Friday, April 17, 2009

Travis County, TX Median Home Price Increase

The chart below shows the trend in Median Home Price for Travis County, Texas over the last year. By analyzing this chart below we may be seeing another sign that the housing market is improving in certain areas. We are seeing a modest seasonal increase in 2009 vs. 2008. The median home price in February 2009 was $218,000 compared to $203,000 in February 2008.

Click on the image below for a larger view of the chart.

Monday, April 13, 2009

Leading DAPs Realized Hugh Revenue in 2008

Down Payment Assistance Providers (DAPs) enabled borrowers to obtain FHA mortgages to purchase homes with no money down. In essence, the DAPs acted is if they were charities. The DAPs gifted the money for down payment and closing costs to the borrower. The funds for the gift came from the seller of the property. Typically the seller of the property inflated their selling price to accommodate the cost of the gift funds. The purchaser of the home typically paid a higher price for the home. In the transaction, the DAPs retained a fee. A typical fee was $500 for a transaction. Multiply the DAP fee times the number of transactions and you can see millions of dollars that the DAPs received through their transactions. Nehemiah and Ameridream were great at exploiting this program dominating more than 50 percent of the DAP market in 2008.

Seller assisted down payments are no longer eligible for FHA mortgage insurance. That leaves these down payment providers in the business of lobbying for changes in legislation that would permit them to once again skim hundreds of millions of dollars from homeowners once again.

Now ask which mortgage companies participated in this program and how much they benefited from seller assisted down payments the program!

Wednesday, April 1, 2009

FHA Originations Continue to Rise

Last month I wrote about the healthy increase in FHA originations from November to December nationally. The trend continued into January with increase in approximately 3,000 originations over the December numbers. The chart below shows the trend since January 2008.

Click on the image below for a larger view.

Check back next month to see if this trend continues to climb to levels we haven't seen since Down Payment Assistance was eliminated last Fall.