Bon Voyage HUD-1!!!
Come get social with us at booth 625 as we bid the HUD-1 farewell and cruise to the new disclosures.
Hanging from a sheer cliff face in Peru’s sacred Valley of Cuzco, three transparent capsules have been installed, providing accommodation for particularly intrepid guests. To reach the sleeping pods, lodgers must first climb 400 feet (122 meters), or hike an challenging trail using ziplines before enjoying the impressive views of the mystical valley.
Clinging to the rock face, the Natura Vive Skylodge is composed of three capsules measuring 24 feet in length and 8 feet in height and width. Each unit is handcrafted from aerospace aluminum and weather resistant polycarbonate, and comes complete with four beds, a dinning area and a private bathroom — separated from the bedroom by an insulated wall.
The suites feature six windows and four ventilation ducts that ensure a comfortable internal atmosphere. An alternative lighting system consists of four interior lamps and a reading light, all powered by solar panels.
After months of denying requests from real estate, mortgage and settlement service industry professionals and trade groups to either delay implementation of the TILA-RESPA Integrated Disclosures (TRID) regulation or agree to enact a “hold harmless” enforcement period, the Consumer Financial Protection Bureau (CFPB) announced today that it will push the Aug. 1 implementation deadline to Oct. 1.
The industries that will be affected by the regulation will now have two more months to prepare their mortgage processing systems, staffs and partners for the sweeping mortgage transaction changes.
The new implementation date came as a relief to many who have been concerned about their ability to comply with the new rule due to technical and operational challenges — not to mention tackling the onslaught of other mortgage industry regulations thrown at them in the last two years — but many are wondering why the bureau had a sudden change of heart.
According to CFPB Director Richard Cordray, the bureau “made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”
In its announcement, the CFPB did not elaborate on the nature of its “administrative error.” However, a spokesman from the CFPB told Inman that the bureau failed to timely notify Congress about the Aug. 1 deadline, a responsibility it has under the Congressional Review Act, which requires agencies to submit the rule to Congress and the Government Accountability Office 60 days before the effective date.
Had the CFPB submitted the rule to Congress and the GAO, its submission should have included a copy of the rule; a concise general statement relating to the rule, including whether it is a major rule; and the proposed effective date of the rule.
Many in the industry are curious about why, after months of trade group letters and comments, testimony in congressional hearings to push for a lenient enforcement period through the end of the year and even federal legislation calling for the CFPB to hold the industry harmless as it adjusts to the sweeping changes, the bureau refused to delay implementation — only to abruptly reverse course less than two months before the Aug. 1 deadline for something as seemingly innocent as an “administrative error” and children starting a new school year.
And some are wondering if that’s the real reason behind the delay.
On March 26, Inman reported that one industry professional, speaking on condition of anonymity, predicted that the CFPB would “announce a delay right after June 18,” which happened to be the date that mortgage industry software provider Ellie Mae planned the release of an update to its mortgage management system, Encompass.
The update included TRID support, but for software that supports about 80 percent of the loan origination systems at small and midsized banks to be released less than 60 days before TRID implementation — during the busy summer months, no less — there are bound to be glitches, our source said.
Other sources tell Inman that other software used by some of the top mortgage lenders and settlement agents in the country “blew up” this week.
Regardless of the reasons behind the CFPB’s announcement, many in the industry are breathing a collective sigh of relief and retooling their preparation efforts for the fall.
“You’ve got to give them credit for pushing the effective date to October,” said Michelle Korsmo, CEO of the American Land Title Association (ALTA), which from the CFPB’s release of the final rule in November 2013 has been the industry trade group that has taken the lead in the educational, training and preparation efforts. “The bureau could have changed the effective dates for a shorter period of time.
“Clearly, the bureau listened to the concerns that industry has for consumers. Consumers would be helped even more if the CFPB also announced a specific hold-harmless period for industry to understand how the forms will work in real-life transactions. Under TRID, some mortgage lenders and settlement service providers may initiate additional risk management tactics that could slow the closing process for homebuyers.”
National Association of Realtors President Chris Polychron said in a statement that “Realtors appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers. We will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation.”
And Mortgage Bankers Association President and CEO David H. Stevens lauded the CFPB for continuing “to prove itself capable of working in a transparent, constructive manner throughout this process.”
“The complexity of this rule, which impacts not just mortgage disclosures but also the business processes behind the entire real estate transaction, warrants the additional time to get it right and ensure that consumers are not adversely affected by the transition,” Stevens said.
“MBA will be providing comments on this proposal to recommend the best way to implement the delay in a manner that protects consumers and mitigates disruptions for lenders in the middle of this complex conversion.”
We likely won’t know the full details of what happened at the CFPB until it issues an official proposed amendment to delay the effective date of the TRID rule. The public will have an opportunity to comment on this proposal, and a final decision is expected shortly thereafter.
But we are already hearing that some companies that have been testing new or updated mortgage processing software in the last two weeks are experiencing significant technical glitches.
Attorney General Pam Bondi filed a complaint against two Clearwater businesses and their president, alleging the companies defrauded consumers out of thousands of dollars in a land buying scheme.
According to the complaint, Property Solutions International Corp., Premier 1 Property Inc. and Marvin Scott promised consumers they could sell their property for many times the value of the land.
The defendants, who also conducted business using the names Coast to Coast Land and FSBO Property Solutions, charged upfront fees on average of $2,250 for brokering the deals, sometimes promising to refund most of the money, but rarely following through on those promises, a statement said.
State records list Scott as president of Property Solutions International in Clearwater. He’s also listed as president of Premier 1 at the same Clearwater address, although Premier 1 was administratively dissolved in 2013 after not filing an annual report, the Division of Corporations said.
The complaint seeks restitution for 34 complainants who paid more than $70,000 to Scott and the two businesses.
A few years ago, my husband and I moved into a gorgeous Craftsman-style house in the Pacific Northwest. It was chockablock with original details like dark wood paneling, stained-glass transom windows … and a 100-square-foot, totally enclosed kitchen in a faux country style—think yellow oak cabinets paired with linoleum countertops. And though we found most of the historical elements quite charming, the kitchen needed a complete overhaul.
So we hired an architect who hatched a plan to steal some space from the nearby office area. But he didn’t want to stop there. He also wanted to knock down the wall between the kitchen and the formal dining room, to give us the open-concept kitchen that it seems just about everybody else has these days.
We balked. Lose the cool, old-fashioned swinging door? And the opportunity to leave my kitchen a mess during dinner parties?
Heck no. Because after having grown up in a New York City apartment where public and private spaces were blurred—both bathrooms were en suite, so guests had to traipse through our bedrooms to use the loo—I loved the idea of an older house’s separate rooms. (Remember Julia Child’s famous quip: If you drop something, “you can always pick it up if you’re alone in the kitchen. Who is going to see?”) To me, they aren’t isolated and inconvenient, but rather refined and gracious. Though open kitchens may be all the rage, let me dare to say right here: I’m anti-open kitchen.
For much of domesticated human history—until mid-past century—I wasn’t alone in the enclosed-kitchen camp. Walk into an American home built before the 1950s, and you’ll most likely find the kitchen tucked away in a far-off corner of the main floor. Rarely visited by guests and not a place where the family spent much time, the kitchen was separate and functional, not designed for hanging out.
“The equipment was usually along the periphery,” explains Virginia McAlester, author of “A Field Guide to American Houses,” “meaning that anyone who entered the kitchen was most likely greeted by the cook’s back.” Or they wouldn’t see the cook at all—how often does Lord Crawley visit Mrs. Patmore on “Downton Abbey”?
Only that wasn’t thought of as hugely rude or anything, because most social interaction occurred either in front parlors (for welcoming guests) or in dens (primarily just for family). Not having to touch a hot pan was a sign of status.
These days, the kitchen is the place to entertain, thanks in part to mid-20th-century technology that made appliances fit into the cabinetry, not stand freely and hoard all the free space.
“The kitchen was becoming quieter, cleaner, better organized and easier to work in,” writes Porch.com. “In essence, the kitchen was becoming a source of pride.” These days, you flip on HGTV or pick up a flier for an open house in your neighborhood and chances are they’re heralding an open-concept kitchen. They’re great for wooing guests while cooking, or so goes the current real estate lore.
“Food preparation is central to how we entertain and socialize,” says Erin Gallagher, chief of insights for the Research Institute for Cooking & Kitchen Intelligence. “It’s how we live today.” Nine out of 10 kitchen designers, she says, report that their clients want their living, dining, and cooking spaces to flow together.
There’s a practical reason for their popularity, too. In an age when houses are getting smaller for the first time since 2007 (the median size of a new U.S. home in 2010 was 2,169 square feet, up from 1,525 square feet in 1973 but down from the 2007 peak of 2,277 square feet) and house prices are rising like never before, open kitchens maximize space and minimize cost. In a closed-plan house, there are more doors and walls, more trim and details needed to delineate various rooms. And to build all that requires more tradespeople, like electricians and carpenters. Consequently, open-plan kitchens have become the new normal. There’s more natural daylight in an open kitchen, too.
And here’s another bitter pill for the fan of the closed-off kitchen to swallow: Open-concept kitchens might help boost a home’s resale value.
“The most common conversation I overhear when showing a property to potential buyers is ‘Is this wall load-bearing? Can we knock it down to open things up?’” says Arthur Jeppe, a principal Realtor® with Read & Jeppe in Newport Beach, CA. “So no matter how gorgeous a home is, it will most likely sell for less if the kitchen is separate.”
OK, so those are compelling reasons, but I remain unconvinced. In part it’s because I find it beyond challenging to turn out culinary masterpieces (or even just a nice meal) while guests are chatting around me in the kitchen, and also because I just don’t believe it’s a good time to “entertain” anyone while I’m wielding a knife and managing fire. Plus, I’m happier when my whole world—especially my living room furniture—doesn’t smell of bacon grease.
Astronaut Images/Getty Images
As it turns out, others might be starting to see things my way. Hilarious and blasphemous blog posts detailing the difficulties of actually living with open floor plans have started to dot the Internet. (“‘Oh my gosh I dropped the chicken!’ In a perfect world, no one would know. Open floor plan? Well, it’ll be tweeted in minutes.”)
Some architects are seeing an uptick in clients asking for separate kitchens.
But interest is also stemming from sophisticated younger clients rediscovering the value—emotional, if not financial—in drawing a line between public and private space.
“Many properties are designed for a mass market, and in order to appeal to as many people as possible, they include trends like an open-concept kitchen,” says Lindman. “But there’s also a market for interesting, well-thought-out separate spaces. It’s just that they appeal to a group with a more curated aesthetic.”
“People think they should love open-plan kitchens because they’ve been told to love them,” says Merson, who thinks galley-style kitchens are underrated. “They can be fine for low-impact prep like chopping, but real cooking is messy work and requires a great deal of concentration.” (Man, it feels good to be validated by a professional!)
So could it be a backlash against open-concept kitchens is emerging? Or maybe this is now just one of those things that you have to be either totally for or dead set against. Either way, I’m glad we bucked the trend and kept our separate kitchen. And if you ever come to my house for dinner and experience just how often we set the smoke alarm off, you’ll be glad we did, too.
So which kitchen is right for you? Here are a few concepts to consider as you decide:
If you tend to do takeout or don’t mind your mess being visible, then an open-concept kitchen could work for you. But if you’re into preparing elaborate meals and prefer to concentrate while cooking, then consider a space that’s separate from your home’s main living areas.
In most states, changing walls requires building permits—and structural modifications can affect your home’s resale value. So before making plans to knock down an existing wall or rough in another, figure out if your long-term plan includes staying put or needing to appeal to other homebuyers in the future.
It’s easy to be dazzled by professional photos of dream kitchens, but what works well in one space might not in another. Consider your own home’s ceiling height, amount of wall space, windows, and views when creating a plan to fit your kitchen and living space.
Some architects value separate kitchen spaces while others think they’re outdated. So if you’re considering closing off your cooking space or shopping for a house that features a closed kitchen, consider working with a builder or Realtor who has an eye for creative elements that make separate spaces feel airy (think a bank of windows, skylights, or glass doors).
A Brentwood, Tennessee homeowner’s association is threatening to sue a family if they don’t take down a wheelchair ramp in the next week. Per KPHO:
Charlotte Broadnax retrofitted her house with a small ramp after her husband Michael Broadnax suffered a stroke late last summer.
As a result, the homeowners association for the Woodlands of Copperstone is threatening to sue.
“The association demands that within 14 days of the date of this letter, you remove the wheelchair ramp and restore the exterior of your home,” Charlotte Broadnax said, reading from the letter.
” [The Declaration] authorizes the association to come onto your property and remove the ramp and charge you with the work,” Charlotte Broadnax read.
The letter then reads, “If you force the association to sue you, it will seek a court order” and charge the Broadnax’s for attorney’s fees
Unfortunately, this is not the first time a homeowner has experienced issues with an HOA.
HOA super liens are an issue as of late. The court recently upheld a law that allows homeowners associations to foreclose on homes ahead of first-mortgage providers, giving HOA assessments “super-lien” status that extinguishes first deeds of trust.
There is a constant debate over the true pros and cons of living in a HOA. While some buyers view HOA rules negatively, others say the regulations protect home values and the community for everyone, an article from Bankrate said.
At least for the Broadnax family, the situation appears to be looking up.
Kathleen Sutherland, director of training and technical services at Ghertner and Company,which manages the homeowners association, sent the following statement to Channel 4.
“The governing documents for this community require that all exterior improvements receive prior approval. A letter was sent to the owner regarding the ramp as no application for approval had been received.
“The board did not know the ramp was for the homeowner, Mr. Broadnax. The association would like to work with the owners on a compromise regarding the appearance and location of the ramp and compliance with any applicable codes.”
Recently, USA Today reported on the influx of foreign real estate buyers in Miami. Since I live in Miami I’m seeing this first hand. But it’s the same story in New York, Los Angeles, Houston, San Francisco, Vancouver, Toronto, and to a lesser degree in other cities in the U.S. and Canada. Foreigners are investing in U.S. and Canadian real estate in droves. There are plenty of reasons for this but the big question is, what are brokerages doing to capture this business?
If you are not actively pursuing the foreign real estate buyer, or at least making it easier for them to do business with you, you are missing huge opportunities. Some things to consider:
The statistics are off the charts and money will continue to flow into the U.S. If you are not improving your position now you are missing out on huge opportunities to tap into a very lucrative market.
Citing a Detroit Free Press story from April about Anthony Carta, who was sentenced to 30 to 99 years in prison for perpetrating a “faith-based” foreclosure relief scam in which he promised to help distressed borrowers avoid foreclosure in exchange for an up-front fee. Carta marketed the alleged foreclosure relief services of his company, Freedom by Faith Ministries, through various unwitting Christian channels from 2009 and 2013 and collected money but did not provide any of the promised services. For his part in the scam, Carta was ordered to pay $400,000 in restitution to more than 300 victims.
On the blog, Freddie Mac points out the number of recent mortgage relief or foreclosure relief scams that were perpetrated by exploiting the members of a particular community.
“The idea behind ‘affinity fraud’ is to exploit the baseline trust that generally exists within an ‘affinity group’ – i.e. a group defined by a common heritage, language, ethnicity, workplace, or circle of friends,” Freddie Mac wrote. “What happened in Detroit is a sad reminder that no group is inherently safe from fraudsters, including devout and religious people.”
One of the steps Freddie Mac lists for borrowers to take in order to avoid being the victim of a scam is, first and foremost, calling your servicer. The borrower’s servicer is the only one who can modify the mortgage or finalize a loss mitigation plan – anyone other than the servicer who professes the ability to do so is a scammer, especially if they require the payment of an upfront fee.
Second, outside of your servicer, borrowers can receive reliable advice by seeking free assistance from a HUD-approved housing counselor. Freddie Mac also says on the blog post that anyone who promises to pay the mortgage and rent the house back to the borrower in exchange for the title to the house should raise an immediate red flag. The GSE also warns borrowers against signing documents with errors or blank spaces, documents they don’t understand, or documents that transfer the title of the home – since genuine mortgage workouts or home retention solutions will never require the title of a home to be transferred.
Freddie Mac encourages anyone who suspects fraud to report it by calling (800) 4FRAUD8 or emailing firstname.lastname@example.org.
In Portland’s hot real estate market, where some homes are getting dozens of offers and bidding wars have sent prices skyrocketing, one buyer found a way to stand out among the rest: Offer free pizza every month for life.
Donna DiNicola, owner of DiNicola’s Italian Restaurant in southeast Portland, might have been joking when she offered the pizza, but it worked. Her offer for a 900-square-foot house in southeast Portland for her 23-year-old son was accepted.
“It was really a joke,” she said. “I swear to you I did not know that made it into the paperwork.”
DiNicola, who has been in business for 38 years, saw the Portland market heating up and encouraged her two sons to start looking.
“I thought, well, time is ticking and we’ve got to get into this market,” she said, adding the house was perfect even though it was at the top of their price range after offering $275,000 and two months of free rent for the sellers.
“Donna’s offer was just so compelling and the fact that she offered 60 days of rent back for free, which is practically unheard of,” said Holly Marsh, the home seller. “And then the pizza part was just hilarious. It just goes to show they really did something to stand out among the offers.”
Marsh, who has a 5-month-old baby and a son turning 4 on Thursday, said they might just take up that pizza offer for their son’s birthday dinner. Marsh, who designs and sews baby items locally, said the family decided to sell after outgrowing their Portland home.
The housing market in Portland is exploding as more people flock to the area thanks to national top 10 lists and shows like “Portlandia.”
“Everything’s going pending in a couple days. Almost everything’s getting multiple offers,” said Nathaniel Bachelder, Urban Nest Realty listing agent for the loosely dubbed “pizza house.” He added housing inventory for March and April was less than two months.
DiNicola said the minute they walked into the house for her son, they knew it was the one.
“We just went ‘Wow,’” she said, adding she is thrilled to share her pizza with Marsh and her family. “They can have whatever they want.”
Congratulations, new grads: You’re free! After four long years at college, it’s time to move on to the next stage of your life: adulthood.
That means you get to start thinking about exciting things like your first job, a 401(k), and—sexiest of all—homeownership. And while you might still be sleeping off those Jell-O shots from last night, it’s time to wake up, chug some water, and start preparing yourself financially—if buying a house happens to be one of your long-term goals.
Start preparing now, and buying a house won’t be a struggle. “If you make good money, you have a clean credit rating, and you’ve got enough money set aside for the down payment, buying a house is not really a big hassle,” says Stewart Koesten, the chief executive and executive chairman of KHC Wealth Management in Overland Park, KS.
Sounds easy, right? Make money, save money, have good credit. Ta-da, a house! Not so much: Getting your finances in order for homeownership can be a challenge, even if your goal isn’t a luxury mansion. Here are seven ways to start achieving those goals right now.
Sure, your mailbox may be overflowing with credit card offers and the idea of “paying the bills” still seems a bit confusing, but now’s the time to start getting your credit score in shape. One simple way to start building a history: Get your first credit card, because the credit bureaus consider the average age of your accounts when evaluating your score—and you’ll want a great score when it’s time to buy a house.
But if you have a history of overspending, this may not be the right solution for you. A long credit history with a high balance and poor on-time payment record will do more damage. One option might be a secured credit card, which is backed by a cash deposit that’s usually equivalent to your limit. That way, you can never spend more than what you have available.
“There’s not too much difference between a good and a great credit score, in terms of buying a home,” Koesten says. The maximum score is 850, but once you get above 700, the only major advantage a better score will get you is a few points difference on your interest rate. “A bad credit score will hurt you. If you have a credit card or debts you didn’t honor, and you messed up your credit in the process, it will be detrimental to the whole process,” he says.
If you have student loans, a credit card may not be necessary. They also contribute to your score, so focus on paying them down regularly (and on time) to improve your rating.
It might be a little too late to change your major, and we’d never suggest passing up your dream job just for money. But if you’re still evaluating your career path (i.e., you really have no idea what you want to or can do for the rest of your life) and homeownership is your dream, make sure to keep finances in mind when you’re searching.
It’s not just about the salary: Does the company match your 401(k) contributions? That will save you tens of thousands of dollars down the line. Are there career opportunities in the cities where you’d like to eventually purchase a home? Everyone should do what they love—but first, make sure that the career you crave is aligned with the lifestyle you dream of.
If you’re like most young Americans, you’ll be coming out of college with a mound of debt. (The national average for a 2015 grad is $35,000!) It’s easy to ignore it, but balancing a mortgage and your student debt payments is a big burden, even with a generous salary.
Make paying off your debt your No. 1 priority, even if it means sacrificing other goals in the short term. For instance, if you have the opportunity to live at home while working for a few years, do it! (Seriously, we’re not judging—just know what you’re getting yourself into.) Or give up smaller pleasures, like Starbucks and gym membership, until you’ve paid down your debt. Short-term independence is a worthy sacrifice for long-term freedom. Plus, making regular payments will help improve your credit score.
If you’ve graduated college with credit card debt, make that the priority: The super-high-interest rates that come with most student credit cards can make them a crippling financial burden for years to come.
You’re young—it’s OK if you don’t know a ranch home from a Colonial. (Unless you were an architecture or urban planning major, in which case, uh, maybe brush up on Design 101 before graduation.) But you should start thinking about where you want to live and how you want your future lifestyle to look. Would you feel lost without a yard? Or are you more of a city person, dreaming of a pristine rowhouse?
Even if you’re just looking to buy a starter home or studio apartment and save the dream home for your future, it’s important to keep in mind how you’d like to live.
First, make sure your financial future matches up with your ideal location.
“If you have a modest income in an area that requires higher incomes to live well, you have to adjust your expectations and live where you can afford,” Koesten says. “Don’t try to be too aggressive with your finances.”
Don’t worry if you haven’t mapped out all of the specifics yet. Even a general idea of your goals can help you develop a financial plan that meets your future needs.
No one’s surprised that homes are expensive—you can see the price right there on the listing! Your dream home might cost more than four years’ tuition, but you just need to save up for the down payment, right?
Not so fast. What can be surprising is how much is due upfront: In addition to your down payment, you’ll have to pay for a home inspector, any relevant taxes, and a bevy of closing costs. Together, they can add up to 5% (or more) of the home’s price.
“Make sure you have sufficient reserves, so when you do eventually buy a home you’re not tapping all your resources,” Koesten says. “You want enough money left over after you buy the home to give yourself a little cushion.”
Sure, it seems like a lot of money—it is a lot of money!—but the sooner you start socking money away, the sooner you’ll be able to start looking for your dream home.
Don’t treat the housing market like a casino and gamble with your future home.
As tempting as it might be, dumping your home savings into the stock market willy-nilly could lead to major trouble if there’s an upset right before you’re looking to buy. Either hire a financial adviser or stick to high-interest savings accounts and CDs.
“You want to make sure that in 10 years, the money you’ve saved has a high probability of being there,” Koesten says.
It’s fun to make money: More nights on the town! A bigger apartment! You can finally get a dog!
Rein in your impulses, and never change your lifestyle because of your salary. A big jump in income is a huge temptation to spend more on eating out or entertainment or weekly happy hours, especially if you’ve been living on a college student budget.
Our advice? Ignore the impulse. The No. 1 way to throw off your financial goals is to fall prey to lifestyle inflation. Raises and bonuses serve you best tucked away in your savings—even if that’s not as much fun.
Your first home doesn’t have to be your forever home. You may love the idea of a white picket fence and multiacre lawn—but it’s OK to start saving with a smaller home or apartment in mind. If you’re planning on staying in one place, purchasing a modest house or studio apartment can be an excellent beginner home. Don’t feel bad if you can’t afford your dream home off the bat: You’ve got many years left to save.
So, are you ready to get out there and start saving for a house now? We sure hope so. After all, you’re not getting any younger.