Scotsman Guide - February 2009 Residential Edition

SALT LAKE CITY

Photo: Steve Greenwood

This past April, Forbes magazine ranked Salt Lake City No. 6 among recession-proof U.S. cities.

One factor that led to this ranking is the city’s relatively low unemployment rate. Plus, Utah continues to add jobs to bolster the economy.

Indeed, the city has a wide variety of employers and industries, from manufacturing and the service sector to technology and transportation. Further, its strong economy likely has helped the Utah capital weather the housing storm and keep home prices steady.

What the Locals Say

“Having a variety of employers here helps our low foreclosure rate. People don’t stay unemployed unless they want to. When one company lays off [employees], it isn’t like the whole economy takes a dive. Plus, we’re always bringing new employers to town.”

— Diane Martin, owner, Mortgage Specialists Inc.

In fact, Salt Lake City’s home-price drops and slower sales have been significantly more conservative than other cities around the country and compared to the national average.

This past October, for instance, its median home price showed a 0.7-percent decrease compared to October 2007. Nationally, prices fell by 11. 3 percent in the same period, according to the National Association of Realtors.

Vitals Population: 180,651

■

Population in 2000: 181,743

■

Rank (U.S.): 125th-largest

■

Metropolitan-area population: 1.1 million

■

Metropolitan-area rank: 48th-largest

Average commute: 20.1 minutes

■

Average commute in 2000: 19.2 minutes

■

U.S: 25 minutes

Median household income: $43,000

■

Median household income in 2000: $36,944

■

U.S.: $48,451

Median age: 31 years

■

Median age in 2000: 30 years

■

U.S.: 36. 4 years

Unemployment: 3. 4 percent

■

Unemployment in November 2007: 2.6 percent

■

U.S.: 6. 7 percent

Market Median home price: $228,450

■

Price in October 2007: $230,000

■

U.S.: $191,600

Median monthly housing costs: $1,296

■

Median monthly housing costs in 2000: $1,116

■

U.S.: $1,402 National foreclosure rank (state): 28th (out of 51)

■

Rank in October 2007: 28th

Homeowner-vacancy rate: 2.6 percent

■

Vacancy rate in 2000: 2.1 percent

■

U.S.: 2.7 percent

Total home sales: 822

■

Total home sales in October 2007: 1,020

Housing inventory: 6,487

■

Inventory in October 2007: 5,829

Housing units (including one-unit, two or more units, and mobile homes): 80,057

■

Housing units in 2000: 77,054

Industry Single-family conforming-loan limit: $600,300

■

Conforming-loan limit in 2008: $729,750

■

U.S.: $417,000 Licensing: Mortgage-officer applicants must complete 20 hours of approved education and pass a mortgage-officer exam before applying; submit fingerprints; and pay a $171 nonrefundable fee that includes the application fee, recovery-fund fee and fingerprint-processing fee.

State association: Utah Association of Mortgage Brokers

■

Online: www.uamb.org

Résumé

Demographics: 81 percent white, 4 percent Asian,

4 percent black, 1 percent American Indian/Alaska Native, 1 percent Native Hawaiian/Other Pacific Islander,

9 percent other; 24 percent identify as Hispanic or Latino Largest private employers (county): Intermountain Health Care, Wal-Mart, Delta Air Lines, Discover Financial Services, Zions Bank Management Services 2nd-least-stressful U.S. city ( bizjournals.com)

Most charitable U.S. city ( bizjournals.com)

Ivanna C. Sukkar is senior associate editor at Scotsman Guide. Reach her at (800) 297-6061 or ivanna@scotsmanguide.com.

First-person accounts from mortgage professionals

Getting Personal

By Gary Lacefield, president and senior consultant, Risk Mitigation Group

A new F-word, “foreclosure,” now haunts millions of homeowners. Real estate professionals of all types can’t help but take some of the blame for that. For those of us planning to stay in the business, we must improve our practices and ourselves if we want to survive.

So how can mortgage brokers improve their businesses and their service?

Thinking about this question often reminds me of the time my daughter, then 24 years old, and her husband wanted to buy their first home. They lived in the Dallas-Fort Worth, Texas, area and had a solid income and modest debt. In evaluating their situation, a loan officer qualified the couple for a $135,000 loan.

My daughter freaked. She couldn’t believe it. In her eyes, there was no way they could buy that much house. In fact, when they calculated their budget, she and her husband figured they could afford about half that much.

Fortunately for them, they knew the importance of budgeting and of understanding what they could truly and reasonably afford. Although they heard they could buy a more expensive house, they prioritized fiscal responsibility. They also didn’t want to harm their credit scores or their economic security by getting behind a mortgage they couldn’t repay.

Because of these things, they ultimately bought a $65,000 home that they will always remember fondly as the first place they owned.

What did I tell my daughter when she asked my advice during this time? Some of the same things that mortgage brokers should make sure to tell their clients:

■ Don’t buy more house than your budget allows.
■ Don’t overpay for fees.
■ Don’t make any unnecessary purchases during the
homebuying process.
■ Do pay for a home inspection.
■ Do make sure that the escrow account is calculated
properly and won’t come up short.
■ Do understand all of the terms on every loan
document.

I would like to say that helping my daughter with her home purchase taught me something important about how to deal with clients. In reality, it’s just the opposite. The things I learned during two decades in the real estate finance industry taught me how to help her.

Maybe that’s the secret: Treat everyone like the people you care about most, and you’ll never find yourself leading people into loans they can’t afford. Mortgage brokers who are willing to start there can help end today’s financial nightmares and begin to return a sense of pride to the American dream. Maybe then we can forget about this new F-word and get back to what we do best — help people buy homes.

Gary Lacefield is president and senior consultant of Risk Mitigation Group, a financial- and regulato-ry-compliance firm that specializes in fair-lending and fair-housing issues. The company’s expertise includes forensic mortgage audits, quality-control audits, compliance, insurance and the Real Estate Settlement Procedures Act. Reach Lacefield at (817) 472-1100 or gary@riskmitigation.net.