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‘Thank You for Your Service’ -- Housing Industry Helps Vets

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | January 27th, 2017

Of the thousands of complaints received by the Consumer Financial Protection Bureau (CFPB), gripes regarding debt collections from the military community numbered twice the rate of the general population.

That’s rather surprising when you consider that servicemen and women, veterans and their families are covered not only by the Fair Debt Collection Practices Act, which applies to everyone, but also by the Servicemembers Civil Relief Act. The latter postpones or suspends certain civil obligations to enable servicemembers to devote their full attention to their military duties.

That the CFPB has fielded nearly 20,000 complaints from servicemembers is dastardly news, indeed. But there’s also good news from the financial field – especially from the housing industry -- when it comes to the military.

Here’s a peek at just some of the “thank you for your service” efforts being taken on behalf of the military:

-- Army Sgt. Matthew White and his two dogs, Nike and Toffee, recently received the keys to a new mortgage-free, fully furnished home in Dumfries, Virginia. The house was donated by PulteGroup’s Built to Honor program, which gives new homes to wounded veterans and their families across the country. (White was injured while on a foot patrol during his second deployment to Afghanistan.) Pulte has given away dozens of houses under the program.

More than 50 national and local contractors, trade partners and Pulte employees donated time, money and resources to build the 1,800-square-foot townhouse. The home’s furniture was donated by TV personality Rachael Ray.

-- Bank of America has given more than 2,000 abandoned and foreclosed houses to such nonprofit partners as HomeStrong USA and the Military Warriors Support Foundation, which vet the eventual recipients to make sure they can handle the responsibilities of homeownership. The bank’s employees volunteer thousands of hours to help put the houses into move-in condition, including stocking the pantries with canned goods.

-- SunTrust honored vets on the Thursday before Memorial Day last year. At exactly 11 a.m., the bank’s 35,000 employees stopped what they were doing for a moment of silence to honor the fallen -- even if a teller or loan officer was with a customer. And in many cases, customers bowed their heads right along.

-- In conjunction with local groups, Freddie Mac -- the giant quasi-government secondary market institution that helps keep the mortgage money flowing -- offers free homeownership counseling during American Heroes Housing Fairs and Open Houses throughout the country. Counseling is open to both active and retired military, as well as educators, firefighters, police and other first responders.

-- The Chesty Puller House in Saluda County, Virginia, is intended to be a refuge for at-risk Marines of all ranks, from privates to generals, before they reach the point of considering suicide. In 2015, to raise money for this cause, Dave Biggers of real estate technology firm A La Mode matched donations, dollar-for-dollar, from customers, employees and anyone else who felt compelled to donate.

-- Brint Construction, a Texas-based, family-owned homebuilder, designed and built the Lone Survivor Foundation’s first retreat center in Bolivar, Texas. The space provides therapeutic healing and educational support for soldiers suffering from post-traumatic stress disorder and other wounds associated with combat.

-- Barbara Mills, a RE/MAX Realty One agent in Inverness, Florida, has arranged hundreds of small parties to greet individual warriors returning home from the Middle East. She also arranged a larger event for 140 National Guardsmen who arrived all at once. Each soldier or sailor is given a gift basket valued at about $450. Each basket also contains $500 or so in checks and other gifts from member of the Citrus County community.

-- Greystone Real Estate Partners of Charleston, South Carolina, is among a number of firms involved with Homes Fit for Heroes, a foundation that provides apartments to wounded special operations warriors -- SEALs, Green Berets, Rangers, Night Stalkers, Delta Force members and others -- while they recover from their wounds.

These are just a few examples of how real estate folks try to give back. There are too many others to list here. But we salute all of them, as well as the warriors they are helping.

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Picking a Potential Roommate

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | January 20th, 2017

Perhaps you are living on a fixed income and need some extra money to pay the bills. Maybe you need some help with daily chores. Or perhaps you simply yearn for companionship.

If any of those scenarios seems to fit, it might be time to consider a roommate: someone with whom to share your house -- and perhaps your life.

House-sharing among empty nesters, retirees and other aging adults certainly isn’t a new phenomenon. But with something like 10,000 people a day turning 65, it is definitely on the rise, says Wendi Burkhardt. She’s the co-founder and CEO of Silvernest, a Boulder, Colorado-based online matching service that helps seniors find compatible housemates.

Proof: In the 12 months since Silvernest’s launch, the service has signed up 10,000 clients, the majority of whom are 50 to 75 years old. The client list includes would-be landlords, who pay $29.99 to use the site for three months, as well as wannabe roomies, who pay the same amount to cover their application fee and the cost of various background checks.

People considering a roommate can use a matching service like Silvernest, or they can save a few bucks by going it alone. But be forewarned: Choosing someone to share your house with is much harder than picking out a ripe melon or the proper exterior paint.

Here are a few tips:

-- First, let your inner circle know about your roommate search. Even if you’re still pretty independent and your mental facilities are intact, it’s easy to be taken advantage of during this process.

”Make sure you tell others what you are doing,” advises Burkhardt. ”Vet your plan with your family, and trusted advisers, such as your attorney or accountant.”

-- Limit your search for a roommate to known sources, such as your circle of friends, your garden club or your church. The wider you cast your net, the more vulnerable you become to someone who might try to fleece you out of your money -- or maybe even your house.

-- Never, ever agree to interview a potential housemate alone or in your home. Bring along a family member or friend, and meet in a public place such as a coffee house.

-- Be picky. “You are going to share not just your space, but perhaps your life, so it’s important to find someone who is compatible,” says Burkhardt. “Be specific about what you’re looking for. If you are retired, you may want someone who works during the day and isn’t around all the time. Or it may be important that they’re tidy, share similar hobbies or keep the same hours as you.”

-- At the same time, keep an open mind. For example, multigenerational living situations have been shown to be highly successful. Don’t write off someone just because they are not what you initially had in mind.

-- Once you’ve settled on someone, run several background checks. Ask your favorite real estate agent to pull a credit report, which will tell you how this person handles their finances. And spend the money to search criminal records: You need to make sure you are not considering a sex offender or swindler.

-- If the person passes muster, it’s time to draw up a lease. Before you ask: “Yes, you positively, absolutely have to have a lease,” says Burkhardt. Even if your new roommate has been your dear friend for 30 years, or has been recommended by one of your children, you need a lease.

”Everyone who opens up their home to someone else needs to have legal protection.” she warns. “People are people. You never know what’s going to happen.”

What you put in the lease is up to you. You can start with a lease template from a stationery store and customize it to your heart’s content. Generally, though, it should contain a clause that outlines, in as much detail as possible, what you and your tenant expect from one another.

Rather than entering into a one-year lease right from the get-go, Burkhardt suggests starting with a three-month trial period. That way, you can get to know your housemate and determine if you really are compatible. If things turn out as you hoped, you can always extend the lease for a longer term.

As for a security deposit, some people ask for them, while others don’t. Again, it’s a personal preference. But Burkhardt thinks it’s always wise to obtain one. That way, you’re covered if your roomie causes any damage to your property.

-- If there is any rent involved, set up an automatic payment system in which the money is transferred into your account on the same day every month. Money is a messy thing, anyway, so a recurring system removes the hassle of collecting rent, and ensures you are paid in a timely manner.

-- Finally, make it easy to terminate the lease. Remember, life happens. Things don’t always work out as planned. Maybe you prove to be mismatched after all, or perhaps one or both of your situations change. Allow each party the option to end the relationship after a 30-day notice.

Above all, don’t allow a bad situation to fester until it becomes a full-blown legal dispute. If you decide to part ways, both sides should document the situation, have it reviewed by a legal professional and keep the signed agreement on file.

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A Treasure Trove of Mortgage Data

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | January 13th, 2017

If you're in the market to buy or sell a house, you'll want to make informed decisions every step of the way. Luckily, Uncle Sam has a huge treasure trove of data you can use.

Information from the Home Mortgage Disclosure Act (HMDA) database is at your disposal, and can be accessed at consumerfinance.gov/data-research/hmda.

For instance, the database shows that average mortgage amounts jumped between 2014 and 2015, meaning that average home prices jumped, as well. The average home-loan amount in 2015 was $261,000 for a first lien (an increase of 6 percent over 2014), and $65,000 for second mortgages and home equity lines of credit (a 10 percent increase).

Great new if you're selling a house, but not so great if you're buying one.

An analysis of the data by the Federal Reserve confirms that real estate grew pricier last year. "In 2015, house prices continued their upward trend evident since 2012, and mortgage interest rates remained low, although slightly above the historical lows reached in late 2012 and early 2013," according to the central bank.

Based on HMDA figures, more than 90 percent of last year's total of $1.8 trillion in mortgage money went to one- to four-unit homes. Non-owner-occupied units (usually investment properties) accounted for 10 percent of loan dollars. (The data are gleaned from the LendingPatterns tool of ComplianceTech, a fair-lending and technology company in McLean, Virginia.)

Multifamily loans accounted for just 8 percent of all mortgages last year, with a tiny 0.6 percent going for manufactured housing. However, that figure doesn't tell the whole story. There are two kinds of manufactured housing loans: one for properties secured to a lot and cannot be moved, and one for units that remain detached. The former is a mortgage; the other, more like an auto loan. The mortgage amount is far lower than the car-type loan.

Getting a mortgage was slightly easier for buyers last year than in prior years, when lenders put a tight squeeze on credit, according to the Fed analysis.

"Mortgage credit conditions continued to slowly ease, but credit remained more difficult to obtain for individuals with lower credit scores," the central bank said.

"Reports throughout the year from the Survey on Bank Lending Practices indicate that several large banks relaxed their credit requirements, on net, for mortgages that were eligible for purchase by the government-sponsored enterprises (Fannie Mae and Freddie Mac) or that met the Consumer Financial Protection Bureau's standards for qualified mortgages. Growth in new housing construction continued at a moderate pace."

More good news: Fewer people were turned down for a mortgage in 2015.

"In 2015, the overall denial rate on applications for home-purchase loans of 12.1 percent, as well as the denial rate for refinance loan applications of 27.4 percent, was somewhat lower than in 2014," according to the Fed report. However, denials for minorities were higher than for whites.

HMDA was designed by Congress to make sure banks lend to minorities and to low- to moderate-income borrowers ("low-mods"). Minorities make up more than a third of the U.S. population, but received only 19 percent of 2015 mortgage dollars ($351 million out of $1.85 trillion).

Breaking it down further, Asians received most of the minority mortgage dollars last year: $134 billion. Latinos were close behind at $129 billion. Blacks trailed at $71 billion, or about 4 percent of total volume. Native Americans and Native Hawaiians together received about $10 billion, or about one half of 1 percent of total lending dollars.

In comparison, whites received 62 percent of all mortgage dollars last year: $1.1 trillion. The balance fell in the "unknown" and "not applicable" categories.

Two-thirds of 2015 minority lending was in conventional (non-governmental) mortgages. The rest was in government loans like those offered through the Federal Housing Administration, Department of Veterans Affairs, the Rural Housing Service and the Farm Service Agency.

Minorities used 54 percent of the dollars they were granted to buy houses, and 43 percent to refinance their current abodes. That's slightly different than the national average, in which 51 percent of the mortgage money went for purchases and 45 percent for refis. (In both cases, the balances were in home-improvement loans.)

Fifty-five percent of 2015's minority mortgage money went to upper-income borrowers. Only 16 percent went to low-mods. Even so, that was more than went to low-mod borrowers overall, which was just 12 percent.

Average loan amounts to minorities were lower than the overall average, at $248,000 for first liens and $38,000 for subordinate liens.

So just how big is the HMDA database? It's huge. Nearly 7,000 lenders reported their mortgage data for 2015 to the Federal Financial Institution Examinations Council, a multi-agency government group. While the database is enormous, it is not quite comprehensive. Mortgage lenders with less than $44 million in assets do not have to provide data. But the large majority of mortgage lenders are required to file.

-- Freelance writer Mark Fogarty contributed to this report.

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