Charlotte NC Real Estate - Mortage Update

Freddie Mac has just announced that they are discontinuing all 100% financing options. Although Fannie Mae still offers a few, the prices have gotten higher and the consensus among industry leaders is that they will probably discontinue their 100% programs soon. Did people even buy homes before 100% financing??? (I'm kidding, of course!) The 100% financing craze has actually not been around that long, and although younger people see it as the norm, many older consumers have always thought of it as a little too loose.


Whether you like 100% financing or not, many consumers don't have very much money to put down. There will definitely be a gap left if all the conventional programs abandon 100% financing. Enter FHA. FHA stands for the Federal Housing Administration and has come to be known for helping first time homebuyers, but FHA is not a one trick pony. Although many first timers use the program, it is not restricted for first time homebuyers. There are no income limits either, but one factor has kept FHA looked at as a lower end program... loan limits.

FHA loan limits still exist, but they have been drastically changed. The new FHA loan limit for the Charlotte Metro area is $303,750. This limit change is temporary but when it expires the new limit will still be respectable $230,000.

FHA makes 100% financing possible through the allowance of gift funds. There are non-profit organizations that will cover the down payment for the homebuyer. The largest of these programs is called The Nehemiah Program. This program provides gift funds that can cover the down payment requirement for FHA loans. The seller is then required to make a donation of at least the same amount along with a processing fee of $499.00. You can learn more about The Nehemiah Program by visiting www.getdownpayment.com.

FHA is really an outstanding program for homebuyers with a limited amount saved for down payment. FHA only requires the buyer to have 3% of the sales price invested into the transaction. That would be $7050.00 for a $235,000 home, and the average FHA interest rate right now is between 6.25-6.5%. These rates would be for a 30 year fixed mortgage!


If you would like more information about FHA financing, please email me at olan@myersparkmortgage.com.


Olan Carder

Myers Park Mortgage

 

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For some time I've waited for the "other shoe" to drop-- the real estate Broker/Agent role in the high number of foreclosures and "upside down" neighborhoods built by Beazer and financed with sub prime lending... I can't speak for the industry, but I can speak for myself, reading "Homebuyers in the Dark" and "Promises Upfront, Deals on the Side" by Observer reporters Applebaum and St. Onge, in my opinion three words descibes the Realty Place concept and their agents: Deception, Collusion, Fraud...A possible fourth, Conspiracy would be harder to prove, but I think there needs to be an investigation, state SBI, are you listening? Key facts uncovered by their excellent reporting: From 2002-2005, Beazer Homes paid Realty Place 2.2M in commissions including 700K in bonuses, on 420 transactions averaging 3.9% of sales price, a full 1.2% higher than the national average. Of 50 purchasers interviewd, not one said they were told of the bonus by builder or agent. From the Observer statisticians, "Most of the increase in foreclosures in Mecklenburg County are accounted for by the increase of "starter home" foreclosures." And, of the "Beazer Homes sold by Realty Place in 2002, 1/3 are in foreclosure". Wow, the national average for foreclosures is 3%. Lets look at where the foreclosures are on the Observer map here. Anyone want to bet that there were a high number of minority purchasers as well? So it seems clear that the "Heinemann Innovation" was to bring sales techniques formerly confined to low class sales companies (sell the payment to undereducated people has been the practice of some home improvement companies, timeshare guys and some of the early Land (swampland) sellers)and prey on a new class of unsuspecting, unfortunately all too gullible first time home buyers. And hide behind statements like, "We disclosed everything," and "I can't be sure we trained to tell every buyer there was a bonus," the owners have produced a wall of what they think is plausible deniability. As they say in Texas, "That dog won't hunt." Key Questions: Realty Place was known for its horrible "split"- the percentage paid to the Agent doing the work. Of that 2.2M paid to Realty Place, how much went to brokers/owners Heineman, Jordan and Boschele? Also- why would Beazer pay 3.9%, over 1.2% higher than the national average to Realty Place? Why would they do that-what were they getting in return? And who were the biggest beneficiaries of that extra 1.2% and what did they give Beazer? And did you note the customer who was taken only to Eastwood and Beazer, and once Eastwood was out, they only looked at Beazer? When there are at least 10 other builders building in this price range, only Beazer? Is it possible the other builders only paid the industry standard 2.5%? The answers to these and other interesting questions lie in the records of Realty Place where every HUD must be kept for a minimum of 7 years. The HUD is a highly detailed record of the transactions, the precise records an investigation would collect. Every lending transaction would appear here as well- anyone want to bet that the loan costs are at least 1.2% higher than the national average? Legal fees, title fees and insurance too? It's the HUD-the one place that will diagram the tangled web of relationships that will prove collusion, quite probably deception, and maybe fraud and conspiracy too. So I think if an investigator reviewing the HUD Statements, and looking at the books to see precisely the income streams and how the owners of Realty Place made their living- this thing will unravel and we'll see some perp walks. Let's hope for that investigation and see where it takes us.

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Here are my slides from the weekend, the Festival was great. Enjoy. Mark you r calender for next year.

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Oh let me count the ways! Let's start with these facts I think most of us could agree on: Charlotte is growing at an extremely high rate, congestion is high here by any measure, and that growth will continue for the foreseeable future. Therefore, The tax, .5 cents added to our sales tax, is good policy because: 1. Roughly 2/3's of the annual $68Million in revenue has supported expanding the Charlotte bus service, rapidly addressing short term needs, and 1/3 supports light rail, long term needs. 2. The sales tax is a regional tax, in other words commuters from Iredell, Union County, Cabarrus, York, Gaston-- everyone coming in to Charlotte and purchasing goods here helps pay the tax, in other words, those who benefit from our economy need to be involved in improving Charlotte infrastructure. If the tax is repealed? Ask the pro-repeal guys, it will fall on the shoulders of Charlotte and Mecklenburg County to pay for it through property taxes. This is an easy economic question for city of Charlotte voters. 3. It allows the city to guide its development and reconstruction. It is inescapable that the "transportation policy" is a "land use policy" in disguise, as a detractor points out. Yup sure is- just like a highway plan! Real estate agents in North Carolina have long known that if you want to invest in land, the first stop you should make is Raleigh to see where the roads will be in 15-20 years! Likewise, when choosing transit corridors, there are by definition "winners" (those owning property on or near the corridors) and Losers ( those owning property along competitive avenues) which accounts for some of the cut with a knife screams of "conspiracy" by Transit detractors. 4. It is something we can do. It will not solve the area's congestion by itself, not by a long shot, but as most know, federal funds for mass transit have dried up and highway policy is set in Raleigh. 5. Suppiorting the tax doesn't keep us from fighting for more roads for the Charlotte region. WE NEED TO! I am a supporter of Republican's Phil Berger and Paul Stam's advocacy that the transportation fund stop being looted, raided, or plundered -your choice of words for a state taking transportation tax revenues to pay for other measures, of a $1.5B road bond for NC being placed on the November ballot, and addressing the archaic way the trust fund allocates highway spending without regard to growth, congestion or highway miles traveled. Berger and Stam also call on Governor Easley and the Democratically controlled state house to take transportation and infrastructure seriously which means NOT cutting the funding by 41M as the current budget does. If education was a winner in the state budget, transportation was a loser. The critics have been against transit from the start, the cost over runs just gave them the cover to get this on the ballot. Just a note, the price of transit projects is very hard to predict accurately, and if you lived in Seattle you'd think our cost over run small. Many of the tranist critic are the same critics who told you we could get more schools by voting against the last school bond, how did that work out for you? Many of the arguments are the same too. "It cost too much", or "I'm not getting enough for my community" or "We're over-taxed", or "My voters won't ride it." All of these arguments can be translated simply into this reality, "I am not getting what I want." The sales tax spreads the cost of transit improvements over the greater Charlotte community, and is decidedly more fair than raising my Charlotte property taxes. Most believe a family of four pays roughly $59 more for the sales tax-- and to get similar revenues from our Charlotte property taxes? $160 per year per property owner to fund the $68M the tax produces. We, the citizens of Charlotte who believe in Charlotte's future, need to take the lead. We need to take the lead on transit, highways, public safety and all the policy's needed to keep this city the great and the wonderful place it is-- for families, for business, and for the state. We need to support forward looking politicians- and communicate that support through our votes and presence to those who believe in the future of Charlotte and this state, and NOT those that believe the city's best days are behind them. I include Mayor McGrory in this forward-thinking group, he has led the way on transit and taken political heat for it. We need to push our State representatives to do what is necessary to provide roads for the 21st Century for North Carolina and Charlotte. And the .5 cent tax benefits every Charlotte resident because for every person taken off the highway... that makes my drive (and those who have to or prefer to drive) around town a little better. Vote for Charlotte's Future, Vote NO on the repeal, and lets beat it 3 to 1.

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