Bryan Head Shot 2011Bryan Sherman is the Senior Vice President and Regional Sales Executive at Bank of America in Dallas. And, for a banker, he’s a pretty funny guy. When I asked him exactly WHAT he does at BofA — I love to give anyone from the Big Three a hard time, because frankly, I prefer smaller local banks and lending institutions — he said, “I’m in charge of all those B of A loan officers running around the street!”

And of course, he’s competition to Well Fargo! Boo-yah!

Bryan tells me that today’s first time home homebuyers are in a better place than their parents ever were. Despite all the ick we slogged through since the financial crisis peaked in mid 2007, the millennials are buying homes and getting mortgages.

“We believe that education is the key to mortgage success,” says Sherman, “and at BofA we are trying to put owners in sustainable home ownership that they can comfortably afford.”

Sustainable is a great buzz word meaning homes they can afford.

As regular readers of this blog know, our market in Dallas has flipped into a seller’s market. The latest Case-Shiller index showed home prices up up up more than 12.2% in May, and Dallas home prices are now 7.6% higher than they were a year ago. I was at a showing recently, and the seller had friends coming over for a glass of wine. All the guests talked about was how they were going to rush home and put their homes on the market, now, too, because values were up and you sell high. Yeah, herd mentality.

Even Steve Brown is getting so disturbed I may need to send him some Preparation H.

So yeah, I said, it may have been a great deal for these kids to buy a home back in the doom and gloom days when President Obama rolled out that first time homebuyer’s tax credit. I know my kids sure took advantage of it, and then just sold that first place and rolled equity over into a second home.

So maybe this market stimulation is coming from some of those buyers, buying up.

“It’s really important that we sit down with clients and educate them about the products out there,” says Sherman. “Every single customer has a unique situation.”

We are still in a full document environment, and every loan depends on the customer’s personal scenario as to whether they should get an ARM or fixed rate product, he says.

Yes, interest rates are rising, but are still at record lows: parents of today’s millennials recall 18% interest rates on homes in the early 1980’s.

“We are nowhere close to that,” says Sherman. Phew!

Interestingly, Freddie Mac economists even declare housing remains affordable. Rates would have to inch up to 7% before housing costs would phase middle class families, says Freddie.

And as he dispels interest rate phobia, Sherman also says that young buyers need to dispel assumptions of the market tightening. Loan products are still available that do not require 20% down. You can buy a $300,000 home for 5% down. Tools developed by B of A hep young buyers learn about the various mortgage products available: the home loan guide and planner.

Another change that may affect the kids: consumers are pulling back from refinancing — so our mortgage market has switched gears from a refi focus to purchase, which may make bankers a little more eager for the business of lending to home buyers if they want any business.

Now this stat surprised me: Millennials tend to like fixer-uppers: A recent NAR (National Association of Realtors) survey says 68% of Americans think now is a good time to buy a home, and 30% of the millennials would prefer a fixer upper over new construction. That’s amazing because I thought this generation had everything DONE for them — ha by us! But 1 in 3 millennials say they would prefer a fixer upper over a house with minimum repairs. They are devouring the FHA 203K product, which allows an individual to purchase a fixer-upper home purchase price plus cost to improve. The home must fit into FHA home limits, which in Dallas is $271,000, limited to the home appraising after completion.

So I guess we needn’t feel too sorry for our kids — they have email, Instagram and are starting life with lower interest rates than we saw! Sherman sees a lot of natural triggers down the pike to keep our Dallas market strong: transplants, home ownership, marriage, divorce, growing a family.

Takeaway: Dallas’ housing values are increasing, making Dallas a prime market for home buyers needing mortgages  — yes, getting a loan has sure changed in last few years, but like it or not, the suits are going to have to ease up on lending to qualified home buyers.

 

 

Will Bank of America's Principal Forgiveness Program bring borrowers back from the brink of foreclosure?

Thousands of homeowners underwater on their Bank of America mortgages could receive one of the 200,000 letters the bank is sending out offering partial loan forgiveness. According to Bankrate.com, BofA borrowers have to clear a pretty significant series of hurdles in order to qualify for the “principal reduction program”:

To be eligible for this principal reduction program, a borrower must:

  • Owe more on the mortgage than the home is worth.
  • Have been at least 60 days behind on the mortgage payments, as of Jan. 31. (I don’t get it either but that’s the rule.)
  • Have monthly housing expenses of more than 25 percent of gross household income. The expenses include mortgage principal payments, interest, property taxes, homeowners insurance and homeowner association fees.
  • Have a loan that is owned and serviced by Bank of America, or serviced for an investor who has given the bank the authority to do this type of modification.

We already know that major lenders are being pretty tight-fisted when it comes to new mortgages, so this program probably won’t have any real impact on the bank’s bottom line. It’s likely just a way for Bank of America to improve its tarnished image.

Still, what kind of message does the “principal forgiveness program” send out to borrowers? And do you think it’ll keep people at risk of foreclosure in their home?

 

Waterford's backyard pool is as green as pea soup

Update: Not only did Bank of America win in court today, they paid $7,330.04 in property taxes on this house 12/14/11.

 It looks like Kenneth Robinson will NOT be getting a house for $16 after all. This morning, in the tiny metropolis of Roanoke, Texas, at Justice of the Peace Precint #4, JP J. W. Hand ruled in favor of Bank of America, the lender who apparently acquired the note on the abandoned house from Accredited Home Lending, who held the original mortgage. It was that financial failure glitch that gave Robinson the chance to live scot-free — or for $16 — for more than six months in a beautiful Flower Mound neighborhood not too far from the sprawling million dollar estates of Argyle. Robinson was given until Feb. 13 to move, but he is now out of the house. The swimming pool is back to green. Neighbors say he started moving out last Thursday at about 11:20 p.m. and had a van in front of the house this weekend. (And my stalking turned up an empty house Saturday night.) In a phone interview with reporters, Robinson said he was gone and leaving behind a futon and a TV — the futon, he said, belongs to someone else anyhow. (Neighbors say a lot of people have been staying at the house.) He has moved on and is not saying where he has moved. If he wants to appeal the case, he must put up an $8900 bond, which he says he will not do. And a check with Denton County shows Robinson also did not pay the property taxes on 2205 Waterford which were due January 31. He also did not pay the annual $300ish HOA dues.

“The media put me here in this, ” he said on the phone, “But I didn’t run away from it. I don’t run.”

He says two reporters did a fair job at reporting his story —  The Dallas Observer was one. He was distressed with news reports from Channels 4 and 8. Robinson did not show up for the hearing.

I spoke to two neighbors, Chris Custard and Terry Roberts, who both own homes in Waterford Park Estates. Terry is just down the street and has a beautiful, well-manicured red brick home with a glossed Pavestone driveway. Chris is on the Waterford Park HOA board was one of the first neighbors who approached Robinson last summer, asking him politely he says to leave. Instead, Robinson called the police on the neighbors. The police were very nice about it, but told the neighbors it was a civil issue.Initially police took Robinson’s key, but returned it after doing some research. If the neighbors tresspassed, THEY would be getting citations, police told them.  I asked the neighbors how he got in since Robinson had several different versions of how he got the key. One was that he found it in the bushes. Another was that he called a locksmith to change the locks. But the neighbors think he broke in, somehow, though they cannot prove it.

“We were talking about buying the house, a group of us neighbors, and we walked all around it trying to get in, every window was closed, every door locked, ” says Custard. This was before last June when Robinson moved in.

Another subject neighbors say has not been touched by the media: how did Robinson live in the house intially with no utilities? Roberts said the last owner, William Ferguson, had obtained a no-down payment loan on the home to begin with, so when he walked, he lost nothing.

Neighbors were distressed over media attempts to turn this into a race situation because Robinson happens to be black. Turns out the neighbors who first alerted Custard and the HOA to Robinson’s move-in, the neighbors directly east, are black. As are the neighbors across the street.

” I don’t care if it was my brother,” says Chris Custard, ” it’s not right that someone can come in here and get for almost nothing what we’ve all worked and paid for.”

The neighbors think Denton County and the Denton County DA’s office needs to handle squatters more like they do in Tarrant County, where at least eight individuals have been arrested for trying the same scheme, some of them “students” of Kenneth Robinson.

Sign on 2205 Waterford's back fence