Temecula Real Estate Daily Blog

Mortgage Refinancing Increases but Some Qualified Borrowers Frustrated, Hopeful

2010-01-15T05:18:00.001-08:00

Mortgage Refinancing Increases but Some Qualified Borrowers Frustrated, Hopeful

While bailout money was given to many banks in 2009 to help stimulate the economy, the stricter rules for getting housing loans are making it a tough job for the qualified, self-employed borrower. Interest rates currently remain very low and that has some looking to capitalize on them but they're being met with frustration. "The word stated-income has been blamed along with a few other things for the whole mortgage-market meltdown," says Wallace. "It is not a word that anybody at the Federal government thinks is acceptable anymore. So none of those kinds of loans come through any government entities at all," says Larry Wallace.

But that doesn't mean the need for them has dwindled. And some, who are capable and qualified, are finding there's nothing available for them.

"We can't get the loan even though we have the equity," says Sid Levin, homeowner and self-employed businessman. He runs a two-decade-old theatrical and commercial agency in Beverly Hills, California. And he is not alone. He's searching for a no-doc loan and so far having no luck.

"The last official stated-income lender that I know of was Union Bank. Union Bank always made super conservative loans, they never got aggressive, and they're a portfolio lender—they keep their loans. Union Bank never wanted to get rid of their stated-income loans, the Federal Regulators that oversee them made them get rid of them," says Larry Wallace, a long-time mortgage expert.

"Union Bank had a perfectly performing stated-income product. They didn't have high default rates, nothing. It was perfect. … They did loans where the loan-to-values were really low," says Wallace. According to the Mortgage Bankers Association, three out of four loan applicants are looking to refinance. Many are trying to take advantage of the low rates before any possible increase occurs—some industry experts speculate that won't be for quite some time but others fear the threat of increased rates could come sooner. This abounding uncertainty is part of the nationwide financial uncertainty regarding inflation.

"[Banks] have to have all the documentation from A to Z. We've offered to show them our bank statements for the last two years, we've offered to show them our credit—no good, it has to be the tax returns. They have to see those for self-employed people," says Levin. "I get this call all the time. Sid is a textbook call for me," says Wallace. But there may be hope, "We've got this one lender who says it will do stated. I'm looking into it. But there has not been financing for this segment of the market for a year-and-half," says Wallace.

Levin is in a predicament that other self-employed folks can relate to. "We have a lot of [business] expenses that are tax deductible and we write them off. We legally and legitimately write off our expenses and in return it looks like we don't make as much money but we do; why should we pay more taxes to the government when legally we don't have to?" says Levin. So, he continues his re-finance hunt but feels that the system is penalizing even those who weren't part of the problem. "It's a stereotype or prejudice against people who require no-doc loans. A few people may have lied about them but now they're penalizing the good people," says Levin.

"If you take away small business and people who legitimately and honestly work hard … what's left? It's very frustrating because you bail out the banks that make mistakes and they're forgiven because they have to keep on providing a bank service for the public—they get a free pass and the same money that bails them out is the tax money and the tax money is the people's money," says Levin.

"Why aren't we given a break like the banks are given? I just don't see how that adds up to the public getting anything out of it," says Levin.

Tips for self-employed seeking loans: Make sure your credit report is pristine. Take the time to review it and get any errors on it fixed. If you have some bad marks, realize that cleaning them up will take several months, at least. Score of 720 or higher are best.

Keep very accurate records. The self-employed need to have excellent personal and business financial records; both are likely going to be required for a loan. Profit and loss statements and even proof of a business license showing you've been in business for more than two years should be kept on file.

Think ahead. Know that it may be a long-road ahead before lenders offer stated-income. Look to conserve costs and save where you can. Another tip from experts is to have an audited financial statement prepared by a certified public accountant.

Hard-money loans. These are available but the rates are considerably higher.

January 15, 2010

Location:Cumbre Rd,Temecula,United States

REO Discontent

2010-01-11T05:52:00.000-08:00

REO Discontent

houses it's stuck with, but now it's moving to sell off that inventory faster than it has in the past, potentially opening up some interesting opportunities for home buyers and their agents.

In a new policy announcement, Fannie says it will now accept purchase offers for its REO immediately after listing, without notifying lenders or mortgage servicers whose loan files are under review.

Under its previous policy, Fannie gave lenders and servicers fifteen days to find a better purchase offer for new REO they sent to the company following foreclosure.

That policy affected all repossessions where Fannie demanded the loan file on the house - potentially exposing errors in underwriting or servicing, and requiring reimbursement for losses by the lender.

But that policy also had a negative impact on Fannie's ability to move its REO out the door quickly. The fifteen day time-out slowed down the works - and sometimes kept properties out of reach of ready and willing buyers.

Partly as a result, Fannie's portfolio of unsold acquired real estate has been ballooning lately. According to its most recent securities filing, the company, now under federal control, took in more than 98,000 properties following foreclosures during the first three quarters of 2009.

During the same time, it sold about 90,000 houses.

But because of a widening imbalance of REO in and out the door dating to prior years, Fannie was sitting with 72,000 unsold houses -- about a 7 percent jump from the same period the year before.

Fannie's response to this REO bloat? Sell off the houses faster by accepting purchase offers through its network of real estate listing agents earlier.

In the company's memo to lenders and servicers, it basically said this: We're now going to market houses as soon as they come in the door and we've established a current value.

No more fifteen day time out period for lenders whose REO we've selected for loan file reviews.

As soon as Fannie lists an REO property, it will be fair game for home buyers. And if Fannie ultimately sells for a loss -- and the loan file review turns up bad underwriting or other problems -- Fannie plans to stick the lender with the loss.

Bottom line for home buyers and agents under the policy change: Look for earlier access to REO properties, and earlier decisions on purchase offers.

Fannie is determined to slim down its REO portfolio in 2010, and that just might provide opportunities for heads-up buyers and agents looking for deals.

Published: January 11, 2010

Location:Temecula,United States

NATION'S HOUSING Obama's standardized short-sale plan could help troubled homeowners

2009-12-18T06:14:00.001-08:00

NATION'S HOUSING
Obama's standardized short-sale plan could help troubled homeowners

By Kenneth R. Harney
December 13, 2009

Reporting from Washington - If you're in trouble on your mortgage and can't get a loan modification, check out the Obama administration's standardized short-sale plan that's scheduled to roll out in the next several months.

The program, outlined Dec. 1 by the Treasury Department, is an attempt to streamline what has traditionally been a contentious, time-consuming process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives.

A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often a short sale is the last alternative to foreclosure available to distressed homeowners and banks. Say you've lost your job and fallen behind on mortgage payments. With little or no income, you can't qualify for a modification program.

In this situation -- grim as it is -- your best move may be to see whether your lender will accept a short sale. Though the idea sounds straightforward, in practice it is not. First, the bank needs to be convinced that a short sale would yield it more money at the bottom line than a foreclosure would.

This usually means you need to bring in a real estate agent who knows the ropes and can pull together the key information needed by the bank: recent comparables on closed sales, local market trends and the likely selling price of your house.

You'll also need a buyer for the house -- one who'll pay a price acceptable to the bank and has financing to close the deal. If you happen to have a second mortgage or home equity credit line on the property, you'll also need to negotiate how much that lender will receive from the sale proceeds.

That can be tricky. In depressed real estate markets, the second-lien lender may be holding a note that's worthless in a foreclosure because plummeting property values have wiped out the collateral. Yet that same bank is in a pivotal position: It has the legal power to block the short sale by refusing to sign on to the deal.

Equally troublesome in short sales is the fact that banks, mortgage servicers and bond investors often have conflicting requirements for documentation and financial yields that can complicate and drag out the haggling for months.

Enter the Obama administration's new streamlining plan. Besides requiring lenders and servicers to use uniform documentation, pre-approved short-sale terms and accelerated turnaround times, the plan provides financial incentives for key players:

* Homeowners who successfully complete a short sale under the program receive $1,500 to defray relocation costs.

* Mortgage servicers can receive $1,000 per case.

* Investors get $1,000.

* Second-lien holders receive up to $3,000 from the sale proceeds.

Even real estate agents get something: The rules prohibit banks from forcing them to cut their commissions from the listing agreement as part of the final deal.

Sounds like a formula for encouraging a lot more short sales, right? The jury will be out on that for months, and most major lenders are still studying the fine print of the Obama program. But early reactions from big banks appear to be positive.

Dave Sunlin, a senior vice president for Bank of America Corp., said: "We're very pleased. We welcome any effort to reach standardization for all parties" involved in short sales.

Faith Schwartz, executive director of Hope Now -- a Washington-based group representing the country's largest banks, mortgage servicers, bond investors and consumer counseling organizations -- said the plan should bring "uniformity and standards" to a process usually characterized by "mayhem" among the negotiating parties.

Scott Brinkley, a senior vice president for First American Corp., a firm that provides market data for banks, said, "You're going to see a lot of cooperation" by lenders and investors.

But there could be a major pothole: The Obama plan tilts to consumers by requiring second-lien holders to drop all financial claims against short-selling borrowers beyond the $3,000 they take out of the deal.

Travis Hamel Olsen, chief operating officer of Loan Resolution Corp., a Scottsdale, Ariz., consulting firm, says the $3,000 payment won't be enough for many second-mortgage lenders. Today they frequently obtain additional short-sale compensation from sellers as the price of their participation -- in cash or through promissory notes -- far beyond $3,000.

"I'm concerned that that could limit participation" by second-lien holders, Olsen said.

Bottom line for homeowners who might benefit: Don't have wild expectations, but definitely ask your servicer whether it plans to participate and whether the forthcoming standardized plan for short sales might work for you.

-- Posted from my iPhone

Location:Cumbre Rd,Temecula,United States

Short Sale need to guard

2009-11-24T05:24:00.001-08:00

Short Sale Sellers Need To Guard Against "Double Whammy" By Bank and I.R.S.

Short-sale sellers and their agents have plenty to think about, and it is understandable if they are annoyed by the reams of paperwork that may come their way. Nonetheless, it really is important not only to pay attention to what is in the paperwork but also to be sure to retain it for possible future use. This is because of bad consequences that the seller may experience sometime after the sale has taken place.

Bad enough that a short sale involves the loss of one’s home with no equity to show for it, and a credit negative that may last for years; it also has the potential to produce two very bad after-effects. One is that the lender, or the lender’s assignee, may continue to pursue the beleaguered seller for the remainder of the debt. The other is that the I.R.S. may come knocking on the seller’s door, seeking tax on the amount of debt that was unpaid.

The first possibility is often contained in the paperwork that goes along with the seller’s ok of the short sale. The borrower may be required to sign a promissory note for the difference between the debt owed and the short sale proceeds received by the lender. Or, a lender may require the borrower to sign a paper acknowledging that the lender reserves its right to pursue the borrower for this amount.

The second possibility resides in the fact that, if a debt is forgiven, the borrower may be taxed on the amount he didn’t have to pay back. (see I.R.S. publication 4681). To be sure, there may be short sales where the debt that is unpaid is not taxable. For those exemptions, see a tax accountant.

The point here is that the short-sale seller may suffer one of those unpleasant consequences; but he ought not to suffer both.

The point is raised because here is what can happen: In allowing the short sale, the bank requires the borrower to sign a note for the difference, or to acknowledge that the bank has the right to take action to collect that amount. Also, probably sometime later, the bank sends out a 1099-C, informing the I.R.S. that a certain amount of debt had been cancelled.

NO ONE who has dealt with a short sale would raise the question: “How could this happen? The two actions contradict each other!” That is because anyone who has been through the process knows that it is common for the right hand of the bank not to know what the left hand is doing. Indeed, it is not uncommon for the right hand not to know what the right hand is doing.

This is why it is important for the seller to be sure to keep his paperwork. If he signed a document to the effect that the bank was going to pursue its unpaid interest, he should hang on to that. Then, if he receives a 1099-C saying that the debt was forgiven (and, therefore, taxable), he will have support for the claim that the 1099-C is incorrect.

Conversely, suppose that there was no specific release of the debt and that the paperwork contained no reference to it. Then, if the seller receives a 1099-C, saying the debt was cancelled, he should keep that, just in case the bank, or its assignee, comes calling a year or so later, trying to collect the debt.

None of what has been said here should be construed as tax or legal advice. I am not certified to do that sort of thing. But I hope this little piece will encourage short-sale sellers to consult with their appropriate advisors about these matters.

Incorrect and Incomplete MLS Entries: Chance of Sale is Lost Forever!

2009-11-02T02:34:00.000-08:00

Incorrect and Incomplete MLS Entries: Chance of Sale is Lost Forever!

Many in real estate delude themselves if a home has the right price it overcomes all objections and will sell if placed in the MLS. I disagree. My proof are the thousands of MLS listings that expire or withdrawn every day without ever selling. Since I specialized in expired listings for a long time I have found there is always a reason why homes do not sell. Contrary to what many believe in our business, it isn't always the price that prevents a sale.

Sometimes the listing languishes on in the MLS system for years and -- no sale, and the reason? The listing is totally flawed! Incorrect data, price, directions, wrong MLS areas, and missing data prevent anyone from finding the listing.

Sellers do not understand that other agents cannot notify them of the mistake. Since they are already listed with another licensed real estate agent, and to do bring the error to their attention would be considered a solicitation of that listing.

That is a violation of real estate license law. Seller's should personally review the MLS listing and check it for errors and completeness. They should question any missing data fields and check their address and city for typos and errors. Agents should request a dated and initialed copy along with corrections to be placed in their clients file when the errors have been corrected.

Placing a new listing in the MLS is just passive marketing if it's done with the belief the entry alone will sell the home. The new listings, many of which are short sales and foreclosures are entered with little or no accompanying data or photos. A shoddy listing entry that is void of detail only ensures the home will never sell or sell at a greatly depressed price. Agents or brokers that believe that details are not important and that MLS entry itself will sell the listing if priced right are dead wrong. Listing agents that act this way obviously do not understand marketing on any level. There more persons that are interested in a property, the higher the bid price will be. This is the day of the Internet and custom searches by consumers to find and preview homes and properties online. However, if they entered incorrectly, no one will ever find them. Personally I believe that our industry is pre-occupied with fear and not doing the job the way we used to. As an industry we're reeling from a bursting real estate bubble and we're obviously not policing our own to ensure sellers get their homes sold and buyers can find what they are looking for.

Homes these days are being entered so poorly into the MLS system that no one will ever find the listing. They simply cannot be found. It does not matter the shape of the home, the upgrades or the price. The listing is in limbo if entered incorrectly or with only sparse data! There should be a law against this called "Criminal stupidity!" Think about it. Sellers that are relying on the broker to sell the home…will never have a chance of anyone finding the listing. This is an inexcusable offense, and the MLS systems that allow listings with loads of errors, or omitted data to be placed into the system is in big trouble. It is conceivable that you could list the perfect home, and no one will ever find it.

The MLS coupled with IDX allows buyers across many portals to search for homes. They all rely on the original data entry to make this viral marketing work. An MLS should never allow fields such as schools, and MLS area should never be allowed to be entered blank, or incorrectly. We all know there is manipulation of fields – listing a home in another city or school district to warrant more exposure or a higher price. Misinformation - really borders on illegal, and fraudulent since it tends to deceive and manipulate unsuspecting buyers.

Ages of homes should be filled in. Many buyers will search for a home or property by zip codes or by schools, city or map. If the listing is entered without schools, or correct cities … what chance is there ever of finding it? Agents that do this should leave the business, be fined, or have their incomplete or erroneous listing pulled. Just because an agent has no interest in entering what they consider minor details - they cannot overlook the fact that their actions may ruin the life of a home owner or seller forever. They are depending on us to get the home sold! There is no bigger abuser of this right now than those listing short sales, foreclosures, and bank owned properties. The losses to the sellers are criminal!

Examples of MLS entries that should never be allowed:

Wrong addresses
Partial Addresses
Age of home should be filled in - as opposed to wild cards or "unknown!”
Wrong City
Wrong Zip Code
Wrong MLS area
Schools not listed
Acreage
Room dimensions where required
Wrong Schools listed
Wrong number of bedrooms / baths
Missing features
No photos
No Virtual tours
No descriptions / remarks
Wrong directions
Wrong features
Wrong photos
Wrong price
Wrong Map coordinates
Wrong Subdivisions
Misspelled Subdivisions
No Map Coordinates

National Average Long-Term Mortgage Rate Rises to 5 Percent

2009-10-23T04:54:00.000-07:00

National Average Long-Term Mortgage Rate Rises to 5 Percent
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.00 percent with an average 0.7 point for the week ending October 22, 2009, up from last week when it averaged 4.92 percent. Last year at this time, the 30-year FRM averaged 6.04 percent.

The 15-year FRM this week averaged 4.43 percent with an average 0.6 point, up from last week when it averaged 4.37 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week when it averaged 4.38 percent. A year ago, the 5-year ARM averaged 6.06 percent.

The one-year Treasury-indexed ARM averaged 4.54 percent this week with an average 0.6 point, down from last week when it averaged 4.60 percent. At this time last year, the 1-year ARM averaged 5.23 percent.

"Following bond yields, long-term mortgages rates edged up slightly this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Although rates for 5/1 ARMs and traditional 1-year ARMs are around half a percentage point below 30-year fixed mortgages, consumers appear to be seeking the stability of fixed-rate mortgages. According to the Mortgage Bankers Association, ARMs averaged only about 6 percent of the number of mortgage applications in September and October thus far."

"The housing market is still trying to recover in the second half of the year. The Federal Reserve reported in its October 21st regional economic review that housing market conditions improved in recent weeks, primarily from a pickup in sales of low-to medium-priced houses. However, residential construction activity was reported to remain weak in most areas. New construction of single family homes rebounded in September, rising at a 3.9 percent annual rate, but did not erase all of the declines set in August, based on figures released by the Department of Commerce. Moreover, homebuilder confidence, as measured by the National Association of Homebuilder's Housing Market Index, fell slightly in October and marked the first decline since January of this year."

Defending Your Home Base Against Foreclosure

2009-10-15T07:06:00.000-07:00

Defending Your Home Base Against Foreclosure

Throughout Florida, we see the number of foreclosures continue to rise. While Winter Park may have been more stable when the housing crisis began, the community is now feeling the impact of the foreclosure wave that is washing over our state and nation.

A recent report by RealtyTrac, Inc. found that Orlando's four county region, including the city of Winter Park, had nearly 8,000 homes with a foreclosure filing, notice of foreclosure or repossession by a lending group. This figure has doubled since last year's data collection. Now, more than ever, I hear from worried homeowners asking questions like: "What should I do if I can't pay my mortgage?" and "What should I do if I'm served a foreclosure notice?" People think there is little that can be done to defend against foreclosure. Good news that is absolutely not true.

Understand that many people, including elected officials and community groups at all levels, are working tirelessly to slow the rate of new foreclosures. There are, however, a few attempting to take advantage of scared, inexperienced homeowners who are faced with losing everything. My Advice: don't be afraid, get informed.

The most critical first step for individuals faced with mortgage foreclosure is to find and secure the services of an experienced attorney, familiar with these issues. A foreclosure filing should be viewed like a lawsuit, and you'll need someone who can successfully litigate your case. A thorough understanding of your mortgage right, which include, but are not limited to, loan modifications, is of the highest importance.

Be wary of non-attorneys offering assistance as they have no leverage in dealing with lenders. In the end, they cannot do anything to help their clients if a foreclosure case goes to court. Lenders have become keenly aware of this deficiency, and they will exploit your team's weakness.

There are a number of benefits linked to working with a reputable foreclosure attorney who can who can lead a dynamic defense. Your attorney will work to delay or stop foreclosure, and you will be able to set aside funds that can be used when seeking reinstatement. Furthermore, people who put up a strong defense have an extra leverage and are well positioned for future reinstatement. Working with a defense attorney, borrowers affected by foreclosures can use the legal process to achieve fair loan modification – a solution that allows people to keep their homes. This route reworks the terms of an existing mortgage, thereby lowering monthly payments and making the loan more affordable.

This can play out in various ways, including; the principal balance of the loan can be reduced; the interest rate lowered, and some or all of the past-due payments can even be eliminated. Essentially, homeowners get a new start on their credit report and improve their credit scores over a matter of months. Each situation is a different, and you must work with your trusted advisers to decide the best course of action for you and your family.

While the process may seem overwhelming, the bottom line is … a reputable attorney will be able to set you on the right course toward keeping your home. If you're in trouble, unable to make your mortgage payments or if a foreclosure complaint has already been filed against you, please do your homework and find experienced legal representation.

Market Conditions

2009-10-14T06:51:00.000-07:00

Market Conditions
Nearly two-thirds of single-family home builders are reporting a severe lack of credit for housing production, threatening the fragile housing recovery before it has time to take hold, according to a new builder survey of acquisition, development and construction (AD&C) financing conducted by the National Association of Home Builders (NAHB).

"Across the country, home builders and developers are reporting a deterioration in credit availability and intensifying pressure on borrowers with outstanding loans," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "Lenders are cutting off loans for viable new housing projects and producing unnecessary foreclosures and losses on AD&C loans. With the pending expiration of the $8,000 first-time home buyer tax credit, these challenges threaten to halt any positive developments we have seen in the housing market in recent months."

In the latest NAHB survey of AD&C financing conditions, 63 percent of builders stated that the availability of credit for single-family construction loans worsened in the second quarter of 2009.

Builders reporting deteriorating credit conditions cited the following reasons: 80 percent said that lenders are lowering the allowable loan-to-value ratio, 76 percent reported that lenders are not making new loans, 75 percent stated that lenders are reducing the amount they are willing to lend and 62 percent said that lenders are requiring personal guarantees or collateral not related to the project. Two-thirds of respondents reported putting single-family construction projects on hold until the financing climate gets better.

While federal banking regulators continue to maintain that they are not instructing institutions to stop making loans or to indiscriminately liquidate outstanding loans, builders responding to the survey cited the top reason that lenders have given them for restricting the availability of new loans or for tightening the terms of outstanding loans is that "regulators are forcing lenders to do it."

NAHB believes that regulators and lenders should provide leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals, loan modifications and perhaps forbearance on loans to give builders time to complete and sell their inventory.

"There can be no meaningful economic recovery until the flow of credit is restored to housing," said Robson.

Real estate outlook

2009-10-13T06:48:00.001-07:00

Real Estate Outlook: Warning of Slow Down?
by Kenneth R. Harney
Though some economic analysts are warning that the housing market's rebound will slow down as the weather turns colder, this week's numbers show no hints of that.

In fact, they're actually pretty warm.

Start with house prices. The Clear Capital Home Data Index, which tracks price movements in thousands of neighborhoods and ZIP codes across the country, reported a 6.3 percent gain last week for the period covering August 27th through September 25th.

The latest index found prices up for the first time since 2006 in two of the hardest-hit real estate markets - Riverside-San Bernadino, California, and Orlando, Florida. Though the gains weren't big - just 1.2 percent in Orlando, and half a percentage point in Riverside-San Bernadino - just the fact that they're finally bottoming out has got to be good news for property owners and sellers there.

Baltimore also saw its first positive price change in seven quarters on the Clear Capital Index, while other major markets continued their multi-quarter strings of gains.

Dallas-Ft. Worth, for example, saw prices rise by an average 2.3 percent. Miami-Ft. Lauderdale was up 3.4 percent, Houston 3.1 percent and even New York, which has had a tough time recently in Manhattan, posted a 1.6 percent jump.

Meanwhile, the mortgage market continued to provide plenty of financing fuel for home buyers looking to use the $8,000 tax credit before it possibly disappears at the end of November.

The Mortgage Bankers Association says average thirty year rates dropped again last week in its national survey -- hitting 4.89 percent -- the lowest they've been since May.

Fifteen year fixed rates decreased to just 4.3 percent, which is the lowest ever recorded in the mortgage association's survey history.

Not surprisingly, record low rates are pulling in massive numbers of new loan applications. Overall applications were up by 16 percent last week. Loans to people planning to buy homes jumped by 13 percent, while refinancing applications soared by 18 percent.

And here's a truly amazing statistic: New mortgage applications to buy houses using FHA loans were 52 percent higher last week than they were a year ago!

With mortgages flying out of banks with interest rates in the mid -to -upper four percent range, you don't spend a whole lot of time worrying about a slowdown in the real estate rebound.

Unless, of course, Congress doesn't extend the $8,000 tax credit into next year.

Published: October 13, 2009

Use of this article without permission is a violation of federal copyright laws.

Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.
He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.

30-Year Fixed-Rate Mortgage Lowest in Four Months, Nearing All-Time Low Set in Survey in March

2009-10-02T06:18:00.000-07:00

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.94 percent with an average 0.7 point for the week ending October 1, 2009, down from last week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.10 percent. The last time the 30-year FRM was below 5 percent was the week ending May 28, 2009, when it averaged 4.91 percent.

The 15-year FRM this week averaged 4.36 percent with an average 0.6 point, down from last week when it averaged 4.46 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, with an average 0.6 point, down from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 6.00 percent.

The one-year Treasury-indexed ARM averaged 4.49 percent this week with an average 0.5 point, down from last week when it averaged 4.52 percent. At this time last year, the 1-year ARM averaged 5.12 percent.

"Low mortgage rates are helping to stabilize home sales," said Frank Nothaft, Freddie Mac vice president and chief economist. "New home sales in August rose to the highest annualized pace since September 2008 and the inventory of unsold houses fell to the lowest level since February 1983."

Although existing home sales fell somewhat in august, it was still the second strongest showin in 23 months. Furthermore, house prices increased for the second month in a row in July, after adjusting for seasonality, based on the 20-city composite S&P/Case-Shiller Home Price index. Moreover, the increases were more broad-based in July with house prices rising in 17 of these metropolitan areas, compared to 16 in June.

How To Avoid Foreclosure 3 Tips To Help You Save Your Home

2009-09-28T06:03:00.000-07:00

During this financial crisis a great many people are finding it difficult to keep up their mortgage payments. For many because they do not know what they can do to avoid this situation they end up actually losing their home. However, in this article we offer a few tips that could prove useful on how to avoid foreclosure so allowing you to remain in your home.
Tip 1 - It is important that as soon as you are faced with the difficulty of paying your mortgage that you don’t try to ignore the situation. It is far better if you contact the lender immediately and explain to them what your current financial situation is. By doing this they may well be able to devise a payment program that ensures that you can still pay the mortgage and so keep your home.
Tip 2 - Whenever you receive any correspondence from the mortgage lender regarding it you should open and reply to it as quickly as you possibly can. Generally the first letter the lender sends to those who are having difficulties in paying their mortgage will provide them with some ways of how to avoid foreclosure happening to them.
If you ignore the initial correspondence from the lender it could lead to further problems for you in the future and also it may contain information relating to the legal proceedings that the lender is about to take against you. Using the excuse that you didn’t think the letter was important with the judge at the foreclosure court won’t work.
Tip 3 - Another thing you need to do is actually go through the mortgage documentation as soon as your financial situation has altered. Reading through these carefully you should be able to determine what the lender is able to do when payments are not being met. If you are not at all sure about what your rights are with regards to foreclosure then contact a lawyer or your local citizen advice bureau.

Who Needs A Modification Company To Stop Foreclosure

2009-09-27T07:09:00.000-07:00

If you, like many people in the U.S.A, are facing foreclosure on your home, then you are looking for anything you can do to stop it. Firstly, be calm and dont panic. Do not get yourself into a situation like mortgage restructure that you have to pay for up front. A reputable mortgage company, that knows that their service will help you, will do this with no money up front because they know they will get paid when the mortgage goes through.
In avoiding foreclosure, the first thing you need to do is always keep the lending company aware of your current situation. Work with the lending company and make an agreement with them to pay what you can, even if it is partial payments. This agreement, if followed by you, will keep your loan from going into foreclosure.
Once you get too far behind in payments, your mortgage company will file a notice of default. Your options, at this point, become very limited and your mortgage holder will not be as likely to work with you once this has been filed and foreclosure proceedings are begun.
When you reach the stage of notice of default, your only option may be to pay the arrears payment along with the interest and foreclosure costs in order to stop the process.
At this point, the fees can begin adding up so fast that there is no way that a person can catch up. At this point, walking away from the problem all together seems like the easiest thing to do. Here is the sad part of this; there are some options that can be exercised.
The laws on foreclosure differ from state to state, They are not the same either in Judicial Foreclosures or Non-Judicial Foreclosures. As of February 2008, the Foreclosure Act of 2008 allows homeowners to file for bankruptcy and be able to save their home. Of course there are different qualifications for this. Most people will qualify. It will be up to the individual judge as to what extent and what the foreclosure will include, as far as all or a portion of the loan goes. It is crucially important that when you receive the Notice of Default, you notify the bank of your intentions immediately. So do your homework before you receive your notice if it is eminent.
Most people are not aware of this, but there are many foreclosure assistance Corps out there that can help you at this point. The earlier you get one of these corps on board, the better off you will be. So be honest with yourself and seek help before it becomes a necessity. This is the key to stopping a foreclosure. There are mortgage prevention programs and mitigation companies out there that know how to help you, so seek their help.
Not only can these companies help you avoid foreclosure, they will communicate with the mortgage holder directly, easing your stress over the situation. They can restructure the mortgage or lower your payments for a period of time.
If You can’t afford one of these companies go to the Internet and use your search engine to find self help to stop foreclosure there are a lot if do it yourself kits for various other legal maneuvers if you dont feel comfortable with the options above. Again, be realistic and seek these forms of help before it becomes completely necessary.

Buying Temecula Real Estate: Foreclosure or Short Sale

2009-09-24T05:35:00.001-07:00

Buying Temecula Real Estate: Foreclosure or Short Sale

It's a buyers market and you're a buyer. You want the very best deal you can get. There are loads of homes for sale; over 1000 in Temecula alone. So where do you start? That question is easy. Find a good buyers agent and tell them what you're looking for. Let them do the work and present you with their findings. Chances are some of the homes they find will be bank owned homes and these are usually among the lowest priced. There will probably be a few short sales on the list also and they may see like a good deal also. But each of these presents their own set of problems.

Foreclosures

Bank owned homes are homes that have already gone through the foreclosure process and now the bank wants to get rid of them. The bank has contacted one of their agents, received a brokers price opinion and now the home is for sale. If you put in an offer on this house, make sure you have a buyers agent, never use the listing agent. The listing agent usually has an ongoing relationship with the bank and may not be completely committed to you as the buyer. So don't sell yourself short, get a good agent to represent only you.

Bank owned homes will be sold AS IS which means you can do a home inspection but the bank will not do any repairs. Most banks will have very strict time lines as to how soon you need to have your home inspection in order to back out of the deal and not forfeit your deposit. So 5 days for inspections is not unusual. The bank will want proof of funds upfront and will not approve the offer until they've seen this information. They can take several days to accept an offer so be prepared for a wait. As part of their acceptance the bank will have it's own addendum, that the buyer will need to sign. One of the conditions in the addendum will be a late fee accesses on escrows that close after the closing date. These fees can range from $100 and up and have additional per day charges as well. These can add up quickly, so get a 45 day escrow if possible with the intentions of closing in 30. This will give you sway time for unexpected delays.

Short Sales

Short sales can be deceptive. Often a short sale will read contingent on bank approval This means that what ever is in the MLS as far as price may not necessarily be what the bank is willing to accept. A short sale is where the owner still lives in the home, he may or may not be making payments, he needs to sell his house but will not be able to sell for what he owes. In a short sale the bank has final approval not the owner. The listing agent most often has arbitrarily put a sale prices (often low) in the MLS, hoping to attract a buyer and this usually works. The problem arises when the bank doesn't want to sell that low and negotiations start between the buyer and the bank. This can be a very lengthy process and the end result can often be weeks of wasted time. If you want to attempt to purchase a short sale the key is understanding it can be a very lengthy process with an outcome that is not what you were hoping for.

Whether you buy a short sale, a pre-foreclosure home, a bank owned home, or a seller owned home, make sure you have a knowledgeable agent that can work with any of these scenarios. The more complicated the transaction the more things can go wrong and the more the transaction can cost the buyer time and money. So do yourself a big favor and get a good buyers agent.
POSTED BY KATHY NEILSEN AT 5:10 AM
LABELS: BUYING A TEMECULA FORECLOSURE, SELL A TEMECULA HOME, TEMECULA REAL ESTATE BUY A TEMECULA HOME, TEMECULA SHORT SALE

Current Real Estate Market in Temecula RedHawlk

2009-09-23T05:57:00.000-07:00

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of REALTORS^®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007 when it was 100.7.

Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. "The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit," he said.

"Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family's monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable," Yun said.

NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible -- it is taking approximately two months to complete home sales in the current market.

The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008. In the Midwest the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago. In the South, pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008. In the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said Congress needs to keep the momentum going. "Even with a good recovery taking place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices," he said.

"To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we're encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy," McMillan said.

NAR's Housing Affordability Index² stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

Yun expects existing-home sales to rise through the fourth quarter. "Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year," he said. "However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,' to ‘I don't want to miss out on a recovery'."

The National Association of REALTORS^®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

²The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income. The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments. The index is a general gauge with conditions varying widely around the country. Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for August will be released September 24; the next Pending Home Sales Index will be on October 1.