It was a thin, pathetic little fox terrier that wandered onto Mom and Dad’s farm a few months ago.
Less than a year old, she was obviously homeless and hadn’t eaten much in a long time. But despite her hard-luck life, the dog was very friendly. She stole the hearts of her new human companions.
Foxy, as she’s now known, has gained some weight, is joyfully bouncy, has made some new doggy friends, and seems perfectly at home in her new environment.
For all of us, house and home mean security, warmth, and a sense of belonging. Unlike our animal friends, of course, we must consider economic issues that impact our housing choices and situations.
|Lora Bray is research librarian at CUNA.|
It’s important, therefore, to remember that in mortgage lending there’s more at stake than a simple refinance, first home purchase, or “routine” foreclosure process. Emotions are an important part of real estate transactions—each such experience is far from routine from the member’s perspective. Our sensitivity to this will be rewarded with member loyalty, repeat business, and referrals.
Homeownership and housing trends prevail in this week’s research findings. Let’s walk through the front door and say hello!
“Despite the fact that the number of homeless people was essentially unchanged between 2009 and 2011, there is much reason for concern… Economic and demographic indicators linked to homelessness continue to be troubling… and effects of the poor economy… are escalating and are expected to continue to do so over the next few years,” reports the National Alliance to End Homelessness in “The State of Homelessness in America 2012.”
We know living expenses vary by location. This topic is explored in “Worldwide Cost of Living 2012: Which City is the Most Expensive to Live in? Which City is the Cheapest?” by the Economist Intelligence Unit.
Check your wallet before moving to Zurich, the world’s most expensive city. Tokyo claims the second-place prize.
What variables do your members evaluate when considering how much of their income to spend on housing? Are your members inclined to over-extend themselves, or could they perhaps accept more debt?
Life on the farm also gets a mention this week. “Trends in U.S. Farmland Values and Ownership” by the USDA Economic Research Service examines the economy’s effect in rural areas:
“In the past few years, U.S. farmland values have been supported by strong farm earnings, which have helped the farm sector in many regions to withstand the residential housing downturn. Historically low interest rates are likely a significant contributor to farming’s current ability to support higher land values.”
In 2011, the number of farms in the U.S. was estimated at 2.2 million, a slight decrease from 2010, according to “Farms, Land in Farms, and Livestock Operations: 2011 Summary,” also by the USDA.
You’ll learn here that “Farm numbers and land in farms are broken down into five economic sales classes… Sales class breaks occur at $10,000, $100,000, $250,000, and $500,000.”
Is your credit union involved in agricultural lending? In your mortgage portfolio, how do rural residences perform compared with those from urban settings?
Refinancing is an important part of the housing scene. “Fact Sheet: President Obama Announces New Steps to Provide Housing Relief to Veterans and Servicemembers and Help More Responsible Homeowners Refinance” issued by The White House, summarizes strategies aimed at supporting a housing market recovery.
* Extension of foreclosure protections for servicemembers serving in harm’s way under the Servicemember Civil Relief Act;
* Provision of compensation for servicemembers wrongfully charged excessive interest rates after a valid request to lower the rate; and
* Short-sale agreements and deficiency waivers shall be provided to “servicemembers who were forced to sell their home for less than they owe on their mortgage due to PCS (Permanent Change in Station), but who are not eligible for HAP (Homeowners’ Assistance Program).”
For more on refinances, see “FHA Announces Price Cuts to Encourage Streamline Refinancing” by the U.S. Department of Housing and Urban Development.
It says potential “borrowers need to be current on their existing FHA-insured mortgages which were endorsed on or before May 31, 2009… By refinancing through this streamlined process, it’s estimated that the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month.”
Is your credit union affected by these refinancing situations in any way?
Some borrowers might feel left out in the cold, according to “Government-Mandated Down Payments Would Block Creditworthy Home Buyers,”by the Center for Responsible Lending.
“As federal regulators consider setting down-payment standards on new mortgages, a new study shows such rules could push 60 percent of creditworthy borrowers into high-cost loans or out of the market altogether.”
For another angle on mortgages, see “Mortgage Loan Fraud Reports of Suspicious Activity Rose in Third Quarter 2011 Compared With Third Quarter 2010,”by the Financial Crimes Enforcement Network.
It reports, “As housing markets look to recover, criminals persist in their efforts to prey on struggling homeowners while financial institutions continue to uncover apparent fraud as they work through their portfolios of earlier mortgages now in default.”
“Be it ever so humble, there’s no place like home.” Whether your members live on a farm or in the penthouses of Zurich, they need confidence in their mortgage lender.
Know the housing trends, and be the institution that makes the difference!