This is another post in our ongoing series on Social Media For Real Estate Professionals. We are now providing Social Media Solutions for real estate agents, mortgage brokers and other real estate professionals through our affiliated company, HubConnected LLC. Please contact us for more info.
A hyper-local real estate blog is a blog targeted at a single town, city, neighborhood, or even a subdivision/gated community. By focusing on, and providing content for, one (and only one) geographic area, a hyper local real estate blog can outperform a more broadly targeted website/blog for lead generation and Search Engine Optimization (SEO).
Why Hyper-Local Blogs Work For Real Estate
The real estate market is extremely saturated with agents who all have static websites and blogs which appeal more to the masses. Using a hyperlocal strategy can help set an agent apart from the sea of agents that are just blogging generally and don’t have a focused SEO strategy.
Today, consumers using search engines are increasingly searching for hyper-local, specific search terms, such as “Brookline, MA places to eat shop” or “Needham MA tennis courts”. A hyper-local blog, if properly managed, can rank high for these hyper-local search terms, even above the restaurants, stores or tennis facilities the consumer was originally searching for. If the consumer clicks on your hyper-local blog, and a trust relationship is created, BINGO, you’re in business and have created a relationship that may result in a lead or referral.
Finally, hyper-local blogging helps build relationships with not only potential buyers and sellers, but other members of the local business community that might provide referrals and other business opportunities. A hyper-local blogger can write restaurant reviews, promote referral partners, the schools, road construction, you name it. A hyper-local real estate blogger can quickly become THE local expert about their community–and that’s exactly where a real estate agent wants to be.
If you are interested in learning more about hyper local blogging, a good place to get started is at HyperLocalBlogger.com.
Here is an example of a hyper local blog for Glendale, CA. The Realtor, Kendyl Young, does an innovative series called 365 Things To Do in Glendale, CA where she posts something every day of the year.
It seems more outdated than hair scrunchies, something we witnessed years ago: discrimination against pregnant women seeking mortgage loans. Apparently it’s still going on and worse than ever which is why the U.S. Department of Housing and Urban Development (HUD) is investigating numerous cases of alleged pregnancy discrimination in lending. The New York Times recently wrote about it: Seeking a Mortgage, Don’t Get Pregnant.
Spurred by the financial crisis, lenders have created more stringent guidelines for granting loans to borrowers looking to buy homes, and have zoned in on pregnant women, essentially deeming them to be liabilities. Lenders are equivocating maternity leave with unemployment, which results in automatic disqualification or reduced buying power for a loan. Although some women on maternity leave can be entitled to temporary disability insurance, this disability insurance may not be used as qualifying income because it is allocated for a period of time less than three years. Women who are on maternity for only a few weeks are also affected, so the range of women denied loans is vast.
In the past, maternity leave was considered a break from work and was not taken into account when considering whether or not to grant a loan. In this financial climate, however, maternity leave has come to be viewed differently – as complete unemployment. So, lenders will not approve a loan until the mother is officially back at work. This subjects women to more red tape: providing documents from their employers specifying the length of their maternity leave and the date of their return to work, as well as letters from their doctors, and other information deemed relevant.
These new guidelines have resulted in too many claims of discrimination from pregnant women to ignore, and thus has resulted in the HUD investigation. If HUD concludes that discrimination against pregnant women and new mothers is indeed taking place, this could be a violation of the Fair Housing Act, one purpose of which is to protect families.
Some results of all this are that families are forced to wait until the mother returns to work (possibly rushing maternity leave), families are altogether giving up on buying homes, or families are purchasing homes that they can afford on one salary.
Families are feeling punished for having babies, and the irony that most families are buying new homes in the first place because they are expecting children does not fail to come through.
While tougher standards for approving loans have become an obvious step to take by lenders, these types of resulting consequences walk a dangerous line between what needs to be done, and unfair treatment towards one group of people. In either case, the allegations of discrimination against pregnant women reek of the sexism that was rampant in the professional world decades ago.
What do you think? Are pregnant women being treated unfairly, or are they indeed a liability to lenders because of the income gap resulting from their maternity leave?
With the students invading Boston any minute now, it’s a good idea to review last month’s rent and security deposits – one of the most heavily regulated aspects of Massachusetts landlord-tenant law and fraught with pitfalls and penalties for the unwary, careless landlord. In my experience, landlords who handle rent deposits correctly are the exception, rather than the norm.
If you don’t really know the rules for handling last month’s and security deposits, DON’T TAKE THEM. The reason is that any misstep, however innocent, under the complex Massachusetts last month’s rent and security deposit law can subject a landlord to far greater liability than the deposit, including penalties up to triple the amount of the deposit and payment of the tenant’s attorneys’ fees.
If a deposit is necessary, take a last month’s deposit, the requirements of which are less strict than security deposits. Here is an overview of the security deposit law:
Requirements For Holding A Security Deposit
The following steps must be followed when a landlord holds a security deposit:
When the deposit is tendered, the landlord must give the tenant a written receipt which provides:
the amount of the deposit
the name of the landlord/agent
the date of receipt
the property address.
Within 30 days of the money being deposited, the landlord must provide the tenant with a receipt identifying the bank where the deposit is held, the amount and account number.
Within 10 days after the tenancy begins, the landlord must provide the tenant with a written “statement of condition” of the premises detailing its condition and any damage with a required disclosure statement;
The tenant has an opportunity to note any other damage to the premises, and the landlord must agree or disagree with the final statement of condition and provide it to the tenant.
The security deposit must be held in a separate interest bearing account in a Massachusetts financial institution protected from the landlord’s creditors.
The landlord must pay the tenant interest on the security deposit annually if held for more than one year.
The security deposit may only be used to reimburse the landlord for unpaid rent, reasonable damage to the unit or unpaid tax increases if part of the lease. Security deposits cannot be used for general eviction costs or attorneys’ fees. Within 30 days of the tenant’s leaving, the landlord must return the deposit plus any unpaid interest or provide a sworn, itemized list of deductions for damage with estimates for the work. Only then can the landlord retain the security deposit.
What Do I Do If A Tenant Claims I Violated The Security Deposit?
First, talk with the tenant about the situation. Most issues can be resolved amicably, usually with the return of the deposit with interest. That’s always my advice to landlords. If that doesn’t work, call me.
Our Mortgage Guy, Brian Cav, is back with his Massachusetts weekly mortgage rate report.
Mortgage Rates are at all-time lows right now; 30 year fixed, 20 year fixed, 15 year fixed and even Jumbo Rates, and they are showing no signs of rising! I don’t see them going any lower but staying down at these levels for a while. What’s moving Mortgage Rates? No one really knows right now but this is usually what happens, bonds go up, stocks go down. Stocks go up, bonds go down. It’s really pretty easy to understand. However this mortgage market that we are in is no where near normal. In fact, it’s the total opposite, it’s like nothing we’ve ever experienced.
The housing market is stagnating at record low levels, refinance loans account for the majority of all present loan production. Credit guidelines are as strict as they’ve ever been, it’s really brutal. Home values are off by incredible amounts of inventory. Mortgage Rates are showing no signs at all of rising anytime soon!
30 year fixed mortgage rates remain in the 4.375% to 4.625% range. The 30 year fixed rate mortgage is 4.375% for a qualified borrower. 4.125% is presently being offered for two points.
Inquire within for current MortgageRates or guidelines [email protected] 617.771.5021
Economic Data
Wednesday’s bond market has opened in negative territory following modest stock gains. The Dow is currently up while the Nasdaq has gained. The bond market is currently down, which should push this morning’s mortgage rates higher by approximately .125 of a discount point.
There is no relevant economic data scheduled for release today. This leaves the stock markets to influence bond trading and mortgage rates. If the stock markets move higher from current levels, we should see bond prices fall and mortgage rates rise if the move is sizable. However, if the major stock indexes fall from where they are now, the bond market would likely improve, leading to slightly lower mortgage rates this afternoon.
The only relevant data scheduled for release tomorrow are weekly unemployment figures from the Labor Department. They will post the number of new claims for unemployment benefits filed last week, giving us a small measurement of employment sector growth. This data usually does not lead to noticeable changes in mortgage rates because the data tracks only a single week’s worth of new claims. Analysts are expecting 455,000 new claims, but it will likely take a fairly large variance for the markets to have much of a reaction to this data. This week’s release may carry a little more significance than usual because there is no other data scheduled for release that day.
Friday brings us the release of July’s Employment report that compiles several key employment readings and is based on an entire month’s worth of data. This is a very important report for the financial and mortgage markets and could lead to sizable changes to mortgage rates. I would not be surprised to see the traders prepare for the report by adjusting portfolios late tomorrow and Thursday. This could lead to some pressure in bonds or possibly improvements if market participants are betting on bad economic news coming. The results on mortgage rates should be fairly minimal and could easily be erased after the report is released Friday morning, but it is worth mentioning.
FLOAT or LOCK
If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days – FLOAT
If I was closing on a Home Mortgage in the next 30 to 60 Days – FLOAT
If I was closing on a Home Mortgage in the next 60+ FLOAT
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
We are pleased to have yet another guest blogger: Debra McPhee, CIC, CPCU, Owner of Suburban Insurance Agency of Holbrook, MA, and a very qualified Massachusetts Flood Insurance Agent. Debbie is here to write about flood insurance, a timely topic given the recent March floods.
A flood can devastate your home and your financial security. Any flood—even a small one—can cause thousands of dollars in damages. Even homeowners in low to moderate-risk zones are at risk. Up to 25% of all flood claims come from people living outside high-risk zones.
Flooding happens anywhere including right here in Massachusetts. Just recently, floods hit nearby towns. People discovered the hard way that when it comes to floods, no one is safe. You don’t have to live near a major waterway to be flooded. Sudden severe storms can cause flooding. Just because it has never flooded in your area, doesn’t mean it won’t.
You might think that your Homeowners insurance covers flooding, but it doesn’t. It covers all kinds of things, but not flooding. Flood insurance gives your home that crucial layer of protection your Homeowners insurance doesn’t provide.
What Is The Definition A “Flood”?
In simple terms, a flood is an excess of water on land that is normally dry. Anywhere it rains, it can flood. A flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow. Many conditions can result in a flood: hurricanes, broken levees, outdated or clogged drainage systems and rapid accumulation of rainfall.
Myth: Flood Insurance Costs Too Much
You might be surprised how inexpensive it is. The average flood insurance policy costs less than $570 per year. Most homeowners live in a moderate-to-low risk area and are eligible for coverage at a preferred rate with building and contents coverage for one low price. In fact, building and contents coverage starts at just $119 per year. If you live in a high-risk area, a standard rated policy is the only option for you. It offers separate building and contents coverage. If your home is in a high-risk flood area and you have obtained a mortgage through a federally regulated or insured lender, you are required to purchase a flood insurance policy.
How to Purchase Flood Insurance
Flood Insurance is written through the National Flood Insurance Program (NFIP), a federal program authorized by FEMA. Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. You need to contact a Massachusetts Flood Insurance Agent for a quote and/or application (all policies written by the NFIP are written through insurance agents).
Typically, there’s a 30-day waiting period—from the date you purchase the flood insurance—before the policy goes into effect. The waiting period, however, does not apply to a new home purchase or refinancing of a mortgage if the mortgagee requires flood insurance.
What is Covered by Flood Insurance – and What’s Not
The following is a summary of items covered and not covered by flood insurance. For specific details as to what is covered, you have to refer to the actual policy.
What’s covered under Building?
The insured building and its foundation.
The electrical and plumbing systems.
Central air conditioning equipment, furnaces, and water heaters.
Refrigerators, cooking stoves, and built-in appliances such as dishwashers.
Permanently installed carpeting over an unfinished floor.
Permanently installed paneling, wallboard, bookcases, and cabinets.
Window blinds.
Detached garages for up to 10% of the building limit; other detached buildings require a separate Flood policy
What’s covered under Personal Property?
Personal belongings such as clothing, furniture, and electronics
Curtains.
Portable and window air conditioners.
Portable microwave ovens and portable dishwashers.
Carpets not included in building coverage
Clothes washers and dryers.
Food freezers and the food in them.
What’s never covered by flood insurance?
Damage caused by moisture, mildew, or mold that could have been avoided by the property owner.
Currency, precious metals, and valuable papers such as stock certificates.
Property and belongings outside of a building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools.
Living expenses such as temporary housing.
Self-propelled vehicles such as cars, including their parts.
Debra McPhee, CIC, CPCU
Limitations to coverage in a basement
Coverage in a basement is very limited. It includes cleanup expense and items such as furnaces, water heaters, washers and dryers, air conditioners, freezers, utility connections, and pumps.
There is no coverage for the contents of a finished basement and improvements, such as finished walls, floors, and ceilings.
Personal property located in a basement is not covered.
Please call me, Debra McPhee, CIC, CPCU at Suburban Insurance Agent at 781-767-3300 and let’s talk about your flood insurance needs. Don’t let a flood wash away your financial future.
Similar to the obsession over Massachusetts real estate and addiction to the Multiple Listing Service (MLS) is our addiction to The Bachelor / The Bachelorette TV series. Many of us really didn’t want to admit that we were glued to the TV/DVR on Monday nights, or that we conveniently didn’t want to make plans, for fear of missing this show. For those who have much better things to do than to watch, the series revolves around a single bachelor or bachelorette (deemed eligible) and a pool of romantic interests (typically 25). The Bachelor/Bachelorette then go through a *grueling* series of dates with the pool of potential mates, weekly-elimination style, with the winner getting the “final rose” and possibly a marriage proposal.
As a busy Metrowest Massachusetts Realtor and an admitted fan of the show, I can attest that the process that each Bachelor and Bachelorette go through to find *true love* can be easily translated to the real estate home buying and selling process.
Buying & Selling Real Estate Is A Lot Like Matchmaking
Buying and selling a house is serious business. For most, you are buying or selling your largest single asset. In addition to needing data and supporting information to make a sound business decision, there is tremendous emotion that goes into the process. Getting married is more serious (well, to some), but the process is comparable. At the end of the day, if you have grown out of a house, you can sell it. Not as easy in a marriage.
There are so many commonalities between matching Bachelors/Bachelorettes and Home Buyers/Sellers. There is no such thing as a “typical” transaction/relationship. When representing either side, it’s so important to understand the people and what makes each person tick. On the Bachelor, the first night cocktail party actually makes a lot of sense from a home buying perspective. So often, on the first day out with a Realtor, a home buyer will see everything that fits the criteria “on paper” that they think they want in a house. Just because you want a 4 bedroom/2.5 bath Colonial, doesn’t mean you will like all of them. Many get eliminated from consideration on the first day. Unlike the show’s host, Chris Harrison, my job is to understand why you eliminated specific suitors and to make sure that you aren’t introduced to any more!
The Bachelor/Bachelorette Desperately Need A Real Estate Agent!
Jake & Vienna, (c) ABC, The Bachelor
If The Bachelor or The Bachelorette producers are truly serious about helping its “star” find love, I think that Host Chris Harrison should behave more like a Buyer’s Agent during the next season of The Bachelor. For those of you who already appreciate and understand the true value of Buyer’s representation, you are one step ahead. For those of you who think you are getting “a deal” without Agent representation, I have 3 words for you: Jake and Vienna.
Last season’s Bachelor, Jake, had no help. Vienna, his now former fiancée, was the pretty house with the nice big kitchen and partially finished basement. She is the house that is lived in, a house that is ready for you to entertain in. But there isn’t much upstairs. Bedrooms are small, possibly mold in the attic, the poor quality roof needs to be reshingled every few years, ice dams in the winter, and the garage door doesn’t close (catch my drift?). As soon as the season ended, so did they.
If, like a Real Estate Agent, Chris Harrison were acting in the best interest of the Bachelor/Bachelorettes, it would have been his responsibility to not only introduce the Bachelor/ette to the appropriate suitors matching their needs, but to:
Assess the TRUE value of each suitor (house)
Give the Bachelor/ette some history about the suitor and the suitors’ family (neighborhood/community)
Provide information that would reveal any work that has been done to the house, before it came on the market, along with permits, etc.
Work with the Bachelor/ette on their financing – will they be able to afford their choice? What will it cost to maintain the relationship?
Disclose any and all research about their history. If any liens (restraining orders) are in effect, this would be important to know
Very importantly – negotiate EVERYTHING on behalf of the Bachelor/ette
Manage the home inspection (home visits) – make sure the Bachelor/ette is asking the right questions
Make sure that everything proceeds smoothly prior to and at the closing (Fantasy Suite and beyond…)
Getting That Final Rose (The Keys)
Ali & Roberto, (c) ABC, The Bachelorette
Bottom line is that your Real Estate Agent is there to guard and protect your real estate purchase and your wallet. We want you to be as sure about your decision as Ali seems to be with this season’s winner, Roberto. We aren’t here to tell you how to decorate or to follow you around a house like the helicopter date in Bora Bora. We are here to guide you, to tell you if we feel you are making a mistake (Jake and Vienna). To negotiate for you. To point out the big issues that we see while you are ogling the gorgeous marble in the master bath (Ed & Jillian). If you want someone to agree with everything you are doing, bring your BFF along. It could be the most dramatic home purchase process ever or it could be truly enjoyable and exciting (Trista and Ryan).
When buying a home, you don’t want to make a mistake. You don’t want to second-guess anything (Jason & Molly). As Real Estate professionals, it’s our preference that you don’t show up on the cover of US Weekly in tears (or the equivalent). If you decide to buy or sell on your own, don’t come crying to us “After the Closing” when you realize that you overpaid for the house that has taken 3 years to sell or that your Buyer couldn’t get their financing and now you can’t close on your purchase (Brad Womack). We would rather be handing you the final rose at your closing.
Carole Daniels and Gabrielle Daniels Brennan are the #1 real estate team in Sudbury. As a top producing, award winning Mother/Daughter team, Carole offers over 31 years of successful Real Estate Sales and Marketing experience. Daniels and Daniels are #30 in New England and within the top 1% of Agents internationally. Gabrielle and Carole have been a team for 7 years. Prior to Real Estate, Gabrielle spent over a decade in sports and event marketing for ESPN, The Olympics, Coca-Cola, Arby’s and NIKE. They work 24/7 for their clients and love what they do. For more information go to: www.liveinsudburyma.com.
We attended the ActiveRain “Raincamp” seminar at the Boston World Trade Center earlier in the week, and wanted to share some great social media facts and tips that we learned. With 94% of all home buyer consumers starting their search online and Facebook just hitting over 500 Million users, Realtors who are effectively using social media are at a huge competitive advantage over those who aren’t. Thousands of leads are being generated online today, and you have to tap into that to be successful selling real estate today.
Here are a few of the lessons learned from the ActiveRain Camp…
Social Media Sites are Dominating the Internet
74.1% all consumers are online today, spending 32.7 hours/week online!
32% of time online is spent on some type of social media site
The fastest growing demographic on Facebook are females over 55. Yes, the grandmothers have figured out the best way to see pictures of the grandkids is on Facebook!
The top websites: 1. Facebook 2. Google 3. Yahoo 4. Youtube 5. MSN 6. Bing
The top social networks: 1. Facebook (55% market share), 2. YouTube, 3. Myspace, 4. Twitter
Facebook has over 500 Million worldwide users and 150 Million U.S. users
Facebook has 2.7Million users in Massachusetts
85% of available traffic come from search engines, namely in order, Google, Yahoo, MSN, Bing
94% of 24-44 year old’s search online for home buying
32% of buyers found the home they actually purchased online. (I found this to be one of the most impressive factoids).
Consumers don’t care anymore about big agency websites. They use Google as their home search start. They type in exactly what they want: “MA homes for sale”
61% of internet searchers think natural search results are more reliable. They know what are ads and what aren’t.
Blog Writing Tips
Write for the major search engines. That is, write articles you think potential customers are searching for on the Web.
Position yourself as expert for field or geographic location
Longer search engine searches account for 80% of search engine traffic. Ex: “Bellingham MA homes with waterfront” instead of “Bellingham MA homes.” Write posts that are hyper focused on those longer search terms.
Blog Post Ideas
Town School Rankings/District
Town Crime Statistics
Town Restaurants
Town Home Values/Trends
Town playgrounds, park and rec, lakes, ponds
Town sports
Town traffic, commute to Boston
Town neighborhoods/villages
Town shopping centers
Condos
55+ retirement projects
365 things to do
100 places to go
Feeling A Bit Overwhelmed With Social Media?
Starting a social media campaign for newbies can be very overwhelming and complicated because there are so many options especially for the technologically challenged. It’s best to consult with an expert before venturing out and making mistakes.
Since social media has been so successful for us as real estate attorneys and we have developed an expertise in the area, we have been giving very popular seminars on Social Media For Realtors at real estate broker offices across the state, and we have already helped numerous agents set up their own blogs and social media sites like Facebook Fan Pages. It’s been so much fun and successful that we’ve launched a new and exciting service for real estate professionals called HubConnected where we develop, build-out and manage all the various social media platforms for busy real estate professionals. That way, you can generate tons of online leads while concentrating on doing what you do best: selling real estate! Please contact me at [email protected]for more information, and look for more information here at the Blog.
Our Mortgage Guy, Brian Cav, is back with his Massachusetts weekly mortgage rate report. JUMBO is the name of the game this week.
I have never seen Jumbo Mortgage rates as low as they presently are right now. Absolutely everyone with a loan amount of $523,750 or greater (depends on county) should be reaching out to their Mortgage Banker for updated mortgage pricing, etc. The new home sales helped the stock market post strong gains yesterday, so when stocks advance, their gains come at the expense of higher interest rates. MBS prices are holding steady down near record highs and mortgage rates are holding steady near record lows. This is all I got this week… absolutely everyone under this beautiful summer sun should at least be attempting to refinancing your current home loan.
The lowest 30 year fixed mortgage rates remain in the 4.25% to 4.625% range. The standard mortgage rate with closing costs is still at 4.50%, 1 discount point of origination presently can get you 4.375% for qualified borrowers. Borrowers must have a mid FICO credit score of 740 or better and a loan to value of 80% or less.
Inquire within for current MortgageRates or guidelines [email protected] 617.771.5021
Economic Data
Wednesday’s bond market has opened relatively flat even though we saw weaker than expected results in this morning’s economic news and a negative open in stocks. The stock markets are posting minor losses with the Dow and nasdaq down. The bond market is currently up, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.
The Commerce Department gave us this morning’s important economic news with the release of June’s Durable Goods Orders. They announced a decline of 1.0% in new orders for big-ticket items when analysts were expecting to see a 0.7% increase. This data is known to be volatile from month to month, but this is still a sizable difference. Even if larger, more volatile transportation-related orders were excluded, we would have seen a drop of 0.6%. That was also well short of forecasts, indicating that the manufacturing sector may have been weaker than expected last month. Therefore, this data can be considered favorable for the bond market.
The Federal Reserve will release its Beige Book report at 2:00 PM ET this afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates as a result of this report.
Also today is the first of this week’s two Treasury auctions that may influence mortgage rates. Today’s sale is the 5-year Note auction while tomorrow brings us the 7-year Note sale. Their results will be posted at 1:00 PM ET both days, so any reaction will come during afternoon hours. If investor interest was strong, the bond market may rally and mortgage rates could move lower later today. However, lackluster demand could lead to bond selling and higher mortgage rates.
There is no relevant monthly or quarterly economic data being posted tomorrow. The Labor Department will post weekly unemployment figures early tomorrow morning, but this data usually has a minimal impact on mortgage rates. Since it tracks only a week’s worth of new claims for unemployment benefits, it takes a large variance from forecasts for the bond market to react enough to influence mortgage pricing. Analysts are expecting to see little change from the previous week’s 464,000 new claims.
FLOAT or LOCK
If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days – LOCK
If I was closing on a Home Mortgage in the next 30 to 60 Days – FLOAT
If I was closing on a Home Mortgage in the next 60+ FLOAT
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
High Court Overrules 100 Years of Massachusetts Snow Removal Law
In a much anticipated ruling, the Massachusetts Supreme Judicial Court overruled 125 years of legal precedent and announced a new rule of law that all Massachusetts property owners can be held legally responsible for failing to remove snow and ice from their property. The case is Papadopoulos v. Target Corp. and can be read here.
Rejecting the old common law rule that property owners could simply leave naturally accumulated snow and ice untreated and escape liability, the SJC held that all Massachusetts property owners must remove or treat snow and ice like any other dangerous condition on property. Justice Ralph Gants reasoned that “is not reasonable for a property owner to leave snow or ice on a walkway where it is reasonable to expect that a hardy New England visitor would choose to risk crossing the snow or ice, rather than turn back or attempt an equally or more perilous walk around it.’’
I am a landlord. How long do I have to shovel snow and ice on my rental property?
There is no clear cut answer to this question, and juries and courts will ultimately decide what is reasonable. The City of Boston’s policy is to give businesses 3 hours to clean snow, and 6 hours to residents. In Worcester, it’s 12 hours to clear snow. Those are the minimums. As with any dangerous condition, my advice is to shovel and treat snow and ice early and often. Even a thin coating of black ice can cause someone to slip and fall and seriously hurt themselves. (Admit it if you’ve dumped on your rear end like I have!). If you are an out-of-town landlord, you must hire someone to shovel your snow.
Am I required to shovel the public sidewalk in front of my house/business after a storm?
In most Massachusetts towns and cities, the answer is yes, and municipalities have the power to enact such bylaws and fine scofflaws. Check your local town ordinances for guidance. The cities of Boston, Cambridge, Somerville, Newton, Lynn, and Worcester (among others) all require property owners and businesses to clear municipal sidewalks in front of their residences or businesses. Fines are assessed against non-compliance. The City of Boston mandates clean sidewalks within 6 hours of a storm; Worcester is 12 hours. In Somerville, for example, if snow ceases to fall after sunrise (during daylight hours), property owners must shovel sidewalks by 10 p.m, and if snow ceases to fall after sunset (overnight), property owners must shovel sidewalks by 10 a.m. You can also be fined for shoveling snow onto the street, blocking a curb cut or putting snow on municipal owned property.
In some more residential towns, the local DPW will clear the sidewalks, but the default rule is that property owners are generally responsible for clearing their own sidewalks and driveways.
My lease states that the tenant is responsible for snow shoveling. Is that legal and will that protect me from liability?
Landlords have the primary responsibility for snow removal at rental property. Under the State Sanitary Code, property owners/landlords must keep all means of egress free from obstruction. As for the removal of snow and ice, the Code provides that the landlord shall maintain all means of egress at all times in a safe, operable condition and shall keep all exterior stairways, fire escapes, egress balconies and bridges free of snow and ice. A landlord may require the tenant be responsible for snow and ice remove in a lease provision only where a dwelling has an independent means of egress, not shared with other occupants, and a written lease provides for same. Otherwise, landlords are responsible for snow and ice removal.
Even if the tenant is responsible for snow removal under a legal lease provision, the landlord could still face personal injury liability for slip and falls on snow and ice under the Target ruling. A person who is injured due to untreated snow or ice will likely sue both the property owner and the tenant. The property owner must ultimately ensure that the property is safe for visitors.
Will my homeowner’s or CGL insurance policy cover any injuries from slip and fall on snow/ice?
Yes, usually. The standard Massachusetts homeowners insurance policy and commercial general liability insurance policy (CGL) will have liability coverage for slip and falls on property. Make sure you have ample liability coverage of at least $500,000 to 1 Million. (You can never have enough insurance!). As with any insurance question, it’s best to contact your personal insurance agent.
I’m just a regular ol’ homeowner. What if the mailman or delivery person slips on my walkway?
You may be liable if you left dangerous snow and ice on your walkway. The new law applies to every property owner in Massachusetts, not just landlords. Get some Ice-melt and sand and spread on your walkway. If it re-freezes overnight into black ice, you will remain liable. Get back out there and spread Ice-melt!
If you have additional questions, please ask them in the comment forms below!
We are pleased to have a new guest blogger, Jonathan Steinberg, a Certified Residential Appraiser with Abelis Appraisals which provides residential appraisals throughout Massachusetts. Jon was quoted extensively in a recent Boston Globe Magazine article on the challenges of appraising residential property. Jon is here to write about the recent overhaul of the Home Valuation Code of Conduct which revamped the residential appraisal system in the U.S.
This week Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is one of the most radical overhauls and reforms to the banking industry since the days of the Great Depression. The bill will fortunately “sunset,” or put an end to, the Home Valuation Code of Conduct, an ill-advised attempt to revamp the residential real estate appraisal system back on May 1, 2009. The HVCC impacted all Freddie Mac and Fannie Mae loans and has stirred up quite a bit of controversy within the real estate industry.
A Failed Experiment: The HVCC
The HVCC essentially re-wrote how lenders order appraisals. The HVCC’s goal was to remove incentives for mortgage lenders to apply pressure on appraisers to inflate values, understanding that lenders and mortgage brokers normally only get paid if a loan closes. No longer could lenders choose from their own roster of local appraisers who knew the local real estate market. Instead, the HVCC prohibited mortgage brokers from even communicating directly with appraisers, and required that appraisals be ordered through an independent Appraisal Management Company, or AMCs.
One of the biggest complaints of the HVCC and the Appraisal Management Companies is that local, reliable appraisers who had built relationships and business with mortgage companies at reasonable fees were suddenly shut out, and the new AMC appraisers frequently lacked the competency and knowledge of local markets. How could an appraiser from Burlington, Vermont come down to Winchester, MA and effectively appraise a home? Furthermore, while the HVCC may have succeeded at eliminating pressure to inflate appraised values, the common result was that an AMC could now set the market for the fees paid to the appraisers. The AMC profits by distributing appraisals who accept the lowest fees. Additionally, if for some reason the loan doesn’t go through with the first lender, consumers had to get a brand new appraisal for each lender, adding more time, and of course more cost, to the process. A further glaring conflict is that the largest national lenders have significant interest in their own, appraisal management companies. The lenders have created a profit center through the appraisal fee by passing on as little of the appraisal fee to the actual appraiser as possible.
What Remains Of The HVCC
Even with the passage of the financial overhaul bill, some of the HVCC’s skeleton remains. The new regulations still requires lenders to order appraisals and will have AMCs be prevalent in the process. Lenders can maintain their interest in appraisal management companies, however, appraisers must now be paid a fee that is “customary and reasonable” for that market area. Whatever that means. For the homeowner, appraisals should become more portable; the new rules are supposed to ensure the portability of the appraisal report between lenders or mortgage brokerage services for consumer credit transactions secured by a lien on the principal dwelling of the consumer. The to-be-created Consumer Financial Protection Agency will have the authority to protect the consumer and assure “appraisal independence” through the issuance of new appraisal rules within 60-90 days from the date of the legislation’s enactment. The HVCC is to sunset at the time the new rules go into effect.
Many questions remain however. How will these new rules look and how they will affect this industry? Will they create transparency so the appraisal fee reflects the fee paid to the appraiser and the fee paid to the appraisal management company is itemized on the HUD-1 Settlement Statement? Will borrowers be protected by ensuring that the appraisals are not simply awarded to the lowest bidder with the fastest turn around time, regardless of competency? Only time will tell.
Thanks Jon for the great insight. And thanks to Patrick Maddigan, Esq. of TitleHub for assistance with this post.
If the condominium project that you are buying into is involved in any pending litigation over construction or its common areas, chances are you will not be able to obtain a conventional loan under newer, strict Fannie Mae condominium lending guidelines. This is not good for condominium buyers, lenders, unit owners desiring to sell and condominium associations.
Fannie Mae underwrites the vast majority of mortgages in the United States today. Reacting to the condominium market meltdown, Fannie Mae (FNMA) substantially overhauled their condo underwriting rules, effective Jan. 1, 2009. The new rules require a 70% sell out threshold for new construction project, tough rules governing condominium finances, and new insurance requirements, among other tighter standards. The net effect is that condominium lending has gotten substantially more difficult to obtain, and the real estate industry and some lawmakers aren’t happy about it.
Pending Litigation Involving Safety, Structural Soundness or Habitability
The new guidelines exclude condominium financing for “projects in litigation, arbitration and mediation that arises out of a dispute as to safety, structural soundness or habitability.” Fannie Mae underwriters now look closely at any pending litigation involving the condominium, especially concerning its construction and common areas. I’ve seen several loans denied and canceled recently over pending condo litigation, regardless of the merits of the lawsuit. According to the Fannie Mae FAQ, if the litigation is minor and covered by insurance, lenders can ask Fannie for a waiver or exception.
So how can buyers and realtors protect themselves here?
First, prior to signing the purchase and sale agreement, make sure you ask the seller and the listing broker (preferably in writing to create a record) whether there is any pending litigation involving the condominium. Realtors should follow up with the board of trustees or management company. Attorneys can obtain access to the state trial court database to search for pending litigation.
If there is pending litigation, borrowers need to inform their lender, and get an answer whether this will affect the financing.
If you cannot get an answer by the signing of the purchase and sale agreement, use a clause in the agreement where the seller certifies there is no pending litigation (and assessments) affecting the condominium.
Buyers’ attorneys should also use a catch-all Fannie Mae contingency clause which gives the buyer an out if the condominium ultimately is Fannie non-compliant. This should give some additional protection to the buyer, especially where these issues often arise on the eve of closing and after the loan commitment deadline.
The Pendulum Has Swung The Other Way
What’s troubling about the new rules is that many condominiums are involved in litigation, some of which is meritless or frivolous unit owner suits. A lot of lawsuits are covered by the condominium master insurance policy so there is little risk of real loss. That Fannie Mae would summarily deny financing to these condominiums is disturbing to say the least. Overall, I believe that the pendulum has swung way too far. I wrote about this back when the rules were first implemented (still our most popular post), and it’s still true. But it’s the reality. Buyers and their advisers need to be aware of the situation.
In a few weeks, the *quiet* streets of Allston, Brighton, Cambridge, Boston and other Massachusetts tenant friendly cities will turn into the zoo that is known as student moving week. So it’s time to review frequently asked questions for Massachusetts landlord tenant rental law.
Screening Prospective Tenants
Landlords can legally ask about a tenant’s income, current employment, prior landlord references, credit history, and criminal history. Your rental application should include a full release of all credit history and CORI (Criminal Offender Registry Information). Use CORI information with a great deal of caution, however, and offer the tenant an opportunity to explain any issues. Landlords should also check the Sex Offender Registry to ascertain whether a potential tenant could be a safety risk to others nearby. Use the rental application and other forms from the Greater Boston Real Estate Board.
Under Massachusetts discrimination laws, a landlord cannot refuse to rent to a tenant on the basis of the tenant’s race, color, national origin, ancestry, gender, sexual orientation, age, marital status, religion, military/veteran status, disability, receipt of public assistance, and children. It’s best to stay away from asking about these topics.
Under a two year old Boston zoning ordinance, no more than four (4) full time undergraduate students may live together in a single apartment. The rule does not apply to graduate students or fraternity/sorority houses. The fines for violating this ordinance are stiff; don’t do it.
While on this topic, landlords should ensure that all roommates are signatories to the lease and are “jointly and severally” liable for rent. That way, if one tenant skips out, the remaining tenants remain liable for the full rent.
Students often create problems for landlords. Meet with students personally before signing the lease and firmly explain a “no tolerance” policy against excessive noise, parties and misbehavior. An ounce of prevention is worth a pound of cure here.
Pets
Subject to some restrictions, landlords may prohibit pets altogether or use reasonable rules to control them on rental property. Under federal law, a landlord cannot prohibit a qualified disabled tenant from using a service pet such as a seeing eye dog. There are also restrictions on prohibiting household pets for federally subsidized elderly and disabled housing project.
More topics, including last month/security deposits and illegal lease clauses, to follow next!
A mechanic’s lien is somewhat of a misnomer. It has nothing to do with auto mechanics. Rather, it’s a type of lien that general contractors, subcontractors and construction materials suppliers are allowed to record against a homeowner’s property to secure the payment of services, labor or materials. A mechanic’s lien creates a cloud on the title of real estate where their work, material, or services were provided.
Unlike most other liens, a mechanic’s lien does not require court approval. That’s why it is a very powerful tool for construction professionals to ensure that they are paid for their work, labor and supplies.
Mechanic’s Lien Requirements
The critical requirement to obtain a mechanic’s lien is that the contractor must have a written contract with the homeowner. Without a written contract in place, there is no entitlement to a mechanic’s lien.
The process of filing and recording a mechanic’s lien is very strict, and should be done under the guidance of an attorney. There are several notices and documents that must be recorded under strict time deadlines. Any misstep will result in a dissolution of the lien.
Who can obtain a Mechanic’s Lien In Massachusetts?
The mechanic’s lien law has been in existence in Massachusetts since the 1800’s, but lawmakers substantially overhauled it in 1997. The following types of construction professionals can file a mechanic’s lien:
general contractors
subcontractors and sub-subcontractors
machine rental companies
materials suppliers
lumber companies
demolition contractors
landscapers
utility contractors
site excavators
painters
civil engineers and architects
construction project managers.
How Does A Homeowner Remove A Mechanic’s Lien?
If the homeowner believes that the mechanic’s lien is improper, the mechanic’s lien law provides a summary procedure in the Superior Court or District Court to discharge a lien. Consult an experienced attorney in this type of situation.
If the parties can come to an agreement on what’s owed, the contractor can voluntarily dissolve the mechanic’s lien.
Owners can also “bond off” mechanic’s lien by procuring a lien bond from a surety company.
I Paid My Contractor, But His Subcontractor Just Filed A Mechanic’s Lien, What Do I Do?
Although subcontractors do not have a direct contract with an owner, they are nonetheless entitled to a mechanic’s lien for unpaid services/supplies. It doesn’t matter if the general contractor failed to pay his subcontractor. A subcontractor who attempts to file a mechanic’s lien, however, is subject to even stricter requirements under the new Massachusetts mechanic’s lien law, so consult an attorney to verify whether they have followed all the rules. Also, a subcontractor/supplier’s right to recovery is limited to the amount due under the prime contract at the time of the lien. Thus, the longer a subcontractor waits to assert a mechanic’s lien, the less money may be available to satisfy its lien. This can be overcome by serving a written notice of identification, which is a form set forth in the statute letting the owner and general contractor know the sub is on the job.
I always put indemnification/liability shifting provisions in construction contracts which make the general contractor responsible for any claims or liens asserted by any subcontractor. But that doesn’t necessarily prevent a subcontractor from filing a mechanic’s lien. If the lien is valid, you may have to bite the bullet and pay (twice) the subcontractor to release the lien. There is also a lien waiver mechanism where general contractors and subcontractors release lien rights upon progress payments, but they are infrequently used in residential projects.
Consult An Attorney
The Massachusetts mechanic’s lien process is extremely complicated, especially for the average homeowner and even for the experienced construction professional. While it provides a powerful tool for persons seeking payment for their securities in improving real estate, one seeking to enforce the mechanic’s lien must strictly comply with the statute requirements. The wise choice is to consult an experienced real estate attorney with respect to mechanic’s lien issues.
Under the new federal Lead Paint Renovation, Repair and Painting Rule (RRP), most home improvement projects on homes build before 1978 will require certified lead paint removal contractors to follow strict lead paint removal precautions. To comply with the new regulation, those working on older sites will need to invest in lead-testing kits, plastic sheeting, respirators, protective clothing and other lead-safety materials.
These rules will really impact Massachusetts because its housing stock is much older than other states’. According to a recent Boston Globe article, home improvement costs will no doubt rise due to the new rules.
The threshold for the new rules is whether the home improvement project will disturb more than 6 interior square feet of paint or 20 exterior square feet of paint. This extremely low threshold will cover virtually any home improvement project involving cutting into any wall or ceiling.
The only way to avoid taking the extra precautions is to have a certified inspector (which may be the contractor) perform an EPA endorsed lead paint test which results in a negative result.
The rules went in effect on April 22, 2010, and cover paid renovators who work in pre-1978 housing and child-occupied facilities, including:
Renovation contractors
Maintenance workers in multi-family housing
Painters and other specialty trades.
The new rules require that the contractor performing the work be certified with the Environmental Protection Agency (EPA). The certification process involves taking a day long training session on lead paint removal safety best practices.
Nothing in the new regulations requires owners to evaluate existing properties for lead or to have existing lead removed.
If you are seeking a certified contractor in the Greater Boston area, George Lonergan of Lonergan Construction, Inc., based in Framingham has been certified and has already performed several jobs using the new precautions.
Our Mortgage Guy, Brian Cav, is back from vacation with his Massachusetts weekly mortgage rate report. Interest rates are still hovering around historic lows.
Mortgage Market
Mortgage Rates are still at all-time lows and there is no real economic news due out this week to make any changes in the markets. The MBA Applications, Weekly Jobless Claims, and Fridays Wholesale Trade should all have minimal to no impact on Mortgage rates this shortened week. I hope everyone had a fun and safe Holiday weekend.
The conventional 30 year fixed mortgage rates remain in the 4.375% and 4.625% range for well qualified borrowers. To get the lowest possible mortgage interest rate on a conventional loan you must have a credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including one point loan discount fee. If you are seeking a 15 year term, you should expect those rates to be in the 3.875% to 4.125% range with similar costs.
Mortgage Rates are slightly higher than the all time lows set last week, but rates continue to hold near the best levels ever. I see very little to gain by floating so I continue to favor locking all loans closing in the next 30 days. In my personal pipeline, I have even locked a few clients on 45 day commitments to remove the risk of volatility.
Inquire within for current MortgageRates or guidelines [email protected] 617.771.5021
Economic Data
Wednesday’s bond market has opened in negative ground with no relevant economic news scheduled for release and the stock markets showing early gains. The Dow is currently up while the Nasdaq has gained 25 points. The bond market is currently down 6/32, but I believe we will still see a slight improvement in this morning’s mortgage rates due to strength late yesterday.
The stock markets opened strong yesterday also, but actually fell into negative ground during the day before closing with respectable gains. If the major stock indexes repeat that cycle, particularly closing well below current levels, we may see improvements in bonds this afternoon. Since it is an especially light week with no relevant data being posted today, this could lead to a downward revision to mortgage rates this afternoon.
However, the flip side of that scenario is if stocks extend this morning’s gains rather than retreat from their current levels. If the major stock indexes move higher, bonds could move lower later today. This would likely lead to an upward revision to mortgage rates this afternoon, but would probably be a minor adjustment.
The Labor Department will post weekly unemployment figures early tomorrow morning. This release usually has little influence on bond trading or mortgage rates, but with a lack of important data scheduled for release this week it may draw more attention than usual. Analysts are expecting to see that approximately 460,000 new claims for benefits were filed last week. The higher the total of new claims, the better the news for bonds and mortgage rates.
FLOAT or LOCK
If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days – FLOAT
If I was closing on a Home Mortgage in the next 30 to 60 Days – FLOAT
If I was closing on a Home Mortgage in the next 60+ FLOAT
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Congress gave home buyers some good news before the July 4th holiday weekend.
Home Buyer $8,000 Tax Credit Deadline Extended to September 30
Congress approved late Wednesday an extension to the June 30 closing deadline for the home buyer tax credit, hours before it was set to expire. The move will give would-be buyers who signed a purchase agreement by April 30 more time to close on those deals and receive the credit that is worth up to $8,000. The new deadline is Sept. 30.
The Senate approved the measure unanimously on Wednesday, one day after the provision sailed through the House of Representatives with little opposition. The President is expected to sign the measure soon.
Even better than the tax credit was Congress’ move to restore funding for the federal flood insurance program which had run out of money on May 31. Perhaps Congress read my prior blog post on this situation!
The Senate has passed the funding extension until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010 to the date of enactment of the extension. It’s a short term fix, but it will get closings completed for homes in flood zones. Congress will have to revisit this in September.
I’m excited to announce that our guest blogger, David Gaffin of Greenpark Mortgage, has jumped on the blog bandwagon, launching the Mass. Mortgage Blog located at www.massmortgageblog.com. David is a mortgage industry veteran who has a wealth of knowledge about all things mortgage and lending. I learn something new from Dave just about every day.
Dave’s got some good posts up on his blog already, so check it out and subscribe (as we will). Thanks!
I recently had a closing on a property in a flood zone almost fall apart because, unknown to everyone, Congress decided to let the federal flood insurance program run out of money. After doing some research, I was dismayed to learn that since the program expired May 31, home buyers have been unable to buy or increase their flood insurance coverage, and many lenders are unwilling to close on properties in flood zones until the program comes back online. When, or if, that may occur is anyone’s guess. Luckily, in my transaction we were able to transfer the seller’s existing policy to the buyers so the deal closed. But others aren’t so fortunate. Researchers estimate that for each day the program remains in limbo, approximately 1,400 closings for home purchases must be delayed, according to the National Association of Mutual Insurance Companies in Washington.
The National Flood Insurance Program Runs Out Of Money
Flood insurance is funded through the federal National Flood Insurance Program (NFIP). Congress appropriates funding for the program, but it inexplicably allowed the program to lapse for the fourth time in a year when lawmakers took the Memorial Day holiday without extending coverage. This lapse comes at a precarious time for lenders, owners, and buyers alike as forecasters are predicting a tumultuous hurricane season and buyers are pushing to close quickly in order to qualify for the first time home buyer’s tax credit.
Consumers with existing policies will not be affected and therefore will not see any interruption in their payments, said Rachel Racusen, a spokeswoman for the Federal Emergency Management Agency. However, renewals or increased coverage requests will not be processed unless Congress decides to renew the program. This means most closings on flood zone properties are in limbo until the program funding is restored.
Flood Insurance Tips
If you are selling or buying a property in a flood zone, you need to deal with this situation well in advance.
Buyers and their Realtors need to verify whether the property is in a flood zone in the first place. Here is the link to the FEMA Flood Zone Maps. Lenders will require a flood zone certification, but with the program out of money, you need to know way ahead of time.
Buyers need to address flood insurance with their lender right after they decide they want to purchase a flood zone property.
Sellers should contact their insurance agent to see whether their existing policy can be transferred to a new buyer.
Our Mortgage Guy, Brian Cav, is back with his Massachusetts weekly mortgage rate report. With near record interest rate lows, his sage advice, again, is to LOCK IN!
Mortgage Refinancing BOOM! Mortgage Markets are officially at 2010 lows and, extremely close to 2009 lows. We are “near record low” rates, and this is going to be as good as it ever will be, I know, I know… I sound like a broken record. The funny thing is rates are at all time lows and the Federal Reserve has stoppped buying mortgage backed securities a few months ago. U.S. housing and the U.S. economy is the reason for record low mortgage rates, the past 4 months it has all been about economic issues in Europe. Mortgage rates will not go any lower, LOCK in your refinancing or purchase mortgage financing very soon, I know, I sound like a broken record.
Inquire within for current MortgageRates [email protected] 617.771.5021
Economic Data
WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected and has not affected the markets or mortgage rates. The post-meeting statement did help influence opinions and bond trading. One of the points of interest was a comment that said the “economic recovery is proceeding” which differed slightly from the previous meeting that said economic activity continued to “strengthen.” Traders are taking that to mean the economic recovery is at a slower pace than previously thought.
The Fed indirectly indicated that concerns about Europe could affect that recovery, but said that they don’t expect that it to push the U.S. economy back into a recession. They also said that inflation remains subdued, which means there is no pressure to raise key rates anytime soon.
Overall, the lack of a change to rates has had no impact on the markets or mortgage rates, but the post-meeting statement was taken as favorable for the bond market. The lack of concern about inflation and the more cautious remarks on the status of our economic growth makes long-term securities such as mortgage-related bonds more attractive to investors.
The stock markets have changed little from their pre-announcement levels with the Dow up a couple of points and the Nasdaq still down a few points. The bond market is currently up, but I don’t think we will see a change to mortgage rates this afternoon since bonds had slipped slightly from morning highs before the 2:15 PM ET announcement. The bond market has improved slightly from its 2:15 PM level, but is still below where it was when rates were posted this morning.
May’s New Home Sales from the Commerce Department was today’s only relevant economic report. It revealed a whopping decline of 33% in sales of newly constructed homes, pushing sales levels down to record lows. This further indicates that the tax credits being offered to homebuyers were heavily supporting the housing market. That raises significant concerns about the growth ability of the housing sector now that they are expiring. This data is favorable news for the bond market and mortgage rates because a weakening housing sector will make a broader economic recovery more difficult and eases inflation concerns. Today’s data usually has little impact on trading and mortgage rates, but the size of decline has allowed the news to influence this morning’s rates.
The only important release scheduled for tomorrow is May’s Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show a decline of 1.3% in new orders from April to May. A larger decline would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing tomorrow.
FLOAT or LOCK
If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days – LOCK
If I was closing on a Home Mortgage in the next 30 to 60 Days – LOCK
If I was closing on a Home Mortgage in the next 60+ LOCK
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
In a huge victory for Massachusetts real estate closing attorneys, a unanimous First Circuit federal appeals court has overturned a controversial lower court ruling which had opened the door for non-attorneys to conduct controversial “witness” or “notary” real estate closings in Massachusetts. The lower court ruling threatened to overturn long-standing statewide practice under which attorneys conduct real estate closings, and open the door for the influx of “notary” or “witness” closings where buyers and sellers receive no legal guidance during the closing.
The First Circuit decision is found here. The lower court ruling is here.
Massachusetts Courts Have Final Say
The First Circuit ruled that the Massachusetts state Supreme Judicial Court has the final say on whether attorneys must conduct real estate closings under rules governing the unauthorized practice of law. The case will now move to the SJC, which may be more hospitable to the real estate attorneys’ position. The federal appeals court also vacated a $900,000 attorney fee award against REBA.
REBA’s Position
REBA and its members believe that non-attorney closings only hurt the consumer. In recent years, the real estate closing process has become as more complicated than ever. A myriad of Fannie Mae guidelines, disclosure requirements, and RESPA rules require the parties to review, understand and execute dozens of dense legal forms and disclosures. In an attorney conducted closing, a trained lawyer will carefully review each document with the parties and answer any questions which may arise. (Click here for our post on everything a closing attorney does). In “witness only” or “notary” closings, however, the non-attorneys who conduct the closings do nothing more than witness the execution of the closing documents, and cannot provide any legal guidance.
“The purchase of a home is the most important investment most families will ever make,” REBA President Thomas Moriarty has said. “Home buyers and sellers, as well as lenders, rely on the training, professionalism, and integrity of attorneys to ensure that their property rights are protected. The reason that only lawyers – who are those trained in the law – can give legal advice is to protect the public,” Moriarty said. “This requirement gives the buyer someone to hold accountable. These multiple levels of protection permit buyers, sellers and lenders to confidently and reliably close loans worth hundreds of thousands of dollars every day.”
The Cost Factor: Debunking The Myth
The appeals court also dismissed the closing company’s claim that requiring attorneys to conduct closings was an unconstitutional restraint on trade which would result in higher closing costs. As REBA President Tom Moriarty notes, and I can personally attest, the typical attorney’s charges in connection with a closing have steadily fallen as a result of increased efficiency and competition. This is not a situation where there is one company that controls the market. There are thousands of attorneys throughout the Commonwealth who provide conveyancing and settlement services, and the competition among them is fierce. The typical closing fees are similar or less than those charged by the closing companies.
My Take
As a real estate attorney who has worked tirelessly to build my own practice, I have a rather huge professional stake interest in this case. Despite this, I cannot see how, for the same cost, borrowers and home buyers would benefit from having a non-attorney drone sit at a closing and simply notarize the dozens of complicated legal forms and refuse to answer any legal questions which may arise. This is especially the case where the legal landscape keeps getting more and more complex. Further, a non-attorney notary cannot resolve many last minute closing issues which often arise, such as title issues, hold-backs, and indemnifications. Closings will become more inefficient and mistake prone.
This is, after all, the largest single purchase in most people’s lives. It’s not the time for do it yourself (DIY).
For more information about the unauthorized practice of law issue, please visit the REBA website.
Richard D. Vetstein, Esq. is regarded as one of the leading real estate attorneys in Massachusetts. With over 26 years in practice, he is a five time winner of the "Top Real Estate Lawyer" award by Boston Magazine, a "Super Lawyer" designation from Thompson/West, and "Best of Metrowest." For Rich's professional biography, click here. If you are interested in hiring Rich or have a legal question, email or call him at [email protected] or 508-620-5352.
