Realty Reality! - Fred Glick's Blog On Real Estate, Mortgages And More

Neighbors rally to help Germantown musician stave off foreclosure, if only temporarily

noreply@blogger.com (Fred Glick) — Thu, 19 Jul 2012 08:09:47 PDT

July 18, 2012

By Alaina Mabaso for NewsWorks

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Neighbors and community members gathered outside the home of Rhonda Lancaster as an eviction crew was on-site. (Bas Slabbers/for NewsWorks)

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"I went door-knocking in the neighborhood, different supporters came down, and within 45 minutes, we were able to raise $1,000. We were able to have somebody go down immediately to file in Bankruptcy Court to at least stave off the eviction until [Lancaster is] given a court date."
-- Cheri Honkala, of the Poor People's Economic Human Rights Campaign and Green Party vice-presidential nominee

"The deputy was saying, 'You're damn lucky, or blessed.' This doesn't happen."
-- Rhonda Lancaster, Germantown resident whose eviction was staved off by the help of some friends

"We do send out a letter of condolences to the heirs, and we also state in the letter the options that you have. Once the borrower is no longer in the home, that loan becomes due."
-- Veronica Clemons, spokeswoman for Wells Fargo

Germantown resident Rhonda Lancaster has been through many ordeals of late, not the least of which was receiving an eviction notice tied to the reverse mortgage taken on the family home before her mother's death.

In her estimation, the last disrespectful straw arrived earlier this month in the form of a man who the bank sent to her home. He had a weed wacker.

"This is the kind of tactics they use, and part of it is psychological warfare," Lancaster said of her experience with Wells Fargo, the originator of the 2009 reverse mortgage, and Fannie Mae, the current holder of the loan.

"Banks do not talk to people," she continued. "If they would talk to the consumer and treat them with some ounce of dignity, a lot of the stuff that's happening would not be happening."

Before that weed wacker could destroy the garden last week, and a moving crew could take her possessions in foreclosure activities, neighbors and friends rallied to Lancaster's side.

"Someone screamed, 'Hold it! Slow down!'" Lancaster said, and the garden her mother had planted was spared.

Temporary reprieve

Lancaster, a full-time musician and fitness instructor, discovered a Philadelphia Sheriff's Office eviction notice on her front door at Morris and W. Logan streets when she returned from a business trip July 8.

Two days later, an extraordinary effort by neighbors and community activists, including Cheri Honkala of the Poor People's Economic Human Rights Campaign, helped to stave off her eviction.

Those supporters helped raise more than $500 in cash. This happened as Lancaster's possessions were being carried away from the house.

Speaking with NewsWorks, Lancaster recounted the on-site Sheriff's Office deputy's surprise at the community response.

"The deputy was saying, 'You're damn lucky, or blessed,'" Lancaster explained. "This doesn't happen."

A reverse-mortgage maze

Lancaster's housing troubles began when her elderly mother fell ill in early 2009. She had been tending to her for 15 years, and in-home care was an expensive proposition.

A reverse mortgage on the home her family had occupied for 35 years seemed like a reasonable option. Reverse mortgages enable senior homeowners to convert a portion of their home's equity into cash as long as they remain in the home. Unlike a regular home equity loan or mortgage, the loan is not repaid until after the borrower moves permanently or dies.

Lancaster said that after extensive research, she settled on a loan through Wells Fargo, in part because of the bank's high customer service rating. She signed for the loan in her incapacitated mother's name.

When Lancaster's mother passed away in Feb. 2009, the trouble with the bank began.

"The first thing they did was call me during the week that I was preparing for a funeral," Lancaster said.

Lancaster considered that a cold move. She wasn't alone.

"What do they do? Are they staring at the death notices every day? That's incredible," said Philadelphia-based mortgage expert Fred Glick, noting that borrowers typically have six months to pay off this type of loan.

For their part, a spokeswoman for Wells Fargo explained that there is a protocol for when a mortgage holder dies.

"We do send out a letter of condolences to the heirs, and we also state in the letter the options that you have," said Wells Fargo spokesperson Veronica Clemons. "Once the borrower is no longer in the home, that loan becomes due."

Frustration builds

As Lancaster attempted to keep the house by acquiring a new mortgage, she claimed to have encountered a labyrinth of legal, financial and communication roadblocks.

She claimed Wells Fargo would not recognize her as the sole executor of her mother's estate but a U.S. Housing and Urban Development helped her bide time until she again faced foreclosure in 2011.

While Lancaster said bank officials missed city-mandated meetings and failed to answer her inquiries, Clemons told NewsWorks this week that, "In terms of the way a reverse mortgage happens, we did reach out to Ms. Lancaster, and we've talked to her numerous times since her mother passed away in 2009."

When Lancaster learned over a month after the fact that the loan had been sold to Fannie Mae, she said calls to that institution brought more troubles. She said one representative claimed to have no record of acquiring the loan.

The supporters pitch in

As foreclosure loomed and Lancaster faced a Sheriff's sale, she reached out to anti-poverty activist Cheri Honkala.

Lancaster said Honkala, who was recently tapped as Green Party Presidential candidate Jill Stein's running mate, was instrumental in organizing a meeting with a Fannie Mae executive. That meeting led to a new agreement of sale.

However, problems persisted, and Lancaster said that she received no further communication from the bank.

"Things were going nowhere," Lancaster recounted.

When the eviction crisis reached a head July 10, Germantown neighbor and fellow artist Susan Mangan was on the scene to help.

"It didn't seem as though she was given a fair chance to settle things with the bank," Mangan said. "She should get more help staying in her house."

Mangan joined a team of neighbors who began calling local politicians, activists and media to get as many people on the scene as possible. There is also an Artists Against Foreclosure petition to sign.

At the scene, Honkala spearheaded a last-ditch effort to keep Lancaster in her family's home. It involved collecting the necessary funds to launch a bankruptcy filing.

"I went door-knocking in the neighborhood, different supporters came down and within 45 minutes, we were able to raise $1,000," Honkala said. "We were able to have somebody go down immediately to file in Bankruptcy Court to at least stave off the eviction until [Lancaster is] given a court date."

What now?

With the filing initiated, word from the Sheriff's office arrived that the movers could leave Lancaster's belongings be. Honkala and Lancaster hope that if the bankruptcy filing is granted, they can stave off foreclosure.

"If not, we know that we've got the next two to three weeks to organize as many people as possible to make sure that Rhonda is not thrown out of her house," Honkala said. "There's going to be a hell of a fight."

Glick, the mortgage expert, said reverse mortgages are not bad loans when used properly.

"Without these reverse mortgages, there would be more houses on the market and values would go down," Glick said.

Honkala took a darker view, though.

"As far as we're concerned, reverse mortgages are predatory lending for our seniors," she said. "Mortgage companies prey upon sick, elderly people, and then people like Rhonda are totally hurt in the process."

For her part, Lancaster called for straightforward advice and better communication between banks and consumers.

"My case was strong. There are so many other consumers whose cases are strong, but they don't know where to turn," she said. "We've got to start training consumers not to be afraid. We have to clear out the mess and get it so people can do what they need to do in a timely fashion."

As for the effort that enabled her to stay in the home, even if only for the time being, Lancaster said, "I'm so thankful my neighbors came out."

FHA MIP to go Higher....Soon!

noreply@blogger.com (Fred Glick) — Wed, 21 Mar 2012 12:58:02 PDT

Have an FHA deal that you're negotiating? The MIP is soon to go much higher.

As of loans issues a case number (not application date) after April 9th, 2012, the up front MIP on an over 95% LTV deal will go from 1.00% to 1.75% (yes, it's financed still).

The monthly goes from 1.15% to 1.25% (not financed).

Yes, it will be harder to qualify for FHA financing and it's only getting worse.

Credit score minimums will go up, collection accounts are being more scrutinized.

If you have issues and/or want to save money, get off the stick and get your loan done now!

HARP2 and Second Mortgages

noreply@blogger.com (Fred Glick) — Wed, 21 Mar 2012 10:50:41 PDT

http://harptwo.wordpress.com/2012/03/21/how-about-that-second/

HUD, Soviet Style

noreply@blogger.com (Fred Glick) — Fri, 16 Mar 2012 06:00:44 PDT

Yesterday, Amtrak happily took me from philadelphia to our nation's capital.

Even though the onboard internet ran as slow as Joan Rivers in a triathlon and the coffee tasted as bad as a three day old slice of pizza that you left on the counter, the cho-cho got me there so that I could meet members of FHA's brain trust to talk about a couple of important issues that face America's ability to purchase real estate.

I was thrilled to be going to HUD HQ for the first time. The excitement of just being in the building would be cool and talking about trying to change their minds on seller assists being lowered, MIP rates and appraisal independence was an honor.

But then, I saw the building. Then I entered the building. Oh my!

I just thought I was back in the Soviet Union of the 70's. Had I been transformed to the Politburo? Not, the people in the building but the architecture.

Former HUD Secretary Jack Kemp once described this building as 10 stories of basement. He wasn't far off!

The 9th floor has just been repaired because the 10th floor crashed into it and the HVAC system is being repaired in each quadrant of the building because there were issues with the original design.

So, there may be something in the air that is causing FHA to reduce the maximum seller assit from 6% to 3% even though Philadelphia has a 2% transfer tax.

They may also be breathing too hard when it comes to increasing the monthly mortgage insurance to high numbers so that people can't refinance.

But, I did have a fruitful conversation and hopefully Marc Savitt and I changed some minds.

What can you do? Public comments are now open on the reduction of the maximum contribution. Please go to http://www.regulations.gov/#%21submitComment;D=HUD-2010-0063-0908 and let them know why this will be a bad thing!

Dasvidaniya, Comrades

Unsealed Complaint Provides Details on $1 Billion BofA Deal

noreply@blogger.com (Fred Glick) — Tue, 28 Feb 2012 08:27:31 PST

By Nate Raymond

February 27, 2012

More details about the U.S. government's $1 billion False Claims Act settlement with Bank of America earlier this month spilled into the public domain on Friday, when a federal judge in Brooklyn unsealed a whistleblower complaint against Countrywide Financial Corporation that sources confirm is related to the deal.

Hagens Berman Sobol Shapiro filed the suit in Brooklyn federal district court in May 2009 for former appraiser at Countrywide subsidiary LandSafe Inc., Kyle Lagow. Lagow accuses Countrywide and its affiliates of defrauding the Federal Housing Administration, which insures loans to homeowners.

The unsealing of the qui tam complaint by ex-LandSafe employee follows the Brooklyn U.S. Attorney's Office announcement on Feb. 9 of a $1 billion deal with Bank of America to settle False Claims Act allegations of underwriting and origination mortgage fraud. Bank of America agreed to the settlement as part of the larger global $25 billion foreclosure accord that BofA and four other banks announced that same day.

The Justice Department has not yet intervened in the suit and the docket gives no public indication of a settlement agreement. But people familiar with the matter confirmed that the suit is connected to the $1 billion Bank of America settlement.

"It's tied into [the] settlement," Steve Berman of Hagen Berman said in a brief e-mail. He declined to comment further "until the larger deal is inked."

Bank of America spokesman Rick Simon confirmed that the suit against Countrywide that was unsealed Friday "is related to the $1 billion [BofA] settlement in principle."

In the complaint, Lagow said he witnessed first hand as Countrywide corrupted the underwriting and appraisal process during his tenure at LandSafe in from June 2004 to November 2008. The complaint accuses Countrywide and its affiliates of knowingly and fraudulently inflating property appraisals on FHA-backed loans. Lagow claimed that Countrywide awarded appraisers who inflated home values while retaliating against those who resisted or produced lower-valued appraisals.

A spokesman for Brooklyn U.S. Attorney Loretta Lynch declined to comment. The docket shows correspondence dating back to 2009 between Judge Raymond Dearie and Richard Hayes, an assistant U.S. attorney in Brooklyn who was amongthose involved in the investigation that lead to the $1 billion BofA deal. Hayes declined comment. In an order Friday, Judge Dearie gave the government until March 16 to file a notice of intervention.

A settlement in the case could put Lagow in line for one of the largest whistleblower awards in U.S. history under the False Claims Act. The Civil War-era law provides qui tam relators with awards of 15 to 30 percent of the government's recovery. In the only other financial crisis settlement so far involving a False Claims Act whistleblower, the government agreed to pay CitiMortgage Inc. employee Sherry Hunt $31.7 million—-20 percent of a $158.3 million accord with Citigroup Inc. announced Feb. 15.

At least two other False Claims Act cases against lenders over alleged mortgage abuses were filed directly by prosecutors with no whistleblower involvement. On Friday, Flagstar Bancorp and the Manhattan U.S. Attorney's Office announced a settlement worth up to $133 million arising from Flagstar's improper approval of mortgage loans insured through the FHA program. Deutsche Bank was separately socked with a $1 billion False Claims Act suit in May. The Deutsche Bank suit remains pending.

Lawyers representing Bank of America in the Brooklyn litigation, including Meyer Koplow of Wachtell, Lipton, Rosen & Katz and Phillip Schulman of K&L Gates, either declined comment or did not respond to requests for comment.

NAIHP, CFPB and the USCC

noreply@blogger.com (Fred Glick) — Sat, 04 Feb 2012 10:02:12 PST

Buyer Brokerage, Zillow, Trulia, Realtor.com, Against Dual Agency and Why They Matter

noreply@blogger.com (Fred Glick) — Thu, 02 Feb 2012 16:27:49 PST

Home appraisers: Don't blame them for market

noreply@blogger.com (Fred Glick) — Fri, 20 Jan 2012 05:53:44 PST

By Alan J. Heavens

Inquirer Real Estate Writer

Ask builders, real estate agents, or mortgage brokers why the housing market continues to occupy a basement apartment, and the word appraisals comes up a lot.

As in appraisals done by people unfamiliar with the neighborhood in which a house is located. And increased use by lenders of appraisals generated by computer rather than by licensed professionals. Those were just two "common" problems raised by a panel discussing appraisal issues at a November gathering of the National Association of Realtors in Anaheim, Calif.

Foreclosures and short sales, in which lenders agree to accept less than is owed on properties, now are the predominant form of transactions in many markets and also are throwing off appraisals. Such homes often sell for about 20 percent less than others in the same area, which can make accurate valuations more difficult, members of the discussion panel said.

The Realtors' group noted that a survey of members late last year found that 18 percent had sales contracts canceled because of appraisals that did not come up to snuff with lenders.
Do not shoot the messenger, responds the group representing appraisers nationally: Low home values are not appraisers' fault, the group says.

"The fact is that appraisers are undertaking the same thorough research and thoughtful analysis that they always have in order to continue producing reliable, credible opinions of value," said Sara W. Stephens, president of the Chicago-based Appraisal Institute, which has 23,000 members in 60 countries.

Stephens called the finger-pointing at appraisers by real estate agents and builders "nonsense."

"Appraisers don't set the real estate market; they reflect what's happening in the market," she said. "Obviously, the market is depressed - home prices have fallen far below the values of a few years ago. Many homes simply aren't worth what their owners think they are."

Mark Zandi, Moody's Analytics Inc.'s chief economist, said that while low appraisals have impeded home sales and a housing recovery, this is "steadily less so."

"House prices are more stable in most parts of the country, and distress sales have leveled off, making it easier for appraisers to get a better fix on market prices," Zandi said.

Most appraisers "do a good job and are knowledgeable in the areas they work," said broker Jerome Scarpello, of Leo Mortgage in Ambler.

Changes in federal law were made in the aftermath of the financial meltdown, and the resulting mandate that a lender not be in direct contact with an appraiser - designed to prevent any potential influence on establishing values - has made everyone's job more difficult, Scarpello said.
One consequence of this firewall: Appraisers are randomly selected, regardless of how far they are from the subject property, he said, adding that he had an appraiser from Mullica Hill, Gloucester County, assigned to a home in Skippack, Montgomery County.

Philadelphia mortgage broker Fred Glick, a board member of the National Association of Independent Housing Professionals, said that before the changes, "I was able to order an appraisal from a company that I had faith that they understood the area and could provide great service at a fair price to them and the consumer."

The problem now, Glick and others say, is the third-party appraisal-management companies from whom lenders order property valuations. Although the cost of appraisals has risen 40 percent, appraisers get 50 percent less than they once did, he said.

The Appraisal Institute's Stephens agreed the process causes trouble for everyone.

Because the management companies' business models are based "on keeping as much of the appraisal fee as possible and paying as little as possible to the appraiser, this can lead to the least qualified, least competent appraisers being hired," including those from cities and often states far from the property being valued, she said.

Zandi said he was certain that "the appraisal process is due for a thorough revamp, given its ignominious performance in the housing boom and bust."

In the meantime, said Ruth Feldman, of Weichert Realtors-McCarthy Associates in Philadelphia, the job for real estate agents "is to talk to the appraiser, get a feel for whether or not they know/work in the immediate area, and always ask if I can send them comparable sales."

In her experience, "the appraiser always says yes," she said. "Why wouldn't they want to at least see what I come up with?"

Fort Washington, George Washington, You Gotta Move Here

noreply@blogger.com (Fred Glick) — Fri, 13 Jan 2012 14:24:43 PST

1752. A year none of us personally remember but it marks the year this home was built. Enjoy a true George Washington moment with an American classic whilst thou cooks in a modern kitchen! A two car garage adorns that parcel not for horses but your Porsches (or even your Yugo!. Since our MLS does not let us put proper paragraphs, I will continue in bad grammar (apologies to my English teachers). There is a way to easily convert to have a first floor master suite. Situated right across the street from the infamous Montauk Park and close to the turnpike, mass transit, Ft Washington's office park, Ambler's up and coming downtown and the Mongomeryville Mall. Property has recently been inspected and appraised. These are available to you. Grander at the pictures, observe the video and make contact to set up a showing!

2012 is the new 1994 in Philadelphia Real Estate

noreply@blogger.com (Fred Glick) — Fri, 13 Jan 2012 11:00:50 PST

Al Heavens, Inquirer Real Estate Columnist

Email Al Heavens, follow Al Heavens on Twitter

The year 1994 was a bad one for real estate. In fact, by then, things had already been difficult for
several years.

In 1987, the bottom had fallen out of the national market, the result of unsustainable price increases and overbuilding. By early 1990, the Philadelphia region had been caught up, too. And by some measures, the early to mid-1990s were even worse here than the current downturn has been, with Philadelphia taking the biggest hit.

From 1990 to 1994, city prices fell 17 percent, compared with 2 percent in the suburbs, according to economist Kevin Gillen, vice president of Econsult Corp. in Philadelphia, and it took 10 years, until 1997, for them to recover to 1987's levels. Since 2007, he said, home prices have fallen 16 percent in the city and 20 percent in the suburbs.

Late in 1994, a group of experts was asked to weigh in with ideas on how to jump-start real estate. This week, a few of those same people were asked again for their thoughts.

Eighteen years ago, one recommendation involved reducing Philadelphia's real estate transfer tax, typically split between buyer and seller. It had already been trimmed once, from 5.07 percent.
"It has been a long time since I rallied the troops to go to City Hall and scream our lungs out to get it
reduced to 4" percent, said Prudential Fox & Roach vice president Joanne Davidow.

In the context of today's market, Gillen proposed that Philadelphia offer a holiday on its portion of the tax, 3 percent (the state gets the other 1 percent) for six months to a year.

"Unlike many other cities, our problem is not plummeting prices but plummeting sales," he said. "We currently have a large backlog of inventory that we need to clear before we can return to a more balanced market.

"Giving people incentive to get into the market," he said, "would get the proverbial chain of dominos to start falling and clear that inventory."

Applied all over the region, it's an idea that could help reduce overall settlement costs, making home purchases easier for qualified buyers with good credit and jobs but low savings.
One difference between 1994 and now? Condo supply.

Production of condos accelerated after 1994, but as their numbers increased and prices soared, too many developers focused on units ranging from $1 million to $3 million instead of those that people could more readily afford.

The result? "There is not a lot of condo inventory under $500,000, because lower prices, low interest rates, and rising rents have let first-time buyers and investors snap them up," said developer/broker Allan Domb.

"At the same time," he said, "suburban buyers saw their equity drop and their ability to buy these high-price units disappear."

Making lower-priced condominiums available could tap into unsatisfied demand.

In late 1994, fixed interest rates were 9 percent, compared with this week's 3.89 percent. In response, mortgage brokers and lenders were recommending "alternative" products such as adjustable-rate mortgages.

Today, as a result of lenders' having been too free with money and people having taken on risks they shouldn't have, mortgage rules have been tightened. The Dodd-Frank Wall Street Reform and Consumer Protection Act "took care of that," said Philadelphia mortgage broker and Realtor Fred Glick, referring to the reform package enacted after the financial collapse of 2008.

"There are five-year adjustables, with points, in the low 2's [percent range], and interest-only [loans] still available. But that's as sexy as it gets," Glick said.

"Banking regulations have made underwriting so tough," said developer Carl Dranoff, "that when people try to take advantage of low rates, they don't know what mortgage they'll get, if they get one at all. There has to be a middle ground."

Although the economy and unemployment remain a drag these days on the housing market nationwide, some things help keep the Philadelphia market more buoyant, the experts said.
"There is more hiring than firing going on here," said Glick, echoing Marcus & Millichap's fourth-quarter 2011 report on factors driving the region's apartment market.

"Low real estate prices and interest rates are the first seed, but the fact that rents have gone up and that people feel comfortable with their jobs is what is pushing them to actually look," Glick said.
Like 1994's market, 2012's is oversupplied with homes for sale and undersupplied with buyers.

In 1994, the experts were pushing "seller assists" to help buyers into houses. Sellers, said John Duffy, of Duffy Real Estate on the Main Line, are no longer greeting such talk with stunned expressions.
"They understand there are costs associated with selling a house," he said, "and that they have to look at net profit."

It has also taken a while to get another message across - that houses must be priced in a way that's appropriate for today's circumstances - but Duffy and others say sellers are getting it.

"This is more important than ever, and up to us to prove it," Duffy said, adding that he still gets people waving 2005 sale-price data "that should be thrown out."

"Sellers have to be honest with themselves," he said, "and price their houses to the competition."
It used to be that one thing the housing industry could always count on was an election year, with candidates on both sides proposing some idea to kick-start the market.

Said Duffy: "I don't see one this year."

Philadelphia Real Estate Market Great for the Feet!

noreply@blogger.com (Fred Glick) — Wed, 11 Jan 2012 08:05:16 PST

(If you've read my posts over the years, you know I am not a rah-rah REALTOR(R) that always says "the market is great, buy now!" I base my opinions on facts. That's why this post will be interesting.)

We are absolutely on the way back.

Jobs in Philadelphia are stable. There is more hiring than firing.

The two elements of supposedly low real estate prices and ridiculously low interest rates are the first seed but the facts that rents have gone up and that people feel comfortable with their jobs is what is pushing them to actually look.

Now, most people that want to find a job can find something or they are inventing jobs by creating their own websites, etc. This changed the paradigm from people being stymied in their shoes, scared to death, gloom and doom reverberating through their heads. There is no double-dip coming to this area.

So, people are putting not just their toes, but their whole foot into looking.

There are places like Graduate Hospital where prices have been going up a lot and surprises for some buyers because Sellers will not take their low ball offers.

As for mortgages, yes, if you have bad credit or can't verify your income, then you will still have issues getting a loan.

Although the mortgage companies ask for many insulting or ridiculous items, deals are going through. The appraisal issues are case-by-case but the lenders are being pushed to get better quality from the appraisals because of pressure from the industry, the public and courts.

People like trends, being part of the in-crowd, following those that lead. This is the time. If I am wrong, tell me what you want me to do to make amends!

Condo vs. single-family home: What's right for you?

noreply@blogger.com (Fred Glick) — Fri, 06 Jan 2012 13:34:54 PST

Al Heavens, Inquirer Real Estate Columnist

Email Al Heavens, follow Al Heavens on Twitter

DAVID M WARREN / Staff Photographer

Among condominium buildings high above the city are10 Rittenhouse Square (front) and Two Liberty Place in the background. Center City condos have held their value.

You've decided to dip your toe into the sea of properties available in the Philadelphia real estate market. Now, the question is: single-family home or condo?

Though location and price are prime considerations for both, real estate agents cite lifestyle as a major factor.

Why? Because when you buy a single-family house, you purchase the land on which it sits, and are responsible for maintaining it.

"When you buy a condominium, you are also buying the services," said developer/real estate broker Allan Domb, who specializes in the Center City high-rise market - "the doorman, the facilities offered, maintenance, and professional management."

"In addition, condos in Center City offer buyers a chance to live in locations" where single-family houses are few or are spoken for, he said.
Location - especially around Rittenhouse and Washington Squares - has helped Center City condos hold their value, Domb said.

Data collected since the real estate downturn began here in August 2007 show Center City and adjacent neighborhoods have not sustained the price hits other areas have experienced.

So, if you don't like mowing the lawn or driving to the gym, or if you travel out of town frequently, a high-rise condo might be your choice.

"It provides you the freedom of locking the door and leaving without worrying" that something will go wrong and remain unattended until you return, Domb said.

With a condo, you do give up some freedom. Though every owner is guaranteed the "right to quiet enjoyment of their space" that can't be infringed upon, he said, you are sharing.
No matter how thick a unit's walls are, for most people there's no substitute for the privacy promised by a single-family house.

Despite condos' increased sales, and sale prices, market observers say they are unlikely to replace single-family homes as the investment of choice in real estate. Traditionally, houses, because of their appeal to families, have tended to appreciate at a faster rate than condos.

Unlike most single-family-home developments,
condos come with rules, established and enforced by owners associations and their boards.
The best condo boards "maximize owners' equity and make living in the building easier, maintaining the common elements and putting away money for expenses," Domb said. One of his buildings, the Barclay, has a reserve fund of $1 million, financed by 15 percent to 18 percent of the annual budget.
Condo boards do have a say on changes made to the units.

"Changing a kitchen or bath and not touching elements common to the building is not usually a problem, but for a gut job, you need an architect or engineer to draw up the plans and make sure they comply with the rules," Domb said.

Before you buy, Mark Wade of Prudential Fox & Roach in Center City, who specializes in low- and mid-rise condos, recommends careful scrutiny of the condo association.

"The association can influence value," Wade said. For instance, if it doesn't monitor the owner-occupancy ratio - that is, if there are more than the acceptable number of renters vs. owner-occupiers - it may make it difficult for a buyer to get financing.

Condos not approved for Fannie Mae, Freddie Mac, or Federal Housing Administration-backed financing are known as "nonwarrantable" and offer few options for buyers or those refinancing.
"This scenario ultimately lowers demand for a building, and reduces resale values as well," Wade said. "A review of the condo budget, money on hand, and knowing what is included in the condo fees should be considered when buying a unit."

Pennsylvania law requires a condo association to provide rules and regulations, financial data, and other relevant information within 10 days of a prospective buyer's request. The buyer has five days after receiving the details to cancel the contract.

Mortgage interest rates for condos tend to be higher than those for single-family houses, unless you are willing to put at least 25 percent down.

Center City mortgage broker/Realtor Fred Glick said that for a mortgage guaranteed by Fannie Mae and Freddie Mac, "if the loan-to-value [ratio] is more than 75 percent and the term of the loan is over 15 years, there is 0.75 percent added to the price."

"That translates to about 0.375 percent in higher rate," Glick said.

Financing purchases in a high-rise building that is less than 70 percent sold is challenging, and many lenders won't touch them, Domb said.

"Usually, a developer has one or two lenders who will provide mortgages," he said. In some cases, the lender submits a project for "spot approval" to Fannie Mae and Freddie Mac, both of which have tightened regulations dramatically on existing buildings as well as new ones.
Domb added, "A lot of seasoned buyers won't look at a new building unless the units are 50 percent to 60 percent sold, concerned that a fire sale will change the makeup of the occupants - that is, speculators and rental units."

When you look at a building, "ask questions and keep your eyes open," he said.
These days, condo sales continue apace, although the chief buyers, especially in Center City, are young professionals and empty-nesters, rather than families, who still gravitate to houses.

"I got a call recently from a guy I sold a condo to in the early 1980s, when he was single, who moved to the suburbs when he got married and had children, and now he and his wife were empty-nesters and looking to move back," Domb said.

Was he surprised the man remembered him?

"I was surprised he was still talking to me."

All About Graduate Hospital Area

noreply@blogger.com (Fred Glick) — Tue, 06 Dec 2011 18:34:14 PST

Tired of being a homeowner and want to rent?

noreply@blogger.com (Fred Glick) — Tue, 06 Dec 2011 15:22:34 PST

You are not alone.

There is a wave, albeit small where people are deciding that they have had enough with fixing things, making mortgage payments and suing the neighbors.

There are examples of people that have seen taxes go up even though they have equity and have refinanced to today's low mortgage rates (see usloans.com for live rates) and still have payments that are higher than what they can rent a similar property for.

The supply and demand features are still important because you do want to have someone who wants and can afford to buy your house!

Are you one of these people? Here's a way to figure it out.

Take the cost in the last few years of things you pay for that your landlord normally would. Divide it by the number of months and add that number to your mortgage payment.

Then take the amount of equity you have and multiply that by 3% and then divide by 12.

Then add that amount to the previous two numbers.

What did you get? The total that you are really paying per month.

If rents are significantly lower than that and you don't think properties are going anywhere in value in your area any time soon? Then, sell.

Cold hard numbers, I know. You'll have to put your own emotions into it.

But, if you are in the Philadelphia, San Francisco or Los Angeles area....let's talk :)

Loan Officer Comp Must Change

noreply@blogger.com (Fred Glick) — Tue, 06 Dec 2011 10:41:09 PST

The people and mission of the CFPB is to make sure that the Consumer (yes, the first name of the organization) are not ripped off.

But, did the Fed LO Comp rule promote the abuse of the public? Let's look at how.

1. No discounts from yield spread. You can't help someone by paying anything.

Have an extension because of a review appraisal ordered by a lender that ordered the original appraisal from the AMC that they hired? Too bad, consumer pays.

2. Lower loan amount borrowers either pay points (lots of them) or they go to a bank that can charge them up front AND make all
the SRP/YSP that they want while giving them terrible service from a call center.

3. Lenders allow minimums from YSP. OK, here's where the s#*t should really hit the fan.

Say you have a lender minimum of $5000 for YSP because you do $150,000 and $1,000,000 loans. So what you have done is because you need to be very competitive with your high loan amount loans, you will leave your lower dollar borrowers to pay. Sounds like a tax system? Well, it is.

I can do the middle class is paying for the rich, blah, blah but I am not going to go there. What this is about is bringing fairness for ALL consumers back by killing the Fed Rule.

The Fed (the same guys that gave out the secret Zillions to banks) seem to have a plan to help their member banks with the LO Comp rule and HVCC but it seems to be coming back to haunt them.

Appraisal fraud is way up and good deals are dying that could help stimulate the economy.

A challenge to overturn? Sure. But, the CFPB seems to be an agency that wants to help consumers, are willing to work with the industry and is willing to listen to reality.

We need to humanize the negatives. Please forward this post along to everyone you know that is being harmed by the rule (and HVCC) and ask them to contact the CFPB with specific incidents.

Councilwoman Reynolds-Brown to Kill the Real Estate Market

noreply@blogger.com (Fred Glick) — Wed, 30 Nov 2011 08:02:43 PST

Can you imagine if no investors were to buy property in Philadelphia?

Can you imagine anyone with children under 8 not being able to rent property in the City of Philadelphia?

Can you imagine if these two things came true the increase in poverty, crime and financial hardship the City would face?

Well, it seems like certain member of Philadelphia's City Council do not. It seems as though COUNCILWOMAN BLONDELL REYNOLDS BROWN is pushing, pushing, pushing to smash through a bill that would require lead based paint inspections BEFORE someone is to move into a property. This bill would be just for residential landlords and not for any other building that may have lead.

Yea, another bureaucratic nightmare to burden L and I, that is understaffed to begin with. One person is fighting very hard against it. Greg Damis, real estate agent and property owner. Greg has tried to convince the Councilwoman that the bill as it stands makes no sense. It will lead to investors going elsewhere, properties not being rented to those people with children and an increase in necessary City services.

Today at 1PM, there is a hearing at City Hall. If you can make it, go for it. If not, please email the following remarks to Councilmans Kenny and Goode.

Dear Councilmen Goode and Kenney, wilson.goode@phila.gov, James.kenney@Phila.gov

Bill 100011 Targets only Philadelphia Landlords when the Philadelphia Public Health Department stated "lead can be brought into a house by pets, on toys, shoes, and work clothes".

Why regulate only Landlords? This is unfair and punitive! Try testing and cleaning lead from public spaces first. Let's start with City Hall, rec centers, Museums, public schools.thousands of city city owned homes, PHA properties and all public spaces.

What applies to landlords to apply to all.

Thank you for listening.

Yea, let's gets th lead out, but let's do it the right way!

What's New in Mortgages?

noreply@blogger.com (Fred Glick) — Tue, 29 Nov 2011 07:32:00 PST

Here is Karen Deis, mortgage expert telling us all about what's new in guidelines from Fannie, Freddie, FHA and VA.

FHA Reverse203k

noreply@blogger.com (Fred Glick) — Mon, 28 Nov 2011 18:31:00 PST

Did you know you could combine an FHA reverse with a bit of 203k in it? Clay Selland from Signet Mortgage explains.

Show Me the House....on Thanksgiving?

noreply@blogger.com (Fred Glick) — Tue, 22 Nov 2011 17:49:25 PST

When Can You Get a Mortgage Again?

noreply@blogger.com (Fred Glick) — Fri, 04 Nov 2011 05:39:17 PDT

After foreclosures, short sales and bankruptcies, there are time period you must wait for conventional, FHA, VA and USDA loans.

Here is a chart with the details.

Do Not List Your Home

noreply@blogger.com (Fred Glick) — Thu, 20 Oct 2011 07:59:03 PDT

The subtle winds of Fall have approached the east coast. Soon, fireplaces will be lit, hot chocolate will be made, overcoats will return from the secured confines of a cedar closet.

Both the NFL and NCAA football will have the top tier teams evolve into the forefront of America's frontal lobe along with thoughts of holiday shopping because of the ever elongated December selling season.

OK, you get the picture.

So now, the people that want or have to sell their home, I have one suggestion. Don't.

That's right, do not list your home for sale this time of year.

What's that? You really need to? You must move for a job or you are having your third kid and live in a one bedroom condo.

OK, OK......I get it. Now, go up to the bathroom, look in the mirror and say the following: "I will list my house at a price that will sell. I will list my house at a price that will sell. I will list my house at a price that will sell. I will list my house at a price that will sell."

If you do not have to put your face in the john after you've said this, contact your real estate agents (or me of course :) and say to them "I will list my house at a price that will sell."

A great agent will understand this, find out the comps, know the price and will be able to market it that way.

Yes, I have taken listings where the house was overpriced by $200,000, yes $200,000 but it was with someone that understood the risk, it was later November and he did not need to sell. I had to prove to him how nuts he was. But, those days are over.

Buyers seem to hear something that makes sense to them that they should absolutely bid about 20% less for every home they see when in fact sellers and their agents mostly try to price at what it should sell near.

So, it's a zoo out there from the buyer and seller side. Hopefully, the negotiators, the agents, will be able to put buyers and sellers together happily!

Gee, is it Spring Training already?

One Deal, One Year, Bad Condo, Sheriff Morons

noreply@blogger.com (Fred Glick) — Thu, 20 Oct 2011 07:14:50 PDT

I just had a mortgage I originated over a year ago close.

No, it was not in underwriting with a large bank that where it fell through the cracks. No, it was not because of an HVCC picked appraiser that took too long because she was serving time for animal cruelty convictions. No, it was not delayed because the condo association secretary could not get it together to get the condo form filled out. And last but not least it was not because of real estate agents that think they are still in high school were too busy picking their noses to get the right paperwork together.

It was the fault of the following, Homeland Security, the Philadelphia's Sheriff office, Fannie Mae and a cast of hundreds.

First, kudos to Mitch Cohen of Premier Real Estate who from the start kept the deal alive and kicking. Mitch sold a nice condo unit to a lovely couple, he British and she Chinese, in a building that was 90 percent investors.

That alone would make the property unkosher for financing. But, alas, since the property was a foreclosure owned by Fannie Mae, they were happy to help dispose the unit with no appraisal, no PMI and no condo approval (remember the 51percent owner stuff).

Ok, we got passed that. Now on to Homeland Security where the green card that was promised had yet to arrive. Finally, after a few long months, there it was. OK, that issue resolved. Good news. Now the nitty gritty title work.

What the title company found was that the sellers had not only screwed up the deed royally, the Sheriff's department lost the deed and could not find the money.

They also told us whe they did find everything that it would take over a month to get it filed. A needless to say a month became 3, three became 6 and finally, a year later, we were able to close.

Don't you just love this business!

noreply@blogger.com (Fred Glick) — Tue, 18 Oct 2011 15:14:23 PDT

Singlehandedly, I just increased the value of an every unit in a large condominium association.

If you add the number of available prospective buyers, demand increase, supply decreases and guess what? Yes, prices go up!

Also, there will be properties that were for sale come off the market because people can refi to lower rates.

How did I do it? What am I referring to?

Simple, for less than $1000 and in less than 45 days, Tim Garrity of U S Spaces, Inc and I got the paperwork together with the condo association and got the condo FHA approved.

Want to know details? Email me fred@fredglick.com or call me at 215-852-4469.

No Appraisal Refis- Fred Glick since 2008 on CNBC

noreply@blogger.com (Fred Glick) — Thu, 13 Oct 2011 14:08:55 PDT

HVCC Solutions

noreply@blogger.com (Fred Glick) — Thu, 13 Oct 2011 03:08:58 PDT