It’s not something that economists routinely track, but it provides a rough sense of what’s happening in local real estate markets. Call it the lowball index. A year ago, according to researchers at the National Association of Realtors, one out of 10 members surveyed in a monthly poll complained about lowball offers on houses listed for sale. In the latest survey — conducted during March among a sample of 4,500 agents and brokers across the country and not yet released — there were hardly any. Instead, the focus of volunteered comments has shifted to declining inventory levels — fewer houses available to sell — and multiple offers on well-priced listings.  [more]

Could gloomy popular assumptions about how tough it is to get approved
for a mortgage be scaring away large numbers of people who are qualified
from even applying? Could the same worries — I can’t come up
with the big down payment I need, my credit scores are too low, my bank
account has almost none of the “reserves” lenders want to see — put a
needless damper on a housing recovery in the new year? You bet.
Lenders and economists will tell you flat out: The lack of accurate
information about the availability of loan programs that are designed to
address special needs is discouraging far too many consumers from even
considering an application, much less shopping around. [more]

Could today’s seductive conditions in the housing market — severely marked-down prices, record low interest rates and hundreds of thousands of foreclosures waiting to be resold — be breeding new generations of the very practices that led to the crash?

In an ironic twist, there are signs that the wreckage left over from the housing bust may be reigniting dubious real estate schemes and fraud. According to researchers:

– Property flippers are back in action in places like South Florida and Las Vegas, where condo prices crashed but are now seeing appreciation again in some areas. [more]

Got a beef with your mortgage lender? Is your bank unresponsive when you complain that your escrow account is fouled up and making your monthly payments needlessly high? Did your loan officer bait-and-switch you into a more costly home loan than you were originally promised? Or worse yet: Did your home loan servicer ignore you when you told him you’ve had an unexpected drop in income and needed a modification to avoid missing payments? [more]

How big a whack did your credit scores take during the grim years of economic
distress following the housing bust? Was it 20 points, 50 points, 100 points
– or maybe no drop at all?

These are key questions affecting millions of potential homebuyers who
hope to qualify for mortgages and current owners looking to refinance. New
research from a major credit-risk evaluation company suggests that the drop
in huge numbers of Americans’ scores was dramatic.

FICO (formerly known as Fair Isaac Corp.), which developed and markets the
eponymous score that dominates the home mortgage field, found that during
2008 to 2009, approximately 50 million consumers in this country saw their
FICO scores plunge by more than 20 points. Nearly 21 million of these lost
more than 50 points. Many lost 100 points or more because of the most severe
delinquencies. [more]

After a year characterized by grumpy partisan gridlock, Congress came up with a Thanksgiving
compromise that could change the mortgage choices of buyers and refinancers in more than
660 markets across the country: It raised maximum loan limits for the Federal Housing
Administration while leaving loan ceilings untouched for Fannie Mae and Freddie Mac.

In effect, this may make FHA the go-to financing option for borrowers needing loans up to
$729,750 — with down payments as low as 3.5 percent — in New York, New Jersey, high-cost areas of California, metropolitan Washington D.C., and scattered counties in other states
including Massachusetts, Florida and North Carolina. Fannie Mae- and Freddie Mac-eligible
loans in those areas, meanwhile, stay capped at $625,500.

Equally important, the new plan raises the FHA ceilings for purchasers in hundreds of more
moderate-priced markets. [more]

How do you fight back when an appraiser — often from another city
working for a low fee on behalf of a big bank — wrecks your sale,
purchase or refinancing with a lowball valuation? It’s a serious problem in markets across the country. For example: — Home builder John Nolde of Richmond, Va., recently sold a new,
green-certified house for $199,500, only to see an out-of-area appraiser
cut the value to $169,000, a figure below Nolde’s own combined
construction and land costs. [more]

When you apply for a mortgage to buy a house, how often does the lender ask detailed questions about monthly energy costs or tell the appraiser to factor in the energy-efficiency features of the house when coming up with a value?

Hardly ever. That’s because the big three mortgage players — Fannie Mae, Freddie Mac and the Federal Housing Administration, who together account for more than 90 percent of all loan volume — typically don’t consider energy costs in underwriting. Yet utility bills can be larger annual cash drains than property taxes or insurance — key items in standard underwriting — and can seriously affect a family’s ability to afford a house. [more]

Is a little-publicized switch in federal mortgage policy causing huge problems for condominium
sellers, buyers and homeowner association boards across the country — even depressing prices
and blocking refinancings?

Condo industry leaders, from the 30,000-member Community Associations Institute to
individual unit owners and real estate agents, are emphatic that the answer is yes. They say a
series of rule revisions by the Federal Housing Administration has caused thousands of condo
projects to become ineligible for FHA mortgages. This, in turn, has abruptly shut off loan money
for would-be condo buyers and refinancers, forcing them to pursue conventional bank loans
requiring much higher down payments — sometimes 20 percent and higher versus the FHA’s 3.5
percent minimum — that they often cannot afford. [more]

With hundreds of thousands of homeowners facing imminent foreclosure and estimates of 2 million or more in the wings, are there any financial tools available to distressed borrowers that haven’t been tried yet? Equally important politically: Is there a way to help owners that won’t rack up huge federal expenditures and add to the deficit?

The Obama administration has been exploring options — including a new refinancing program expected later this month — but a concept has surfaced on Capitol Hill that might offer modest help with no revenue cost to the government: Amend the tax code to allow homeowners who have 401(k) retirement plans to pull out money to save their houses from foreclosure without the usual tax penalties. [more]