Realtors to FHA: Your Mortgage Insurance Rates Drive Buyers Away

Realtors to FHA: Your Mortgage Insurance Rates Drive Buyers Away
Source: HousingWire

The Federal Housing Administration’s (FHA) mortgage insurance requirement is facing criticism from real estate professionals who argue that home purchases are becoming increasingly out of reach for many qualified borrowers who rely on FHA financing but are hindered by mortgage insurance rules. Steve Brown, president of the NATIONAL ASSOCIATION OF REALTORS® (NAR), called on the FHA to relax its mortgage insurance rules due to concerns about high annual mortgage insurance premiums and mortgage insurance required for the life of a loan.
Making sense of the story:

• NAR posits as many as 125,000 to 375,000 prospective buyers were priced out of the market in 2013 by the FHA’s high insurance premiums and mortgage insurance requirement.

• In 2014, FHA fees make up nearly 25 percent of a monthly mortgage payment.

• On a $150,000 loan, at 4.5 percent, the mortgage payment is 13 percent higher today than it was in 2008.

• In 2014, the mortgage insurance premium of 1.35 percent is 80 basis points higher than the rate of 0.55 percent in 2010. The 80 additional basis points pushed an estimated 1.45 million to 1.65 million renters over a sustainable debt-to-income level for the purchase of a home in 2013.

• Many first-time home buyers, who are priced out of FHA and unable to migrate to private mortgage insurance, are likely under the age of 44. Since 2008, income growth has been slowest among Millennials, ages 33 and younger, and Generation Xers, ages 34-44.

• Many of the potential home buyers who are priced out of FHA cannot migrate to private mortgage insurance. Combined with the higher funding cost of roughly 25 basis points for a GSE execution, only borrowers with the highest credit could afford to migrate to GSE financing.

Coronado Flower Show Spring Fling

The Coronado Spring Fling is doing something new this year – scrumptious food samplings from Coronado and San Diego County Restaurants as well as a variety of craft beers from local brewers, regional fine wines, and live entertainment. Participants include Alexander’s Pizza, Tartine, Ganosh Gourmet, Saiko Sushi, The Brig, Miguels, Vigalucci’s and many others. Chefs will be creating a classic menu item or something new to delight their guests. Coronado Brewing Company, Wine-a-Bit, Zilaro Cellar and Magnifico Giormeta will be providing alcoholic beverages. Tickets cost $45 and can be purchased through the Coronado Floral Association website and through purplepass.com. Tickets include admission, food and drink tastings, drink tickets for wine and beer, a Spring Fling souvenir glas, entry into grand prize drawings, live music, and transportation. Also included is admission to the after party which will be held at McP’s Irish Pub from 9:30 – 11:30. For more information:
Source: Anne Covington Morse
Ecoronado.com

Sales of Vacation Homes Up 30% in 2013

According to the National Association of Realtors, second-home purchases made up the biggest share of the housing market since 2006. Lawrence Yun, NAR’s chief economist writes “Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,”. According to the NAR, more people consider these homes in part as investments. 28% of all vacation homes purchased last year were in the West. Read the whole story here.
Tim Logan
La Times

Margaret La Grange #3 in Sales Production

Joe Campagna, Manager of the Coronado office, together with everyone at Berkshire Hathaway HomeServices California Properties, is proud to recognize Margaret La Grange for ranking #3 for her sales production in 2013, for individuals in the Coronado office.

Margaret also earned the President’s Circle award for her sales in 2013, ranking her in the top 3% of the brokerage’s national network of sales associates. She was recognized in a special reception at the Museum of Contemporary Art in San Diego , for her exceptional sales performance.