Daily Briefing: Thursday, April 18, 2013
TODAY'S TOP STORIES
BofA settles mortgage investors' class-action suit
NEW YORK – April 18, 2013 – Bank of America has agreed to settle a class-action lawsuit brought by investors who bought mortgage investments from Countrywide Financial, the California-based lender it acquired in 2008. The announcement came as the nation’s second biggest bank reported higher net income for the first quarter, but missed analysts’ expectations.Bank of America said Wednesday that it would pay $500 million to settle the lawsuit brought by the Maine State Retirement System and other pension funds who said Countrywide had misled them about the quality of the mortgages they bundled together and sold to investors before the crisis.The settlement is the latest reminder of the long fallout of Bank of America’s decision to buy Countrywide, which was known for making exotic loans. The purchase catapulted the bank into a spot at the top of the nation’s mortgage scene, but it’s been an albatross ever since, bringing lawsuits, regulatory investigations and quarterly losses.Bank of America made the settlement announcement while reporting first-quarter results. Its profit soared but analysts described the quarter as noisy because of accounting charges that affected results. Revenue dipped slightly, profits missed expectations and investors sent the stock down 30 cents, or 2.4 percent, to $11.98 in trading 45 minutes ahead of the market opening.The Charlotte, N.C., bank reported earnings after paying preferred dividends of $2.3 billion in the first quarter. That was up nearly seven times from earnings of $328 million a year ago. However, the 2012 results were also obscured by an accounting rule that forced the bank to record a charge because the value of its debt had risen.Mortgages and wealth management helped this quarter’s results. Loans fell while deposits and credit card spending rose.The bank funded $25 billion in mortgages, a jump of 56 percent from a year ago. More than 90 percent came from refinancings. The overall mortgage unit continued to lose money, though, weighed down by legal costs.The bank continued to cut jobs and other expenses. It trimmed nearly 16,000 jobs over the year, or nearly 6 percent of its work force.“We feel like we made a lot of progress this quarter,” Chief Financial Officer Bruce Thompson said on a call with reporters, “and there’s a lot more to do.”Earnings per share amounted to 20 cents. That missed the expectations of analysts polled by FactSet, who had expected 22 cents per share.Revenue was $23.9 billion after stripping out an accounting charge. That was down 8 percent from last year, but it beat analysts’ expectations of $23.3 billion. Copyright © 2013 The Associated Press, Christina Rexrode. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Study: A smoker's home can lower value up to 29%
KIRKLAND, Quebec, Canada – April 18, 2013 – A recent survey of Ontario real estate agents and brokers, sponsored by Pfizer Canada, found that smoking in the home could lower the value of property up to 29 percent.
“Smoking has a profound impact on how appealing a home is to a prospective buyer,” says David Visentin “It stains walls and carpets, and leaves a smell that can be hard to eliminate. Many prospective buyers are really put off by homes that have been smoked in, and they can be very challenging to sell.”
Visentin hosts “Love it or List it” on , which also features who will appear at the Florida Realtors Convention & Trade Expo Aug. 14-18, 2013.
Impact of smoking in the home: Beyond cosmetic
Almost half (44 percent) of the real estate agents and brokers surveyed said smoking in the home affects resale value. Of these, one-in-three (32 percent) said smoking in the home may lower the value by 10-19 percent and a further one-in-three (32 percent) said it may lower the value by 20-29 percent.
An overwhelming majority of Ontario real estate agents and brokers (88 percent) said it’s more difficult to sell a home where owners have smoked. More than half (56 percent) said most buyers are less likely to buy a home where people have smoked, and 27 percent went further and said most buyers are actually unwilling to buy a home where people have smoked.
© 2013 Florida Realtors®
Finding the right home can be easy
MIAMI – April 18, 2013 – Marianne Cusato is sitting on top of the world. Well, not really. But she likes to think so.
Cusato lives on the 15th floor of a 57-story condo building in Miami’s swanky Brickell neighborhood. She has views of the city and the Miami River, where fishing boats and sailboats glide by daily en route to the sea and back.
“It’s all very Miami,” says Cusato, author of The Just Right Home: Buying, Renting, Moving – or Just Dreaming – Find Your Perfect Match (Workman).
It’s also very her. She’d like to find a similar perfect fit for you.
Cusato, 38, an award-winning architect who designed the Katrina Cottages as housing in New Orleans after the hurricane of the same name, acknowledges it’s not easy finding the perfect home.
It’s easy to mess up a move
About 37 million Americans move every year, and many of them make mistakes in the process. She’s out to correct that with her no-nonsense book filled with lists, questions and quizzes to help determine what you really want in a home.
As a single woman, she wanted safety, for instance. “I didn’t want to be alone in a house at the end of some cul-de-sac,” she says. She also wanted to be able to walk to restaurants, shops, ball games and cultural events, something she can easily do.
She found her one-bedroom condo three years ago when “great deals were to be had” in South Florida. “It was a no-brainer,” she says. And yes, she rents. In fact she calls herself a “proud renter. At this point in my life mobility is important.”
But enough about her and her floor-to-ceiling glass view of the world. What about us? What’s wrong with us when we go house hunting?
“We don’t always think about what we actually want. We make decisions on what we’re told we should do,” she says. “We don’t take the time to look at what works for us.”
With the real estate market coming back strong, Cusato says, there has never been a more important time to take a moment and reflect on what works best. Her mantra: Maximize your investment and minimize surprises.
That doesn’t mean your gut instincts should be ignored. Her high-ceilinged condo “spoke to me” the moment she walked in, she says. (It also helped that a cafe and pool are on the same floor.)
She says problems arise when buyers accept things – too many bathrooms, too many amenities – for resale value “but you don’t really want them. So we end up living in homes that don’t meet our needs. What we need to do now is live in a home that works for us.” Simply put, a home’s live-in value is greater than its resale value.
Architect and author Sarah Susanka agrees. She was early to the smaller-is-better trend with her groundbreaking “Not So Big House” series of books back in the late ‘90s. She has followed Cusato’s career and is happy to see she and others are now on her once lonely bandwagon.
“It’s a whole new world today,” she says. “I go to conferences now and they’re all singing my old song. ‘Smaller is better.’ It’s amazing, really.”
Many of Cusato’s questions revolve around the less-is-more theory. Do you want to take care of a lawn? How much time do you want to spend commuting to work? And are you budgeting those costs into your monthly household bills?
As for the car question, Cusato says, the more important rule today is “proximity, proximity, proximity” rather than the old “location, location, location” adage.
Where to land can be tricky, too. “Some people just know where they want to live,’ says Cusato, who grew up in Alaska but now says she loves being from Alaska. She lived in Manhattan for eight years but was looking for a change. Miami gave her the urban feel, but with a much different flair to it – and at half the cost.
Bigger is not better
And then there’s the size question. Cusato likes to say small is the new big. Out, out, damn McMansions.
“We’re in a swing-back place now,” she says of the trend to smaller and more efficient homes. And where did those McMansions come from?
Huge houses were built in communities where a car was a necessity. “There wasn’t anything to walk to, so everything had to be at the house. You weren’t going to leave once you got there, once you got home,” she says. Think huge kitchens and home theaters.
She says builders then got into “building wars. They were going to raise you two gables and a turret.”
That’s why the return of the front porch makes so much sense to her. It pleases her, too. According to a survey by the National Association of Home Builders, a front porch is an outdoor feature now most likely to be included in the average new home in 2015.
“Millennials are getting ready to buy now, and they don’t want a house with those turrets. We want to walk to things,” Cusato says. “They, like me, want everything in their house to make sense. They want to connect to their neighborhood. Where we live is so important. That’s why we can’t jump into the old patterns. What’s the community we’re connected to? What’s that experience? What do we want that to be? You have to be a savvy consumer to ask those questions.”
Brian DiSabatino, a co-founder of The Town of Whitehall in New Castle County, Del., says Cusato’s book makes perfect sense. He has been working with state and local officials for years to prepare for the shift away from suburbia. His Whitehall project, which begins next year, is a mixed-use development featuring a walkable community of 10,000 residents.
Like Cusato, DiSabatino says savvy buyers need to understand that instead of “location, location, location,” they need to think “simple, convenient and vibrant.”
“Our advice?” he asks. “Choose a place to live, in addition to a house to live in.”
Copyright © USA TODAY 2013, Eliot J. Schechter.
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Problems cashing foreclosure checks resolved
WASHINGTON – April 18, 2013 – Some of the mortgage borrowers who received checks this week as part of a $3.6 billion foreclosure-abuse settlement were initially unable to cash the checks, the Federal Reserve said Wednesday. The Fed said, however, that the problem has been resolved.
The paying agent for 13 mortgage servicers, Rust Consulting Inc., “corrected problems that led to some checks being rejected,” the Fed said in a statement, without offering any details. According to a source with knowledge of the problem, recipients were able to deposit the checks in their bank accounts, but some ran into trouble when they tried to cash them.
Margaret Jurow, a lawyer with Legal Services of New Jersey who works with homeowners facing foreclosure, said many of her clients don’t even have bank accounts, so cashing the check was their only option.
She called the error “incredibly disrespectful” to homeowners and former homeowners who were eligible for the checks because they faced foreclosure in 2009 and 2010.
“You try sending a bad check to your mortgage company, and see what happens,” Jurow said.
Checks began going out on Friday to 4.2 million borrowers after federal regulators reached an agreement with the 13 mortgage servicers.
Borrowers will get checks ranging from $300 to $125,000, for a total of $3.6 billion. The deal involves 13 mortgage servicers: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.
The agreement was one in a series of settlements related to foreclosure abuses that included “robo-signing,” in which mortgage industry representatives signed legal documents without checking them in their rush to evict homeowners.
The largest settlement amount – $125,000 – will go to members of the military who lost their homes in violation of the Service Members Civil Relief Act, which gives deployed service members extra protection in foreclosures. Also eligible for $125,000 are homeowners who lost their homes even though they weren’t in default on their loans. But all homeowners who were in some stage of the foreclosure process in 2009 and 2010 with one of the 13 mortgage companies will receive a payment, without having to prove any wrongdoing. More than 64 percent of the borrowers – about 2.7 million people – will get $300 or $400, according to the Office of the Comptroller of the Currency.
Copyright © 2013 The Record (Hackensack, N.J.) Distributed by MCT Information Services.
NOW YOU KNOW
Bid farewell to the ‘master bedroom’
WASHINGTON – April 18, 2013 – While a home’s “master suite” – typically the largest in the residence and containing its own bathroom – generally is desirable, the term itself can be perceived as offensive to some. The word applies more to men than women, and even has a slightly racist overtone to some people.
As a result, the real estate community is moving away from the term. Many floor plans offered by homebuilders now use the phrase “owner’s suite” or “owner’s bedroom” instead.
The shift is trickling down to the resale housing market as well, where “owner’s bedroom” is used most often in luxury property listings.
“The (owner’s suite) terminology has more of an upscale tone to it, particularly in some of the really large homes that truly have a large bedroom, sitting area, enormous walk-in closets and lavish bathrooms,” says Brian Block of RE/Max Allegiance in McLean, Va. “‘Owner’s suite’ conveys a sense of being distinguished, having ‘made it’ or ‘arrived’ rather than the everyday ‘master bedroom.’”
“I imagine it’s not only a more accurate description, but also a more politically correct term of art,” adds Winchester Homes Inc. executive Steve Nardella.
Source: Washington Business Journal (04/17/13) Neibauer, Michael
© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688
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