FHA Mortgages to Cost Borrowers More

Home buyers will have to make a larger down payment to get an FHA-backed mortgage and will need to have higher minimum credit scores under changes announced today by HUD Secretary Shaun Donovan.

Reporting from Washington - Home buyers will have to pay more cash upfront to get a mortgage backed by the Federal Housing Agency and will need to achieve higher minimum credit scores under changes announced today by Housing and Urban Development Secretary Shaun Donovan.

In testimony prepared for a House hearing on the agency's increasingly precarious finances, Donovan also said he was considering raising the premium the FHA charges for mortgage insurance and will ask Congress for the authority to do so if needed.

He wants to make those and other changes because a recent audit has shown that the FHA's reserves have fallen below mandated levels as the agency has become a larger part of the housing market. The percentage of mortgages insured by the FHA has soared from 6% in 2007 to almost 30% this year. The FHA insures mortgages made with as little as 3.5% for a down payment and has become vital in a housing market where credit remains tight and borrowers' bank accounts have been depleted by the financial crisis.

In Southern California, the number of FHA-backed loans has soared, becoming a crucial source of financing for first-time home buyers, particularly those snapping up foreclosed homes. FHA loans made up 38.3% of all Southland purchase loans in October, up from 32.5% a year earlier and just 2% two years prior, according to MDA DataQuick, a San Diego real estate research firm. Riverside County had the region's highest rate of FHA loans, at 49.2% of the market.

"The loans FHA insures must be safe and self-sustaining for the taxpayer over the long-term," Donovan said in his testimony. "With these reforms and others we will be considering, the Administration is committed to ensuring that they are today -- and into the future."

Donovan said the expanded role of the FHA, which he oversees, is only temporary until the mortgage financing market recovers.

Many lawmakers are concerned that the FHA, which is funded by mortgage insurance premiums paid by borrowers, will need an infusion of government money. The agency is supposed to hold a secondary reserve fund equal to 2% of all the mortgages on its books. An annual independent actuarial study released last month showed the reserve had fallen to .53%.

Aware in September that the reserve fund would fall below 2%, the FHA announced several policy changes to reduce its risk of future losses to limit the chances the fund will have to be tapped. Those changes included requiring lenders to have at least $1 million in cash and other assets, up from $250,000, to issue FHA-backed loans.

But with the actual shortfall of the reserve fund larger than expected, Donovan announced the additional changes today.

"We've learned from recent history that the market is fragile, and we have to plan for the unexpected," he said.

Many details still need to be worked out. For example, the agency wants to increase the upfront cash required from borrowers so they "have more 'skin in the game' and a stronger equity position in their loans."

But administration officials are analyzing several ways to do that. Likewise, HUD is analyzing what the minimum credit score should be for an FHA-backed loan. Any change there would be temporary, he said.

Donovan can make those changes without congressional approval, but would need a vote by lawmakers to increase its mortgage insurance premium because it is at the mandated limit.

Donovan did not propose increasing the minimum down payment from 3.5%, a change some lawmakers are advocating. Rep. Scott Garrett (R-N.J.) has introduced legislation raising the minimum down payment to 5%.

Courtesy of LA TIMES

Keller Williams, Coldwell Banker get top marks in J.D. Power homebuyer survey

Two residential sales firms with broad operations in the Dallas-Fort Worth area ranked tops in a new comparison.

Keller Williams rated highest in homebuyer survey released Thursday by consumer research firm J.D. Power and Associates.

Coldwell Banker placed second in buyer satisfaction but was highest rated by home sellers quizzed for the annual report.

The study rates national brand residential sales firms based on overall satisfaction with the agent, the office and additional services.

Re/Max and Century 21 also performed above average, according to buyers.

J.D. Power said that both buyers and sellers indicated that while the performance of the agent is the most important factor in their overall satisfaction, the importance of additional marketing services has grown in the last year.

The study also found that the number of first-time buyers in the housing market grew this year to 56 percent from 44 percent in 2008.

“The presence of more first-time buyers is encouraging, as it indicates that the real estate market is returning to more normal activity, with fewer speculators," Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates, said in the report. "However, real estate companies and agents must carefully manage first-time buyer expectations.”

J.D. Power also found that agents are holding fewer open houses to sell properties, but the number of sellers using the Internet to market their properties is at a record 64 percent.

The Power survey did not rank local and regional residential sales firms, which dominate the business in some markets.

By STEVE BROWN / The Dallas Morning News

Keller Williams Realty Receives Nod as the Highest Ranked in Customer Satisfaction

According to the J.D. Power and Associates 2009 Home Buyer/Seller Study, Keller Williams Realty, Inc., the third largest real estate company in North America, received the highest overall satisfaction ratings from home buyers among the largest full-service real estate firms for the second year in a row. The company also ranked second-highest among home sellers in the study.

“We couldn’t be prouder. This is an achievement our associates have truly earned. It is the face-to-face interaction and the relationships they build daily that has impacted this study and elevated Keller Williams Realty to another level in customer service,” said Mark Willis, CEO of Keller Williams Realty. “Knowing that this study was conducted during the toughest times the market has seen shows that spirit and dedication can make an impact.”

The study was produced by J.D. Power and Associates to measure home buyers’ and sellers’ customer satisfaction. The results of the home-buying experience were determined by three factors including the agent, office and the package of additional services.

“I am absolutely beaming with pride that our agents have been honored in such a fantastic way,” said Mary Tennant, president and COO of Keller Williams Realty. “We are lucky to be in business with such incredible business people, who have shown incredible resolve over the past two years. If there was a time to build their business, it is now.”

About Keller Williams Realty Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 679 offices and 73,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).

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Oklahoma City Defies Recession

Of the five big metro areas with the lowest unemployment rates — Salt Lake City, Oklahoma City, Washington, San Antonio and Austin — four are state or U.S. capitals and all have a large government workforce.

Oklahoma City's economy is not only diversified but, by coincidence, is strong in areas that are thriving — or at least not collapsing — in this recession:

•Government jobs: As a state capital, it has a jobs base that enjoys the stability of government — federal, state and local. Despite budget shortfalls across the USA, state and local government are among the few parts of the economy that have added jobs during the recession.

•Medical and education jobs: Oklahoma City has large medical facilities and universities, types of employers that have held up well in the recession.

•Energy jobs: Oklahoma City is home to the state's two largest oil and gas companies, Devon Energy and Chesapeake Energy.

The city also escaped the real estate bubble.

The area's median housing price is $129,900, up 4% from a year earlier, according to the National Association of Realtors. Nationally, housing prices were down 14% during that time.

"Our highs are not high, and our lows are not low," says Michael Bernard, president of the Mid-Continent Oil and Gas Association of Oklahoma.

April 2009 Recognition for Oklahoma

NewsOK.com was honored earlier this month as one of the top 12
newspaper media websites in the world by the International Digital
Arts and Sciences. The Washington Times, the New York Daily News,
USA Today and The Wall Street Journal were also nominated.

More than 667,000 visitors attended 50 events at the Ford Center
during the first quarter, according to SMG, which manages the
facility owned by Oklahoma City.

Bob Howard Toyota, 12929 N. Kelly Avenue, received Toyota Motor
Sales U.S.A. Inc.’s President’s Award for outstanding sales and
service. The dealership has received the award five times.

Four energy giants from Oklahoma earned spots on the annual Fortune
500 list of the country’s 500 largest publicly traded companies.
Oneok Inc. was 159th, Devon Energy Corporation placed 163rd, Williams
Company was 218th and Chesapeake Energy Corporation came in at 230th.

Baptist Medical Center and Oklahoma Heart Hospital were among the
top 125 hospitals in the nation on a list published by AARP The
Magazine. (The Journal Record, 04/01/2009)

Tulsa and Oklahoma City are among a select group of metro areas that
as of January hadn’t succumbed to the recession, according to
msnbc.com. (Tulsa World, 04/09/2009)

Oklahoma City is the winner of the “Mission:Orange” campaign by the
American Society for the Prevention to the Cruelty to Animals which
provides additional money and staff to shelters in the fight against
pet overpopulation. (The Oklahoman, 04/14/2009)

The number of visitors to the state’s tourism information centers is
up by 12% compared to last year, despite the economy. (Tulsa World,
04/14/2009)

Chesapeake Energy Corporation of Oklahoma City ranked 12th on Outside
magazine’s second annual “Best Places to Work” list. (The Journal
Record, 04/27/2009)