BEDC Releases Economic Benchmarking Report

BLOOMINGTON, INDIANA (November 18, 2011) – The Bloomington Economic Development Corporation (BEDC) today announced the release of A Look Inside the 2011 Bloomington Economy, a report providing comparative data about the Bloomington economy alongside Bloomington’s peer communities across the United States. The report, completed by the Indiana Business Research Center (IBRC) at Indiana University’s Kelley School of Business and funded in partnership with the City of Bloomington’s Department of Economic & Sustainable Development, provides an up-to-date look at the current economic conditions of Bloomington relative to 15 similar communities. Since 2000, the BEDC, the City and the IBRC have partnered to publish periodic reports on the state of the Bloomington area economy. The last study was produced in 2007 and the current report marks the fifth publication in this series. The benchmarking approach measures economic indicators, such as education, employment, income and innovation, among others, and compares them to other university cities of a similar size. These comparisons provide an accurate measure of how Bloomington ranks against cities of similar size and demographics. “We use the benchmarking report to help us understand the community’s strengths and weaknesses and to inform us in the planning and implementation of future economic development efforts,” said Ron Walker, President BEDC. “We want Monroe County to be in the top tier among our national peers and we now have a better idea where we do and do not meet that goal,” expressed Walker. The study produced positive results for Bloomington on a number of indicators. With unemployment rates lower than the national average and many of our peers, solid population growth, a diversifying economy, and growth in key sectors, the report shows that Bloomington has weathered the economic recession reasonably well. Bloomington also showed relatively strong numbers in affordability of housing, educational attainment, per capita income growth, and job growth in the health care and social assistance sector. IBRC director Jerry Conover observed that “Although incomes in the Bloomington area continue to lag the state and nation, we’ve experienced impressive income growth over the past several years. Employment growth in industries paying above-average wages is a welcome trend that’s helped our area weather the economic downturn relatively well.” Many of the study’s findings do show the negative impacts of the economic recession that hit the country over the past few years, and Bloomington has not been immune to its impacts. However, despite scoring low on such indicators as wages and personal income compared to national and state peers, the indicators also reveal that the Bloomington economy remains in a solid position and should return to a period of greater job growth as the nation’s economy improves. “This periodic study helps our community to view our local economy within the perspective of other cities like us, and in some cases, of cities we aspire to be like,” said Danise Alano-Martin, the city’s director of Economic & Sustainable Development. “It’s a benchmarking effort not only comparing us to peers, but it’s also a study that helps inform and guide the collaborations between the City and the BEDC and other partners.” Some key findings include: . Monroe County added an average of 800 new jobs each year between 2009 and 2011. . Employment in local life science manufacturers nearly doubled between 2001 and 2009. . In the 2007 study, Bloomington had the second-highest unemployment rate among national peers, but now ranks ahead of six of the communities. . The Bloomington area had an average wage per job of $34,145 in 2009. . Bloomington ranks 8th out of the 16-city national peer set in a county-level Innovation Index, which measures inputs and outputs to innovation (venture capital, broadband penetration, investments in R&D and educational attainment). . In 1990, manufacturing accounted for 15% of Bloomington’s total employment. This share is down to 8% as of 2009. . Housing in Bloomington was the 6th most affordable of the 15 national peers. . Forty percent of Monroe County’s adult population has a bachelor’s degree or higher, ranking in the top 3% of counties nationally. . Bloomington’s per capita personal income (PCPI) ranks as the fourth lowest in the national peer set. However, the annual PCPI growth rate ranked 8th among national peers and 1st in the Indiana set. BEDC and City Economic & Sustainable Development staff will continue to analyze the report findings to better understand where to direct limited resources that can close gaps in economic prosperity and promote the area’s strengths. A Look Inside the 2011 Bloomington Economy can be viewed at the BEDC’s website www.comparebloomington.us. Click on the “2011 Bloomington Benchmarking Report” in the Quick Facts section of the home page.

3 Red Flags when applying for a Mortgage

Daily Real Estate News | Monday, November 07, 2011

More lenders are scrutinizing mortgage applications since the financial crisis fallout, which has triggered fears of borrowers who will default or walk-away from their mortgage or mortgage fraud.

Here are the triggers that may cause the most lender scrutiny of loan applications, according to a recent article at The New York Times:

Large deposits of money: Lenders are required to account for any cash gifts for down payments, such as from relatives. So if a borrower earns $5,000 a month and suddenly deposits an extra $10,000 beyond that, lenders may question where the money came from when applying for a loan.

The home’s new address: Buyers who are purchasing a primary home three hours from where they work may also draw increased scrutiny from lenders, according to The New York Times article. Borrowers may even need a letter from their employer stating that they work from home a few times a week. That’s because lenders may want to ensure the borrower plans to be an owner-occupant and not buying the property to rent or flip, which must be disclosed.

Signing up for new credit cards: Borrowers should avoid taking on extra debt when applying for a loan — so they may want to wait to buy all the new furniture. Extra debt can be a red flag to a lender and could even jeopardize closing on a new home if the debt pushes the borrower’s total debt levels beyond lender-accepted limits.

Source: “Mortgages: Triggers of Lender Scrutiny,” The New York Times (Nov. 3, 2011)

HUD Offers REO Homes for $100 Down in Select States

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.

In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

Denver Homeownership Center’s Jurisdiction:

•Arkansas
•Colorado
•Iowa
•Kansas
•Louisiana
•Missouri
•Minnesota
•Montana
•Nebraska
•New Mexico
•North Dakota
•Oklahoma
•South Dakota
•Texas
•Wisconsin
•Wyoming
•Utah

Atlanta Homeownership Center’s Jurisdiction:

•Alabama
•Florida
•Georgia
•Kentucky
•Illinois
•Indiana
•Mississippi
•North Carolina
•South Carolina
•Tennessee
•Caribbean

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.

Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.

“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.

Information Courtesy of DSNews.com by Carrie Bay Retrieved on 10/27/2011 from this website:

Rural Buyers Can Get No-Down Payment Loans

Total Mortgage Services, a national mortgage lender, is offering rural home buyers 100 percent financing or closing cost assistance.

Through its new Guaranteed Rural Housing Loan Program, insured by the U.S. Department of Agriculture, the lender will offer low- and moderate-income residents living in rural areas (usually defined by a population of 10,000 or less or, in some cases, 20,000 or less) several affordable housing finance options:

•No down payment required.
•Closing costs can come from any source, including gifts.
•Competitive 30-year fixed rates.
•No monthly mortgage insurance premiums.
Borrowers can obtain a loan to purchase a new or existing home that is located in a designated rural area.

“The USDA home loan program is one of the most compelling mortgage products in today’s challenging mortgage marketplace and offers real solutions for rural borrowers, especially those in need of 100 percent financing or with lower credit scores," John Walsh, president of Total Mortgage, said in a statement.

To read more about eligibility requirements, visit the U.S. Department of Agriculture Rural Development Web site.

By REALTOR® Magazine Online - Retrieved on Aug 3, 2011

Sellers Sweeten the deal to attract Buyers

Need to give buyers some extra incentive to choose your listing over the large inventories of others? Sure, price will get their attention, but some incentives may be the extra motivation needed to get the deal to the closing table.

Here are a few common extras that are growing in real estate transactions.

Home Warranties
Home warranties, which can cover the repair or replacement of many home system appliances and components (such as air conditioner, water heaters, and more), can provide buyers with some extra confidence when purchasing a home. “Home warranties are appealing to buyers because they cover appliances and system components that a new home owner has no familiarity with,” says Lelia Chapman, vice president of field sales for American Home Shield. “Sellers benefit from offering a home warranty because it sets the home apart from the rest of the competition in today’s saturated market, often leading to faster sales at better prices.”

Seller financing
With tight credit nowadays making it difficult for some to get a loan, some sellers may even offer financing to get a deal closed. Seller financing, in which the seller is willing to hold the loan, has become more common. Seller-financing is generally offered at a higher rate that is capped at a few years and then requires the buyer to pay off the loan or find new financing. (Read more.)

Furniture
Furniture can be costly to move anyway so more sellers are offering some of their furnishings to sweeten home deals too. For example, if sellers are moving to a condo, in which lawn care is no longer their responsibility, throwing in that riding lawn mower may just be the extra incentive a buyer needs. Some home sellers also may even offer to sell some of the furniture to the buyer at a discounted price to earn a few extra bucks.

Creative offers
Some home sellers are getting more extravagant and creative with the incentives they are offering to buyers. Some have even offered a week’s vacation in Hawaii or thrown in a time-share ownership, which they wanted to unload anyway.

Source: “5 Ways to Sweeten a Home Sale,” AOL Real Estate News (June 29, 2011)

5 Questions to Ask When Evaluating Short Sales

“Mortgage lenders across America are eager to avoid foreclosures, and short sales can be an attractive option for clients and real estate professionals alike,” writes Bill Ervin, the national sales director of real estate relationships for CitiMortgage Inc., in an article at RISMedia. “Ask the right questions and you’ll be well on your way to a successful short sale.”

Here are some questions Ervin points out are important for real estate professionals to consider when evaluating a potential short sale for a client.

1. Who owns the lien according to the servicer?

2. What documents are required? For example, the transaction always requires a Letter of Authorization (which is from the client authorizing the real estate professional to speak on their account); listing agreement; purchase contract; estimated/final HUD Settlement Statement; and 2nd Lien Approval Letter.

3. Do all of the parties agree on the property’s value?

4. Has the seller signed a short sale agreement?

5. What are the major challenges the client may face in this transaction? (For example, are there subordinate lien holders or will the client be able to secure financing in time?)

Read more of Ervin’s tips for successful short sale transactions at RISMedia.

Source: “Don’t Fall Short: Follow This Path to Successful Short Sales,” RISMedia (June 29, 2011)