Scotsman Guide - August 2011 Residential Edition

From the Editor

BY IVANNA C. SUKKAR, EDITOR

Being green isn’t AlwAys cheAp — or convenient. But for mortgAge
professionAls And their clients, it is Becoming eAsier.

as americans become increasingly aware of their own carbon footprints, many strive to lessen their impact. For homeowners, this often means trading down to smaller living spaces, cutting home-energy costs or making energy-efficient upgrades to their homes. and for the mortgage originators who help these homeowners buy or refinance their homes, this means learning about the financing options available.

and these options are expanding, as Susan Frost of alliance Mortgage and Marketing points out on Page 21. From energy-efficient mortgages to a pilot program from the U.S. Department of Housing and Urban Development that allows homeowners to finance energy improvements, originators can build their toolkit to help clients who seek green financing.

also, in this month’s BackSpace (Page 66), associate editor Darrick Meneken discusses the business opportunities that exist for mortgage originators who embrace green financing.

Legislation affecting green home financing also may not be far behind. the Sensible accounting to Value Energy (S.a.V.E.) act, if passed, would add energy to the complete cost of homeownership. Under this bill, principal, interest, taxes and insurance (PItI) payment calculations would expand to include expected annual energy costs (i.e., PItIE).

a question that often arises about green homes and sustainable living revolves around value. are energy-efficient homes appraised differently than others? the appraisal Institute’s Joseph C. Magdziarz writes about valuation issues with green homes in his article on Page 42.

U.S. housing developments also are changing since the economic downturn, and many communities are moving toward urban, close-in developments. this benefits residents, who often have more access to public transportation and use less energy by living in smaller homes, as well as the cities, which minimize their greenhouse-gas emissions. andre Shashaty, president of the nonprofit Partnership for Sustainable Communities, talked to us this month about this move toward greater sustainability in housing. Read that interview on Page 16.

Energy efficiency and green-home financing have come a long way in the past decade. Mortgage and real estate professionals, along with their clients, likely will find that it’s now easier to be green and to contribute to sustainable living.

ivannas@scotsmanguide.com

NEXT MONTH

… in September’s Scotsman Guide

•;Educating;clients;about
foreclosure avoidance
•;Why;stubbornness;won’t
get you anywhere in today’s
market
•;How;a;paper;jam;is;affecting
New Jersey
•;A;convicted;fraudster;opens
up from prison

… and much more.

Online? Check out current and past editions of Scotsman Guide at scotsmanguide.com.

TIP OF THE MONTH

Leave a lasting impression

When a company establishes itself in the community through the use of a distinct image, a sustainable image is left with its patrons. Carefully choose the image that will represent your company. Consider one that lends itself to a variety of possible promotions, giveaways and sponsorships. By associating your company with a theme, you can create an idea and image within the community that will benefit the organization.

— GARY OPPER, APPROVED FINANCIAL CORP., GAR Y@APPROVEDFINANCIAL.COM

In the Past Month
Foreclosure auctions
increase in May

IRVINE, Calif. — Nearly 90,000 U.S. home sales this past May involved houses auctioned as part of a foreclosure process, Realtytrac reported.

Foreclosure auctions increased 3 percent from april to May to 89,251, Housing Predictor said.

While auctions increased 3 percent, foreclosure filings declined 2 percent in May compared to april and 33 percent compared to May 2010, Housing Wire reported.

In May, one out of every 103 residential units in Nevada was involved in foreclosure, giving the state the highest percentage in the country for 53 consecutive months. arizona had the second highest rate, followed by California.

Pending home sales increase,
new- and existing-home sales decline

Pending U.S. home sales increased this past May, indicating a busier second half of the year for the housing market, the National association of Realtors reported. the group also reported that sales of existing homes slipped in the same month, noting the housing inventory at the end of May was 3.72 million homes, a 9.3-month supply.

New-home sales also fell from april to May, according to the U.S. Commerce Department. the department said the average sales price for a new home sold in May was $266,400.

Next release Existing-home sales: Aug. 18 New-home sales: Aug. 23 Pending home sales: Aug. 29

Unemployment picture
varies widely

WaSHINgtON, D.C. — twenty-four states saw their unemployment rates decrease this past May, while 13 saw increases, the U.S. Department of Labor reported. the department said 13 states experienced no change.

Florida added the most nonfarm jobs in May, gaining 28,000. Ohio added 12,000 jobs in the month, while arizona and Louisiana added 10,000 each.

the largest declines were posted by California (down 29,200), New York (down 24,700) and Pennsylvania (down 14,200).

the unemployment rate was highest in Nevada ( 12.1 percent) and California ( 11. 7 percent) and lowest in North Dakota ( 3.2 percent).

B of A to set aside
$14 billion in settlement

CHaRLOttE, N.C. — Bank of america said it would set aside $14 billion to settle claims that mortgage securities it sold to big investors turned into toxic securities. the bank said it was ready to pay $8.5 billion in claims made by the Federal Reserve Bank of New York, Pimco, BlackRock, INg Capital LLC and 18 others.

the bank said the settlement would resolve “nearly all of the legacy Countrywide-issued … mortgage-backed” securities the bank absorbed when it bought Country wide in 2008.

Family debt soars
with second child

COLUMBIa, Md. — a debt-management firm said the second child in a U.S. family is apt to increase the family’s credit card debt out of proportion to the first.

CareOne Services found that the average credit card debt for families without kids was $13,992 in 2010. With one child, the average debt grew by 3 percent to $14,351. adding a second child to the mix, however, pushed the average credit card debt to $16,815.