Focus on Real Estate

Oversized garages a must have for many homebuyers

Oversized garages with two or more parking spaces are a must-have feature for many homebuyers, even during times of elevated gasoline prices, according to a report released by the National Association of REALTORS®.

According to the "Profile of Buyers' Home Feature Preferences," 57 percent of recent buyers considered a large garage very important to a home - that's 16 percentage points higher than the last time the question was posed in the 2004 survey. Of the buyers who purchased homes without an oversized garage, 56 percent of them said they would have paid more for the feature. Only six percent said the same in 2004.

And while homes are getting bigger, they have fewer bedrooms, the study found. The size of the typical home purchased in 2006 increased by about 100 square feet, compared with 2004, but the median number of bedrooms dropped from four to three.

Other features considered "very important" by many homebuyers included:

• Air conditioning (ranked "very important" by three out of four buyers)
• A walk-in master bedroom closet (53% of buyers)
• Hardwood floors (28% of buyers)
• Granite countertops (23% of buyers)
• Cable or satellite TV-ready (46% of buyers)

More ARM borrowers refinancing into another ARM

Freddie Mac reported that about 4 percent of borrowers with 1-year ARMs stayed with that product when they refinanced during the second quarter, compared with 1 percent in the first quarter and 2 percent a year ago. Another 10 percent of 1-year ARM borrowers went with hybrid ARMs when they refinanced during the second quarter, compared with 8 percent in the first quarter.

According to Amy Crews Cutts, deputy chief economist for Freddie Mac, the widening spread between fixed- and adjustable-rate mortgages in the second quarter made ARMs a bit more attractive than they had been. Since then, interest rates on conventional fixed-rate loans have fallen, while worries about credit quality have pushed rates on some nontraditional and ARM loans up. That should result in more ARM borrowers choosing fixed-rate loans when they refinance, Crews Cutts said.

The vast majority of borrowers refinancing 1-year ARM loans ? 85 percent ? chose fixed-rate loans during the second quarter, down from 89 percent in the first quarter. About 86 percent of those refinancing hybrid ARM loans during the second quarter chose a fixed-rate mortgage, compared with 88 percent during the first quarter.

Fed cut could make it easier on home borrowers

When the Federal Reserve Board cut its discount rate by half a point Friday, August 17th, Wall Street celebrated. Home buyers and sellers may have reason to cheer as well. The discount rate is the one the Federal Reserve charges qualified lenders, mainly banks, for temporary loans. Lowering interest rates encourages banks to lend more money to mortgage borrowers. That in turn could make it easier for home buyers, especially those using big-ticket loans called Jumbos, to get financing.

According to David Wyss, chief economist for Standard and Poor's, the biggest obstacle to lenders is that they have been unable to obtain short-term financing to enable them to keep issuing loans. The Fed's latest move means they can. "It provides emergency liquidity for securities backed up in the financial markets because people are afraid to buy them," said Wyss. "It announces that the discount window is open for business and that means there will be mortgages available."

Even more significant, according to Wyss, is that the Fed extended the length of the loan to 30 days, giving lenders a larger window they can use to place loans with other investors. (CNNMoney.com)

Damages Awarded for Swanberg Do-Not-Call Abuses

American Financial Mortgage secured a declaratory judgment and punitive damages on 6/19/07 against Ryan Swanberg of Minnesota for what a Missouri court described as "baseless litigation" under the federal "Do Not Call" law. Swanberg, a self-described consumer advocate, had threatened numerous brokerages and other companies in real estate with lawsuits if they couldn't provide a "Do Not Call" policy within a short period of time. 

At the same time, Swanberg would offer to help companies without a policy for a fee or to settle with him to avoid legal action. The Missouri court noted that "the threat of baseless litigation for pecuniary gain is a perverse misuse of the court system, injuring not just the plaintiff but the public at large." RE/MAX Ideal Properties secured similar injunctive relief in Minnesota Federal Court in March of 2007 and that case was cited by the Missouri judge.