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Understanding Aug.1 Changes to HUD-1, Closing process

The days of filling out the HUD-1 settlement form and getting a Good Faith Estimate (GFE) from the lender are going away pretty soon! On August 1, those two forms will no longer be used! The Truth in Lending Act (TILA) disclosure form is going away, too. Replacing them are two new forms: the Closing Disclosure and the Loan Estimate. You can familiarize yourself with these new forms on the website of the Consumer Financial Protection Bureau (CFPB), which has taken over administration of the Real Estate Settlement Procedures Act (RESPA) from HUD. Just go to CFPB.gov and type in the name of the forms in the search box.

There are also new rules for the closing procedure. One of these rules requires all forms to be ready three days prior to closing. NAR is recommending you actually get everything ready 7 prior to closing, so when you go into the three-day period, you don’t have to make any changes. Because making changes as the clock winds down comes with a cumbersome  set of hurdles.

Closing

What this means is, you and the other settlement service providers, including the lender and title agent, are under the gun to get everything squared away earlier than what has been traditionally required. And the buyers and sellers have to be cooperative as well, because if last-minute changes are made, a new three-day waiting period kicks in, at least in some cases.

The good news is, you have until August 1 to get familiar with the new forms and learn about the new closing procedures, and NAR is hosting a series of webinars on the topic. To learn when the next one is, go to Realtor.org/respa.

Loan

The video above, with Ken Trepeta of NAR Government Affairs, provides a concise overview of what to expect and also shares some tips on how to decrease the likelihood of snags in this new environment. Visit ExecutiveHomesRealtyInc.com to see more info about anything real estate related as well as phenomenal homes in the East Bay!

The CFPB’s goal in making these changes is to increase transparency for consumers. Start your education process by accessing the 5-minute video.

A Forecast of Trends in Real Estate for 2014

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The real estate market in 2013 was a breath of fresh air; home values increased and buyers had stable jobs creating a market frenzy for current homes for sale. Experts expect 2014 to have similar growth, but at a more stabilized pace.

 Fixed rate mortgage rates are estimated to linger around 5 percent. The Federal Reserve will continue to step back from directly supporting mortgage lenders and allow room for inflation and economic growth to dictate mortgage rates. Inflation is not a current concern for the market but we all know this can fluctuate throughout the year. Economic growth is expected to become more reliable and strong with the growth in 2013 as a foundation.

 Home prices in 2013 skyrocketed with attractively and historically low mortgage rates. While we don’t expect those rates to return, a 5 percent rate on your mortgage is still a below average rate. This higher mortgage rate will have a marginal slow down affect on the current market and home prices. But with the continued economic stability, home prices will remain competitive. Home values will still rise, just not exponentially as we saw in 2013. Last year the number of qualified buyers far outweighed the available homes for sale. We expect more homes to be available this year, which will also aid in leveling out home prices. However, with continued economic stability there will be a continuous need for more and more homes to meet the needs of house hunters.

 Qualifying for your home mortgage will have a few extra requirements this year. On January 14 lenders began considering all of your income and outcome, not just current loans as done previously. The intent is to ensure you have the ability to pay your monthly mortgage, all things considered. The debt-to-income cap will operate at 43 percent. Lenders will enforce these considerations to protect themselves from future consumer lawsuits claiming the property and borrowers were not properly assessed. These deeper qualifications will aid in stabilizing the number of buyers in the market as well.

 All said and done the excitement of real estate happenings will not diminish in 2014.  Sellers and buyers are becoming more educated and aware of the still historically wonderful mortgage rates and will continue to brave the rising home prices for a fantastic investment.

 

 

 

 

Stock drift slower despite upbeat data

Stocks drifted lower Wednesday as investors tried to make sense of better-than expected economic reports and gauge the mindset of the Federal Reserve. The Dow Jones Industrial Average, S&P 500, and the Nasdaq were all down slightly in afternoon trading, erasing previous gains. In its Beige Book report on regional economic activity, the Fed said the economy expanded at a “modest to moderate pace” from early October to mid-November.

It noted gains in the auto and high-tech industries and reported that retailers are “hopeful, but cautious” about the holiday shopping season. Investors remain fixated on clues as to when the Fed might pull back, or taper, it’s $85 billion per month bond buying program.

The three indexes were in the green earlier Wednesday after the Census Bureau said sales of new single family residential homes rose 25% in October compared to September, topping economists’ expectations.
That report came after payroll processor ADP (ADP, Fortune 500) reported that 215,000 private-sector jobs were added in November — well above the 160,000 gain that was expected.

Bond investors stayed focused on when the Fed might taper. The yield on the 10-year Treasury note spiked to 2.85% Wednesday, near the year’s high of almost 3% back in September. At that time, investors feared the Fed would taper at its meeting in September. It didn’t. But some experts believe that the Fed could now announce it is pulling back on stimulus at the conclusion of its next meeting on December 18.

In corporate news, J.C. Penney (JCP, Fortune 500) said Tuesday that same-store sales in November grew 10% from the same period last year. The stock, which has been the worst performer on the S&P 500 this year, is in the midst of a turnaround and has caught the attention of some major hedge funds.

But investors seemed unimpressed with the decent November sales. Shares of J.C. Penney were down about 4%. Despite that, one trader on StockTwits was bullish that it would bounce back by the end of the day.
$JCP green by close,” said Jason100. Others were optimistic, but acknowledged it’s a difficult trade.

“$JCP only patient ppl or idiots can win this stock LOL”, said Smellyegg.
Shares of Deere (DE, Fortune 500) jumped over 3% after the agricultural machinery giant announced it boosted its share repurchase program.
“Stopped out of $DE ystdy after holding for 2 weeks & today they announce buyback” said Sspencer_smb, a StockTwits trader who worried he missed out on the stock’s recent move. Another mover was Hewlett-Packard (HPQ, Fortune 500), which rose more than 3% after reports that the PC and printer maker plans to shed 1,100 jobs in its U.K. unit.

StockTwits trader Shaggyeleven was not buying the stock for now, but is keeping a close eye on it. “$HPQ not in, watching, if keeps moving like this, thinking, I’m missing something.” Also trending on StockTwits: Apple (AAPL, Fortune 500). Shares of the iPad maker have surged back to life in recent months, gaining almost 50% from its 52-week low earlier this year. Activist investor Carl Icahn reiterated in an interview with Time Wednesday that he wants the company to buy back more of its stock.

“$AAPL slow and steady rise the rest of the day” said trader ChazMac09.
European markets slid in afternoon trading, shrugging off the final purchasing managers’ data for November that came in a little better than expected. The European Union levied a record antitrust fine of €1.7 billion ($2.3 billion) on six European and U.S. banks and brokers for rigging benchmark interest rates. The largest fine, of €725 million ($986 million) went to Deutsche Bank (DB).