Quiet setting draws attention to townhomes

The plan was untested five years ago: build a townhome community around a longtime landlocked lake in the center of North Charleston, close to Interstate 26 and the city's coliseum.

But it's worked out for developer Lake Palmetto LLC and its lead partner and marketer, Denny Fortney. The last group of 32 townhomes are being offered at the 117-unit complex, located just south of West Montague Avenue. "It's really taken off," he says.

The townhomes' moderate prices as well as the complex's placement in North Charleston's "new downtown" area are big attractions, Fortney says. "I think the main draw is the location," he says.

The two- and three-story dwellings in four buildings are slightly larger than previous models. Floor plans are a 1,528-square-foot townhome with two to three bedrooms priced at $199,900 and up and a three- or four-bedroom, 2,228-square-foot model with a starting cost of $238,900. Detached garages are available for an extra $7,500.

The final group of townhomes backs up to a pond. "We call it The Sanctuary. It's like a cove back here," Fortney says.

The units are close to the lake, which is used for swimming, fishing and boating. There are two community docks on the lake.

Among the townhome attractions are large kitchens with stainless steel appliances including refrigerators, porcelain tile floors, granite countertops and 42-inch cabinets.

Other standard features are a laundry room with a washer and dryer on the second floor, family room fireplaces and jetted tubs and stall showers in the master bedrooms. All units have two or three exterior decks and patios with private entries. Options include hardwood floors and screened-in porches.

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source: charleston.net

Regulators crack down on housing-related schemes

Rigged appraisals, lax underwriting and toxic loan products may dominate the headlines, but they are hardly the only issues causing problems in residential real estate.

The federal government and state regulators are targeting other housing-related misdeeds that can cost consumers big bucks, especially involving under-the-table kickbacks among builders, real estate brokers, loan officers, mortgage bankers and title insurers. Buyers and sellers are rarely aware of the cash changing hands, and as a result, they are paying needlessly higher prices for services.

In a little-publicized series of legal moves during the past five weeks, regulators have reached settlements with six major home builders and one of the largest title insurers in the country. Under the settlement, the firms are to pay the government a total of $6.4 million, while denying they committed any illegal acts.

The largest settlement was announced the week before Thanksgiving. First American Title Insurance Co. agreed to shut down 84 "affiliated partnerships" formed in Florida with real estate brokers, mortgage brokers, banks and home builders. Federal and state investigators charged that while the affiliates claimed to be title companies, they were actually referral conduits that performed few, if any, title services. Officials said they existed primarily to steer lucrative title insurance business to First American, which split consumers' insurance premiums with participating "partners."

In effect, according to the investigators, home builders, lenders and realty firms could pocket part of home buyers' closing costs without their customers' knowledge. On paper, the partnership affiliates appeared to be ordinary title agencies, carrying names such as Security First Title, USA Title Partners, Discount Title Services LLC and the like.

But investigators from the federal Department of Housing and Urban Development and Florida insurance regulatory agencies found that "all regular title services required to effect title insurance were performed by First American, not the limited partnership agency," which was essentially a shell entity constructed "to compensate (participants) for the referral of the business."

Payments for referrals of home real estate business when little or no services are performed violate the federal Real Estate Settlement Procedures Act, which is enforced by HUD.

Though no example was provided in the settlement agreement, title company referral conduits often work like this: Say you, the homebuyer, are charged $2,000 for lender and owner title insurance policies. Your real estate agent or broker has partnered with a title company and agreed to steer all of its business to the affiliate. All the work is performed by the title insurance underwriter, which receives a steady and profitable flow of business. The affiliate may not even have employees or office space.

Revenues may be split according to the size of individual partners' stakes in the affiliate. If the stake is 25 percent, the realty agent or mortgage broker might get $500 out of your $2,000 title insurance premium. If the stake is half, the split might be $1,000.

Buyers typically are provided a disclosure along with paperwork that accompanies a mortgage closing that an "affiliated business" relationship exists between the realty firm or mortgage broker and the title partnership. But the boilerplate language of the disclosure form does not reveal the magnitude of the financial compensation involved.

The settlements with the six home builders — Pulte Homes, KB Home, Beazer Homes USA, Ryland Group, Meritage Homes and Technical Olympic USA — also involved alleged kickbacks from title insurers. HUD investigators charged that the builders' participation in so-called "captive reinsurance" schemes amounted to illegal splits of homebuyers' insurance premiums rather than actual sharing of risks with the underwriters.

Bottom line: Before agreeing to direct your title and settlement business to an "affiliate" of your realty agent, mortgage lender or builder, shop the market for potentially lower fees from independent, nonaffiliated competitors.

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source: charleston.net

Area home sales off but prices still have muscle

While they may be lagging indicators, the third quarter Greater Charleston real estate figures from Market Opportunity Research Enterprises show home values continue to go up even as sales dropped off.

From July through September, the average cost of a home locally was $326,500, up 10 percent from $296,500 a year before. Median prices also inched up 1.5 percent in the third quarter to $209,000, from $205,000 a year ago. At the same time, sales sagged close to 20 percent to 4,378 from 5,630 in the same three months of 2006.

The Rocky Mount, N.C.-based company found prices rising in all sectors except condominium resales. Average values increased in Dorchester, Berkeley and Charleston counties, although median prices slid a bit year-to-year in Charleston County. Sales sank in all three counties.

I'On green at Mixson

The new urban, sustainable Mixson neighborhood from I'On Group in North Charleston is taking its environmental ethos to the bank.

Even in a slow market, the community booked 23 reservations and sold a dozen residences in one week, says Vince Graham, founder of the I'On Group. "This is a powerful message: People are not only interested in sustainable development. They're ready to buy," he says.

The developer, known for the neotraditional I'On neighborhood in Mount Pleasant, launched sales at Mixson at the end of October. Eventually, the 44-acre village will have stores, civic buildings and 950 homes along "winding, cobblestone streets, archways and grand oaks," the developer says.

Beazer teaser

As part of its "Unwrap a New Home for the Holidays" promotion, Beazer Homes is holding free gift-wrapping workshops open to the public, including one in Summerville on Sunday.

Local "gift wrap artist" Dana Dalton of Saks Fifth Avenue will demonstrate techniques and materials that make opening presents an experience in itself.

The workshop will take place 2-6 p.m. at 102 Gaslight Boulevard in Reminisce, a Beazer neighborhood off Butternut Road. For more information, visit www.beazer,com.

Brought together

Trying to find the latest gatherings for this holiday season? Well, here's one: a mile north of Bees Ferry Road. That's the location of The Gatherings, a new riverside community of condominiums and townhomes. The neighborhood, at 3100 Ashley River Road, is on 44 acres with 100 oak trees and more than 800 feet of frontage on the Ashley River.

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source: charleston.net

Winds of change

In many ways, they are inseparable.

There's South Windermere, the shopping center. The 1950s-era Folly Road plaza has undergone a 21st-century face-lift while attracting customers to eclectic stores and eateries such as Earth Fare, Med Bistro, Starbucks, Urban Nirvana and Haddrell's Point tackle shop.

Then there's South Windermere, the neighborhood. The 300-home village, just northwest of the plaza, likewise has a long heritage, and similarly is going through a modernization.

South Windermere subdivision, which traces its roots to 1931, essentially emerged a half-century ago as an early suburban community of moderate-sized brick homes on marsh and woods. Another wave of pricier houses rose along Wappoo Creek starting 15-25 years ago.

Now the community is again going through a transformation, as buyers are attracted to its quiet streets and proximity to Charleston's peninsula, just a few minutes' drive away. Tidy ranch houses have been remodeled with elegant bedrooms, amenity-rich kitchens and wide decks, and an upscale townhome complex opened this fall on Windermere Boulevard.

Yet even with the growth, South Windermere remains tight-knit, a blend of retirees and younger families. The magnet St. Andrews School of Math & Science is in the midst of the community on Chadwick Drive.

"It's an old-fashioned neighbor-hood, in a good way," says Saida Russell, real estate agent with Disher, Hamrick & Myers. "Children can ride their bikes and (residents can) walk to shop," she says.

"It's just friendly," notes Sandra Henry, who with husband Charlie Henry remodeled a 1950s ranch home at 21 Lord Ashley Drive as a two-story dwelling and is listing the 2,700-square-foot house at $630,000.

The Henrys opened up the inside, installing stainless steel appliances, a wet bar, vented range, granite countertops and glass cabinets in the open kitchen. They redid the three bedrooms and two baths, including affixing tile in the master bath. Hardwood floors, recessed lighting, fireplace and vaulted ceiling highlight the living room. The front door is mahogany.

"It's amazing what you can do with a '50s-style house," says Russell, who is listing a 2,081-square-foot home with renovated kitchen at 122 Chadwick Drive for $519,000.

The house has a relatively new deck with open views of pristine marsh. Ranch homes are popular with families and seniors. "Everything is one level," she says.

Along with renovations, South Windermere has some new construction, too.

Flanking the neighborhood's entry street is Windermere Townhomes, a new upscale development of 28 up and down units costing $399,000-$425,000. The three-bedroom, three-bath dwellings, built by Windermere Townhome Developers LLC, are 1,575 to 1,719 square feet. Standards are hardwood floors downstairs, stainless steel kitchen appliances, screened porches, landscaped yards and two-car garages underneath.

"We are seeing professionals (buying) as well as investors, too," says Charles S. Swanson, real estate agent with William Means Real Estate, which is marketing 15 of the townhomes. The Web site is www.windermerecharleston.com.

To reach South Windermere from downtown Charleston, cross the Ashley River Bridge to U.S. Highway 17 (Savannah Highway). Angle left onto Folly Road. Pass through the first traffic light and immediately turn right onto Windermere Boulevard. The neighborhood is ahead.

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Nervous lenders put squeeze on homebuyers

Call it the credit risk hangover following the housing boom binge. Homebuyers and those refinancing who can't come up with sizable down payments, and whose Fair Isaac Corp. credit scores are below 680, are about to get squeezed in the mortgage market.

Giant investors Fannie Mae and Freddie Mac are imposing significant increases in fees for a broad range of borrowers who have lower than 30 percent down payments and formerly were treated as "prime" credit applicants. At the same time, the two largest private mortgage insurers, MGIC Corp. and PMI Group, are raising premiums on consumers who have low down payments and FICO scores in the mid- to upper 600s. The added costs for some potential homebuyers could mount into the thousands of dollars either upfront at settlement or in the form of higher interest rates.

Each of the companies says it has experienced unexpectedly high losses on loans with these characteristics and must now revise prices upward to handle the elevated risks. But some mortgage bankers and brokers say the higher costs and down payments will make homeownership impossible or very difficult for a large number of borrowers, and slow any future housing market recovery.

Though Fannie Mae's and Freddie Mac's revised fees won't take effect until March 1, major lenders who sell loans to the two investors began imposing the surcharges on applicants at the beginning of December. Some mortgage loan officers are upset that clients with FICO scores close to 700, far above the once-traditional 620 cutoff point between "prime" and "subprime," are now being charged more.

"This is outrageous," said Steven Moore, a mortgage broker with 1st Solution Mortgage in Falls Church, Va. "On a loan of $300,000 and with a credit score of 675, which is not a bad score, and a 75 percent loan-to-value ratio (25 percent down payment), the cost is an additional $2,250 per loan." If the same borrower wants to do a cash-out refinancing to consolidate debt, the new Fannie-Freddie fee schedule will add another $1,500 to total costs on a $300,000 mortgage, said Moore. On a $400,000 loan, he estimates the extra fees would total $5,000.

Jeff Lipes, president of Family Choice Mortgage in Wethersfield, Conn., said the new emphasis on higher FICO scores and larger down payments could greatly complicate rate quotations. "To get any sort of quote, you're going to need to know your FICO score in advance, and before actually applying you may need to take some steps to raise your FICO score."

Under previous standards, applicants with scores comfortably above 620 "could reasonably assume" they would qualify for a good rate, said Lipes. "But now we've got this whole new gray area between 620 and 680" FICOs under the revised Fannie/Freddie risk-based pricing guidelines.

Lipes predicts loan officers and brokers will make far greater use of so-called "rapid rescoring" services offered by some local credit bureaus to increase applicants' scores legally by correcting errors, lowering debt utilization ratios on credit card accounts and other techniques.

According to mortgage banker Lipes, if applicants choose to roll the higher fees into the interest rate on the mortgage, the new Fannie/Freddie charges generally will increase rates by anywhere from one-eighth to one-half of 1 percent.

The MGIC mortgage insurance premium increases, which were scheduled for announcement the first week of December, are expected to have the heaviest impacts on borrowers making down payments of less than 3 percent and whose FICO scores are below 660, according to company officials. On such loans, MGIC is expected to raise premiums to 1.7 percent per $100,000 of loan amount, up from the current premium level of 0.96 percent. On a $200,000 mortgage, that would raise the annual premiums from $1,920 to $3,400.

The PMI Group's increased premium levels, which have already taken effect, are roughly similar, but the company also announced that it will no longer insure any mortgages where the down payment is less than 5 percent and the borrower's FICO score is below 620.

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source: charleston.net