Ruth's Blog: November 2007

The article below appeared in the Rocky Mountain News recently titled: 

Denver soars to No. 1 in home value increase.

If you didn't happen to catch the article click here: http://www.rockymountainnews.com/drmn/real_estate/article/0,1299,DRMN_414_5735517,00.html

What did you do after reading it?

Did you take action to applaud the author of the article?

Did YOU make YOUR voice heard?

Or did you even know what steps to take to speak out on the subject?

All too often we sit back and complain about what the media is doing to our industry. Yet, we do nothing about it! Maybe it's time to carve a few minutes out of your day and write a sentence or two commenting on this article.

The author has a blog site set up so that your views on the article can be expressed, which you can find here: Home prices on the rise? Weigh in on RockyTalk Live.

By the way, I wouldn't challenge YOU to do something I wouldn't do myself! Here's my post (and something you might want to share with buyers that are sitting on the fence waiting for market to "bottom out"!)

Most people do not pay cash for homes. So, they get a mortgage to assist them in their purchase. Therefore, it's imperative to factor in a comparison of interest rates when determining whether or not NOW is the time to buy a home. Current interest rates are about 1% lower than the historical averages. What does that translate to in buying power for the same monthly $$$? In the example of the home referenced in this article, the home buyer would have to put an additional $75,000 cash down to have the same monthly payment should interest rates go back up to the historical average! Looking at a $250,000 price range, the buyer would be required to put $25,000 down! So while waiting for higher home appreciation, you run the risk of higher interests rates. You need to buy now when the market AND INTEREST RATES are down!

HUD was ordered on October 31, 2007 by a Federal Judge to hold the implementation of FR5087 which would have eliminated seller-assisted Down Payment Assistance on FHA loans allowing DPA programs to be used through February 29, 2008!

FAQ

Q. How long can I use DPA?

A. As long as the Purchase Contract is dated by February 29, 2008, HUD has stated that they will accept DPA related transactions.

Q. What's next?

A. For all DPA's that are an official party of the lawsuit, there is a 4 month window of opportunity; however it is up to the Courts to ultimately decide if DPA is to operate permanently.

Q. What about the status of HR 1852?

A. This Bill has passed the House, with amendments that support the existence of DPA, The Senate Banking Committee is reviewing the Bill and it appears that they are not as supportive, however the Bill has not come up for a full vote. There are intense lobbying efforts in support of DPA coming from House members as well as others.

Here's an interesting look at the breakdown of DPA programs that lenders are using:

PREFERRED PROGRAM/HDGF     31%
AMERIDREAM                          21%   
NEHEMIAH                              17%
A Myriad of Other Programs      31%

Even though Nehemiah and Ameridream are well known in the marketplace, we have used American Home Grant's DPA and have been very pleased with their service.

 Stay tuned as the story continues to unfold...

:)