Subprime borrowers paying credit cards before mortgages
According to a new study from Experian Group, the Ireland-based company that maintains a huge database of consumer credit histories, subprime borrowers are now more likely to be late on their mortgage than on their credit cards. One explanation could be that many recent subprime homebuyers simply aren't that worried about losing their homes because they don't have much to lose. Most put down small or zero downpayments. If prices have fallen since they bought, they may actually owe more than the house is worth, making it an easy choice to walk away.
Experian's study, released June 20, says that the share of subprime borrowers who were 30 days or more late on their mortgages went up from about 32 percent at the beginning of 2003 to around 36 percent at the end of 2006 - a sign of increasing financial distress. Yet those same subprime borrowers actually caught up on their credit cards over the same period. The share who were 30 days or more late on their cards fell from 32 percent to around 24 percent between early 2003 and late 2006.
According to Experian's research, prime borrowers have exhibited more conventional behavior than subprime ones, perhaps because they have more to lose from a home foreclosure and aren't quite as reliant on credit cards to get them through the month. Experian's study shows that they remain less likely to be late on their mortgages than on their credit cards.
Repeal of Septic Rules
The two-year budget bill passed 6/27/07 by the Ohio Legislature and sent to Governor Strickland for his signature includes the OAR-backed repeal of the household sewage treatment system rules that went into effect on January 1, 2007. The Governor must sign the bill prior to Sunday, July 1st, which is when the new fiscal year begins.
No Duty to Advise Client of Termination Deadline
A salesperson had no duty to inform his client that the purchase agreement required the client to deliver contract termination forms by the deadline contained in the purchase contract ruled the Court of Appeals of Texas, (affirming the trial court). The client should have known about the deadline, since it was included in the purchase agreement that was signed.
HUD Limits FHA Proposal to Seller-Paid Assistance
There has been a lot of attention given to the proposed HUD rule that implies the department is seeking to prohibit the use of downpayment assistance programs in FHA transactions. To clarify, the HUD proposal would only prohibit seller-paid downpayment assistance. For background, HUD's proposal is consistent with a report of the U.S. Government Accountability Office, which found that the average price of homes using seller-paid assistance was inflated by 3 percent and had a higher foreclosure rate. The proposal also follows action by the IRS, which has published a rule that strips organizations found to be "middlemen" for seller-paid assistance of their 501(c)(3) tax-exempt status. Looking ahead, FHA reform legislation under consideration in Congress would allow for zero-downpayment FHA loans, which would then abrogate the need for any downpayment assistance.
Roommate Locator Web site FHA Lawsuit Reinstated
A federal appellate court remanded a case to a trial court for reconsideration on whether a statute shielded an apartment roommate finder Web site from lawsuits based on housing preferences and responses it sought from those who used the site. The Fair Housing Council of San Fernando Valley and the Fair Housing Council of San Diego filed a lawsuit against the Web site, Roommate.com, accusing them of violating the Fair Housing Act and California state laws. The lawsuit stems from the site's questionnaire, which asks users for information about their gender, age, sexual orientation, occupation, and familial status.
Web sites of Interest
www.moving.com -- Provides excellent city profile and school reports. Also provides utility/service providers (from their selected network of service providers). The ability to find a home or REALTOR® links to REALTOR®.com
www.usps.com/realmove-- The United States Post Office is asking REALTORS® to send their clients to this web site to change their address online. They have created REALTOR® Message Cards and other free marketing materials to help spread the word. Find these materials at www.realmovevalue.com.
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