Mortgage Backing For Previous Foreclosed Homeowners

     Obtaining a mortgage in today's market can be a difficult task for some people. Credit scores are the focal point for mostly all lenders and it is causing many people to be rejected as the lenders are requiring a score of approximately 640 for an FHA loan and 740 for a conventional loan. In the case of people affected by the housing market crash and forced into foreclosure, the feat of obtaining a mortgage may seem impossible. NOT ANYMORE! The Federal Housing Administration (FHA) is giving some former home owners a second chance at home ownership. The FHA has sent a letter to mortgage lenders saying that they will offer mortgage insurance to homeowners that once filed for bankruptcy or homeowners that lost their homes through short a short sale of foreclosure during the economic recession. This is great news for many people whose credit scores were ruined by the housing crash.

"FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage," according to the letter FHA sent to lenders.

     This does NOT mean that every single person who was foreclosed upon will receive this mortgage backing from the FHA. If you are someone who fits into this category, you will still be obligated to meet all other FHA requirements and the FHA needs to see proof that you are no longer financially constrained. In other words, it will not be a free-for-all as it was in the beginning of the housing bubble where mortgages were handed out regardless of your financial situation. Potential buyers that were once foreclosed upon need to show proof that they are financially able to afford the amount they are being lent. These borrowers will also have to take part in housing counseling and the FHA is requiring all lenders to make sure at least a year has passed since the foreclosure or bankruptcy occurred. 

Job Market Holding Back Housing Market

The housing market is boosting the job market however, the job market is not reciprocating. The rising home sales has successfully boosted the residential construction employment rate by 4.5% from last years figure. Compared to the national employment growth rate of 1.7%, the residential construction employment rate is significantly higher. Jed Kolko, chief economist at Trulia, has states that the unemployment rate is holding back demand for housing. Kolko specifically focused on the 25-34 year-olds, stating that only 75% of that population group is employed because of the continuously weak job market. 

“Job growth remains sluggish for young adults — who are key for household formation — and job growth is lagging in the “clobbered metros” hit hardest in the housing bust. That means the job market isn’t improving enough to give a strong boost to housing demand.”

The group stated above (25-34 year-olds) is crucial for the housing recovery because they are the first-time home buyers who need to be entering the market right now with the purchase of a home. However, it continues to be a struggle for this age group to gain any real momentum in their job security and acquire any potential to save money towards the future. Is it the government regulations and complicated tax structure that is holding them back? Is it the fact that we are still recovering from an economic collapse? Or, is it simply that the NEW generation of working class in this country is focused more on spending and partying, rather than woking and saving? Whatever the reason may be, something needs to change and we need to find a way to boost the job market and create more opportunities for job growth so people can earn the money they need, rather than figuring out more ways to hand out more free money. 

"EMPOWERHOUSE" The Future Of Living

   
The term "energy efficient home" just acquired an entirely new concept, and that is the "Empowerhouse". Engineered and developed by students at Stevens Institute of Technology, Parsons The New School for Design, and Milano School for International Affairs; the Empowerhouse won the Department of Energy's Solar Decathlon competition for its cost effectiveness. The Empowerhouse, located just outside of Washington D.C., has basically NO carbon footprint by using approximately 90% less energy for heating and cooling.

     The home is a 1,000 sqft duplex with 12 inch think walls and triple glazed windows. For proof of the homes efficiency it was given the passive house certification test and passed. To test the home a giant blower fan was positioned in one of the doors while all the other doors and windows were closed. The fan slowly sucked out all of the air until the house was pressurized at 50 pascals and then the amount of air that creeped its way back in was measured. The results on a typical home will have a reading of 7 air changes per hour which basically means that in one hour, all the air in the home is replaced 7 times. To pass the passive house certification test means you have recorded a reading of 0.6 air changes per hour. 

“That means that all the little leaks put together are smaller than a postage stamp,” said Orlando Velez (Manager of the Housing Services for Habitat for Humanity of Washington D.C.) “And if you wanted to, you could heat your home with a hair dryer quite easily.”

     Now to answer the questions that I am sure most people are wondering, what is the price tag on this housing innovation and how much will you actually save in energy costs? Well, the cost is approximately $200,000 for each half of the duplex and the estimated energy savings is almost $72,000 over the length of a resident's 30-year mortgage. A lot can be done with that amount of money freed up for your future. 

“I just remember thinking, we did it, a non-profit, affordable house developer can do this, even using volunteers with no construction experience,” said Velez. “And then I started thinking, what’s everyone else waiting for?”

Energy Efficient Home Could Lead To Bigger Mortgage

One of the biggest considerations when it comes to mostly anything now-a-days is the environment. Energy efficiency is becoming more and more relevant and it is now encroaching on the mortgage industry. Energy efficient homes are homes that have additions such as solar panels or high efficiency appliances in order to save energy costs for the home. A new bipartisan bill in the Senate is proposing that home buyers who purchase energy efficient homes should qualify for a higher amount with their mortgage. This new act, which is labeled the SAVE ACT, would allow lenders to factor in energy savings to the value of a home.

"It's about energy efficiency, it's about savings, it's about increasing the borrowing power for the borrower. I think it's a win-win for the industry," said Sen. Johnny Isakson, R-Ga., a co-sponsor of the bill.

If approved, any lender with loans backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration (which accounts for approximately 90% of the market) would account for expected energy cost savings. Another aspect the bill would affect is appraisals. The bill would require lenders to add the value of expected energy savings into the value of the home being appraised.