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First-Time Homebuyers Could See Mortgage Fees Lowered

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The Federal Housing Administration has sent its borrowing fees soaring over the last five years in an attempt to rebuild its dwindling cash cushion.

But now that the agency has finally gotten its cash reserves back into the black, many financial experts are urging the FHA to bring those fees back down.

“It’s time for FHA to do as deep an analysis as possible on this issue,” Julia Gordon, CAP’s director of housing finance and policy, told The Washington Post. “We’re very concerned that people are being unnecessarily shut out. It’s important for taxpayers to be protected. But at the same time, the people being shut out are also taxpayers.”

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Childhood Neighborhoods Help Determine Future Earnings

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A new study conducted by Douglas Massey of Princeton University and Jonathan Rothwell of the Brookings Institution has confirmed that the neighborhood in which an individual lives for the first 16 years of his or her life has a greater impact on future wealth than even the gap between high school and college graduates.

The men found that individuals who are raised in the wealthiest 20 percent of neighborhoods earn $900,000 more over their lifetimes than those in the poorest 20% of neighborhoods.

“Growing up in a poor neighborhood would wipe out much of the advantage of growing up in a wealthy household,” Rothwell adds, citing school districts in this neighborhoods as the determining factor.

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Montana Couple Settles Lawsuit Over Mortgage

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A Montana couple has settled their lawsuit against Bank of America after the financial giant allegedly “acted negligently and fraudulently” when Abraham and Betty Jean Morrow attempted to refinance their mortgage in 2008.

According to the Associated Press, the couple built a home in 2005 and then refinanced in 2008. When business problems left them unable to make their mortgage payments, the couple says the bank “told them to skip a payment so they would qualify for the federal Home Affordable Mortgage Program.” Bank of America, however, denied ever making such a statement, and the bank eventually foreclosed on them.

Terms of the settlement have been kept confidential.

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Report: Mortgage Lending Drops to 13-Year Low

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The Federal Reserve Bank of New York revealed in a new report on Tuesday that mortgage lending is at its lowest level in 13 years.

At the current rate, 2014 is set to go on record as the weakest year for new loans since 2000.

According to Wall Street Journal blogger Nick Timiraos, “For the year ended in September, mortgage lending has averaged $357 billion per quarter over the prior four quarters, the lowest since the middle of 2001. And unless the fourth quarter is unusually strong – and it usually isn’t, because housing market activity slows in the winter – that will leave 2014 as the worst year for mortgage volumes since 2000.”

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2015 and 2016 Expected to Boast a ‘Landlord’s Market’

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With the vacancy rate of rental properties expected to remain around 4 percent over the next two years, 2015 and 2016 are predicted to hold steadily onto the title of “landlord’s market.”

Whereas the current vacancy rate is at 4 percent (as of the end of the third quarter of 2014), that number is expected to rise just slightly to 4.3 percent by the end of 2015, according to the National Association of Realtors.

The NAR is also forecasting a rent growth of 3.9 percent in 2015 and another 3.5 percent in 2016.

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Existing Home Sales See First Annual Gain of 2014

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For the first time in 2014, the number of existing home sales in October exceeded those from the same period a year ago.

Existing home sales were up 1.5 percent from October 2013, with overall home sales up 2.5 percent.

“Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” Lawrence Yun, National Association of Realtors chief economist, told Mortgage News Daily. “Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases.”

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Median New-Home Size on the Decline

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The median size of newly built homes is currently on the decline, leading many housing experts to believe that the market is opening up to entry-level buyers.

“It doesn’t reflect changes in preferences, necessarily,” Robert Dietz, an economist with the National Association of Home Builders, told the Wall Street Journal. “It reflects who’s buying new, single-family homes.”

Whereas new homes measured an average of 2,472 square feet in the second quarter of 2014, that number was down to 2,414 square feet in the third quarter, making it the second consecutive quarterly drop.

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Experts Recommend to Always Consider Schools When Buying a Home – Even if You Don’t Have Kids

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According to a new report by the Washington Post, it’s important to research school districts in your area when buying a home, regardless of whether you have children.

On average, homes in areas with good quality school districts cost approximately $50 more per square foot than homes that fall elsewhere.

In one extreme example given by the Post, two statistically similar homes located less that a mile apart in Alexandria, Va., were priced at $790,000 and $920,000 – a difference of $130,000 because of the respective school districts they fell into.

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FHA Is Back in the Black

The Federal Housing Administration revealed on Monday that it is back in the black.

“FHA has taken several prudent actions to improve the fiscal health of the fund, and those actions have led to the stronger position that we’re in today,” Julian Castro, U.S. Secretary of Housing and Urban Development told reporters.

Just two years ago, in 2012, the FHA’s insurance fund had been more than $16 billion in the negative.

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