Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Fri, Apr 3 1992 Date: Fri, 3 Apr 92 05:43:48 EST Message-ID: 04-03 0000 DECISIONLINE: Real Estate USA TODAY Update April 3-5, 1992 Source: USA TODAY:Gannett National Information Network HOUSING REFORMS CRITICIZED: The Bush Adminstration is under fire from critics who say its efforts to cure the government's largest housing program are doing more harm than good. Real estate groups, such as the National Association of Realtors, want to roll back changes at the Federal Housing Administration, the agency that guarantees some 7 million home loans. (For more, see special Reforms package below.) HOME EQUITY DROPS: An ominous trend in land prices could signal long-term trouble for the USA's homeowners. The Federal Reserve says owners saw home equity - the difference between home value and mortgage debt - fall an average $6,300 in 1990. Main reason for the 17% drop: An alarming fall in land values. Home equity has fallen three times since the Fed began measuring it in 1945. BUILDING VALUE ACTUALLY ROSE: Home equity's only fallen three times since 1945, but 1990 saw the first decline caused by falling land values. Building value rose 2% during the year. "We could be in for a prolonged period" of falling home prices, says Michael Wilson of the U.S. Savings League. Belief is fading fast. Wilson says land values fell an average 10% in 1990 and may have continued to decline last year. HOTEL CONTENTS AUCTION SET: The Auction Company of America Thursday announced an absolute auction of the contents of the Regency Hotel in Florida Wednesday at 10 a.m. Items include a 350-seat fully equipped restaurant; a commercial laundry; hotel furnishings, including beds and lamps; and decorations including marble statuary and an 1886 Steinway piano. The hotel is in Bal Harbor. Call 305:576-1999. MOVING COSTS MOVE DOWN: The average cost companies paid to relocate an employee who is a homeowner is going down after several years of increase, according to Runzheimer International. In 1991, average cost was $44,804, down from $45,620 in 1990. That was an increase from nearly $41,000 in 1989 and just $36,891 in 1988. Costs had been rising steadily since 1986 before dropping last year. PROPERTY INSURANCE WILL GO UP: West Virginia Gov. Gaston Caperton has signed into law a bill that increases property insurance rates. The increase will help finance volunteer fire departments and teacher pensions. He also has signed into law a bill creating a $10 million trust aimed at adding 100,000 jobs to the state's economy by 2000. CITY TRYING TO BUY SKI AREA: Oregon Gov. Barbara Roberts has committed $500,000 from the state's lottery to help the city of Ashland purchase the Mount Ashland ski area. The city has to raise $375,000 more to meet a Monday deadline. FIXED-RATE MORTGAGES STABLE: The rates for 30-year fixed-rate mortgages from the Federal Home Loan Mortgage Corp. were listed at 8.98% Thursday, unchanged from Wednesday but down from 9.03% the week before. They were at 9.52% a year ago. For 30-year adjustable-rate mortgages, the rates were 6.19%, unchanged from Wednesday but down from 6.22% the week before. A year ago they were at 7.41%. ARM INDEXES UNCHANGED: The one-year Treasury ARM index rates were listed at 4.64% Thursday, unchanged from Wednesday but down from 4.73% the week before. A year ago they were at 6.34%. For the 11th District ARM index, rates were at 5.800%, unchanged from Wednesday and down also from 6.002% the week before. A year ago they were at 7.848%. T-BONDS INCREASE: Treasury security rates for the 30-year bonds showed an increase Thursday, listing at 7.91%. That's up 0.02 from rates of 7.91% Wednesday and down 0.07 from 7.98% the week before. A year ago T-bonds were at 8.18%. SPECIAL PACKAGE ON REFORMS: RULES MEAN BORROWERS PAY MORE: Reforms at the Federal Housing Administration were ordered last July by the Department of Housing and Urban Development. New rules mean higher premiums for federal insurance that backs FHA borrowers' mortgages. It also means paying more closing costs up front. Changes were to save the FHA's main loan-guarantee fund from insolvency, but critics say HUD went too far. BORROWERS MAY BE DRIVEN AWAY: Critics of changes at FHA say HUD went too far in trying to rescue the FHA's loan fund and that HUD may be driving away many of the low-risk borrowers needed for FHA to get financial stability. Because their loans are federally backed, FHA borrowers need to make down payments of less than 5% on most homes and as little as 3% on homes costing less than $50,000. REFORMS APPROVED IN 1990: In 1990 Congress approved several reforms aimed at salvaging FHA. Loans for most borrowers were held to 97.75% of home value, forcing them to put more money down. A new monthly insurance premium was added, payable in the early years of a loan. The smaller the down payment, the longer borrowers must pay the fee. Congress set a 1993 target to get FHA's main fund in the black. (End of package.) Real Estate Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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