Northrup Grumman Moving Headquarters to Washington, DC Area Should Help Baltimore Housing Market

The Los Angeles Times reported today that Northrup Grumman is moving its Headquarters to the Washington, DC area.

This could mean a lot of jobs in the Maryland/DC/Virginia area, if current employees don’t want to move across the country.

They will be scouting locations in all three states before deciding where to plant their roots, which will happen by summer of 2011.

Should they choose to be in Maryland or even the northern part of DC, this could be a fanastic for the Baltimore real estate market in 2011.

Why?

Washington, DC, the Potomac, and the surrounding areas are very expensive places to live. Now, coming from Los Angeles, it might not be as much of a shock, but with MARC trains and easy commutes from Baltimore to the DC area, living in Baltimore is a great option for those employees who will be working for them.

So, welcome, Northrup Grumman!

New Fannie Mae Credit Score and Debt Ratio Requirements for Conforming Loans

Beginning December 12, 2009, Fannie Mae will have new requirements on credit scores and debt ratios for all of their conventional loans.

Prior to this change, the lowest credit score a borrower could have for this type of loan was 580. The new lowest score is 620. This is not negotiable, even if you are putting 20% down!

The other change is that the maximum debt ratio for this same 20% down borrower cannot be more than 45% of their income in order to qualify for the loan. Again, this is not negotiable.

Fannie Mae is a government controlled finance company who provides many of the mortgages offered to buyers through lending institutions. Part of the reason that these new requirements cannot be changed is that it uses an automated system to qualify or reject, so it is not a human making those decisions.

Fannie Mae made these determinations after studying what types of borrowers have been most defaulting on their loans. In this Reuters article, spokesperson Brian Faith had this to say:

“Loans to people with credit scores below 620 fell seriously behind at a rate approximately nine times higher than other loans purchased in the same period, Fannie Mae spokesman Brian Faith said. Loans taken out by borrowers with lots of debt also suffer higher levels of serious delinquency, he said.”

So what does this mean for the Towson homebuyer? If you are getting a conventional loan, you must have at least a 620 credit score and only 45% debt-to-income ratio.

Please note this does NOT affect FHA home loans or loans not provided by Fannie Mae, though as T. Jeremy Loomis of Wells Fargo Home Mortgage notes, Freddie Mac tends to follow Fannie Mae’s policies very quickly, so he expects to see these changes come through there soon, with most other institutions following their lead.

I want to thank Jeremy for this information, as he provided this to a large group of REALTORS(R) in his Continuing Education Course at the Greater Baltimore Board of REALTORS(R) earlier this week. Please also note, many lending institutions have already instituted this new policy to be in compliance for loans closing after December 12, 2009.

Monkton Real Estate: 35 Chesterfield Ct in North Baltimore County is a Great Value at $635,000 per Zillow Zestimate

This very large Colonial home at 35A Chesterfield Ct in Monkton on 6.46 acres, is a GREAT deal at $635,000!

Per Zillow’s Zestimate, its’ value is approximately $696,500! Now, Zestimates are an approximation, and are not an appraisal of true value, and can be off a lot in our area, but they give you a general idea of a starting point as to what a property may be worth when using statistics and history.

So enjoy this great deal, and come visit us at the open house on Saturday, October 3,  from 3-5 pm!

Towson Condominium Real Estate : New FHA Condo Guidelines Effective November 2, 2009 May Harm Towson Condo Owners

Towson Condo Owners have a new issue to grapple with.

First there was the change in the laws for condo insurance converage. Now we have the new FHA condo guidelines that may affect many people who want to buy or sell a Towson condo!

HUD announced this change in July, and the new guidelines were to take place October 1, but on September 15 they extended it per this note on their website: “This new approval process was effective for all case numbers assigned on or after October 1, 2009. However, the new effective date is for case numbers assigned on or after November 2, 2009“. This allows more time for buildings and mortgagees to be prepared for these changes. Here is the mortgagee letter from HUD, under “Notice on FHA Condomimium Processing” explaining the changes.

The biggest issue is that EVERY condo development in the United States will have to go through this process to be re-qualified to have FHA loans allowed in their building. Imagine the hold up/back up this is likely to create.

A major change in the guidelines that could ALSO create a delay is the elimination of the “Spot Loan Approval” process.  HUD states the reason for this is that “DELRAP and HRAP processes have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a “spot loan” basis.”

Unfortunately, this new process could add a decent amount of time to approving a condo project because much more paperwork has to be submitted to the bank, reviewed, and then submitted onto HUD.

Add onto that the many people wanting to take advantage of the $8,000 First Time Homebuyer Tax Credit that is set to expire at the end of November, and you have a recipe for a huge disaster looming in the near future!

SO, if you have been considering buying a condo in Towson or selling one, the time to do so is NOW. Luckily with this extension, we have a little more time to GET IT SOLD!

Back to School Brings Buyers Back to Towson Real Estate Market

Last week, Baltimore County went back to school. A long Labor Day weekend allowed for a feeling of lengthened summer, but today is the official day that we are back in full swing and the long days of summer are over.

Since kids are back in school, that usually brings a boost to the Towson Real Estate market, and this year appears to be no different. I have appointments every evening this week as the cool crisp air brings a new sense of urgency to get into the home of your dreams as you get ready to hunker down indoors for the cold weather months!

The $8,000 First Time Homebuyer Tax Credit is also a catalyst, because buyers really should get a home under contract by September 25 in order to ensure closing happens before November 30, 2009. This affects home sellers too, because if their home is in a Towson neighborhood like Loch Raven Village, where first time homebuyers are flocking, they need to get their homes on the market now so they can move soon and their buyers can take advantage of this credit.

Contact me today to take advantage of this first time homebuyer market, whether you are a buyer or a seller. Everyone wins!

First Time Homebuyer Tax Credit is Running Out of Time

November 30, 2009 seems far enough away. It’s after Thanksgiving, and it’s currently 95 degrees out. Who’s counting?

Towson First Time Homebuyers should be, that’s who!

If you want to take advantage of the First Time Homebuyer Tax Credit, you must get MOVING NOW!

It can take some time to find a house. If we start looking tomorrow, it could take you 30 days to find the perfect place, couldn’t it? Today is August 24. 30 days brings us to September 24. If you are using an FHA mortgage, banks are stating 45-60 days to ensure issues that may arise are covered/taken care of. That brings you to yes, November 24th. What is November 24th? The Tuesday before Thanksgiving. Think of all of the First Time Homebuyers across the US trying to take advantage of this credit. All under the same guidelines, deadlines, etc. How well do you think a closing may go on November 24th????

Keep in mind, if you settle December 1, you will NOT receive the tax credit benefit, even if the delayed closing is NOT YOUR FAULT. You would still not be eligible.

So what does this mean?

Contact me today to GET MOVING and get $8,000 back from the government on your taxes next year. WHAT A GIFT!

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Here is a great chart by Chik Quintans of Blue Sky Mortgage Strategies in Seattle, Washington showing just how little time is left!

Towson Real Estate : Robert E. Lee Park to be restored — will this help Towson House Values?

There is a special section of Baltimore County, hidden from immediate view, where dogs and people alike used to frolick amongst the grass and swim in the lake. That place is Robert E. Lee Park, right on Lake Roland, in Baltimore County, off Falls Road.

The park had been closed off, as the pedestrian bridge was closed, making the trails unusable. The pedestrian bridge will be replaced, and a legal dog park put in place. Read more

Are High End Stores like Louis Vuitton in Towson Town Center Affecting Towson House Values?

The Towson Town Center Mall has been undergoing a tremendous transformation. For about two and a half years, construction had taken over that central part of Towson. A new high end wing was added, and just last week, a Louis Vuitton store opened its doors.

One question that has been in my mind, besides if the Baltimore marketplace can support a luxury store of this caliber, is whether this store, or the high end wing in general has had any effect on Towson House Values?

The new wing was completed October of 2008. When reviewing statistics for Towson Real Estate, October 2008 showed an upward trend as did November and December. More houses sold, and for the most part, average sales prices were up. 2009 has dropped a bit in the 21204 zip code, but not a large amount. Meanwhile, Baltimore County in general showed a drop during these same months.

I am sure there is no direct correlation, I just find the data interesting. I will keep an eye on the trends in Towson Real Estate!

Great News for Towson Homebuyers — Affordability Abounds!

Exciting news for the Towson Homebuyer — the 43% of the homes in the Baltimore real estate market are in the “affordable” range — under $250,000, according to the Metropolitan Regional Information Systems, the multiple listing system in our area. Towson’s percentage is lower, however a few neighborhoods that were more expensive before are now in that range!

Reporter Jamie Smith Hopkins wrote a front page article in July 15th Baltimore Sun on how the affordable market has doubled in Baltimore. It is truly exciting, because, as she pointed out, with the first time homebuyer market being generally prohibitive in the past few years, the owners of those homes couldn’t sell, which meant that they couldn’t move up to the next upgrade — causing that portion of the market to stumble.

A catalyst for first time homebuyers right now is the lure of the $8000 tax credit, which is available to them until the end of 2009. Low prices, low interest rates, plus a large credit on your taxes make NOW the time to buy!

If you are ready to take advantage of these incredible market opportunities, contact me for more information.

Home Valuation Code of Conduct (HVCC) Could Negatively Affect Towson House Values

From our esteemed guest blogger, Tasha Linton, of Atlantic Home Equity Mortgage, more details about the Home Valuation Code of Conduct (HVCC), enacted May 1, 2009, and how it is negatively affecting home sales.

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Here is the actual verbiage in the Home Valuation Code of Conduct. There are many concerns, as local, honest, fair and experience appraisers are being put out of business, and the AMC is collecting 40% as a referral fee — requiring the HOMEBUYER to pay MORE for an appraisal on any given property if they are using Fannie Mae or Freddie Mac for their loan.

The other issue that is coming up is that before the HVCC, an appraisal from one company could transfer to another mortgage company. Meaning, if a buyer wanted to switch lenders, they could fairly easily. NOW, that buyer must pay for a SECOND appraisal on the same property — at the inflated rate!

RESPA (Real Estate Settlement Procedures Act) lawyer, Marx Sterbcow, wrote an article that the Federal Deposit Insurance Corporation’s “Interagency Appraisal Evaluation Guidelines” will most likely top the HVCC, which is what we can all hope and wish for. 

What does this mean for you, the Towson Homebuyer or Towson Homeseller? Appraisal values are coming in low because the AMC appraisers are not local and do not understand local markets. For homebuyers, if you change your mortgage company, you will have to pay for a new appraisal.

So far, a lose-lose situation for everyone in the real estate marketplace.

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