How hiding cash in your mattress can hurt your house-hunting prospects
By Daniel Goldstein,
January 21, 2016
It may be tempting in the middle of a market meltdown to stash your cash in your mattress instead of investing it in the stock market. But if you want to buy a home, you may not be able to use that cash for the down payment.
A majority of consumers ( 57%) say they keep their cash savings in a bank, according to a 2015 financial survey from American Express, but more than half (53%) also say they keep their cash at home in a secret location. Still, when you’re closing on a home you’re not going to be able to come to the settlement table with duffel bags full of Benjamins like Al Pacino in Scarface.
Mortgage lenders, as part of the Secure and Fair Enforcement for Mortgage Licensing Act or SAFE Act of 2008 and increased safeguards on so-called “stated income” loans as part of the Dodd-Frank financial reform law of 2010 , now must account for every dollar used in a residential mortgage transaction. In addition, the Patriot Act of 2001 put added restrictions and reporting requirements to prevent terrorist groups from laundering money through real-estate transactions.
Not only must cash savings be deposited in a bank account to be part of asset calculations, it has to stay there for at least 60 days so that mortgage lenders can account for the cash through at least two bank statement cycles, a process lenders called “sourced & seasoned.” Cash gifts from relatives must be documented too; otherwise, they can be considered an undisclosed loan which could impact your all-important debt to income ratio. Even if you try to slip a large amount of cash through the bank in small amounts, under federal regulations the banks will consider that a “layered” deposit, where a large amount of cash is being deposited over time to get under the legal limits of anything over $10,000 and flag the IRS regardless, said Assurance Financial’s Alexander.
Still, about 5% of his company’s 3,000 annual mortgage loans have so-called “mattress-money” issues, which can get worked out, so long as you let your lender know earlier enough in the home buying process, Alexander said. But remember: Large cash deposits must be made at least 60 days before you start the home buying process and at least two months before you even sign a contract, he added, as the bank will only begin its due diligence after the contract is signed.
Polk gets 625 new e-commerce jobs
Press Release, WFLA – September 17, 2015
Governor Rick Scott today announced that Walmart Stores, Inc. has chosen Davenport in Polk County as the site to build its newest e-commerce fulfillment centers. Walmart will build two fulfillment centers that will be dedicated to shipping online orders, which will create more than 625 new jobs and open next year.
Bill Johnson, President and CEO of Enterprise Florida, said, “Walmart bringing 625 new jobs to Polk County sends the signal loud and clear that Florida is the best place to do business. They are investing in Florida in a big way, and are committed to creating great opportunities for Floridians. We must work to fully fund our toolkit to remain competitive with other states for projects like these.”
Walmart selected the Majestic I-4 Distribution Center park, located near the intersection of I-4 and Highway 27 in Polk County, as the site to build two e-commerce fulfillment centers. The first facility will be just under 1 million sq. ft., will employ more than 500 associates and house smaller products, such as iPads, PS4 gaming systems, apparel, toys and more. Walmart’s second facility will be a 1.2 million sq. ft. building that will employ more than 125 associates and will house oversized items, such as large electronics, select home products and exercise equipment.
USDA Mortgage Program Fees to Increase Oct. 1
Bloomberg (06/26/15) Shenn, Jody; Bjerga, Alan, WASHINGTON – July 7, 2015
The U.S. Department of Agriculture's (USDA) Rural Housing Service is raising the cost of its home-loan guarantees that enable borrowers to purchase homes in certain areas without downpayments, according to news agency Bloomberg.
On Oct. 1, the upfront fee paid by buyers under the USDA program will rise to 2.75 percent from the current 2 percent.
The move will enable the $24 billion program "to continue to sustain itself without a congressional appropriation to offset credit-related costs," says David Sandretti, a spokesman for the USDA.
The need for the increase stems from losses on properties financed during the last housing bubble that exceed losses on homes not overvalued at origination, according to Sandretti.
Borrowers will not have to pay the fee increase upfront, however. They can add them to the monthly payments on their 30-year loans.
Study: Student loans don’t hinder mortgages
"TransUnion: Student Loans Do Not Impact Housing," HousingWire, May 13, 2015
Young buyers aren't being held back from obtaining a mortgage due to their student loan debt, according to a new report released from TransUnion.
Consumers between the ages of 18 and 29 with a student loan in repayment are "generally able" to qualify for new loans. Not only that, the study finds that those loans tend to perform as well or better than new loans to similarly aged consumers without student loans.
For its analysis, TransUnion researchers studied borrowers with student loans who entered repayment from three different timeframes: the fourth quarter of 2005, fourth quarter of 2009 and fourth quarter of 2012.
The report finds that student loan consumers in their 20s pass similarly aged consumers without a student loan after making payments for only three to six years. Student loans often have decades-long payoff periods. The study included mortgage loans but also auto loans and credit cards.
"Going to school impacts young consumers' access to credit; while in school, students may be less likely to have a job and generate the income necessary for loan approval," says Steve Chaouki, executive vice president and head of TransUnion's financial services business unit. "However, most catch up once they leave school – and their ability to catch up has not changed over the past decade. Our study demonstrates that consumers in their 20s with student loans in repayment – that is, once they finish school – are in fact able to access credit at levels similar to or better than their peers who do not have student loans."
The study found that the changing economy between 2005 and 2012 impacted young consumers' access to credit, and the percentage of consumers aged 18-29 with mortgages, credit cards or auto loans dropped significantly. But the study showed that the drop impacted consumers without student loans, as well as those with student loans.
"This is an especially important finding, because it shows the dramatic rise in student loan balances has not materially impacted young consumers in gaining access to mortgages, auto loans or credit cards, or in their ability to successfully manage their new credit obligations," says Charlie Wise, co-author of the study and vice president in TransUnion's Innovative Solutions Group.
Polk's Makeup, Economy Changing
By Bill Rufty, published in The Ledger, Guide to Polk, April 19, 2015
Businesses and ethnicities show more diverstity.
Polk County, once a bastion of agriculture and small rural communities has grown into a diverse area both in population and in business.
The county is now estimated to have a population of 623,174, according to 2014 estimates by the Bureau of Economic and Business Research at the University of Florida. That is a 3.5% increase from its US Census population in 2010 of 602,095.
Polk County has 17 municipalities, ranging from 237 residents of the smallest town, Highland Park, to the county's largest city, Lakeland, with 100,728.
Kevin Brickey, a Lakeland resident who is an economist for Hillsborough County and who keeps track of Polk as well, said Amazon was a major spur for growth as well and will likely be a Catalyst in the future.
"From November of 2013 to November of 2014, Polk County increased by roughly 400 jobs in manufacturing, 800 in whole sale (warehousing), 100,100 in retail and 600 professional," Brickey said.
Expectations and Market Realities in Real Estate 2015
National Association of REALTORS® February 6, 2015
As 2015 gets underway, many investors are more optimistic than they have been in years. Economic growth has been increasing, job growth has been improving, and consumers have been given a boost as gasoline prices have dipped nationwide. Compared to the markets and financial systems in other developed countries, the U.S. economy looks generally healthy.
With respect to commercial real estate investment, interest rates are still low and fundamentals continue to improve. Volume and pricing have been increasing, especially for high-quality properties in the coastal markets, but we have also seen high values and prices in more secondary and tertiary markets.
This report gives commercial investors the information they need to make forward-looking changes to the way they approach today's market, focusing on:
Highlights and expectations for the five major property sector markets
Collective analysis of the commercial investment environment