A new year end report shows that 19 of 20 major markets across the country are still dropping in price. This means that we have not reached the bottom yet.
Is this doom and gloom? I don't see it that way. This means that there is plenty of opportunity for the fence sitters to jump in the investment market. The first time buyers those that have not purchased a home yet still have the opportunity to do so at a great price. Interest rates are still down giving even more incentive for ones to buy or invest.
So who is this not good for. Real estate agents whose income is tied to commissions. Lower prices means we have to sell more house to make the same money. Home owners that are looking to sell this is hurting them. I have helped several families that have had job transfers and had to do a short sale.
This is a great market to purchase to home. If you are thinking about buying stop thinking and take action. If you need help call a true professional to work with that will guide and aid you to make the best decision.
Thursday, December 29, 2011
Tuesday, December 20, 2011
New Hope for Short Sale customers
There is now help for home owners that had to Short Sale there homes. I am working with law form that will work to remove the Short Sale from 6 different recording companies. What does this mean. Once the Short Sale is removed and all negative comments on credit report the customer can qualify to purchase a home again.
This means that they can take advantage of the market place and purchase a property at today's great prices and incredible interest rates. This will not work for everyone however it will work for many. Call today for a consultation 888-559-0691.
This means that they can take advantage of the market place and purchase a property at today's great prices and incredible interest rates. This will not work for everyone however it will work for many. Call today for a consultation 888-559-0691.
Monday, November 21, 2011
Fha loan limits are being restored to past levels. Why is this good? It means that more houses will be purchased. More houses that are purchased to more the economy will recover. This is a good thing. Take a look at this article it is very informative.
Congress votes to restore FHA loan limits
Fannie and Freddie excluded from proposal
By Inman News
Inman News™
Share This
Lawmakers have voted to restore loan limits for the Federal Housing Administration to pre-Oct. 1 levels, but the reprieve won't apply to Fannie Mae and Fannie Mac.
House and Senate leaders signed off Monday on a conference report for a "minibus" appropriations bill that included language restoring FHA's ability to insure loans of up to $729,750 in high cost markets through 2013.
Because the minibus appropriations package also contains a continuing resolution to avoid a government shutdown and continue federal operations until Dec. 16 -- or until Congress completes nine remaining appropriations bills -- lawmakers didn't dally in approving it.
The House approved the bill today in a 298-121 vote, and it sailed through the Senate 70-30.
The ceiling on so-called jumbo conforming loans -- raised in 2008 after the collapse of secondary markets for loans that don't lack government backing -- dropped, as scheduled, to $625,500 last month.
The formula for determining the jumbo conforming loan limit within that ceiling in high cost housing markets, which for much of the last four years has been 125 percent of median home price, was also trimmed back to 115 percent of median home price.
Last month, Senate lawmakers approved an amendment to the same spending bill approved today that would have restored through 2013 the $729,750 ceiling and 125 percent formula in high cost markets for FHA, Fannie Mae and Freddie Mac. But there were doubts that the proposal would fly in the Republican-controlled House.
The compromise plan hammered out Monday by a Conference Committee excluded Fannie and Freddie.
A summary of the "minibus" bill issued by House Appropriations Committee Chairman Hal Rogers, R-Kentucky, said the bill does not increase the limits for Fannie and Freddie, which have been "under public scrutiny for their questionable businesses practices and use of billions in federal bailout funds, some of which have been used for extravagant management bonuses."
FHA, the summary said, "is subject to greater congressional scrutiny and oversight."
FHA expects claims on defaulted mortgages to climb to new peaks during the next two years, but is unlikely to require a taxpayer bailout unless there's another recession, according to assessments by independent actuaries.
If there is another recession, FHA could require $13 billion to $43 billion in taxpayer assistance to build up its loss reserves, depending on the severity of a second economic downturn, those studies show.
Dr. Joseph Gyourko, chairman of the real estate department at the University of Pennsylvania's Wharton School, thinks those projections are overly optimistic.
In a paper published by the American Enterprise Institute for Public Policy Research, Gyourko predicts that even without an unexpected deterioration in housing markets, FHA will need $50 billion to $100 billion in taxpayer assistance.
In an annual report to Congress, the Department of Housing and Urban Development (HUD) maintains that loans insured after the first quarter of 2009 are generating profits that will allow FHA to build its capital reserves back up to statutory minimums by 2014.
But the report acknowledges that the loan guarantee program is facing a massive backlog of claims on loans insured during the housing boom, particularly those made with seller-financed downpayment assistance.
"FHA has not yet seen the peak of claim expenses from this national housing recession," Secretary of Housing Shaun Donovan said in the report.
Although the robo-signing scandal has slowed down claims, Donovan said, there will soon be a day of reckoning for loans now stuck in the foreclosure pipeline.
"Current expectations are that claims could come in very large numbers this next fiscal year and, as a result, capital resources decline significantly over (fiscal years 2012-2013) as loss reserves are expended," Donovan said.
In fiscal year 2011, which ended on Sept. 30, FHA had a $2.2 billion cash flow deficit as it collected $7.6 billion in premiums and $6.1 billion on sales of foreclosed homes but paid out $14.9 billion in claims and racked up $1.1 billion in property maintenance expenses.
Projections show that even if an economic recovery remains on track, FHA will have a $19.5 billion deficit in fiscal year 2012, which begins Oct. 1, as claims rise to $35.7 billion, outstripping revenue from insurance premiums ($8.7 billion) and sales of foreclosed properties ($7.5 billion).
That dramatic increase in claims -- nearly equal to the $37 billion FHA paid out in the past three years -- will put a serious dent in FHA's $32.4 billion in net capital resources. In the event there is not another recession, FHA's net capital resources are projected to bottom out in fiscal year 2014 without dipping below $10 billion.
But Gyourko argues that actuaries have overestimated the value of FHA's Mutual Mortgage Insurance Fund, in part because they have made overly optimistic assumptions about expected declines in default rates.
Previous studies failed to acknowledge that borrowers who used the federal homebuyer tax credit to fund down payments pose a higher risk, he said, and underestimated the amount of negative equity on homes backing FHA's mortgage insurance portfolio.
"Rather than requesting that Congress strengthen its capital resources as the housing bust deepened, FHA decided to pursue a strategy of growing out of its problems beginning in 2008," Gyourko said in his paper.
While FHA's total insurance-in-force has more than tripled from $305 billion at the end of the 2007 fiscal year to just over $1 trillion, FHA has not increased its capital resources proportionally, he said.
"Unless one believes that the risk of the mortgages it insures has declined substantially, FHA has become a much riskier organization," Gyourko concludes.
But FHA does believe the mortgages it's insuring today are much less risky than many of those it guaranteed during the boom.
Losses on loans insured through the first quarter of fiscal year 2009 are expected to reach $26 billion within a few years, Donovan said. Net losses on seller-funded downpayment assistance loans -- banned in 2009 -- grew by $1.8 billion over the past year to $14.1 billion, he said.
But lower default rates and higher premium charges on loans FHA has insured since then will boost the economic value of the MMI Fund by $18 billion, Donovan said. The mortgages FHA expects to insure next year alone will boost FHA's bottom line by an additional $9 billion.
The FHA's mortgage insurance program has been self-sustaining since it was created in 1934 during the Great Depression. Although the program faced similar challenges during the 1980s, borrower premiums have always covered claims.
Even as HUD projects that the more profitable loans FHA is insuring today will help the mortgage insurance program squeak through the downturn without taxpayer assistance, it's also expecting to insure fewer loans going forward.
The Obama administration has said it wants to see the government gradually reduce its role in mortgage lending to make way for the return of private capital.
In terms of the dollar volume of single-family loans insured, 2011 was FHA's third biggest year ever, second only to 2009 and 2010. But FHA's share of the purchase loan market fell from 19 percent in 2009 and 2010 to 15 percent this year.
Source: HUD/FHA
FHA raised mortgage insurance premiums three times in 2010, and "We are already seeing signs that premium rate increases we have put in place are causing a shift of some business back to the conventional mortgage market," Donovan said.
Homeowners can obtain conventional mortgages backed by Fannie Mae and Freddie Mac with down payments of as little as 5 or 10 percent by purchasing private mortgage insurance.
Another change that could also dent FHA's market share was the reduction of FHA loan limits in 669 counties on Oct. 1. HUD estimates that about 3 percent of the loans insured by FHA in 2010 -- 33,300 mortgages -- would have been ineligible under the new limits.
Source: HUD/FHA
Mortgage Bankers Association Chairman Michael Young said it's not surprising that FHA's financial reserves are under stress, given the "persistent troubles in the economy and real estate markets" and FHA's mission of providing access to home loans for lower-income and first time homebuyers.
With its low, 3.5 percent minimum down payment requirement, 75 percent of the purchase loans FHA guaranteed in 2011 were for first-time homebuyers.
"FHA plays an important countercyclical role in the housing market, with its greatest contributions coming during those times of market stress, like those we have seen in recent years," Young said in a statement. "Without FHA's support, our housing market would be in far worse shape than it is today."
Congress votes to restore FHA loan limits
Fannie and Freddie excluded from proposal
By Inman News
Inman News™
Share This
Lawmakers have voted to restore loan limits for the Federal Housing Administration to pre-Oct. 1 levels, but the reprieve won't apply to Fannie Mae and Fannie Mac.
House and Senate leaders signed off Monday on a conference report for a "minibus" appropriations bill that included language restoring FHA's ability to insure loans of up to $729,750 in high cost markets through 2013.
Because the minibus appropriations package also contains a continuing resolution to avoid a government shutdown and continue federal operations until Dec. 16 -- or until Congress completes nine remaining appropriations bills -- lawmakers didn't dally in approving it.
The House approved the bill today in a 298-121 vote, and it sailed through the Senate 70-30.
The ceiling on so-called jumbo conforming loans -- raised in 2008 after the collapse of secondary markets for loans that don't lack government backing -- dropped, as scheduled, to $625,500 last month.
The formula for determining the jumbo conforming loan limit within that ceiling in high cost housing markets, which for much of the last four years has been 125 percent of median home price, was also trimmed back to 115 percent of median home price.
Last month, Senate lawmakers approved an amendment to the same spending bill approved today that would have restored through 2013 the $729,750 ceiling and 125 percent formula in high cost markets for FHA, Fannie Mae and Freddie Mac. But there were doubts that the proposal would fly in the Republican-controlled House.
The compromise plan hammered out Monday by a Conference Committee excluded Fannie and Freddie.
A summary of the "minibus" bill issued by House Appropriations Committee Chairman Hal Rogers, R-Kentucky, said the bill does not increase the limits for Fannie and Freddie, which have been "under public scrutiny for their questionable businesses practices and use of billions in federal bailout funds, some of which have been used for extravagant management bonuses."
FHA, the summary said, "is subject to greater congressional scrutiny and oversight."
FHA expects claims on defaulted mortgages to climb to new peaks during the next two years, but is unlikely to require a taxpayer bailout unless there's another recession, according to assessments by independent actuaries.
If there is another recession, FHA could require $13 billion to $43 billion in taxpayer assistance to build up its loss reserves, depending on the severity of a second economic downturn, those studies show.
Dr. Joseph Gyourko, chairman of the real estate department at the University of Pennsylvania's Wharton School, thinks those projections are overly optimistic.
In a paper published by the American Enterprise Institute for Public Policy Research, Gyourko predicts that even without an unexpected deterioration in housing markets, FHA will need $50 billion to $100 billion in taxpayer assistance.
In an annual report to Congress, the Department of Housing and Urban Development (HUD) maintains that loans insured after the first quarter of 2009 are generating profits that will allow FHA to build its capital reserves back up to statutory minimums by 2014.
But the report acknowledges that the loan guarantee program is facing a massive backlog of claims on loans insured during the housing boom, particularly those made with seller-financed downpayment assistance.
"FHA has not yet seen the peak of claim expenses from this national housing recession," Secretary of Housing Shaun Donovan said in the report.
Although the robo-signing scandal has slowed down claims, Donovan said, there will soon be a day of reckoning for loans now stuck in the foreclosure pipeline.
"Current expectations are that claims could come in very large numbers this next fiscal year and, as a result, capital resources decline significantly over (fiscal years 2012-2013) as loss reserves are expended," Donovan said.
In fiscal year 2011, which ended on Sept. 30, FHA had a $2.2 billion cash flow deficit as it collected $7.6 billion in premiums and $6.1 billion on sales of foreclosed homes but paid out $14.9 billion in claims and racked up $1.1 billion in property maintenance expenses.
Projections show that even if an economic recovery remains on track, FHA will have a $19.5 billion deficit in fiscal year 2012, which begins Oct. 1, as claims rise to $35.7 billion, outstripping revenue from insurance premiums ($8.7 billion) and sales of foreclosed properties ($7.5 billion).
That dramatic increase in claims -- nearly equal to the $37 billion FHA paid out in the past three years -- will put a serious dent in FHA's $32.4 billion in net capital resources. In the event there is not another recession, FHA's net capital resources are projected to bottom out in fiscal year 2014 without dipping below $10 billion.
But Gyourko argues that actuaries have overestimated the value of FHA's Mutual Mortgage Insurance Fund, in part because they have made overly optimistic assumptions about expected declines in default rates.
Previous studies failed to acknowledge that borrowers who used the federal homebuyer tax credit to fund down payments pose a higher risk, he said, and underestimated the amount of negative equity on homes backing FHA's mortgage insurance portfolio.
"Rather than requesting that Congress strengthen its capital resources as the housing bust deepened, FHA decided to pursue a strategy of growing out of its problems beginning in 2008," Gyourko said in his paper.
While FHA's total insurance-in-force has more than tripled from $305 billion at the end of the 2007 fiscal year to just over $1 trillion, FHA has not increased its capital resources proportionally, he said.
"Unless one believes that the risk of the mortgages it insures has declined substantially, FHA has become a much riskier organization," Gyourko concludes.
But FHA does believe the mortgages it's insuring today are much less risky than many of those it guaranteed during the boom.
Losses on loans insured through the first quarter of fiscal year 2009 are expected to reach $26 billion within a few years, Donovan said. Net losses on seller-funded downpayment assistance loans -- banned in 2009 -- grew by $1.8 billion over the past year to $14.1 billion, he said.
But lower default rates and higher premium charges on loans FHA has insured since then will boost the economic value of the MMI Fund by $18 billion, Donovan said. The mortgages FHA expects to insure next year alone will boost FHA's bottom line by an additional $9 billion.
The FHA's mortgage insurance program has been self-sustaining since it was created in 1934 during the Great Depression. Although the program faced similar challenges during the 1980s, borrower premiums have always covered claims.
Even as HUD projects that the more profitable loans FHA is insuring today will help the mortgage insurance program squeak through the downturn without taxpayer assistance, it's also expecting to insure fewer loans going forward.
The Obama administration has said it wants to see the government gradually reduce its role in mortgage lending to make way for the return of private capital.
In terms of the dollar volume of single-family loans insured, 2011 was FHA's third biggest year ever, second only to 2009 and 2010. But FHA's share of the purchase loan market fell from 19 percent in 2009 and 2010 to 15 percent this year.
Source: HUD/FHA
FHA raised mortgage insurance premiums three times in 2010, and "We are already seeing signs that premium rate increases we have put in place are causing a shift of some business back to the conventional mortgage market," Donovan said.
Homeowners can obtain conventional mortgages backed by Fannie Mae and Freddie Mac with down payments of as little as 5 or 10 percent by purchasing private mortgage insurance.
Another change that could also dent FHA's market share was the reduction of FHA loan limits in 669 counties on Oct. 1. HUD estimates that about 3 percent of the loans insured by FHA in 2010 -- 33,300 mortgages -- would have been ineligible under the new limits.
Source: HUD/FHA
Mortgage Bankers Association Chairman Michael Young said it's not surprising that FHA's financial reserves are under stress, given the "persistent troubles in the economy and real estate markets" and FHA's mission of providing access to home loans for lower-income and first time homebuyers.
With its low, 3.5 percent minimum down payment requirement, 75 percent of the purchase loans FHA guaranteed in 2011 were for first-time homebuyers.
"FHA plays an important countercyclical role in the housing market, with its greatest contributions coming during those times of market stress, like those we have seen in recent years," Young said in a statement. "Without FHA's support, our housing market would be in far worse shape than it is today."
Thursday, October 27, 2011
Social Media good or Bad for Real Estate? Look at this and make up your mind
I have looked at social media and I have not seen the true benefit. However there is good and not so good (as opposite to bad). This shows to me that social media should be used in a specific way. Look at this and make up your own. mind.http://lowes.inman.com/newsletter/video/111765. Let me know
Friday, October 21, 2011
Are you taking advantage of the great oppertunities available today?
A lot of people are wanting the foreclosures to go away and prices to climb.( look at article
http://www.housingwire.com/2011/10/17/reo-sal.. ) The saying is every cloud has silver lining. What is the silver cloud? Lower prices and lower interest rates have made it a great time to buy homes for families and for investors to increase net worth. Are you taking advantage of market or are you complaining?
I choose to look at the positive. If you have some issues to clean up in credit get on it so you can buy now. The predictions are in 7-10 years housing will not be affordable again so make some good decisions take positive action and use the time we have now to get a home or investment property.
Call your local real estate professional and loan officer (or better yet CALL ME 888-559-0691) and get moving taking advantage of this great opportunity we have today.
http://www.housingwire.com/2011/10/17/reo-sal.. ) The saying is every cloud has silver lining. What is the silver cloud? Lower prices and lower interest rates have made it a great time to buy homes for families and for investors to increase net worth. Are you taking advantage of market or are you complaining?
I choose to look at the positive. If you have some issues to clean up in credit get on it so you can buy now. The predictions are in 7-10 years housing will not be affordable again so make some good decisions take positive action and use the time we have now to get a home or investment property.
Call your local real estate professional and loan officer (or better yet CALL ME 888-559-0691) and get moving taking advantage of this great opportunity we have today.
Monday, October 10, 2011
Great News about Interest rates.
According to INMAN news interest rates will stay down for a while. I have attached the whole article if you want to read it. I personally have mixed feelings over what is being said. They are saying not to worry about interest rates going up. That I do not agree with. Any number of things could change that trigger rates going up. What does this mean to you? Cost of home ownership is at an all time low. Now is the time to buy or invest. Call me with any questions.
Here is the article
http://lowes.inman.com/newsletter/2011/10/10/news/155628
Here is the article
http://lowes.inman.com/newsletter/2011/10/10/news/155628
Friday, October 7, 2011
How are property list prices and what property sells for are related? It would seem they are the same or be very close. That is not the case in today's market I have included a chart of property list prices as opposed to closed sale prices. This chart is for Victorville CA you can put any zip code in the US to get your neighborhood.
Why is this important? This is what separates the true real estate professionals from just being an agent. Knowing information this accurate arms the buyer with offering the right price and has the seller price their property so they are not chasing the market. This translates into working with a true professional from the part timers and hobbyist. Don't get me wrong there are some good part time agents, having the right knowledge or the ability to obtain it and use it properly is becoming harder to find.
Does this mean it is bad time to buy or sell. Now is great time to buy. Selling is relative to you and your needs. Are there buyers out there? There are a lot of buyers so if you are thinking of buying or selling use this tool to see if you are working with a good professional agent or not.
If you have any questions about your property value or you want to take advantage of the market contact me.
http://www.zacharybettssoldmyhome.com/mimarket/zip/92346/
Why is this important? This is what separates the true real estate professionals from just being an agent. Knowing information this accurate arms the buyer with offering the right price and has the seller price their property so they are not chasing the market. This translates into working with a true professional from the part timers and hobbyist. Don't get me wrong there are some good part time agents, having the right knowledge or the ability to obtain it and use it properly is becoming harder to find.
Does this mean it is bad time to buy or sell. Now is great time to buy. Selling is relative to you and your needs. Are there buyers out there? There are a lot of buyers so if you are thinking of buying or selling use this tool to see if you are working with a good professional agent or not.
If you have any questions about your property value or you want to take advantage of the market contact me.
http://www.zacharybettssoldmyhome.com/mimarket/zip/92346/
Wednesday, October 5, 2011
Loan issues
This is part of a bigger article published by Lowe's thru Inman on Lowe's newsletter. This article shows how one side is trying to help out the real estate market and the other side is still in panic mode. This panic mode is hampering any real kind of improvement in the economy. This is not fun for us in the industry if you are a loan officer or real estate agent.
Unleash Fannie and Freddie
Since the crisis, Fannie and Freddie have been working at cross purposes to the Federal Reserve. The Fed has countered economic weakness by forcing down long-term interest rates, including mortgage rates, to all-time lows. But Fannie and Freddie have made it increasingly difficult for potential borrowers to qualify, and cut the number who qualify for the very best rates to a trickle.
To get the lowest rate possible on a loan directed to the agencies, a borrower must have a loan-to-property-value ratio of no more than 60 percent and a credit score no less than 700. The property must be single-family but not manufactured, occupied as a permanent residence by the borrower, and in an area not subject to an "adverse market delivery charge." The mortgage cannot have an interest-only provision, and any second mortgage has to be included in the 60 percent limit.
Millions of refinance transactions that would increase the spending power of homeowners, which would have been funded in prior recessions, are not getting funded today. Either the borrowers no longer qualify, or they don't qualify for rates low enough to help them.
Two strategically important groups have been particularly hard hit. One is the self-employed, predominantly small-business owners who are a major potential source of employment growth. The other: investors who buy homes to resell at a profit, and who are desperately needed right now to buy foreclosed homes sold by lenders. Specific proposals related to these groups are discussed later.
Unleash Fannie and Freddie
Since the crisis, Fannie and Freddie have been working at cross purposes to the Federal Reserve. The Fed has countered economic weakness by forcing down long-term interest rates, including mortgage rates, to all-time lows. But Fannie and Freddie have made it increasingly difficult for potential borrowers to qualify, and cut the number who qualify for the very best rates to a trickle.
To get the lowest rate possible on a loan directed to the agencies, a borrower must have a loan-to-property-value ratio of no more than 60 percent and a credit score no less than 700. The property must be single-family but not manufactured, occupied as a permanent residence by the borrower, and in an area not subject to an "adverse market delivery charge." The mortgage cannot have an interest-only provision, and any second mortgage has to be included in the 60 percent limit.
Millions of refinance transactions that would increase the spending power of homeowners, which would have been funded in prior recessions, are not getting funded today. Either the borrowers no longer qualify, or they don't qualify for rates low enough to help them.
Two strategically important groups have been particularly hard hit. One is the self-employed, predominantly small-business owners who are a major potential source of employment growth. The other: investors who buy homes to resell at a profit, and who are desperately needed right now to buy foreclosed homes sold by lenders. Specific proposals related to these groups are discussed later.
Tuesday, October 4, 2011
Home searches
I read an article that in August people were searching for higher priced homes.
The median list price of properties viewed at Realtor.com was $214,990 in August, Realtor.com reported, which is about 28 percent higher than the U.S. median price of single-family resale homes sold that month, according to National Association of REALTORS® data.
A home's list price, of course, can vary greatly from its selling price, based on a variety of factors including local market conditions.
What does this mean? It could mean that the market and economy is getting better? I hope so. It could also mean people are day dreaming more. This is not a bad thing, because good ideas and growth come out of dreams.
I personally intend to use this in a positive manner. How you use it is up to you. I would like your thoughts.
The median list price of properties viewed at Realtor.com was $214,990 in August, Realtor.com reported, which is about 28 percent higher than the U.S. median price of single-family resale homes sold that month, according to National Association of REALTORS® data.
A home's list price, of course, can vary greatly from its selling price, based on a variety of factors including local market conditions.
What does this mean? It could mean that the market and economy is getting better? I hope so. It could also mean people are day dreaming more. This is not a bad thing, because good ideas and growth come out of dreams.
I personally intend to use this in a positive manner. How you use it is up to you. I would like your thoughts.
Saturday, October 1, 2011
Mold in homes.
I did not think this was a relevant issue in my business. I was wrong. I have 2 homes that my buyers love and both have mold issues. They are being dealt with. Both of the homes are newer, 2007 builds, me thinking it would not be as big an issue however because of being newer it became worse.This is just info to help you protect yourself and buyers.
Inman News™
DEAR BARRY: My home was in escrow until the buyers found mold under the kitchen sink -- just one black stain from an old plumbing leak. They didn't even ask us to fix it. They just canceled the deal and walked away. I don't get it. Mold has been on the earth forever.
How did it suddenly become so toxic that people are tearing apart their houses, pulling out their hair, and spending fortunes on mold removal? People used to just clean it up with bleach, slap on some primer, and apply a fresh coat of paint. Now people act like it's an invasion of space aliens. How did mold become such a major panic? --Martin
DEAR MARTIN: One does wonder how a naturally occurring substance, present almost everywhere, came to be seen as a life-threatening scourge. Actually, it's just the latest in a series of indoor air quality "crises" to sweep the nation. To begin, let's define the problem.
Microscopic mold spores are present in the air in nearly all homes. Mold infection on walls and other surfaces occurs where there are excessive or persistent moisture conditions, such as unresolved plumbing leaks, ground moisture under a building, or areas with insufficient ventilation.
In newer homes, mold infection has become common because of airtight construction to conserve energy. When there is little air exchange with the outside, mold spores and moisture can increase within a building, causing mold to grow on some materials.
In many instances, visible stains or musty odors can alert homeowners to the presence of mold. But some mold cases can be detected only by professional testing, and the cost of a mold survey is often prohibitive.
Since the 1970s, there has been a parade of indoor environmental hazards, including asbestos, radon gas, urea formaldehyde, lead, electromagnetic fields, microwaves, etc. In each case, public hysteria was induced by exaggerated media coverage. In the late 1980s and early '90s, homebuyers routinely canceled escrows at the mere mention of asbestos or radon gas. In the mid-1990s, lead paint sent buyers running for the hills.
This is not to say that there are no related health risks, but the risks were limited to specific circumstances. For example, acoustic ceilings often contain asbestos, but asbestos fibers are not released into the air if the material is left alone. The same is true of lead paint: keep small children from teething on woodwork involving lead paint, and use appropriate safety methods when stripping paint.
But then came mold, the environmental/economic bombshell of them all. The excitement began when some extreme cases of mold infection were given high-profile media treatment on network news shows. This was accompanied by a rash of mold-related lawsuits and insurance claims, causing major insurance carriers to withdraw their business from some states.
In reaction to this, the real estate, pest inspection, and home inspection industries began scrambling for secure ground, searching for safe verbiage -- what to say and what not to say amid this new liability environment. Meanwhile, trial attorneys were sharpening their teeth and chanting the new mantra, "mold is gold."
Some may read this article and conclude that it whitewashes a significant environmental health hazard. To avert this misunderstanding, a few points should be clarified:
1. Toxic forms of mold definitely do exist and can have harmful health effects.
2. Some homes have become so seriously infected with mold that mitigation is not possible, short of total demolition.
3. The statistical likelihood of serious mold infection does not warrant dire levels of anxiety, mitigation, litigation and expense. There was a time when a mold stain could be cleaned, primed and painted. Now we invest in costly analysis by a certified industrial hygienist, followed by removal and replacement of all affected materials.
A more rational approach would be to balance the costs and risks of mold infection. The risks, of course, are real. Mold might someday invade your home, just as a drunk driver might someday cross the double line in your path of travel.
But how much must we spend to affect a sense of safety? The panic over mold will eventually subside, as it did with previous environmental concerns. Then, barring the discovery of some new and unforeseen health hazard, we may return to the relative composure of sensible problem-solving, to a place where mold, toenail fungus and the common cold occupy their customary positions among the adversities of everyday life.
Understanding mold risks in real estate purchase
Likelihood of health risks lower than many think By Barry StoneInman News™
DEAR BARRY: My home was in escrow until the buyers found mold under the kitchen sink -- just one black stain from an old plumbing leak. They didn't even ask us to fix it. They just canceled the deal and walked away. I don't get it. Mold has been on the earth forever.
How did it suddenly become so toxic that people are tearing apart their houses, pulling out their hair, and spending fortunes on mold removal? People used to just clean it up with bleach, slap on some primer, and apply a fresh coat of paint. Now people act like it's an invasion of space aliens. How did mold become such a major panic? --Martin
DEAR MARTIN: One does wonder how a naturally occurring substance, present almost everywhere, came to be seen as a life-threatening scourge. Actually, it's just the latest in a series of indoor air quality "crises" to sweep the nation. To begin, let's define the problem.
Microscopic mold spores are present in the air in nearly all homes. Mold infection on walls and other surfaces occurs where there are excessive or persistent moisture conditions, such as unresolved plumbing leaks, ground moisture under a building, or areas with insufficient ventilation.
In newer homes, mold infection has become common because of airtight construction to conserve energy. When there is little air exchange with the outside, mold spores and moisture can increase within a building, causing mold to grow on some materials.
In many instances, visible stains or musty odors can alert homeowners to the presence of mold. But some mold cases can be detected only by professional testing, and the cost of a mold survey is often prohibitive.
Since the 1970s, there has been a parade of indoor environmental hazards, including asbestos, radon gas, urea formaldehyde, lead, electromagnetic fields, microwaves, etc. In each case, public hysteria was induced by exaggerated media coverage. In the late 1980s and early '90s, homebuyers routinely canceled escrows at the mere mention of asbestos or radon gas. In the mid-1990s, lead paint sent buyers running for the hills.
This is not to say that there are no related health risks, but the risks were limited to specific circumstances. For example, acoustic ceilings often contain asbestos, but asbestos fibers are not released into the air if the material is left alone. The same is true of lead paint: keep small children from teething on woodwork involving lead paint, and use appropriate safety methods when stripping paint.
But then came mold, the environmental/economic bombshell of them all. The excitement began when some extreme cases of mold infection were given high-profile media treatment on network news shows. This was accompanied by a rash of mold-related lawsuits and insurance claims, causing major insurance carriers to withdraw their business from some states.
In reaction to this, the real estate, pest inspection, and home inspection industries began scrambling for secure ground, searching for safe verbiage -- what to say and what not to say amid this new liability environment. Meanwhile, trial attorneys were sharpening their teeth and chanting the new mantra, "mold is gold."
Some may read this article and conclude that it whitewashes a significant environmental health hazard. To avert this misunderstanding, a few points should be clarified:
1. Toxic forms of mold definitely do exist and can have harmful health effects.
2. Some homes have become so seriously infected with mold that mitigation is not possible, short of total demolition.
3. The statistical likelihood of serious mold infection does not warrant dire levels of anxiety, mitigation, litigation and expense. There was a time when a mold stain could be cleaned, primed and painted. Now we invest in costly analysis by a certified industrial hygienist, followed by removal and replacement of all affected materials.
A more rational approach would be to balance the costs and risks of mold infection. The risks, of course, are real. Mold might someday invade your home, just as a drunk driver might someday cross the double line in your path of travel.
But how much must we spend to affect a sense of safety? The panic over mold will eventually subside, as it did with previous environmental concerns. Then, barring the discovery of some new and unforeseen health hazard, we may return to the relative composure of sensible problem-solving, to a place where mold, toenail fungus and the common cold occupy their customary positions among the adversities of everyday life.
New blog
This is my first attempt at a Blog, please be kind. My goal here is to provide useful information about real estate and life. Please feel free to add useful and humorous information. Thank you and good reading.
Subscribe to:
Posts (Atom)