined and is near a post-crisis low, according to Black Knight Financial Services [2]First Look at Mortgage Data for July 2015 [3] released Friday.

The number of properties in foreclosure pre-sale inventory dropped by 24 percent year-over-year in July down to 711,000 properties, representing about 1.4 percent of all residential mortgages nationwide. It was the lowest total of properties in foreclosure inventory for one month since 2007, according to Black Knight.

Foreclosure inventory was not the only metric that experienced a large decline in July, however. The delinquency rate (percentage of properties 30 days or more overdue but not in foreclosure) dropped by 16 percent year-over-year down to 4.71 percent, nearly reaching its lowest point since the crisis. That share of 4.71 delinquent properties represents about 2.39 million loans nationwide.

BK Graph 1[4]Among states, Colorado's non-current residential mortgage loan share of 2.96 percent was the lowest in that state in 10 years. It was also the second-lowest rate in the nation in July (North Dakota's non-current rate was 2.12 percent). The state with the largest 16-month improvement in non-current share in July was Florida with 21.6 percent, down to 7.69 percent; that share is approximately one-third of California's non-current residential mortgage loan share peak of 25.48 percent reached in January 2010. California joined the top five in six-month improvement for non-current loan share with a decline of 16.4 percent, down to 3.52 percent. California's peak was 15.69 percent, reached in February 2010.

BK Graph 2[5]The number of foreclosure starts during July also declined nationwide both over the month and over the year. July's total of 75,400 foreclosure starts represented a decline of 4.5 percent from June and nearly 17 percent from July 2014, Black Knight reported.

BK Graph 3[6]The monthly prepayment rate, which is historically a good indicator of refinance activity, was reported at 1.26 percent in July – a decline of 9.4 percent from June but was up from 20.4 percent from July 2014.

For its "First Look" at mortgage data, Black Knight used statistics from its loan-level database representing about two-thirds of the overall mortgage market.

Eligible borrowers and their heirs will be able to claim uncashed payments made pursuant to the 2013 Independent Foreclosure Review Payment Agreement through their respective states' escheatment process, according to announcement from the Office of the Comptroller of the Currency (OCC) on Wednesday.

The OCC announced that any uncashed payments made pursuant to the IFR Payment Agreement will be escheated at the end of 2015 in order to allow eligible borrowers and their heirs to claim the funds.

Also on Wednesday, the OCC announced that it has terminated foreclosure-related consent orders against three national mortgage servicers that have met the consent order requirements and imposed business restrictions on six banks that have not met the requirements.

More than $2.7 billion has been distributed to more than 3.2 million eligible borrowers from OCC-supervised institutions as a result of the IFR Payment Agreement, representing about 90 percent of the amount available for distribution, according to the OCC. The agency estimates that about $280 million from OCC-supervised institutions will go unclaimed by the end of this year after all efforts to find remaining eligible borrowers have been exhausted; the escheatment of funds from uncased checks will give eligible borrowers and their heirs an additional opportunity to claim the funds.

The OCC determined that Bank of America, Citibank, and PNC bank have complied with the orders the agency issued in 2011 and the amendments it issued in 2013 and therefore the consent orders against them have been terminated.

The six institutions that the OCC determined have not met all the requirements of the IFR were (alphabetically) Everbank, HSBC Bank USA, JPMorgan Chase Bank, Santander Bank, U.S. Bank, and Wells Fargo, and therefore the OCC issued orders to restrict their business activities.

The restrictions include limitations on the acquisition of residential MSR portfolios, new contracts to perform residential mortgage servicing for other parties, the outsourcing or sub-servicing of new residential mortgage servicing activities to other parties, off-shoring new residential mortgage servicing activities, and new appointments of senior officers responsible for residential mortgage servicing. OCC said the restrictions will vary based on the individual circumstances of each bank, and the agency will continue to monitor the corrective actions for these institutions.

A spokesman for the OCC told DS News that the restrictions are meant to focus servicer action on meeting the remaining requirements in their respective consent orders, and that the restrictions will not impede consumers' access to mortgage loans.

The Independent Foreclosure Review concluded in January 2013 with 10 mortgage servicers reaching an agreement with the Fed and the OCC to pay a combined total of $8.5 billion to more than 3.8 million homeowners whose homes were in foreclosure in 2009 and 2010. The sum included $3.3 billion to be paid directly to borrowers. The claims allege that the servicers mishandled loan paperwork and robo-signed documents related to the foreclosures. The settlement totals were later increased to 15 servicers and a total of $10 billion in payments, according to the Fed.

Breaking News: CFPB Announces 'Good Faith' Grace Period For TRID Rule Compliance

by The Cope Real Estate Team

~The Consumer Financial Protection Bureau (CFPB) announced on Wednesday morning that a grace period will be in effect for those servicers attempting to comply in good faith with the TILA-RESPA Integrated Disclosure (TRID) requirements that are scheduled to go into effect August 1.
Both mortgage industry stakeholders (servicers in particular) and lawmakers have been asking the CFPB to delay the implementation of TRID. In a letter to CFPB Director Richard Cordray dated May 20, a bipartisan coalition in Congress asked for a grace period, expressing concerns that "this complicated and extensive rule is likely to cause challenges during implementation" that could "negatively impact consumers."

While the CFPB did not push back the August 1 implementation date of the rule, it attempted to ease some of those concerns on Wednesday by saying it would take into account a company's good faith effort to comply with the rule after it goes into effect.


"We also delivered a letter to Members of Congress stating that our oversight of the implementation of the Know Before You Owe mortgage rule (also known as the TILA-RESPA Integrated Disclosure rule) will be sensitive to the progress made by those entities that have been squarely focused on making good-faith efforts to come into compliance with the rule on time," the CFPB wrote on its blog on Wednesday. "We have spoken with our fellow regulators to clarify this approach. This is consistent with our approach in the implementation of the Title XIV mortgage rules."


Cordray responded to the lawmakers' letter on June 3, stating the Bureau's desire for a smooth transition and that since the rule was published in November 2013, the CFPB has made it a point to "engage directly and intensively with financial institutions and vendors through a formal regulatory implementation project." That project includes inter-agency coordination, the publishing of a "readiness guide" and other resources, publishing amendments and updates to the rule in response to industry requests, providing unofficial staff guidance, conducting webinars, and clarifying misunderstandings.


The CFPB Director also pointed out in his response that the Bureau will continue to work with industry, consumer, and other stakeholders to support implementation of TRID after August 1. Click here to see the full text of Cordray's letter.


Some mortgage industry leaders praised Cordray's response to the concerns expressed by lawmakers and those within the industry.


"I thank CFPB Director Cordray for listening to the requests of CUNA, Congress, and others in our call for a safe harbor period through the end of the year for the enforcement of the TRID rule," said Jim Nussle, president and CEO of the Credit Union National Association (CUNA), released the following statement. "CUNA supports the CFPB’s goal for transparency with the new disclosures helping consumers better understand mortgage terms, and now credit unions will be allowed the time they need to figure out the day-to-day aspects of complying with the rule without worrying about enforcement."


National Association of Federal Credit Unions president and CEO Dan Berger, who along with his staff lobbied Congress and met with Cordray several times to discuss the impact of the TRID rule and their concerns about compliance,  released the following statement: “We appreciate Director Cordray’s consideration and leadership in recognizing the value of ‘good faith efforts’ by credit unions on this complex new rule. We also appreciate the bipartisan support of all the members of Congress who wrote Director Cordray and met with him to urge a restrained examination period. A grace period will not only ensure a smoother implementation of the new TILA/RESPA mortgage disclosure forms, but it will also allow those who make a good faith effort to comply with the regulation to do so without the fear of potential regulatory enforcement actions.”


There were some lawmakers in Congress that were not satisfied, however. Representatives Randy Neugebauer (R-Texas) and Blaine Lutkemeyer (R-Missouri), respectively the Chairman of the Housing and Insurance Subcommittee and Chairman of the Financial Institutions and Consumer Credit Subcommittee, released a statement saying that while they appreciated Cordray's taking a "first step" in showing "regulatory sensitivity" toward those showing good faith efforts to comply with the TRID rule, they believe that anything short of a formalized "hold harmless" period is "unacceptable."


"Today’s announcement falls far short of our expectations and runs contrary to the impression with which Members were left yesterday," Neugebauer and Lutkemeyer said in a joint announcement. "We hope the Bureau and all banking regulators will stand by their commitment to work with consumers and market participants to ensure a seamless implementation of the rules. The Bureau should expect vigorous oversight and attention from members of Congress in how its supervision efforts play out after August 1st’s effective date. To that end, we will be sending letters to all major financial trade associations asking that they keep Congress informed of any and all disciplinary actions taken by the CFPB and other financial regulators on TRID implementation."


Representative Steve Pearce (R-New Mexico) released the following statement: “Since the finalization of the rule, businesses have been working to meet the August 1, 2015 deadline. Despite a concerted effort to meet the demands of the August implementation date, a billion dollars spent by industry to train staff, procure needed new technology and hire additional employees, will not be enough to meet CFPB’s unobtainable requirements. If not changed, the uncertainty would cause fewer homes to be sold during the peak sales season – the end of summer before school starts. Today’s lackluster response from Director Cordray, despite national calls, and repeated bipartisan letters from Congress urging a defined hold harmless period, clearly shows the agency’s disconnect from the American people and the state of our economy. The nondescript and weak announcement from CFPB creates even greater uncertainty in the housing market, at the worst possible time of the year."

The number of single-family homes built-for-rent experienced a 50 percent year-over-year decline in Q1 2015, from 4,000 starts in the same quarter a year earlier down to 2,000 starts, according to data released recently by the National Association of Home Builders (NAHB). The Q1 market share for single-family build-for-rent homes stood at 3.5 percent of all single-family starts during the quarter, which is higher than the historical norm (2.8 percent) but lower than the peak of 5.8 percent in early 2013. The market share is measured on a one-year moving average using NAHB analysis and the Census Bureau’s Quarterly Starts and Completions by Purpose and Design. Since estimates for the market are small, there are rarely any significant statistical changes from one quarter to the next. The market share for built-for-rent homes increased following the financial crisis of 2008, despite a share higher than the historical average in Q1, the total numbers overall are low. This particular measure includes only single-family homes that are built and rented out; it does not include homes that are sold to another party to rent. "Despite the elevated market concentration, the total number of single-family starts built-for-rent remains fairly low – only 23,000 homes started during the last four quarters," said Robert Dietz, economist for the NAHB, on the Eye on Housing blog. "It appears the market is returning to historical averages after recent peaks." Dietz said according to a 2011 American Consumer Survey, the single-family home share of rental housing stock was 29 percent, considerably larger than the built-for-rent share of single-family homes – because single-family homes often transition to rental housing stock as they get older.

Homeowner VS Renter

by The Cope Real Estate Team

Did you know a Homeowner's Net Worth is over 30X Greater Than Renters? Stop renting and give us a call today! 661-871-2673(COPE)

Yup, Pretty Much What We Expected: Pending Home Sales up 11% in March

by The Cope Real Estate Team
There were more houses under contract in March than in any other month since June 2013, according to the National Association of Realtors®. The Pending Home Sales Index shows an 11% increase in home buyer activity from March 2014 to March 2015. The index tracks contracts signed that are waiting to close, so it’s a good indicator of future existing-home sales numbers. A property is marked as “pending” only after all contingencies have been met. For March, pending sales inched up only about 1% from February. However, this is the third straight monthly increase, which leads experts to believe the housing market could be in for a banner year—if only there is enough inventory to satisfy demand. “Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer,” said Lawrence Yun, chief economist at NAR. “This in turn has pushed home prices to unhealthy levels—nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.” Of course, some parts of the country performed better than others. Pending sales dropped in the Northeast for the fourth straight month. In the Midwest, the index declined by nearly 3%, but market activity is still more than 11% above where it was in March 2014. No surprise, the strongest markets are posting the highest pending home sales activity. In the South, pending sales increased 4%, bringing the index to 126.5, which is more than 12% above March 2014. In the West, pending sales rose just under 2%, bringing the index to 103.7 and giving March 2015 a nearly 16% increase over March 2014, according to the report. The good news: Housing demand seems to be driven by job growth and traditional home buyers rather than investors. According to the March Realtors Confidence Index, about 15% of first-quarter 2015 home sales were made to investors, down from 19% in the first quarter of 2014.

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