Obama Signs Patent Law: Help to Real Estate?

President Obama signed into law today the most sweeping reforms to the U.S. patent system in decades, and it holds out hope for real estate. A number of REALTOR® associations and MLSs have been hit with patent infringement lawsuits in recent years, and this law aims to reduce the number and cost of these lawsuits. The “America Invents Act” is divided into three parts. First, it aims to keep the U.S. patent system attractive to global companies by aligning its processes with other countries’ processes. Second, it tries to align funding for the U.S. Patent Office with its needs by modifying its fee system. And third, it aims to raise the bar on the quality of the patents so only the most appropriate patent infringement lawsuits are filed. It’s this third part that’s of most interest to real estate. Right now, companies can obtain patents that are so broad that all sorts of applications fall under them. The new law aims to narrow the scope of patents so that just the truly innovative parts are protected. In doing that, the likelihood of broad-based patent lawsuits, like the CIVIX-DDI lawsuit that hit a number of REALTOR® associations and MLSs last year (and for which NAR negotiated a comprehensive settlement earlier this year), will be reduced. It will be years before we know whether the patent changes will have their intended effect and no doubt the law will be tweaked in the years ahead, but what’s clear is that lawmakers understand that the U.S. system needed modernization. NAR will be monitoring its implementation to make sure real estate interests remain protected. In this four-minute video, NAR Senior Legislative Analyst Melanie Wyne walks us though the law and how it might impact real estate. By Robert Freedman, Senior Editor, REALTOR® Magazine

Home price depreciation over the past few years has made housing more undervalued relative to incomes than ever before, yet home sales have continued to decline.

Home price depreciation over the past few years has made housing more undervalued relative to incomes than ever before, yet home sales have continued to decline. Based on the Case-Shiller house price index and compared to the 1975-2010 average, the research firm says housing is now around 23 percent undervalued against disposable income per employee and disposable income per capita. These are both record lows. As Capital Economics said, the weak labor market and outstanding loan balances that exceed property values are keeping first-time and repeat homebuyers on the sidelines, even with mortgage rates at all-time lows. Moreover, the firm’s analysts note that mortgage rates have yet to respond in full to the decline in 10-year Treasury yields to 2 percent. It is possible that 30-year mortgage rates will soon fall below 4 percent, according to Capital Economics. If so, the firm says the monthly mortgage principal and interest payment on a median priced home bought with an 80 percent loan would fall to a record low of 13 percent of median income. That would compare with the 20-year average of 20 percent. For cash buyers and investors, the weaker economic and investing climate is clearly taking its toll on housing demand, according to Capital Economics. The resulting fall in home sales has offset recent declines in the number of homes for sale, leaving housing inventory still high relative to demand, the research firm explained. And there’s nothing in the cards to suggest a resurgence to bring activity closer to normal levels. All this at the same time that home prices appear to be close to stabilizing, Capital Economics notes. Although, the firm says home prices have yet to respond fully to the recent weakening in consumer and investor demand.

Industry Calls for Expanded Refinance Program

At a hearing before the Senate Committee on Banking, Housing, and Urban Affairs, witnesses urged Congress to help more underwater homeowners refinance their loans at current, record-low interest rates.

The Home Affordable Refinance Program (HARP) – part of the Marking Home Affordable program – allows underwater homeowners with mortgages backed by Fannie Mae and Freddie Mac to refinance their mortgages at lower interest rates.

However, the program has helped fewer than 900,000 of the more than 10 million underwater homeowners in the country.

“Reinvigorating HARP would provide a substantial boost with no meaningful cost to taxpayers,” said Mark Zandi, chief economist at Moody’s Analytics before the Senate committee Wednesday.

“Refinancing has been disappointing given record-low borrowing costs,” Zandi said.

“In 2003, when fixed mortgage rates were between 5.5% and 6%, home loans were being refinanced at an annualized rate above $4 trillion. The current level of activity is less than half that,” he stated.

Zandi believes in order to expand HARP’s reach, Fannie and Freddie need to discontinue charging add-on rates and allow homeowners with lower credit scores to refinance.

Sen. Barbara Boxer (D-California) shares Zandi’s view and has proposed the Helping Responsible Homeowners Act of 2011 (S. 170) to allow more homeowners to refinance.

“One reason existing refinancing efforts have fallen far short of their goals is that Fannie and Freddie continue to charge homeowners high, risk-based fees up front to refinance their loans,” Boxer explained to the committee.

Boxer’s act would “eliminate the risk-based fees on loans for which Fannie and Freddie already bear the risk” and allow about 5 million homeowners to refinance, according to Boxer.

“It’s the best way to get money into our economy quickly,” Boxer said.

“It is not a boost to the housing market from the standpoint of creating sales, but it is a depressant on more foreclosures,” Sen. Johnny Isakson (R-Georgia) said of the bill, which he is co-sponsoring.

Isakson believes the bill will reduce the likelihood of strategic default for the millions of underwater homeowners.

David Stevens, president and CEO of the Mortgage Bankers Association (MBA) addressed the committee stating that the MBA also supports a HARP adjustment.

He believes streamlining appraisal and closing processes will reduce the cost of refinancing and suggested raising HARP’s required loan-to-value ratio, which is currently 125 percent.

Richard A. Smith, CEO of Realogy Corporation, agreed that widespread refinancing will help the market in the short-term, but he cautioned that “an improved economy and value appreciation are essential to any long-term solution.”

“Underwater equity today that remains underwater equity five years from now does little to improve the long-term state of housing,” Smith stated.

HUD Wants Housing Counseling Funds Back

The Department of Housing and Urban Development is asking Congress to restore funding for its housing counseling program, which it says is “important to the recovery and stability of our housing markets.”
The program faced major cuts in April. Congress slashed $88 million in HUD nonprofit counseling funds for 2011.
"This cut jeopardizes the vital consumer protections housing counselors provide nationwide, and restoration of these funds is important to the recovery and stability of our housing markets," Deborah Holston, HUD’s acting deputy assistant secretary for single family housing, told a House subcommittee Wednesday.
About half of the clients in the counseling program in 2009 and 2010 sought foreclosure prevention assistance. HUD points to research such as from the Government Accountability Office that found counseling resulted in fewer defaults. Also, borrowers who received National Foreclosure Mitigation Counseling program funds before a loan modification had a 53 percent better chance of bringing their mortgage up-to-date.
"This program has far-reaching effects throughout our economy, and the services it supports will continue to be vital to the ongoing recovery," Holston told the subcommittee.
Source: “HUD Asks Congress to Restore Housing Counselor Funding,” HousingWire (Sept. 14, 2011)

Mortgage Applications on the Rise Last Week

Mortgage applications increased 6.3 percent last week compared to one week earlier, as more borrowers took advantage of record-reaching low interest rates.
For the week ending Sept. 9, the purchase index — a gauge for future home buying — increased on a seasonally adjusted basis by 7 percent compared to one week earlier, the Mortgage Bankers Association reported in its weekly mortgage application survey. However, the purchase index is 7.2 percent lower from the same week one year ago.
Meanwhile, the refinance index increased 6 percent from the previous week, ending three consecutive weekly decreases in activity. Still, it is 23.5 percent lower than the same week a year ago.
By REALTOR® Magazine Daily News

| -A A +A NAR: Increased Lending, Short Sales Will Reduce REOs

Improving access to affordable mortgage financing for qualified home buyers and investors and committing additional resources to loan modifications and short sales will help reduce current and future inventories of real estate owned (REO) properties held by government agencies, according to the National Association of REALTORS®. In a letter sent today to the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, and the U.S. Department of the Treasury, NAR responded to the agencies’ recent request for input and offered its recommendations for selling REO properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration. In its letter, NAR urged the agencies to create an advisory board as they explore new options for selling foreclosed properties to ensure that efficiently disposing of agency REO properties will minimize taxpayer losses and reduce the negative effects that distressed properties have on local real estate markets. “As the leading advocate for housing issues, REALTORS®know that foreclosures affect families, communities, the housing market and our nation’s economy,” said NAR President Ron Phipps. “We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties. This will help stabilize home prices and neighborhoods and help support the broader economic recovery.” Phipps said that the lack of available and affordable mortgage financing is hurting REO sales and the entire housing market, and urged increased consumer and investor lending. While NAR supports strong underwriting standards, the lack of private capital in the mortgage market, unduly tight underwriting standards, and increasing fees have discouraged many potential home buyers from applying for mortgages. NAR believes ensuring mortgage availability for qualified home buyers and investors will help absorb the excess REO inventory. To prevent further REO inventory increases, NAR also recommended that the agencies take more aggressive steps to modify loans and, when a family is absolutely unable keep their home, to quickly approve reasonable short sale offers that allow families to avoid foreclosure. Phipps said that while federal programs have been put into place to help keep families in their homes, many of these have fallen short of expectations, and advocated that those resources be applied toward modifying loans and expediting short sales, which are typically less costly than foreclosure. “Loan modifications keep families in their home and reduce defaults, while short sales keep homes occupied, helping stabilize neighborhoods and home values,” Phipps said. “Expanding resources and ensuring the use of already allocated funds for pre-foreclosure efforts is the best opportunity to reduce taxpayer costs and creates more positive outcomes for homeowners and their communities.” NAR’s letter also outlined concerns about proposals to pool large volumes of REO properties for bulk sales. While these types of transactions may help quickly alleviate high REO inventories, taxpayers would be required to accept larger losses than are necessary. Phipps said that efforts should be made to incentivize individual versus bulk sales, except in small geographic areas that meet certain criteria, since selling in bulk to large national investors puts a large section of the housing market into the hands of fewer market participants and puts individual home buyers and sellers at a disadvantage. He also said the success of any bulk sale programs should be determined by the stabilizing effect the program has on a locale and whether it maximizes value to taxpayers. Maximizing the recovery on the agencies’ assets will depend on how property valuations are determined and that those valuations are accurate, appropriate, and reflective of market conditions, such as the valuations available through the Realtors Property Resource™, an NAR subsidiary. NAR is also concerned about proposals that include lease-to-own elements. Phipps said that agency policies should first be focused on keeping families in their homes through loan modifications or short sales if that’s a better option, and that the agencies should not expedite foreclosures so that those properties could be included in a lease-to-own program. He added that any lease-to-own programs should not be administered by the government, but instead should include the participation of local investors or nonprofits that can manage the specialized needs and challenges of the local market. “REALTORS® welcome the agencies’ desire to receive input and ideas to help address their REO inventory. We look forward to serving on any advisory board and working together with agency staff, real estate professionals, property managers, and others with extensive real estate industry experience to develop sound strategies and solutions to ongoing REO issues,” said Phipps. Source: NAR

Defaults Soar 33%, Biggest Monthly Gain in 4 Years

A new wave of foreclosures hit in August, as banks picked up the pace in taking action against home owners who have fallen behind on their mortgage payments, RealtyTrac Inc. reported Thursday. The number of U.S. homes that receiving an initial default notice rose 33 percent in August from July. That increase represents the biggest monthly gain in four years, according to RealtyTrac. "This is really the first time we've seen a significant increase in the number of new foreclosure actions," says Rick Sharga, a senior vice president at RealtyTrac. "It's still possible this is a blip, but I think it's much more likely we're seeing the beginning of a trend here." The uptick in foreclosure activity follows after months of a slowdown in foreclosures, which started last fall, with banks reviewing foreclosure policies and paperwork after facing lawsuits and criticism over how they processed foreclosures. Some banks even temporarily halted their foreclosures as they more carefully reviewed pending cases. The slowdown was also blamed on court delays in some states. But some housing experts say the increase in foreclosure activity actually could be good for the housing market. A faster turnaround in foreclosures could help clear the glut of shadow inventory hovering over the market, which many say has caused home values to plummet. The “bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery," said Josh Levin, a Citi analyst. About 3.7 million more homes are in some stage of foreclosure than in a normal housing market, Levin said. Banks are on track to repossess about 800,000 homes this year — down from more than 1 million last year, Sharga said. Overall, 228,098 U.S. homes — or one in every 570 U.S. households — received a foreclosure-related notice in August, a 7 percent increase from July. However, that represents a 33 percent decline from August 2010. Source: “Report: Mortgage Default Warnings Spiked in August, Signaling Potential New Foreclosure Wave,” Associated Press (Sept. 15, 2011)

Fannie Mae

Several servicers remain below median performance level as of the first half of the year, as ranked by Fannie Mae’s Servicer Total Achievement and Rewards (STAR) Program. Fannie Mae announced the STAR Program in February to measure servicers’ success in providing sustainable solutions to distressed homeowners. The mid-year results released Wednesday by the GSE indicate that four out of the 11 banks in Peer Group 1 areon track to receive at least a three-STAR rating at the end of the year. Banks are ranked on a five-STAR scale, with three STARs signifying median performance level relative to peers and five STARs signifying superior performance. Servicers are split into three peer groups based on the number of Fannie Mae loans they service. Those in Peer Group 1 who are on track to receive at least three STARs are GMAC Mortgage, LLC, Citi Mortgage, Inc., Everhome Mortgage, and Wells Fargo Bank. In Peer Group 2, six of 10 servicers are on track for a median rating at year-end, including, Fifth Third Bank, The Huntington National Bank, HSBC Mortgage Corporation, Aurora Financial Group Inc., Regions Bank and Central Mortgage Company. The results for Peer Group 3 have not yet been released and are expected in the next 30 days. “We are committed to helping stabilize the housing market by requiring servicers to prevent foreclosure whenever possible,” said Leslie Peeler, Vice President for Servicer Portfolio Management, Fannie Mae.

Surge in Defaults Breaks Six-Month Run of Declining

The lingering effects of the foreclosure moratoriums enacted after evidence of improper foreclosure processing came to light appear to be fading. Data released by RealtyTrac Thursday shows the first rise in foreclosure filings since January, with all of the increase coming from new default notices. The tracking company says filings – including default notices, scheduled auctions, and bank-repossessed REOs – rose 7 percent between July and August on the national stage. But with the steep declines seen over previous months, filings remain 33 percent below the level recorded in August 2010. Default notices posted their biggest month-to-month increase since August of 2007, up 33 percent. The 78,880 new default notices filed last month represents a nine-month high, but is down 18 percent from a year earlier. Default notices increased more than 40 percent on a month-over-month basis in several states, including New Jersey (42 percent), Indiana (46 percent), and California (55 percent). James Saccacio, RealtyTrac’s CEO, says the big increase in new foreclosure actions is a sign lenders are pushing foreclosures through and foreshadows more bank repossessions in the coming months. Foreclosure auctions (NTS, NFS) were scheduled for 84,405 U.S. properties in August, a decrease of 1 percent from the previous month and a decrease of 43 percent from August 2010. Despite the nationwide decrease, scheduled auctions were up substantially from the previous month in several states where the auction notice is the first public notice in the process, such as Oregon (19 percent), Arizona (20 percent), Georgia (22 percent), and Colorado (51 percent). Lenders repossessed a total of 64,813 homes (REOs) in August, a 4 percent decrease from the previous month and a 32 percent decrease from a year earlier. The REO total in August marked a six-month low. Five states accounted for more than half of the foreclosure activity in August. Leading the pack was California, where 59,383 properties had foreclosure filings during the month. Florida posted the second highest state total with 23,569 filings, followed by Michigan (13,016), Illinois (12,493), and Georgia (11,743 properties). RealtyTrac’s report shows that defaults surged in August in some of the hardest-hit local markets. A 30 percent month-over-month increase in default notices helped Las Vegas maintain the nation’s highest foreclosure rate among large metropolitan areas. Eight of the metros with top-10 foreclosure rates can be found in California. All but Stockton posted a double-digit monthly increase in default notices. The biggest jump was found in Visalia-Porterville, where new defaults climbed 97 percent from the previous month. Closing out the metro top-10 list is Reno, Nevada. There, new defaults rose 23 percent in August.

Government Guarantees Called Into Question at Senate Hearing

The Senate Banking Committee held a hearing Tuesday on housing finance reform, the first of three housing-related hearings on the agenda this week. The issue of government guarantees for mortgages came under fire.
Peter Wallison, a fellow with the American Enterprise Institute in Washington, D.C. , noted in his testimony that the Congressional Budget Office (CBO) recently estimated – even after the recent debt extension agreement – that if current policies are pursued the national debt will balloon from $14.3 trillion today to $23 trillion in 2021.

“Virtually all proposals for U.S. government assistance to the housing finance market assume that it will involve an explicit government guarantee, but even if this guarantee is only implicit — as it was with the government sponsored enterprises Fannie Mae and Freddie Mac – it will make no significant difference except in the budget numbers,” Wallison said.

“The bailout of Fannie and Freddie proved beyond question that this debt is every bit a part of the nation’s debt as the securities are issued by the Treasury,” he added

Wallison says without any change in policies and without any further increase in the GSEs’ debt, the national debt will reach $30 trillion in 10 years.

“With this background, it is hard to believe that there is actually a viable campaign to have the government support the housing market once again,” he told lawmakers from the Senate committee.

Wallison said that the housing finance market can and should principally function without any direct government financial support.

Others scheduled to testify with Wallison were Dwight Jaffee, a real estate and finance professor at the University of California-Berkley; Adam Levin, a law professor at Georgetown University; and Richard Green director and chair of the USC Lusk Center for Real Estate, University of Southern California.

In other sessions on Capitol Hill this week, Wednesday the Senate Banking Subcommittee on Housing, Transportation and Community Development is scheduled to hear new ideas for mortgage loan restructuring and refinancing from Mortgage Bankers Association President and CEO David H. Stevens. No other witnesses are currently scheduled.

Also on Wednesday, the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity will examine HUD’s and NeighborWorks America’s housing counseling programs. Peter Bell, president of the National Reverse Lenders Association and a representative from the U.S. Government Accountability Office are scheduled to testify

Investment Bank Expects Moderate Government Refinancing Program

While the Obama administration is still working through the specifics with the Federal Housing Finance Agency (FHFA) on how to open up refinancing to more borrowers, Keefe, Bruyette & Woods (KBW) – an investment bank specializing in financial services – notes that the most likely course of action is a moderate expansion of the Home Affordable Refinance Program (HARP) rather than a broad refinance program.



“We expect additional details to be released in the coming weeks but we think chances of a large, blanket refi program have faded and the impact of whatever program the Administration unveils will be modest,” KBW said in one of two recently released research notes.

Even a HARP expansion is likely to be modest at best, the other research note said, pointing out that HARP volume to date has totaled 838,000 loans over two years. Assuming an average loan size of $150,000, this would equate to total volume of roughly $125 billion.

“Even if this number doubles, it would still reflect a small percentage of the roughly $1 trillion in annual mortgage volume,” the research note said. “Further, given industry capacity constraints we believe that prepayments speeds are going to be constrained so an increase in HARP volume is likely to extend the current mini-refinance wave well into 2012.”

KBW said the two most likely changes include eliminating Loan Level Price Adjustments (LLPAs) and marketing directly to eligible borrowers, which is currently prohibited. LLPAs can add 40 to 50 basis points to the rate of borrowers with lower credit scores.

KBW noted: “The main impediment to refinancing older loans is rep and warranty risk for the new originator. This is unlikely to be changed because waiving rep and warranty rights would increase the credit risk for the GSE.”

The research note said any upcoming changes will have only a moderate impact on the Agency mortgage backed securities market

More Than One-Fifth of Mortgages Underwater: Report

Nearly 10.9 million, or 22.5 percent, of all residential mortgages had negative equity at the end of the second quarter of the year, according to a report released Tuesday by the analytics firm CoreLogic.

The figure is actually a slight improvement from the 22.7 percent of all mortgages with negative equity in the first quarter of 2011.

An additional 2.4 million borrowers had less than 5 percent equity in the second quarter, according to the report, which also shows that nearly three-quarters of homeowners in negative equity situations are also paying higher, above-market interest on their mortgages.

The states that had the most inflated property values before the housing bubble burst, and Michigan, which continues to suffer from the fall off of the automotive and manufacturing industries, had the highest negative equity percentages
Nevada held the top position in terms of negative equity with 60 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (45 percent), Michigan (36 percent), and California (30 percent).

Yet there are some signs that the worst could be over in those states. According to the report, the average negative equity share for the top five states declined from 41 percent to 38 percent during the past year.

Nevada had the largest decline over the last year, with its negative equity share dropping from 68 percent to 60 percent. The reason for the Nevada decline is the high number of foreclosures that led to lower numbers of remaining negative equity borrowers.

“High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” said Mark Fleming, chief economist with CoreLogic in releasing the data.

Fleming added, “The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices.”

According to CoreLogic, 8 million borrowers with negative equity, or nearly 75 percent of all underwater borrowers, have above market rates.

Since the 2005 sales peak, non-distressed sales in ZIP codes with low negative equity have fallen 61 percent, compared to an 83 percent sales decline in high negative equity zip codes.

Freddie Offers New Loan Mod Option

Freddie Mac borrowers ineligible for participation in the Home Affordable Modification Program or previously in default on a HAMP or other loan workout will be able to take advantage of a new option that reduces mortgage principle and monthly payments by at least 10 percent each.

Under a Standard Modification, loans will have the interest rate set at 5 percent and the amortization period extended to 40 years from the time of the workout; lenders will receive cash incentives of up to $1,600 per home owner approved.

The Standard Modification replaces Freddie Mac's Debt Coverage Ratio loan modification, which is now being referred to as a Classic Modification.

Source: "Freddie Offers New Loan Mod Option," NASDAQ (09/13/11)

Poverty Level Rises to Highest Level Since 1993

More Americans are living in poverty: The number of Americans living in poverty rose to 15.1 percent, its highest level since 1993, the Census Bureau reported Tuesday.

Median household income has fallen 7 percent since 2000 (adjusting for inflation) to $49,445 — its lowest since 1996.

The largest drops in incomes were from young professionals and minorities. The median income for black households dropped 3.2 percent to $32,068.

“It’s about joblessness,” Timothy Smeeding, director of the Institute for the Research of Poverty at the University of Wisconsin, told USA Today. “Young [people] don’t have work, and poverty would be even higher if so many 25- to 34-year-olds weren’t living at home with their parents.”

Indeed, the number of households “doubling up” grew from 19.7 million in 2007 to 21.8 million in the spring of 2011, according to Trudi Renwick, the Census Bureau’s chief of poverty statistics.

Meanwhile, the only age group to prosper in the last decade: Americans aged 65 and older. Adjusted for inflation, their household income increased 7.5 percent over the decade, according to U.S. Census data.

Source: “Poverty at 15.1%; Its Highest Level Since 1993,” USA Today (Sept. 13, 2011)

Underwater Borrowers Hold Back Sales

Declines in home values have pushed a high number of home owners to be “underwater,” in which borrowers owe more on their properties than they are current worth, and it’s hampering home sales, according to new data by CoreLogic.

About 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter, down slightly from 22.7 percent in the first quarter, CoreLogic reports. What’s more, about 2.4 million borrowers had less than 5 percent equity, which CoreLogic refers to as “near-negative equity,” in the second quarter.

Since the peak in home sales in 2005, nondistressed sales in ZIP codes with low negative equity have dropped 61 percent, compared to an 83 percent sales decline in high negative equity ZIP codes.

“The typical seasonal changes in sales volume in high negative equity ZIP codes is very muted, which indicates that nondistressed sales are being heavily impacted by the high levels of negative equity in their neighborhood, even if sellers have equity,” according to CoreLogic’s report.

“High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” says Mark Fleming, chief economist with CoreLogic. “The hardest hit markets have improved over the last year, primarily as a result of foreclosures. But nationally, the level of mortgage debt remains high relative to home prices.”

States With the Highest Number of Underwater Borrowers

1. Nevada: 60 percent of all properties with a mortgage were considered underwater

2. Arizona: 49%

3. Florida: 45%

4. Michigan: 36%

5. California: 30%

By REALTOR® Magazine Daily News

Green Mortgages Allow More Options for Upgrades

With the growth of green building the last decade, green lending has emerged to help finance those often costly “green” upgrades.

Dave Porter, with PorterWorks in Stanton, Wash., who provides continuing education courses on green lending to those in the real estate industry, says there are several basic types of green mortgages, which most of the public still isn’t very aware about. For example, energy-efficient mortgages (EEMs) are “used to finance the construction of a home that would meet green standards or to buy one that’s newly built.” An energy improvement mortgage (EIM), on the other hand, is used to buy and fix up a house that needs green improvements, like insulation or new windows.

The loans are available through mortgage programs by Fannie Mae, the Federal Housing Administration, Veterans Affairs, and the Department of Agriculture.

“They have slight differences in requirements, but basically they allow you to finance the home, plus the energy-conserving improvements, without having to qualify for the additional cost of the improvements,” Porter told the Chicago Tribune.

Source: “Market Ripe for Green Loans,” Chicago Tribune (Sept. 9, 2011)

Downsizing Trend Shows Signs of Reversing

New-home sizes had shown signs of shrinking since the housing crisis and recession. However, Americans are still showing signs of living large.

A new-home built in 2010 averaged 2,392 square feet — still more than 650 square feet larger than in 1980, according to U.S. Census Bureau data. While square footage in new homes have dropped slightly since 2007 (when it as 2,521 square feet), new-home sizes are still bigger than what they were from three decades ago. In 1980, new homes were, on average, 1,740 square feet.

With the extra square footage nowadays, home owners are adding more rooms. For example, in 1980, more than 25 percent of all new homes had 1.5 bathrooms or less. In 2010, only 8 percent of homes had 1.5 or fewer bathrooms, while the overwhelmingly majority had a lot more.

Source: “The Way We Live Now is Bigger,” LifeInc.com (Sept. 8, 2011)