Be careful when it comes to mortgage life insurance.
Why? Knoxville, Tenn., station WATE recently told the story of a couple that was new to the Knoxville housing market and signed up for a mortgage life insurance plan - only to find their seemingly helpful policy full of mistakes.
Ones that could have cost them plenty.
Under this kind of policy, if one spouse dies, the mortgage is subsequently paid off in full.
So when Margie and Butch Pfeiffer wanted to protect the East Knox County home they bought in June 2006, they purchased a life insurance policy to do just that.
But when the mortgage life insurance policy arrived a couple weeks ago, they were concerned about several mistakes on it. Specifically, Social Security numbers, ages and birthdays - not exactly trivial details.
The Pfeiffers said they were truthful in all their answers. Yet there were many things wrong.
“Let’s see, closing date on our house, October 6. We moved here June 30,” Margie said.
The Pfeiffers said their agent, Shane Vaughn, visited in December and spent several hours explaining their policy and filling out paper work. Vaughn’s card says he is general manager of Tennessee mortgage protection for Chase Financial.
But when the couple attempted to call Vaughn, they couldn’t get answers to their questions. With the mistakes, they figured their home mortgage would not be protected if something happened to either of them.
The Pfeiffers wanted their contract. When they were finally able to contact Vaughn, he downplayed the mistakes on the couple’s policy, stating that they were likely typographical errors.
In a fax to the Pfeiffers, sent two days after the call, Vaughn apologized. He claimed his writing is often illegible, said the errors should not have happened, and he’s refunding their premium and canceling their policy.
The Pfeiffers will search for home loan protection with another company.
The lesson learned here if you do opt for this mortgage loan protection option, make sure your information is 100 percent accurate. Had they not caught the mistakes and helped bring them to the company’s attention, a major problem could have hit this couple at the worst possible time.
SOURCE: WATE 6 - Knoxville
Posted by Richard Barber on Feb 20 2007 under Tennessee
Following a sluggish 2006, new home construction in Knox County, Tenn., is expected to improve in 2007 but remain well off the record-setting pace of 2005.
A total of 3,049 residential building permits were issued in the county last year, down 10.5 percent from 3,405 permits the year before, reports the Knoxville News-Sentinel.
The median price for an existing single-family home in the Knoxville metro area in the fourth quarter last year was $153,600, marking a 3.2 percent gain over the fourth quarter of 2005.
With Tennessee mortgage costs remaining relatively affordable, condominium prices in metropolitan Knoxville also were up in the fourth quarter, with a median of $145,400, up 4.9 percent from the same period the previous year.
Despite a recent upswing in mortgage defaults, many real estate observers anticipate similar or slightly higher appreciation rates for the Knoxville metro area’s homes and condos this year.
Compared to Tennessee’s other major metro areas, Knoxville home prices were the strongest in the fourth quarter. Chattanooga’s median rose 1.5 percent to $134,600, while Memphis’ median fell 1.6 percent to $141,900.
Nashville’s fourth-quarter numbers were not available.
Elsewhere in the Southeastern U.S., the median price in the metro Atlanta housing market fell 2 percent to $166,800, while Lexington, Ky., dropped 2.9 percent to $146,300 and Spartanburg, S.C., declined by a modest 3.4 percent to $121,300.
Southeast markets with fourth-quarter price gains included:
- Raleigh, N.C., up 14.5 percent to $226,300
- Charlotte, N.C., up 8 percent to $198,200
- Montgomery, Ala., up 2.4 percent to $139,600
- Birmingham, Ala., up 0.2 percent to $161,700
In its December issue, SmartMoney magazine rated Knoxville “fairly valued” in contrast to some U.S. markets where the average home prices are 51-74 percent “over valued” and prone to a market correction or price decreases.
The cost of a California mortgage loan is often 2-3 times more than what you’d pay in most of Tennessee. That gives you a fair indication of where the Volunteer State stands.
And you can find that kind of overheated pricing (and subsequent declines) even out East. Existing home prices in Florida - one of the hottest markets in recent years - took a beating in the fourth quarter, posting some of the highest percentage declines in the country.
With mortgage loans in Florida costing more than many residents could hope to afford, prices will invariably fall. Knoxville real estate executive Roger Moore was in Destin, Fla., recently and the downturn was evident.
“I must have counted 100 ‘for sale’ signs in a mile drive,” said Moore, president of R.M. Moore Real Estate Co.
Unlike the Tennessee housing market, where homes sold in an average of 79 days last year, according to the Knoxville Area Association of Realtors, it can take much longer to sell a house in overbuilt coastal areast.
“Two years ago, if you wanted something (in Destin) I would have said ‘you better get it now because it won’t be here long.’ But not anymore,” Moore said.
Continue reading this article in the Knoxville News Sentinel.
Posted by Richard Barber on Feb 19 2007 under Tennessee
Tenensee mortgage lenders are pulling homes back into their possession at almost the same rate Realtors are selling residential property in Memphis.
The Memphis Area Association of Realtors reported 19,738 home sales for the Memphis MSA in 2006, marking a 4.5% increase from 18,881 home sales in 2005.
But there were 18,155 foreclosed properties in the Memphis housing market in 2006, according to year-end data from RealtyTrac, a national provider of foreclosed property data.
Those numbers represent one foreclosure for every 1.09 home sales in the Memphis MSA, with the bulk of the foreclosures occurring in troubled Memphis neighborhoods such as Hickory Hill.
John Gnuschke, director of the Sparks Bureau of Business and Economic Research at the University of Memphis, says foreclosures do impact the overall state of the Memphis housing market because the data speak to the local population.
“We have a large low- to moderate-income population group that tends to produce a large group of marginal home buyers,” Gnuschke says. “Any run-up in interest rates or additional costs associated with almost anything, including utilities, have a major impact on their cash flow.”
The foreclosure numbers, like bankruptcy statistics, reflect the fact that Memphis has a large population that struggles, he says.
Charles Ricketts, regional manager of BancorpSouth’s Memphis mortgage office, says rising numbers of foreclosures may be the mortgage industry’s own undoing.
Ricketts suspects that the number of borrowers receiving 100% financing likely contributes to the foreclosure picture. High loan-to-value loans have a higher rate of delinquency, he says, because borrowers have little incentive to make payments when they haven’t invested their own money in a home purchase.
Five years ago, there were only one or two bad credit home loans like that available; now there are literally dozens, he says.
“It’s not a good situation, but it’s probably not unexpected,” Ricketts says.
Much of the foreclosure activity in the Memphis MSA is in specific neighborhoods, where foreclosure tends to self-perpetuate.
“I think in certain areas where foreclosure rates are higher, it has a negative effect on that specific housing market,” says Neil Hubbard, president of MAAR. “But as a whole, Memphis has always been a very stable market with a minimum amount of risk.”
To continue reading this Memphis Business Journal article, click here.
Posted by Jed Moss on Feb 19 2007 under Tennessee
For Judy Gluck, hope is blooming anew.
Gluck and her husband, Frank, first listed their duplex near Woodmont Boulevard in Green Hills last October, not long after they bought their dream house on a nearby street.
There were no takers. Since then, they’ve been forced to pay the mortgages on both houses while they wait for the brisk sales that characterized the market until the end of last year to resume.
But Gluck believes the changing season — when Tennessee mortgage borrowers usually return to the market after their holiday hiatus — will bring good fortune.
“We kind of came in at the end of a good run,” Gluck said Thursday as she prepared for a weekend open house. “But hopefully, spring is coming and sales will be picking up.”
Residential property sales in the Middle Tennessee housing market fell in January for the fifth time in six months, extending a slide that began late last year, according to data released Monday by the Greater Nashville Association of Realtors.
The number of properties on the market also rose, returning to the near-record level reached early last fall.
The decline in home sales comes on the heels of what had been a record real estate market for Middle Tennessee. And six months after the slowdown began, it still has not erased the gains that the market enjoyed previously.
Prices rose compared with a year ago, and the 2,289 closings in January was the second-best on record for that month, largely thanks to low Tennesee mortgage rates.
That encouraged real estate agents, who said it shows that the market is holding up despite the nationwide slump in residential real estate.
“Other parts of the country are seeing a sharp decline — 10 percent to 18 percent and things like that,” said Richard Courtney, the Greater Nashville Association of Realtors president. “This is still a strong area for home sales.”
Taken as a group, sales of all residential properties — detached houses, condominiums, multifamily houses, farms and vacant lots — dropped 3.5 percent last month, compared with the same time a year ago.
Single-family sales in Middle Tennessee were down 6.8 percent from January 2006. Single-family home sales have fallen for six straight months.
Single-family homes were down even more sharply in Williamson County, which collects and reports its own data each month on home sales. There, the number of single-family closings fell nearly 19 percent from a year ago.
Also in Williamson County, the median price for a single-family home has risen 32 percent to $388,757 since last year.
SOURCE: The Dickson Herald
Posted by Jed Moss on Feb 14 2007 under Tennessee
The Nashville housing market is moving along nicely.
And those involved in it appear to have the Internet to thank for such success.
The Greater Nashville Association of Realtors reported that more than two-thirds of home buyers in the region surveyed last year used the Net frequently during their house-hunting.
This statistic and others were in a 2006 survey that polled 347 residents of the greater Nashville area.
According to a press release, 69 percent of recent home buyers used the Internet frequently to search for homes and compare Tennesee mortgage products, compared to a national average of 59 percent.
The median household income of local home buyers was $64,800, compared to $71,800 nationally. The median price of homes purchased in greater Nashville was $184,000, compared to $214,000 nationally.
On average, city residents owned their houses for six years before selling and these pieces of property were on the market for six weeks. That’s still an above average period of time, putting the ball in the court of home purchase loan applicants during negotiations.
Posted by Jed Moss on Jan 30 2007 under Tennessee
This isn’t great news for Memphis mortgage holders:
The city has climbed to the top at-risk mortgage markets in the U.S., according to the CoreLogic Core Mortgage Risk Monitor.
CoreLogic, a Sacramento, Calif.-based provider of residential home mortgage risk management services, examined 379 metropolitan statistical areas for its data on such troubled regions.
The five highest risk markets are:
- Memphis
- Detroit-Livonia-Dearborn: Michigan housing market
- Youngstown-Warren-Boardman: Ohio-Pennsylvania housing market
- Warren-Troy-Farmington Hills: Michigan housing market
- and Indianapolis-Carmel: Indiana housing market
“From low unemployment to high foreclosures, our data indicates that [bad credit mortgage] risk and fraud will continue to play an important role in the overall health of the housing market,” said Mark Fleming, chief economist for CoreLogic, in a statement.
“Fraud and collateral risk are still on the rise, as is foreclosure activity, but the silver lining is low unemployment and a small increase in house price appreciation.”
Posted by Jed Moss on Jan 26 2007 under Tennessee
Over in Memphis, Tennessee mortgage applications rose to a record number in 2006.
Meanwhile, there was more good news in the Nashville housing market: it set a new record in building permits last year with nearly $2 billion worth of construction approved by the codes department.
Permits issued in 2006 totaled 10,937, a 4 percent increase over 2005, according to a released statement from the mayor’s office. The year-over-year increase in permit value was 11 percent, with $1.85 billion in permits pulled in 2006 compared to $1.66 billion in 2005.
Steady mortgage rates contributed to the confidence of builders and buyers in the region.
“These numbers show the vitality and strength of Nashville’s economy,” Nashville Mayor Bill Purcell said. “We continue to grow in a healthy way, from the new skyscrapers coming downtown to the residential communities being built across the county, to the home renovations in the city’s older neighborhoods.”
While permits overall fared well, there was a 3 percent decline in residential single-family permits issued. Nevertheless, last year still comes in as the second highest in residential permits on record with 3,498 issued, down from 3,642 in 2005.
With home loan rates expected to remain reasonable, 2007 could result in even better numbers.
Posted by Jed Moss on Jan 24 2007 under Tennessee
Thanks to low mortgage rates in the area, the Memphis housing market exceeded home sale numbers from 2005 by 4.5 percent for a total of 19,738 sales last year.
The data provided by the Memphis Area Association of Realtors lists 19,738 home sales for 2006, up from 18,881 in the previous year.
December 2006 home sales declined 13 percent from the same period in 2005. However, Tennessee mortgage activity remains strong in the region, a good sign as the new year begins.
The Memphis MSA had 1,294 home sales in December 2006, compared to 1,488 in December 2005.
“The continued strength of the local economy and overall affordability of Memphis-area real estate helped make 2006 the best year on record for home sales,” said MAAR president Neil Hubbard. “With the historically low mortgage rates and good supply of homes available, buyers have a great opportunity as 2007 begins.”
The average home sale price for the Mid-South area in 2006 was $173,200, according to MAAR’s year-end data.
Posted by Jed Moss on Jan 15 2007 under Tennessee
The Ashland City Times put it simply: It was a good year to sell a house in Middle Tennessee, especially if it was in Williamson County.
The median price of a single-family home jumped 21 percent in Williamson County in 2006, the biggest leap in a region that saw generous price gains across the board and a record number of residential property sales over the nine-county area.
A record 40,056 residential properties were sold in Davidson and eight surrounding counties last year, a 3 percent gain over 2005, the previous record year. Sales were brisk through the summer, as well, as Tennessee mortgage activity remained strong.
For the year as a whole, home prices soared by more than 10 percent in Wilson, Sumner and Maury counties. Even in the area’s laggard, Dickson County, prices rose 5 percent, according to data released Tuesday by the Greater Nashville Association of Realtors.
“We felt like, all year long, it would be a record year, and we feel like 2007 will be another record year,” said Richard Courtney, the Realtors association’s president. He predicted sales will rise 2 percent to 3 percent in 2007.
Sales down for month: The final returns on 2006 show a market that rose for the year, even though sales softened in December, extending a slowdown that began in the fall.
Sales of single-family homes, which make up more than three-quarters of the local real estate market, dropped nearly 13 percent in December, compared to the same month in 2005.
Overall residential property sales - which also include condos, duplexes and land tracts - dropped more than 7 percent for the month. It’s typical around the holidays, however, for fewer mortgages loans to be applied for.
Williamson surges: The biggest surge in prices was in Williamson County, where the median price of a single-family home sold last year rose to $353,155 from $291,900 in 2005.
Sales of single-family homes in Williamson increased by 2.4 percent during the year.
One reason for the gain was new construction. Williamson County remained one of the area’s top markets for homebuilding in 2006, especially in homes priced $750,000 or more, local agents said.
“The resale market follows the new homes market,” said Bill Henson, Jr., president of Franklin-based SilverPointe Properties.
Sumner and Wilson counties - both of which have major subdivisions under construction - also enjoyed high price gains, 16 percent and 15 percent, respectively.
Posted by Jed Moss on Jan 10 2007 under Tennessee
At this point, it’s barely even news. But The Greater Nashville Association of Realtors reports record-setting home sales in the Nashville housing market again, the sixth consecutive year this milestone has taken place.
The 40,056 homes that closed in 2006 represented a 3 percent increase from 2005. The city is known for enjoying consistently high Tennessee mortgage demand.
The 3,109 closings in December represented a 7.5 percent decline from the same month last year, but was still the second-highest number of closings in the last month of the year.
Fourth-quarter closings were also the second best on record, although they were down 2.6 percent from the 9,563 closings seen in the fourth quarter of 2005.
Richard Courtney, president of the Greater Nashville Association of Realtors, said changes in the market in 2006 included “a significant increase” in the number of condominiums purchased, and expected the trend to continue, with more condominiums becoming available in downtown Nashville and surrounding cities.
Inventory at the end of December stood at 15,815 listings, down from 17,175 in November, but up 24 percent from the same time last year. Moreover, the average number of days on market was 65 days, up from 58 days in 2005.
This would indicate it’s still somewhat of a buyer’s market in the region because properties are taking time to sell. However, if you’re interested in a house there, you should speak with a home mortgage company ASAP in order to find a deal.
Posted by Jed Moss on Jan 10 2007 under Tennessee
