The article titled “Buying a new home in Maryland”, written by Dan Krell and published in The Sentinel, provides important information and tips for individuals purchasing, or looking into purchasing, new builds/new homes. Many home buyers do not believe that they need representation when purchasing new builds, often because the new home builder representatives are “friendly, helpful and may appear to be on your side in the transaction”. According to the article, before you engage a home builder and its sales representative(s), you should research whether the home builder is registered with the Home Building Registration Unit. The sales representative(s) must also be registered with the Home Building Registration Unit if the home builder has not hired a licensed real estate agent.
If you decide to purchase a new home, it is suggested that the home buyer read the consumer information booklet (provided by the Maryland OAG Consumer Protection Division) that home builders are required to give consumers prior to entering into the sales contract.
The Maryland OAG Consumer Protection Division also “oversees a home Builder Guaranty Fund ‘that allows consumers to seek compensation for losses resulting from an act or omission by a registered builder who constructs a new home for a consumer.’” Payments from this fund are to cover actual losses that result from “‘an act or omission by a registered builder as determined by the Consumer Protection Division or a court of competent jurisdiction…’” “Actual Loss” refers to “‘the costs of restoration, repair, replacement or completion that results from the incomplete construction of a new home, a breach of an express or implied warranty, or a failure of the builder to meet certain construction standards or guidelines.’” Actual losses do not entail attorney’s fees, punitive damages, interest, or personal injury.
It has come to Olde Key Title’s attention that effective January 1, 2012 Montgomery Village Foundation, Inc. will charge each buyer with an additional fee “upon purchase of any property (private dwelling unit – home or condominium – or multi-family apartment complex)”. This fee, entitled the “Capital Contribution Fee”, must be paid at settlement and will total one tenth of one percent of the gross selling price of the property. These funds will be placed in a separate account and will be used “to fund new facilities and amenities open to the use and enjoyment of all residents and will help offset dependence on assessment dollars to implement these capital projects.”
In light of the current economy and high delinquency rates of payment of condominium and/or home owners’ association fees, this is not surprising. This additional fee will also protect properties’ values and the ability to sell properties within the community.
If you know of other communities that are doing this, we are eager to hear of them so please let us know.
If you have any questions, please feel free to contact Lynn Caudle Boynton, Esq. or Caryn S. Wetmore, Esq. at 301-294-3333.
According to the article titled “Booming boomer population strains ‘burbs”, written by Liz Farmer and published in The Washington Examiner, “[b]aby boomers and retirees make up the fastest-growing populations in the Washington suburbs.” This group of individuals (those ages 55 to 64), who make up the fastest-growing population group, are “growing anywhere from two to five times the average growth rate over the last decade, according to Census Bureau data….”
As baby boomers enter retirement and begin collecting pensions and Social Security, there are concerns that government funding for such programs will be in trouble. According to Richard Johnson, director of the Urban Institute’s Program on Retirement Policy, “…there’s not enough savings to pay out these benefits once people start collecting. It will force governments to cut on services or raise taxes.” Currently, Maryland’s pension fund is underfunded by $33 billion and Virginia’s pension fund is underfunded by close to $18 billion.
There is a silver lining to this, however. “[T]hanks to its urban environment, the Washington region isn’t aging as quickly as the rest of the country.”
To read the article in its entirety, please click here.
As we posted on our Facebook page last month, housing prices in the Washington, DC area are increasing! According to the article titled “Region’s home prices bucking nation’s double dip”, written by Liz Farmer and published in The Washington Examiner, compares the housing prices in the Washington, DC area to the top markets in the United States. The table exemplifies these comparisons.
“While home prices are nearing their 2009 lows in some markets and averaging closer to 2003 prices, D.C.-area home prices are averaging around their 2004 values and climbing, experts said. ‘D.C. is similar to Los Angeles, New York or Chicago, where there’s not a lot of land mass to population — it’s hard to overbuild and add new inventory,’ [Maureen] Maitland, [ vice president of S&P Indices] said. ‘To D.C.’s benefit, it didn’t overbuild in the run-up to the market collapse like you saw in Phoenix, Las Vegas and Florida.’”
To read the article in its entirety, please click here.
The article titled “Md. bill would make banks care for foreclosed homes”, written by Liz Farmer and published in the March 13, 2011 edition of The Washington Examiner, explains a proposed bill that focuses on care for all foreclosures. The bill, recently introduced by delegates from Prince George’s and Charles counties, “would require banks and investment companies that repossess or foreclose on a home to pay for maintaining and securing the property, a measure just as much about safety as it is appearance”.
In January 2011, more than 700 homes in Prince George’s County went into foreclosure; this amount is nearly five times the total amount of homes that are foreclosed on in Montgomery County. The more than 4,000 foreclosed homes in Prince George’s County account for nearly one-third of the State of Maryland’s total. Prince George’s County has the highest foreclosure rate in Maryland, followed by Dorchester and Charles counties.
Foreclosures depreciate a neighborhood’s property value; neglected properties only “exacerbate the problem.” “‘When foreclosures…are vacant or abandoned, those properties are not kept up or maintained, so it not only pulls down the value when it’s finally sold, but also the perceived value when someone drives through the neighborhood,’ Daren Blomquist, spokesman for the foreclosure tracking firm Realty Trac”, explained.
The proposed bill “would authorize localities to pass laws requiring lenders to register their repossessed properties with the city or county and establishing fines for those who violate the maintenance requirements.”
The delegates who proposed this bill explain that they are not putting fault on banks and investment companies, but they are holding such banks and investment companies accountable to the same standard a homeowners’ association would be.
To read the article in its entirety, please click here.
The U.S. Department of Housing and Urban Development (HUD) released a video that educates consumers on the homebuying process entitled “Shopping for Your Home”. This helpful ten-minute video from HUD can be found here:
Mortgage loans are supposed to be modified more than ever before in an effort to help consumers avoid foreclosure. The goal is to assist consumers, who through no fault of their own, due to deflation of their home value, to remain in their homes, which would help to stabilize the overall home market which effects everyone. Further, the goal is to ease tight credit and improve the flow of credit and increase the borrowing authority of the FDIC and NCUA (National Credit Union Association). The benefits offered to consumers and lenders are tempered by consumer protection and fraud prevention provisions enforced by the National Mortgage Fraud Task Force in the Department of Justice.
Modification of a homeowner’s original loan terms includes reducing the rate as low as 2%, fixing an adjustable rate, increasing the term up to 40 years and even reducing the principal balance.
Typically, modifications made the terms more favorable but added on any unpaid principal, interest and penalties to a consumers mortgage balance, essentially causing the property to be even more “underwater”. More recently, lenders are implementing a home retention program which includes an “earned principal forgiveness” of up to 30% of the loan balance to reward a consumer for living up to the modification terms. Unfortunately, the lenders lack the processes or staff to efficiently handle the loan modification applications. The idea of modification is talked about more than it is being implemented.
To read more about loan modification resources, eligibility, etc. please click here. Olde Key Title provides a number of additional resources on our website; you can find such resources by clicking here.
Are you in the market to buy a new home? According to an article titled “Is time to buy a new home now?“, written by Dan Krell, the answer is it depends. Although the mortgage rates are at “historic lows” and “home prices remain low”, the answer to the question is that it depends on your circumstances. You “can compare rent versus buy via a ‘rent calculator’” which can be found on various websites. This calculator compares the costs of home ownership to the costs of renting.
Is now the right time to buy a house for you? The answer may be “yes” in your circumstance, but first consult with a financial advisor, your family, friends, realtor, etc. If so, happy house hunting!
According to the Freddie Mac Conventional Mortgage Home Price Index (CMHPI), “[h]ome values in the U.S. fell 0.2% in the second quarter of 2010 from the same quarter last year”. However, compared to the previous quarter, home values in the U.S. increased 3.1%. These statistics include “only property values based on home purchases with a conventional mortgage.” Because of the significance of these statistics, Freddie Mac will continue to carefully observe the housing values within the U.S. over the next quarter.
This article, titled “Home values drop 0.2% from a year ago: Freddie Mac” and written by Jon Prior on HousingWire.com, can be found in its entirety by clicking here.
The title of a CNNMoney.com article, “30-year mortgage at lowest rate since 1971“, says it all. Mortgage rates are very low right now and are continuing to decrease. According to this article, ”Freddie Mac’s weekly report said the 30-year fixed rate slipped to 4.44% for the week ended Thursday, the lowest since the government-backed lender began tracking the rate in 1971. Last week’s rates stood at 4.49%, and a year ago it was at 5.29%.” 15-year mortgages as well as adjustable-rate mortgages have decreased as well. These “‘[l]ow rates are helping to heal many battered local housing markets by increasing home-purchase activity’, said Frank Nothaft, chief economist at Freddie Mac. We can imagine that the rates will continue to drop, but we will continue to keep a close eye on them and their effect on the housing market.
