June 17, 2019

Quicken Loans has agreed to pay $32.5 million to settle claims that the lending giant resold faulty mortgages to the Federal Housing Administration. After the announcement of the agreement Friday, the lawsuit was dismissed by a federal judge.

In the lawsuit, the federal government accused Quicken Loans of not properly vetting FHA-insured loans by verifying borrowers’ income. Quicken Loans also allegedly used improper appraisals to issue larger mortgages, according to the lawsuit. Since the loans were insured by the FHA, Quicken Loans was paid even if the borrower defaulted.

Quicken Loans officials have denied any wrongdoing. The company did “nothing wrong” except pay for losses involving “human error,” Vice Chairman Bill Emerson told the Detroit Free Press. “Resolution is the right term, not settlement,” Emerson said, adding that the error was a 0.02% rate on some $108 billion in FHA-related lending since 2007.

Quicken Loans is one of the nation’s largest FHA lenders and will continue to remain in the FHA program.

“All parties fully understand the important role the FHA program plays in helping middle-class Americans access home financing, and this resolution allows the parties to move ahead together with that mission and to ensure their future relationship,” former federal judge Gerald Rosen, who was involved in mediation in the case, said in a statement. “The parties worked diligently and in good faith to mediate for a solution to resolve their differences and to put the dispute behind them.”

Source:
Quicken Loans to Pay $32.5M to Settle Lawsuit Over Bad Loans,” Associated Press (June 14, 2019) and “Quicken Loans to Pay $32.5 Million to Resolve Mortgage Suit,” Detroit Free Press (June 14, 2019)

June 18, 2019

The right home improvements could help shave energy bills by up to 35% or unlock up to $627 in annual savings, according to the U.S. Department of Energy.

Steve Chalk, who recently retired from his work at the department, told CNBC that a home energy assessment can help determine what the best savings projects are for a homeowner to take on. Home energy audits cost about $400, but the price greatly depends on the type of residence and its location.

“You could easily have payback for that [assessment] in a couple of years,” Chalk says. “You’re not only saving money in the long term, but your house is more comfortable, and your air quality can be better.”

Some of the big items that are sending energy costs higher in many homes: proper insulation, incandescent lighting, or air conditioners that aren’t the correct size.

Chalk says one of the most common mistakes he sees is that many homeowners have an air conditioning system that is too large. Therefore, it does not run as long as smaller ones, Chalk says. “[That] might sound energy-efficient, but it’s not,” he says.

Sealing up air leaks in heating and air conditioning ducts or crawl spaces can also offer energy savings, Chalk says.

Even small changes can add up, too. For example, switching from incandescent lighting to LEDs can increase a home energy efficiency by about 85% alone, he says. Programmable thermostats and power strips can also help save on bills.

Some cities offer incentives to help offset energy efficiency and renewable energy upgrades. Check the Database of State Incentives for Renewables & Efficiency website to search for incentives by state.

Living on a beach is the dream to many homeowners. But for many, the high cost keeps them from ever making it a reality.

However, you don’t need seven figures in your bank balance to buy in some beach towns. Realtor.com®’s research team analyzed the nation’s largest metro areas with the highest share of listings with keywords such as “beach,” “beachfront,” and “ocean.” They also factored in the number of water activities for their rankings. The beach towns were then ranked based on their median prices from May 2018 to April 2019.

The cities topping realtor.com®’s list as the most affordable beach towns to buy in this year are:

1. Jacksonville, N.C.

  • Median list price: $198,846

2. Aberdeen, Wash.

  • Median list price: $229,564

3. Atlantic City, N.J.

  • Median list price: $241,655

4. Myrtle Beach, S.C.

  • Median list price: $245,233

5. Palm Bay, Fla.

  • Median list price: $269,393

6. Port St. Lucie, Fla.

  • Median list price: $279,696

7. Virginia Beach, Va.

  • Median list price: $284,873

View the full list at realtor.com®.

Source:

The rising cost of building materials are leaving many homeowners in disaster-prone areas underinsured, warns a new study from CoreLogic. The increased costs are not being factored into insurance coverage, which means homeowners could be left with devastating losses and a huge cleanup bill.

The costs of labor and materials have increased significantly over the past two years, the study notes. Further, the risks from natural disasters including floods, wildfires, and hurricanes are also increasing. In 2018, there were 14 natural disasters in the U.S., from record-setting wildfires in California to costly hurricanes in Florida, that totaled $91 billion in reconstruction, according to the National Oceanic and Atmospheric Administration. “The financial impact of not updating reconstruction costs for two years is significant,” according to CoreLogic’s report. “If a catastrophic event were to affect only 5% of homes and cause just 30% storm surge damage to those 5% of properties, the reconstruction cost undervaluation is approximately $205 million.”

Insurers are rushing to recalculate coverage on homes that may be impacted by natural disasters, CNBC reports. In one study, CoreLogic researchers identified 110,000 Southern California properties that were in “very high” to “extreme” risk of wildfires. Costs are “significantly higher”—5.6% more–than they were two years ago because of higher labor and building material costs. Given the higher reconstruction costs, if just 1% of the homes at risk were completely destroyed in a wildfire, the undervaluation would be $25 million from insurance coverage not being current, the CoreLogic study shows.

CoreLogic’s study identified about 1.1 million properties at “very high” to “extreme” risk of loss from a storm surge in coastal hurricane-prone areas along the Northeast Atlantic and Gulf Coast regions. Factoring in recent building costs, reconstruction of at-risk properties in Florida is estimated at $240 billion.

Many inland metros at risk of floods and tornadoes face insurance obstacles, too. For example, Oklahoma averages about 56 tornadoes per year. About 1.3 million properties with $257 billion in reconstruction costs are at “very high” or “extreme” risk of damage. “If insurance on these homes is not valued at current cost levels, which have increased 6.6% over the past two years, homeowners could be left with huge losses,” CNBC reports. “If one tornado caused 20% damage to just 1% of the homes deemed at very high risk, the reconstruction coverage would fall short by approximately $34 million.”

In the event of a disaster, homeowners who lack adequate coverage are more likely to default on their mortgages, researchers note. If that becomes a wide-scale issue, some regions could see home values plummet as many homeowners fall underwater on their loans. “Underinsurance issues can cause financial devastation for property owners, artificially low coverage limits for insurance carriers, and increased loan delinquencies,” Amy Gromowski, senior analytics leader at CoreLogic, told CNBC. “Homeowners who experience natural hazard events, such as the California wildfires, are often struck by personal and financial devastation, and many aren’t able to rebuild their homes, which prolongs the region’s recovery and often causes homeowners to default on their mortgages.”

May 30, 2019

Shopping around for a mortgage can provide savings beyond just the interest rate. Borrowers could save thousands in lender fees as well.

Borrowers who collect up to five offers from mortgage lenders could save more than $2,000 on mortgage fees, according to a new study from LendingTree of 300,000 loan offers. These extra fees include the costs for a mortgage application, underwriting, origination, appraisals, and up to 16 other fees that borrowers are charged by lenders.

Some mortgage fees are flat fees. Others may be based on a percentage of the loan amount.

“Most aspiring home buyers are focused on saving for their down payment—and they may not have budgeted for additional thousands of dollars in fees,” the study’s authors note.

About 7% of new-purchase borrowers paid no fees when taking out a mortgage, and 15% paid less than $500. On the other hand, 13% of purchase borrowers paid $5,000 in fees and 3% paid more than $10,000.

Taxes, flood certification, city and county stamps, and recording fees tend not to be negotiable. But other mortgage fees may be, researchers say.

“You can skip the back-and-forth by shopping around for the best rate and fees before you commit to a lender,” the researchers note. “In our study, we looked at the savings available to the same borrower who received offers from multiple lenders. The median spread between the highest and lowest fees proposed was $2,045 for people who received five offers or more. That’s a lot of money to potentially save.”

It can be difficult to lend the illusion of more space to a home with low ceilings. A recent article at Houzz from columnist Becky Harris explains how you can make low ceilings appear higher.

Lourdes Gabriela Interiors

© Lourdes Gabriela Interiors

Use High-Gloss Paint to Your Advantage

Painting the ceiling a glossy white will allow the room to reflect more light, making it appear more spacious that it really is. Interior designer Lourdes Gabriela used glossy white ceilings in a Florida condo that, she said, was suffering from “oppressively low” ceilings. The short height of the ceilings was exacerbated by low-hanging track lights and short louvered doors. After giving the ceiling a glossy paint finish, Gabriela also used a flush-mount chandelier over the dining table to help lift the perception of the ceiling.

Contemporary kitchen

© MainStreet Design Build

Emphasize Long Horizontal Planes

Using horizontal design elements can actually lift the vertical parts of a room. It also distracts the eye from looking up. Designers with MainStreet Design Build used long horizontal display shelves on the walls in the kitchen to “draw the eye to the long horizontal planes and the objects on them,” Harris notes. The shelves command attention and lead people to notice the expanse of the wall instead of the challenges of a short ceiling. “The generous amount of white space between the top shelf and the ceiling makes the ceiling seem higher,” Harris writes.

Transitional kitchen

© Carl Mattison

Add Some Millwork

Floor-to-ceiling millwork not only gives a space an eye-catching design element but also can be used to lift the ceiling, too. Designer Carl Mattison added wall paneling to the open-concept dining space in an Atlanta cottage. “Seeing so many stacked squares lends the illusion of height,” Harris writes. “Painting the millwork and adjacent kitchen cabinets the same color keeps the room from feeling chopped up.”

Height isn’t the only reason to consider design elements that can showcase the ceiling in a different light. There are plenty of stylish ways to showcase the ceiling as a means of adding more depth to a room or more pizzazz to a home that may be lacking eye-catching qualities. Consider some of the design pops for the ceiling in the photo gallery below.

wood kitchen ceiling in loft

 

 

 

Source:
7 Ways to Make Low Ceilings Seem Higher,” Houzz (May 2, 2019)

April 30, 2019

Pending home sales were back on track last month, reversing course after last month’s drop. Three of the four major regions saw an uptick in contract signs in March, the National Association of REALTORS® reported Tuesday.

NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.8 percent last month over February, and contract signings reached a reading of 105.8. Still, contract signings are down 1.2 percent year over year, marking the 15th consecutive month of annual decreases.

Pending home sales have been volatile in recent months. However, NAR’s Chief Economist Lawrence Yun predicts the numbers to begin climbing more consistently.

“We are seeing a positive sentiment from consumers about homebuying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable,” Yun says.

Sales activity in the West has risen at a relatively stable rate for the past five consecutive months. The region saw a “significant spike” in activity in March, Yun notes. “Despite some affordability issues in the West, the numbers indicate that there is a reason for optimism,” he says. “Inventory has increased too. These are great conditions for the region.”

But overall, sales activity continues to “underperform” across the country, says Yun.

“In the year 2000, we had 5 million home sales,” he says. “Today, we are close to that same number, but there are 50 million more people in the country. There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”

March 2019 Pending Home Sales - Content reflects article text.

© National Association of REALTORS®

April 30, 2019

Newbie home buyers are more likely to shop around for a better mortgage loan term than repeat buyers, a new study from LendingTree shows. Studies have shown that shopping around for a mortgage can be a smart move, too: Home buyers could see a median lifetime savings of $40,959 in interest on a $300,000 loan by comparison shopping.
LendingTree researchers recently compared first-time buyers with repeat mortgage borrowers to see who is the more savvy shopper.

First-time buyers may be new to the real estate world, but they are entering the loan process prepared, the study confirmed. Fifty-two percent of first-time buyers consider more than one lender when choosing a mortgage, slightly more than 48 percent of repeat borrowers who do the same. Further, 29 percent of first-time buyers apply for a mortgage with more than one lender compared to just 20 percent of repeat buyers.
Researchers also note that first-time buyers may be more likely to shop around because they are concerned about qualifying for a loan. Only 24 percent of home buyers said they were very familiar with the different types of mortgages available, compared with 52 percent of repeat borrowers who said they were. Not surprising, first-time buyers also were less familiar with all aspects of the mortgage process, given it’s the first time they’re going through it.

Source: Lending Tree

April 16, 2019
An “electrical livable yacht” from Arkup

© Craig Denis

An “electrical livable yacht” from Arkup

As sea levels rise, architects are brainstorming ways to make homes more resilient to flooding. A floating unit is being singled out as a living solution for coastal areas.

Oceanix, a nonprofit that designs and builds floating cities, and the MIT Center for Ocean Engineering are showing off a futuristic concept of a floating city. The floating communities can expand, contract, and combine to form cities in prefabricated hexagonal islands of 4.5 acres that are able to house up to 300 people. Combine six of these islands and you could have a small city of 10,000, they estimate.

Modular floating villages could be clustered around a central port that offers shopping, health care, and other businesses. The islands would be designed to be self-sufficient, growing their own food and purifying their own water.

Researchers estimate that 90 percent of the world’s largest cities could be exposed to rising sea waters over the next few decades. Up to 2.4 million homes and more than 100,000 commercial properties are at risk of chronic flooding over the next 30 years, warns a 2018 report from the Union of Concerned Scientists.

Arkup home dining room and deck

© Craig Denis

Arkup home dining room and deck

Architects are responding to the warnings, and are even making disaster-proof homes available now—for a hefty price. The Florida company Arkup recently touted the houseboat of the future—an “electrical livable yacht,” which combines a luxury yacht, waterfront villa, and a floating motor home, all incorporating self-sustainability. It boasts 2,300 square feet of rooftop solar panels to power it at shore. But it’s getting lots of buzz for its apparent ability to withstand a Category 4 hurricane.

Arkup home living room

© Craig Denis

Arkup’s floating home living room.

The Arkup, divided between the main and upper decks, boasts 4,350 square feet of indoor and outdoor living space. It’ll be costly to buy; the purchase price starts at $5.5 million and goes up to $12 million.

Adding Resilience to Homebuilding

Prices remain high for disaster-proof homes, but as disasters mount, will buyers be willing to pay more for resilient architecture?

“Resilient buildings provide value for our stakeholders because they withstand extreme weather and natural disasters more effectively, and they reduce the cost and waste associated with damage and reconstruction,” according to “A Culture of Resilience,” a sustainability report from Prologis, a warehouse firm that has about 3,200 facilities across 19 countries.

Prologis has outfitted its Japanese warehouses with seismic isolation systems that are capable of absorbing earthquake shocks and also have back-up energy and water supplies, Forbes.com reports.

“When hurricanes and earthquakes hit North America and typhoons struck Japan last year, our buildings stood strong while our teams mobilized immediately—keeping our customers in business or putting them back in business quickly,” Prologis CEO Hamid Moghadam told Forbes.com.

More reports are calling for global real estate to do more to protect itself from natural-disaster threats. “Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” according to the 2018 U.S. National Climate Assessment report, issued by the U.S. Global Change Research Program, a program mandated by the U.S. Congress comprising 13 federal agencies.

Source:

April 17, 2019

This week’s fire at Paris’ Cathedral of Notre Dame is bringing a realization that historic buildings may be prone to such tragedies. The fire spread through the wooden attic, bringing down its 300-foot spire and engulfing two-thirds of the roof, and occurred over just an hour.

Notre Dame's interior from below

lauramusikanski – Morguefile

Building the cathedral attic required the wood of more than 1,300 trees. Attics tend to be dry spaces and, when dust and debris accumulate, they can be even more flammable, fire experts say.

“Once these massive timber structures start to burn, they almost never can be stopped,” Jonathan Barnett, an international fire safety authority at Basic Expert in Australia, told The New York Times. “We focus on their masonry walls and forget all the massive timber within.”

Firefighters were able to save the Norte Dame’s two massive bell towers and at least one of the stained glass windows, but the quickness of the fire is testament that more may need to be done to protect historic buildings, which may be among the most vulnerable to fires. The cause of the Notre Dame fire is still under investigation.

In 1979, the Trinity Congregational Church, a 19th-century church in Gloucester, Mass., caught fire and burned to the ground within minutes. Renovators were using a blowtorch to melt old lead paint in the building, instead of scraping it off, when the fire first broke out. Three years ago, the Serbian Orthodox church in Manhattan was also destroyed by a fire.

“When you combine ancient webs of timber and a large volume of open space, you have the ideal situation for a raging inferno,” Forbes.com reports.

The National Fire Protection Association says that about 31 American congregations burned from 2007 to 2011.

Fire safety experts say historic cathedrals’ wooden roofs are made of flammable materials and can be difficult to reach when fires break out.

“These cathedrals and houses of worship are built to burn,” Vincent Dunn, a fire consultant and former New York City fire chief, told The New York Times. “If they weren’t houses of worship, they’d be condemned.”

But a big question remains: How do you retrofit historic buildings to meet fire safety codes without destroying part of the history? The U.S. Department of Interior’s Advisory Council on Historic Preservation and the General Services Administration published “Fire Safety Retrofitting in Historic Buildings” in 1989.

“Fire safety improvements support historic preservation objectives, as such improvements ultimately will protect the property from extensive damage in a fire incident,” the report states. “In most cases these improvements can be accomplished without significantly altering the historic features of the property.”

Source:
Notre Dame Fire Shows Just How Vulnerable to Disaster Historic Churches Are,” Forbes.com (April 16, 2019) and “How the Notre-Dame Cathedral Fire Spread,” The New York Times (April 16, 2019)