From Realtor Magazine Online, Daily Real Estate News January 28, 2009
The Federal Reserve will take aggressive action to renegotiate mortgages that are likely to enter foreclosure, Fed Chair Ben Bernanke said in a letter to Congress Tuesday.
Under the program, which only affects mortgages owned by the Fed, the central bank will be able to reduce what a home owner owes on a mortgage, lower the interest rate, lengthen the term on the loan, or take other steps that might persuade home owners to keep paying. Borrowers will deal directly with their mortgage servicer.
The Fed says that the mortgages most likely to be affected are those with loan balances that are more than 125 percent of estimated value of the property.
"It's a step beyond what FDIC is doing with its own portfolio," said mortgage expert Alan White, an assistant professor at Valparaiso University School of Law. "Principal write-downs are still the critical issue" in keeping borrowers in their homes.
Source: Washington Post, Neil Irwin and Renae Merle (01/28/2009)
Wednesday, January 28, 2009
Despite Low Rates, Mortgage Applications Decline
From Realtor Magazine Online, Daily Real Estate News January 28, 2009
Mortgage applications were down last week.
Loan rates that fell less than the Federal Reserve had hoped kept borrowers away. And the difficulty in getting approvals for those with iffy credit scores and small down payments also apparently had an impact.
The Martin Luther King Jr. holiday and miserable weather in many parts of the country also might have discouraged applications.
On an adjusted basis and factoring in the holiday, applications fell 38.8 percent from 1,195.3 the previous week to 732.1 last week, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the index decreased 46.5 percent compared to the previous week and 40.4 compared to last year.
The refinance share of mortgage activity decreased to 72.8 percent of total applications from 83.3 the previous week.
Mortgage rates were down:
* 30-year fixed-rate mortgages decreased to 5.22 percent from 5.24 percent
* 15-year fixed-rate mortgages decreased to 4.98 percent from 4.99 percent
* 1-year ARMs increased to 5.96 percent from 5.89 percent
Source: Mortgage Bankers Association (01/28/2009)
Mortgage applications were down last week.
Loan rates that fell less than the Federal Reserve had hoped kept borrowers away. And the difficulty in getting approvals for those with iffy credit scores and small down payments also apparently had an impact.
The Martin Luther King Jr. holiday and miserable weather in many parts of the country also might have discouraged applications.
On an adjusted basis and factoring in the holiday, applications fell 38.8 percent from 1,195.3 the previous week to 732.1 last week, according to the Mortgage Bankers Association weekly survey.
On an unadjusted basis, the index decreased 46.5 percent compared to the previous week and 40.4 compared to last year.
The refinance share of mortgage activity decreased to 72.8 percent of total applications from 83.3 the previous week.
Mortgage rates were down:
* 30-year fixed-rate mortgages decreased to 5.22 percent from 5.24 percent
* 15-year fixed-rate mortgages decreased to 4.98 percent from 4.99 percent
* 1-year ARMs increased to 5.96 percent from 5.89 percent
Source: Mortgage Bankers Association (01/28/2009)
Monday, January 26, 2009
Inflation: The Enemy of Bonds and Mortgage Rates
Inflation chatter could come around again this week, as the Fed will be holding their regularly scheduled meetings on Tuesday and Wednesday, with their Policy Statement and decision regarding the Fed Funds Rate coming on Wednesday.
Remember, the Fed made history last month when they slashed the Fed Funds Rate by .75% to the lowest target range in history of 0% to .25%.
Other potential market movers include Friday's Gross Domestic Product (GDP) Report. GDP is the broadest measure of economic activity, and given the state of our economy, a negative report might not be too much of a surprise.
In addition, Thursday's Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc) will give us a read on consumer and business consumption and buying behavior.
We got a look at the housing market with Monday's Existing Home Sales Report, which was rather strong. On Thursday we get the New Home Sales Report.
Remember: Inflation is the arch enemy of Bonds and home loan rates, and even the mention of it can have negative ramifications. I will be watching very closely to see how Bonds and rates respond to all the news of the week.
Remember, the Fed made history last month when they slashed the Fed Funds Rate by .75% to the lowest target range in history of 0% to .25%.
Other potential market movers include Friday's Gross Domestic Product (GDP) Report. GDP is the broadest measure of economic activity, and given the state of our economy, a negative report might not be too much of a surprise.
In addition, Thursday's Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc) will give us a read on consumer and business consumption and buying behavior.
We got a look at the housing market with Monday's Existing Home Sales Report, which was rather strong. On Thursday we get the New Home Sales Report.
Remember: Inflation is the arch enemy of Bonds and home loan rates, and even the mention of it can have negative ramifications. I will be watching very closely to see how Bonds and rates respond to all the news of the week.
10 Real Estate Myths for Buyers and Sellers
The truth about the housing market: In today’s uncertain market, fear runs rampant on both the buying and selling sides of the fence. Many myths need debunking. Here are five untruths held by buyers, and five held by sellers.
Buyer myth No. 1: The longer the house is on the market, the more you can negotiate.
When buyers ask, “How long has this property been on the market?”, they think “six months” means they can negotiate the price down. It more often means the seller is stubbornly holding on to their price.
Buyer myth No. 2: The sellers today are desperate.
Most aren’t. Always ask why the sellers are selling. It’s the key to finding how motivated and anxious they are. “I’m being transferred to Dallas” is a very different answer than “We’d like to find something bigger.” The first homeowner is hot to trot.
Buyer myth No. 3: You can’t buy a home today with less than 20 percent down.
FHA loans require only 3.5 percent down, and you can even ask the seller to pay the closing costs.
Buyer myth No. 4: You need good credit to get a good loan.
Once again, the FHA to the rescue! They’re happy to lend money to buyers with bad credit.
Buyer myth No. 5: You shouldn't buy before prices have bottomed.
You can’t sharpshoot the real estate market. Once you identify the “bottom,” prices have already moved up.
Seller myth No. 6: Now’s the absolute worst time to sell.
Not necessarily. It depends upon where you live. Many of the worst hit markets, like Las Vegas, Phoenix or San Diego, are already beginning to turn around. And if you’re a homeowner who wants to trade up, the loss you’ll take on your current home will be more than offset by the bargain you’ll get on the next one.
Seller myth No. 7: Never respond to a low-ball bid.
All buyers today feel obligated to put in low-ball offers to see if the seller bites. If you respond with a reasonable counter offer, most buyers can be convinced to come up in price and make the deal.
Seller myth No. 8: The first offer is never the best offer.
Most sellers believe that it’s smart to hold out for something better. But four times out of five, the first offer is the best you’ll ever see.
Seller myth No. 9: 'I can always reduce my price later.'
Sellers often price their home high for a few weeks just to test the market. But buyers shop by price bracket and if your house is in the wrong one, you’ll just help sell everyone else’s home while yours sits there overpriced. And reducing your price later in small increments puts you in the position of chasing the tide as it goes out.
Seller myth No. 10: Before you refinance, shop around.
You can if you want, but you’ll usually get the best deal from your current lender. And you’ll be able to negotiate your closing costs.
Source: Barbara Corcoran
Buyer myth No. 1: The longer the house is on the market, the more you can negotiate.
When buyers ask, “How long has this property been on the market?”, they think “six months” means they can negotiate the price down. It more often means the seller is stubbornly holding on to their price.
Buyer myth No. 2: The sellers today are desperate.
Most aren’t. Always ask why the sellers are selling. It’s the key to finding how motivated and anxious they are. “I’m being transferred to Dallas” is a very different answer than “We’d like to find something bigger.” The first homeowner is hot to trot.
Buyer myth No. 3: You can’t buy a home today with less than 20 percent down.
FHA loans require only 3.5 percent down, and you can even ask the seller to pay the closing costs.
Buyer myth No. 4: You need good credit to get a good loan.
Once again, the FHA to the rescue! They’re happy to lend money to buyers with bad credit.
Buyer myth No. 5: You shouldn't buy before prices have bottomed.
You can’t sharpshoot the real estate market. Once you identify the “bottom,” prices have already moved up.
Seller myth No. 6: Now’s the absolute worst time to sell.
Not necessarily. It depends upon where you live. Many of the worst hit markets, like Las Vegas, Phoenix or San Diego, are already beginning to turn around. And if you’re a homeowner who wants to trade up, the loss you’ll take on your current home will be more than offset by the bargain you’ll get on the next one.
Seller myth No. 7: Never respond to a low-ball bid.
All buyers today feel obligated to put in low-ball offers to see if the seller bites. If you respond with a reasonable counter offer, most buyers can be convinced to come up in price and make the deal.
Seller myth No. 8: The first offer is never the best offer.
Most sellers believe that it’s smart to hold out for something better. But four times out of five, the first offer is the best you’ll ever see.
Seller myth No. 9: 'I can always reduce my price later.'
Sellers often price their home high for a few weeks just to test the market. But buyers shop by price bracket and if your house is in the wrong one, you’ll just help sell everyone else’s home while yours sits there overpriced. And reducing your price later in small increments puts you in the position of chasing the tide as it goes out.
Seller myth No. 10: Before you refinance, shop around.
You can if you want, but you’ll usually get the best deal from your current lender. And you’ll be able to negotiate your closing costs.
Source: Barbara Corcoran
For Your Clients: 4 Tips to Getting a Loan
From Realtor Magazine Online, Daily Real Estate News January 26, 2009
These days one of the biggest impediments to closing a real estate sale can be the buyer’s ability to get a mortgage.
Here are some tips for anyone who hopes to land a loan:
1) Turn to the government. The biggest source of loans these days is the Federal Housing Administration (FHA) and the Veterans Administration (VA). These programs accept borrowers with lower credit scores and allow them to put down as little as 3.5 percent of the purchase price.
2) Document, document, document. Borrowers will need bank statements, brokerage statements, W-2 forms and tax returns.
3) Boost credit scores. Borrowers should avoid having more than one-third of their maximum borrowing capacity outstanding on one credit card. If necessary, rotate the debt among several cards.
4) Work your connections. Comparison shopping is easy online, but if your customer has an established relationship with a local bank, suggest they try that lender first.
Source: BusinessWeek.com, Christopher Palmeri (01/23/09)
These days one of the biggest impediments to closing a real estate sale can be the buyer’s ability to get a mortgage.
Here are some tips for anyone who hopes to land a loan:
1) Turn to the government. The biggest source of loans these days is the Federal Housing Administration (FHA) and the Veterans Administration (VA). These programs accept borrowers with lower credit scores and allow them to put down as little as 3.5 percent of the purchase price.
2) Document, document, document. Borrowers will need bank statements, brokerage statements, W-2 forms and tax returns.
3) Boost credit scores. Borrowers should avoid having more than one-third of their maximum borrowing capacity outstanding on one credit card. If necessary, rotate the debt among several cards.
4) Work your connections. Comparison shopping is easy online, but if your customer has an established relationship with a local bank, suggest they try that lender first.
Source: BusinessWeek.com, Christopher Palmeri (01/23/09)
Existing-Home Sales Show Surprising Gain
From Realtor Magazine Online, Daily Real Estate News January 26, 2009
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is underperforming and hurting the broader economy.
“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
Housing Stats
National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.
Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.
Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.
Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.
Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.
Existing-Home Sales By Region
* Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
* Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
*South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.
* West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
A Good Time to Buy
NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.
“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”
McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.
Source: NAR
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is underperforming and hurting the broader economy.
“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
Housing Stats
National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.
Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.
Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.
Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.
Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.
Existing-Home Sales By Region
* Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
* Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
*South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.
* West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
A Good Time to Buy
NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.
“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”
McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.
Source: NAR
Friday, January 23, 2009
New Refinance Boomlet May Lift Economy a Bit
From Realtor Magazine Online, Daily Real Estate News January 23, 2009
Record low mortgage rates are providing a small measure of stimulus to the troubled U.S. economy as borrowers scramble to refinance their home loans--a move that frees up cash to spend on other items.
The Mortgage Bankers Association reports that the volume of loan applications has soared since November to its highest level in six years.
However, despite mortgage rates hovering around and even under 5 percent in recent weeks, a surge of buyers back into the housing market is not likely anytime soon, and some homeowners who want to refinance are finding they cannot because of lenders' tightened credit standards.
Source: Christian Science Monitor, Mark Trumbull (01/23/09)
Record low mortgage rates are providing a small measure of stimulus to the troubled U.S. economy as borrowers scramble to refinance their home loans--a move that frees up cash to spend on other items.
The Mortgage Bankers Association reports that the volume of loan applications has soared since November to its highest level in six years.
However, despite mortgage rates hovering around and even under 5 percent in recent weeks, a surge of buyers back into the housing market is not likely anytime soon, and some homeowners who want to refinance are finding they cannot because of lenders' tightened credit standards.
Source: Christian Science Monitor, Mark Trumbull (01/23/09)
Lender Shopping: Multiple Applications on Rise
From Realtor Magazine Online, Daily Real Estate News January 23, 2009
A flood of borrowers are applying to more than one lender in hopes of refinancing into a mortgage with record low interest rates.
Many applicants are having trouble refinancing, however, because lenders have toughened their underwriting criteria and also are swamped with applications that have overwhelmed their downsized staffs.
Fannie Mae chief economist Doug Duncan says anecdotal evidence shows that about half of refinancing applicants are getting approved, down from 60 to 70 percent during previous refinancing booms.
Source: The Washington Post, Dina ElBoghdady (01/16/09)
A flood of borrowers are applying to more than one lender in hopes of refinancing into a mortgage with record low interest rates.
Many applicants are having trouble refinancing, however, because lenders have toughened their underwriting criteria and also are swamped with applications that have overwhelmed their downsized staffs.
Fannie Mae chief economist Doug Duncan says anecdotal evidence shows that about half of refinancing applicants are getting approved, down from 60 to 70 percent during previous refinancing booms.
Source: The Washington Post, Dina ElBoghdady (01/16/09)
Thursday, January 22, 2009
Mortgage Applications Dip as Rates Rebound
From Realtor Magazine Online, Daily Real Estate News January 22, 2009
Interest rates that rose from their record lows the previous week slowed mortgage applications last week.
The Mortgage Bankers Association weekly mortgage applications survey declined 9.8 percent on a seasonally adjusted basis to 1,195.3 last week from 1,324.8 the previous week.
On an unadjusted basis, the index decreased 10.3 percent compared with the previous week and was down 23.1 compared to the same week a year ago.
Most of the business is still in refinances, but the refinance share of applications decreased to 83.3 percent of the total from 85.3 percent the previous week.
Interest rates were generally up:
* 30-year fixed-rate mortgages increased to 5.24 percent from 4.89 percent
* 15-year fixed-rate mortgages increased to 4.99 percent from 4.63 percent
* 1-year ARMs remained unchanged at 5.89 percent
Source: Mortgage Bankers Association (01/22/2009)
Interest rates that rose from their record lows the previous week slowed mortgage applications last week.
The Mortgage Bankers Association weekly mortgage applications survey declined 9.8 percent on a seasonally adjusted basis to 1,195.3 last week from 1,324.8 the previous week.
On an unadjusted basis, the index decreased 10.3 percent compared with the previous week and was down 23.1 compared to the same week a year ago.
Most of the business is still in refinances, but the refinance share of applications decreased to 83.3 percent of the total from 85.3 percent the previous week.
Interest rates were generally up:
* 30-year fixed-rate mortgages increased to 5.24 percent from 4.89 percent
* 15-year fixed-rate mortgages increased to 4.99 percent from 4.63 percent
* 1-year ARMs remained unchanged at 5.89 percent
Source: Mortgage Bankers Association (01/22/2009)
San Diego #3 of Cities for Top Housing Deals
From Realtor Magazine Online, Daily Real Estate News January 22, 2009
Property values are down, but in some cities sales are up because motivated sellers are slashing prices and buyers are getting deals.
“There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic, a New York derivatives firm.
In San Diego, Calif., transactions are up 90 percent as buyers compete for available bargains.
"Unlike stocks, housing has intrinsic value," says Barry Ritholtz, chief market strategist of Ritholtz Research, a New York research firm. "Outside of Love Canal or Detroit, house prices do not go to zero."
Here are the cities where sales are up the most in the last three months:
1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose, Calif.
10. Atlanta
Source: Forbes, Matt Woolsey (01/12/2009)
Property values are down, but in some cities sales are up because motivated sellers are slashing prices and buyers are getting deals.
“There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic, a New York derivatives firm.
In San Diego, Calif., transactions are up 90 percent as buyers compete for available bargains.
"Unlike stocks, housing has intrinsic value," says Barry Ritholtz, chief market strategist of Ritholtz Research, a New York research firm. "Outside of Love Canal or Detroit, house prices do not go to zero."
Here are the cities where sales are up the most in the last three months:
1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose, Calif.
10. Atlanta
Source: Forbes, Matt Woolsey (01/12/2009)
Wednesday, January 21, 2009
Mortgage Applications Surge on Low Rates
From Realtor Magazine Online, Daily Real Estate News January 21, 2009
U.S. mortgage applications spiked in the first full week of 2009 as record low interest rates triggered the highest demand for loan refinancing in 5-1/2 years, according to the Mortgage Bankers Association.Low mortgage rates, however, have yet to fuel a surge in loans for home purchases.
The MBA said its seasonally adjusted index of mortgage applications for the week ended Jan. 9 increased 15.8% to 1,324.8. That's the highest reading since the week ended July 11, 2003, when it reached 1,358.2.
Thirty-year mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan in November to buy as much as $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The refinance share of applications increased to 85.3% from 79.8% the previous week, the highest level since the MBA started conducting its survey in 1990.
Spencer Rascoff, chief operating officer at Zillow.com, an online real estate service company based in Seattle, said loan requests to his company are up more than 200% from just two months ago, with loan requests on pace to hit about 25,000 in January and loan quotes on pace to hit 200,000.
"Many experts agree that rates will stay relatively low for at least the next few months since the federal government is now committed to buying mortgage-backed securities to keep borrowing costs low," Rascoff said.
Here's a sampling of interest rate drops:
* 30-year-fixed mortgages, averaged 4.89%, down 0.18 percentage point from the previous week, the lowest level recorded in the MBA's survey's history.
* 15-year fixed mortgage averaged 4.63%, down from 4.67% the previous week.
* One-year ARMs decreased to 5.89% from 5.90%
Source: Reuters, CNNMoney.com (01/21/2009)
U.S. mortgage applications spiked in the first full week of 2009 as record low interest rates triggered the highest demand for loan refinancing in 5-1/2 years, according to the Mortgage Bankers Association.Low mortgage rates, however, have yet to fuel a surge in loans for home purchases.
The MBA said its seasonally adjusted index of mortgage applications for the week ended Jan. 9 increased 15.8% to 1,324.8. That's the highest reading since the week ended July 11, 2003, when it reached 1,358.2.
Thirty-year mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan in November to buy as much as $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The refinance share of applications increased to 85.3% from 79.8% the previous week, the highest level since the MBA started conducting its survey in 1990.
Spencer Rascoff, chief operating officer at Zillow.com, an online real estate service company based in Seattle, said loan requests to his company are up more than 200% from just two months ago, with loan requests on pace to hit about 25,000 in January and loan quotes on pace to hit 200,000.
"Many experts agree that rates will stay relatively low for at least the next few months since the federal government is now committed to buying mortgage-backed securities to keep borrowing costs low," Rascoff said.
Here's a sampling of interest rate drops:
* 30-year-fixed mortgages, averaged 4.89%, down 0.18 percentage point from the previous week, the lowest level recorded in the MBA's survey's history.
* 15-year fixed mortgage averaged 4.63%, down from 4.67% the previous week.
* One-year ARMs decreased to 5.89% from 5.90%
Source: Reuters, CNNMoney.com (01/21/2009)
Tuesday, January 20, 2009
Mortgage Rates Remain Below 5%
From Realtor Magazine Online, Daily Real Estate News January 20, 2009
The weekly average rate borrowers were quoted on Zillow for 30-year mortgages rose slightly last week to 4.96 percent, up from 4.92 percent the week prior, according to the Zillow Mortgage Rate Monitor.
Meanwhile, rates for 15-year fixed mortgages increased to 4.72 percent, up from 4.58 percent and 5-1 adjustable rate mortgages decreased to 5.22 percent from 5.35 percent.
Rates for 30-year fixed mortgages rose slightly on Monday evening, with the average rate on Zillow Mortgage Marketplace at 5.01 percent.
At a state level, the 30-year fixed rate in Michigan was the only rate decrease recorded, dropping from 5.05 percent to 5 percent. Rates on 30-year fixed mortgages were lowest in the states of Oregon (4.87 percent) and Florida (4.88 percent), while Colorado (5.06 percent) and Tennessee (5.06 percent) had the highest rates.
The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace by mortgage lenders to borrowers who have submitted loan requests. Zillow Mortgage Marketplace is a lending marketplace where borrowers can anonymously receive mortgage quotes directly from lenders.
Source: Zillow.com
The weekly average rate borrowers were quoted on Zillow for 30-year mortgages rose slightly last week to 4.96 percent, up from 4.92 percent the week prior, according to the Zillow Mortgage Rate Monitor.
Meanwhile, rates for 15-year fixed mortgages increased to 4.72 percent, up from 4.58 percent and 5-1 adjustable rate mortgages decreased to 5.22 percent from 5.35 percent.
Rates for 30-year fixed mortgages rose slightly on Monday evening, with the average rate on Zillow Mortgage Marketplace at 5.01 percent.
At a state level, the 30-year fixed rate in Michigan was the only rate decrease recorded, dropping from 5.05 percent to 5 percent. Rates on 30-year fixed mortgages were lowest in the states of Oregon (4.87 percent) and Florida (4.88 percent), while Colorado (5.06 percent) and Tennessee (5.06 percent) had the highest rates.
The Zillow Mortgage Rate Monitor is compiled each week using thousands of mortgage rates quoted on Zillow Mortgage Marketplace by mortgage lenders to borrowers who have submitted loan requests. Zillow Mortgage Marketplace is a lending marketplace where borrowers can anonymously receive mortgage quotes directly from lenders.
Source: Zillow.com
Monday, January 19, 2009
Report: Housing Markets Will Roar Back in 2009
From Associated Press, Tuesday January 6, 2009
FAIR OAKS, CA - The nation’s foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the 2009 Outlook from ForeclosureS.com.
“Recovery is underway. Affordable is back in the housing market,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com. “In 2009, housing will not only recover, but we’ll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market.”
“With 4.5% fixed mortgage rates, housing prices lower than they were 'pre-housing bubble', commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009” adds McGee. “This is a great time to buy properties for investors -- to buy properties at wholesale prices below today’s already low prices -- rent them out for positive cash flow and then sell them for big profits in late 2009 once price appreciation kicks in.“
The latest U.S. Foreclosure Index by ForeclosureS.com shows a slight drop from 84,534 to 84,291 in the number of properties repossessed by lenders following foreclosure last month over October. These are REOs or lender-owned real estate. But that’s off nearly 21% from September’s 106,415 REO filings. (Year to date 12.6 of every 1,000 households nationwide have been lost to foreclosure.)
“Certainly some of the drop reflects growing results of government and private efforts to keep homeowners in their homes,” says McGee. “But the recovery takes shape when you factor in other things like what the National Association of Realtors calls ‘solid’ gains from a year ago in existing home sales in some key areas, and the fact that many of the same areas are seeing dropping home prices. Fewer foreclosure actions were initiated in the last quarter, too, according to the latest Mortgage Delinquency Survey from the Mortgage Bankers Association,” McGee adds.
“California is a great example of what’s happening now and what lies ahead for the housing sector. Long a leader in the subprime mortgage mess and rising numbers of foreclosures, the state’s foreclosures have slowed significantly,” says McGee.
The latest U.S. Foreclosure Index numbers show November REO filings in the state down to 15,978 in November, down 6.55% from October and off nearly 50% from September. Home prices there have come down, too, as much as 39.4% from the third quarter from a year ago in some areas like Riverside-San Bernardino-Ontario, according to National Association of Realtors numbers. That’s left many homeowners that bought their homes at high price points with upside down mortgages—they owe more than the value of the home. But it’s also made homes more affordable for plenty of other people. Solid and in many cases rising existing homes sales support that, adds McGee.
In November, another perennial leader in foreclosures, Arizona, saw its REOs and pre-foreclosure filings drop (down 5.19% and 5% respectively), according to U.S. Foreclosure Index numbers.
The pre-foreclosure picture when averaged nationally isn’t quite as bright. Pre-foreclosures include notice of mortgage default and/or foreclosure auction. Amid all the negative economic news across the nation, pre-foreclosures for November were up 5.57% from October with 27.1 of every 1,000 households across the country facing some kind of foreclosure action (177,254 vs. 167,906 filings in October). But that’s still down nearly 2% and more than 7.5% from March’s high, according to U.S. Foreclosure Index analysis.
“Pre-foreclosure numbers likely climb in early 2009 (albeit at a much slower rate than in 2008)” says McGee. “Too many homeowners already are just too overextended and likely won’t seek help to work out their delinquent mortgages until after a pre-foreclosure filing against their property. That filing, it seems, is the wake-up call for many to get the help they need and sell” McGee adds.
“Potential homebuyers and investors on the other hand, will find the bargains growing in 2009,” says McGee. “As the year progresses more bright spots will emerge, too, both in terms of foreclosure numbers and housing markets as efforts to work with strapped homeowners really begin to take root.”
“I wish my crystal ball could pinpoint everything that’s going to happen with housing markets in the next 12 months, but there are just too many variables. What I can tell, though, is that hardest hit housing markets have already hit bottom and others will follow in 2009.
Third-quarter National Association of Realtor numbers actually show existing home sales picking up in about 20 percent of the areas studied. And, given the uncertainty and volatility of the stock market combined with all time low interest rates, extremely affordable low priced homes, and all the choices out there, 2009 is an excellent time to buy real estate. Properties, especially foreclosed ones, will be highly discounted, lenders are motivated to work with buyers, and the opportunities are abound. The bottom line to keep in mind: What goes down absolutely positively will go back up again.
“The return of solid housing markets is an important part of restoring stability to financial markets. The market will return when mortgage rates and home prices are down, and that's exactly what is happening now in the hardest-hit areas of the country,” adds McGee.
FAIR OAKS, CA - The nation’s foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the 2009 Outlook from ForeclosureS.com.
“Recovery is underway. Affordable is back in the housing market,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com. “In 2009, housing will not only recover, but we’ll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market.”
“With 4.5% fixed mortgage rates, housing prices lower than they were 'pre-housing bubble', commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009” adds McGee. “This is a great time to buy properties for investors -- to buy properties at wholesale prices below today’s already low prices -- rent them out for positive cash flow and then sell them for big profits in late 2009 once price appreciation kicks in.“
The latest U.S. Foreclosure Index by ForeclosureS.com shows a slight drop from 84,534 to 84,291 in the number of properties repossessed by lenders following foreclosure last month over October. These are REOs or lender-owned real estate. But that’s off nearly 21% from September’s 106,415 REO filings. (Year to date 12.6 of every 1,000 households nationwide have been lost to foreclosure.)
“Certainly some of the drop reflects growing results of government and private efforts to keep homeowners in their homes,” says McGee. “But the recovery takes shape when you factor in other things like what the National Association of Realtors calls ‘solid’ gains from a year ago in existing home sales in some key areas, and the fact that many of the same areas are seeing dropping home prices. Fewer foreclosure actions were initiated in the last quarter, too, according to the latest Mortgage Delinquency Survey from the Mortgage Bankers Association,” McGee adds.
“California is a great example of what’s happening now and what lies ahead for the housing sector. Long a leader in the subprime mortgage mess and rising numbers of foreclosures, the state’s foreclosures have slowed significantly,” says McGee.
The latest U.S. Foreclosure Index numbers show November REO filings in the state down to 15,978 in November, down 6.55% from October and off nearly 50% from September. Home prices there have come down, too, as much as 39.4% from the third quarter from a year ago in some areas like Riverside-San Bernardino-Ontario, according to National Association of Realtors numbers. That’s left many homeowners that bought their homes at high price points with upside down mortgages—they owe more than the value of the home. But it’s also made homes more affordable for plenty of other people. Solid and in many cases rising existing homes sales support that, adds McGee.
In November, another perennial leader in foreclosures, Arizona, saw its REOs and pre-foreclosure filings drop (down 5.19% and 5% respectively), according to U.S. Foreclosure Index numbers.
The pre-foreclosure picture when averaged nationally isn’t quite as bright. Pre-foreclosures include notice of mortgage default and/or foreclosure auction. Amid all the negative economic news across the nation, pre-foreclosures for November were up 5.57% from October with 27.1 of every 1,000 households across the country facing some kind of foreclosure action (177,254 vs. 167,906 filings in October). But that’s still down nearly 2% and more than 7.5% from March’s high, according to U.S. Foreclosure Index analysis.
“Pre-foreclosure numbers likely climb in early 2009 (albeit at a much slower rate than in 2008)” says McGee. “Too many homeowners already are just too overextended and likely won’t seek help to work out their delinquent mortgages until after a pre-foreclosure filing against their property. That filing, it seems, is the wake-up call for many to get the help they need and sell” McGee adds.
“Potential homebuyers and investors on the other hand, will find the bargains growing in 2009,” says McGee. “As the year progresses more bright spots will emerge, too, both in terms of foreclosure numbers and housing markets as efforts to work with strapped homeowners really begin to take root.”
“I wish my crystal ball could pinpoint everything that’s going to happen with housing markets in the next 12 months, but there are just too many variables. What I can tell, though, is that hardest hit housing markets have already hit bottom and others will follow in 2009.
Third-quarter National Association of Realtor numbers actually show existing home sales picking up in about 20 percent of the areas studied. And, given the uncertainty and volatility of the stock market combined with all time low interest rates, extremely affordable low priced homes, and all the choices out there, 2009 is an excellent time to buy real estate. Properties, especially foreclosed ones, will be highly discounted, lenders are motivated to work with buyers, and the opportunities are abound. The bottom line to keep in mind: What goes down absolutely positively will go back up again.
“The return of solid housing markets is an important part of restoring stability to financial markets. The market will return when mortgage rates and home prices are down, and that's exactly what is happening now in the hardest-hit areas of the country,” adds McGee.
Sunday, January 18, 2009
VA Loans Offer Superb Opportunities
If you are a veteran, you should be sure to take advantage of your VA Loan benefit.
VA Loans offer substantial benefits:
• No Down Payment is required in most cases
• No minimum credit score required
• Loan maximum may be up to 100% of the VA –establish reasonable value of the property
• Lower interest rate than fixed-rate mortgages
• No monthly mortgage insurance premium to pay (Funding Fee is upfront and financed)
• Limitation on borrower’s closing costs
Eligible Properties
• 30 yr fixed • 1-4 units
• 15 year fixed • Condominiums
• 3/1 adjustable • PUD’s
• 5/1 adjustable • Modular Home
*Manufactured Homes
VA Loan Types
• 30 yr fixed
• 15 year fixed
• 3/1 adjustable
• 5/1 adjustable
So, if you're looking to buy...Just say, "Home, James! ®"
Call:
Tim James
Prudential California Realty
1299 Prospect Street
La Jolla, CA 92037
Cell: (909) 702-3220
Fax: (858) 246 6078
Email: drtimjames@usa.net
http://www.homejames-sandiego.com/
http://www.homejames-orangecounty.com/
http://www.invest-in-california-property.com/
VA Loans offer substantial benefits:
• No Down Payment is required in most cases
• No minimum credit score required
• Loan maximum may be up to 100% of the VA –establish reasonable value of the property
• Lower interest rate than fixed-rate mortgages
• No monthly mortgage insurance premium to pay (Funding Fee is upfront and financed)
• Limitation on borrower’s closing costs
Eligible Properties
• 30 yr fixed • 1-4 units
• 15 year fixed • Condominiums
• 3/1 adjustable • PUD’s
• 5/1 adjustable • Modular Home
*Manufactured Homes
VA Loan Types
• 30 yr fixed
• 15 year fixed
• 3/1 adjustable
• 5/1 adjustable
So, if you're looking to buy...Just say, "Home, James! ®"
Call:
Tim James
Prudential California Realty
1299 Prospect Street
La Jolla, CA 92037
Cell: (909) 702-3220
Fax: (858) 246 6078
Email: drtimjames@usa.net
http://www.homejames-sandiego.com/
http://www.homejames-orangecounty.com/
http://www.invest-in-california-property.com/
Friday, January 16, 2009
Interactive Maps: Median Home Prices and State Existing Home Sales
From National Association of Realtors
Research has two interactive maps that now bring you both state and local housing data with just a click of the mouse. Using the Median Home Price interactive map, you can zoom in to your metropolitan statistical area to get the latest quarterly median home price for your market, and its percentage change from the previous quarter. The State Existing Home Sales map allows you to click within the borders of your state to see its Existing Home Sales value for the past quarter and to see the change percentage from the previous quarter, and the previous year.
Find your market’s median home price
Find the value of homes sold in your state
Research has two interactive maps that now bring you both state and local housing data with just a click of the mouse. Using the Median Home Price interactive map, you can zoom in to your metropolitan statistical area to get the latest quarterly median home price for your market, and its percentage change from the previous quarter. The State Existing Home Sales map allows you to click within the borders of your state to see its Existing Home Sales value for the past quarter and to see the change percentage from the previous quarter, and the previous year.
Find your market’s median home price
Find the value of homes sold in your state
10 Cities Boasting Mini Sales Booms
From Realtor Magazine Online, Daily Real Estate News January 16, 2009
Some cities that were hardest hit by the real downturn are experiencing mini sales booms.
Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.
Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country."
There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences.
"We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."
By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."
Here are the cities where experts say it makes the most sense to buy now.
1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose
10. Atlanta
Source: Forbes, Matt Woolsey (01/12/09)
Some cities that were hardest hit by the real downturn are experiencing mini sales booms.
Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.
Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country."
There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences.
"We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."
By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."
Here are the cities where experts say it makes the most sense to buy now.
1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose
10. Atlanta
Source: Forbes, Matt Woolsey (01/12/09)
NAR: Buyers Need Higher Loan Limits
From Realtor Magazine Online, Daily Real Estate News January 16, 2009
The drop in mortgage loan limits for conventional financing at the end of 2008 is hurting home sales and trade-up activity in higher price ranges across the country, according to the National Association of Realtors®.
The latest existing-home sales data shows transactions under $400,000 are 3 percent below a year ago. However, sales of homes priced at $750,000 or more have declined a whopping 47 percent.
Outside of FHA, Fannie Mae and Freddie Mac, mortgages that do not have government backing are still experiencing a credit crunch. Buyers who need jumbo mortgages must pay interest rates that are nearly 2 percentage points higher than conventional financing; as a result, the high-end market is not moving.
Lawrence Yun, NAR chief economist, said restoring higher mortgage loan limits is critical to this part of the market.
“Buyers in higher price ranges are at a severe disadvantage because they have to pay higher interest rates,” he said. “Lower loan limits are having a pronounced impact on trade-up activity at the upper end of the market, which depends more on large downpayments to keep mortgage amounts below the maximums for conventional financing.”
While homes above $750,000 are considered luxurious in many areas, they are modestly sized homes in the midprice ranges of many high-cost markets.
“However, the lower mortgage limits for conventional loans mean upper middle-class home buyers in much of the country, including many areas in the Midwest and South, also have to pay higher interest rates,” Yun said. “As a result, we are seeing a universal stalling of sales in higher price ranges across the country.”
To illustrate in dollar terms, if mortgage limits are permanently raised to $729,750, the maximum limit that expired at the end of December, the mortgage payment on such a loan would drop by $942 per month by lowering interest rates 2 percentage points. Over the life of a 30-year loan, the homeowner would save $338,000.
NAR President Charles McMillan said all consumers should have access to today’s historically low mortgage interest rates. “It’s only fair that all hard-working, tax-paying, successful people who want to purchase a home have equal access to low interest rates regardless of where they live or where they want to buy,” he said.
“Every segment of the housing market needs a turnaround to spark an overall housing recovery, which will help the economy to begin to recover,” McMillan said.
Source: NAR
The drop in mortgage loan limits for conventional financing at the end of 2008 is hurting home sales and trade-up activity in higher price ranges across the country, according to the National Association of Realtors®.
The latest existing-home sales data shows transactions under $400,000 are 3 percent below a year ago. However, sales of homes priced at $750,000 or more have declined a whopping 47 percent.
Outside of FHA, Fannie Mae and Freddie Mac, mortgages that do not have government backing are still experiencing a credit crunch. Buyers who need jumbo mortgages must pay interest rates that are nearly 2 percentage points higher than conventional financing; as a result, the high-end market is not moving.
Lawrence Yun, NAR chief economist, said restoring higher mortgage loan limits is critical to this part of the market.
“Buyers in higher price ranges are at a severe disadvantage because they have to pay higher interest rates,” he said. “Lower loan limits are having a pronounced impact on trade-up activity at the upper end of the market, which depends more on large downpayments to keep mortgage amounts below the maximums for conventional financing.”
While homes above $750,000 are considered luxurious in many areas, they are modestly sized homes in the midprice ranges of many high-cost markets.
“However, the lower mortgage limits for conventional loans mean upper middle-class home buyers in much of the country, including many areas in the Midwest and South, also have to pay higher interest rates,” Yun said. “As a result, we are seeing a universal stalling of sales in higher price ranges across the country.”
To illustrate in dollar terms, if mortgage limits are permanently raised to $729,750, the maximum limit that expired at the end of December, the mortgage payment on such a loan would drop by $942 per month by lowering interest rates 2 percentage points. Over the life of a 30-year loan, the homeowner would save $338,000.
NAR President Charles McMillan said all consumers should have access to today’s historically low mortgage interest rates. “It’s only fair that all hard-working, tax-paying, successful people who want to purchase a home have equal access to low interest rates regardless of where they live or where they want to buy,” he said.
“Every segment of the housing market needs a turnaround to spark an overall housing recovery, which will help the economy to begin to recover,” McMillan said.
Source: NAR
30-Year Rates Fall Below 5 Percent
From Realtor Magazine Online, Daily Real Estate News January 16, 2009
Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
* 15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
* 1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
* 5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week.
Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Source: Reuters, Julie Haviv (1/15/09)
Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
* 15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
* 1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
* 5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week.
Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Source: Reuters, Julie Haviv (1/15/09)
Thursday, January 15, 2009
FHLBank President Sees Stabilization This Year
From Realtor Magazine Online, Daily Real Estate News January 15, 2009
Nationwide more than 860,000 properties were repossessed by lenders in 2008 and more than 2.3 million homeowners faced foreclosure proceedings, double the number in 2007, according to RealtyTrac, a foreclosure listing firm.
Things are likely to get worse this year. Moody’s Economy.com predicts that the number of homes in foreclosure will rise another 18 percent in 2009.
Nevada, Florida, Arizona, and California had the highest foreclosure rates in 2008.
"I expect the housing sector will finally hit bottom in 2009 and the financial markets will gradually return to some semblance of normalcy," said Charles Plosser, president of the Federal Reserve Bank of Philadelphia, in a speech at the University of Delaware Wednesday.
Source: The Associated Press, Alan Zibel (01/15/2009)
Nationwide more than 860,000 properties were repossessed by lenders in 2008 and more than 2.3 million homeowners faced foreclosure proceedings, double the number in 2007, according to RealtyTrac, a foreclosure listing firm.
Things are likely to get worse this year. Moody’s Economy.com predicts that the number of homes in foreclosure will rise another 18 percent in 2009.
Nevada, Florida, Arizona, and California had the highest foreclosure rates in 2008.
"I expect the housing sector will finally hit bottom in 2009 and the financial markets will gradually return to some semblance of normalcy," said Charles Plosser, president of the Federal Reserve Bank of Philadelphia, in a speech at the University of Delaware Wednesday.
Source: The Associated Press, Alan Zibel (01/15/2009)
Tax Credit Changes Could Unleash Home Sales
From Realtor Magazine Online, Daily Real Estate News January 15, 2009
If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, enough to meaningfully draw down excess housing inventory, the NATIONAL ASSOCIATION OF REALTORS® says.
An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase.
Under the current $7,500 first-time home buyer tax credit, which must be repaid over 15 years, 264,000 households meet the purchase requirements. Using the same assumptions, with plans to hold their home for a median 10 years, it would mean only 66,000 additional sales.
Lawrence Yun, NAR chief economist, said NAR is advocating a tax credit for any home purchase meeting qualifying underwriting standards. “A home buyer incentive is critical to help reduce housing inventory and stabilize home prices,” he said. “The bigger the incentive, the faster housing can help pull the economy out of recession. The cost to the Treasury would be far less than the additional costs of a prolonged recession with insufficient housing stimulus.”
Analysis of other options shows that if only first-time buyers are eligible and the repayment feature is dropped, it could mean an additional 202,000 home sales. If extended to all home buyers but the repayment feature is retained, the gain would be 181,000 home sales.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said a flexible approach to the tax credit would have added benefits. “A home buyer tax credit also should be allowed to be used as a part of downpayment. This would instantly add an equity cushion for homeowners – a vested financial interest provides the foundation for sustainable homeownership, which helps improve economic stability,” he said.
NAR estimates only 25 percent of newly eligible households would become homeowners, and does not capture the effect of increased trade-up buying activity. As such, these projections may understate the full impact of a home buyer tax credit.
Source: NAR
If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, enough to meaningfully draw down excess housing inventory, the NATIONAL ASSOCIATION OF REALTORS® says.
An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase.
Under the current $7,500 first-time home buyer tax credit, which must be repaid over 15 years, 264,000 households meet the purchase requirements. Using the same assumptions, with plans to hold their home for a median 10 years, it would mean only 66,000 additional sales.
Lawrence Yun, NAR chief economist, said NAR is advocating a tax credit for any home purchase meeting qualifying underwriting standards. “A home buyer incentive is critical to help reduce housing inventory and stabilize home prices,” he said. “The bigger the incentive, the faster housing can help pull the economy out of recession. The cost to the Treasury would be far less than the additional costs of a prolonged recession with insufficient housing stimulus.”
Analysis of other options shows that if only first-time buyers are eligible and the repayment feature is dropped, it could mean an additional 202,000 home sales. If extended to all home buyers but the repayment feature is retained, the gain would be 181,000 home sales.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said a flexible approach to the tax credit would have added benefits. “A home buyer tax credit also should be allowed to be used as a part of downpayment. This would instantly add an equity cushion for homeowners – a vested financial interest provides the foundation for sustainable homeownership, which helps improve economic stability,” he said.
NAR estimates only 25 percent of newly eligible households would become homeowners, and does not capture the effect of increased trade-up buying activity. As such, these projections may understate the full impact of a home buyer tax credit.
Source: NAR
Stated Loans Still Available
STATED loans ARE available for good borrowers who deserve a stated loans.
While the program is available, it is not the "one size fits all" stated programs that we are used to. We need premium borrowers. Even the location and details of the property are important.
Loans are available for Owner, Investor and Second homes.
Rates/Terms
Rates for Owner Occupied PURCHASE loans come in two varieties:
1.) 5.875% 3/1 ARM, or
2.) 6.75% 5/1 ARM.
Either option is available as Interest Only for 0.125% rate increase.
Refi rates are 0.75% higher, and Cash Out are 1.0% higher.
Add 1.0% to rate for Investor loans or Second Homes.
Rental Units: add 0.25%
All rate adds are cumulative.
* Down payment requirements: 30% for Owner Occupied, 35% for Second Homes 40% for Investors.
* Loan limits: In Santa Barbara, Ventura, Orange, Los Angeles, and San Diego counties the minimum loan amount is $400,000, maximum of $3,000,000.
* Loan costs: 2 points plus $995.
* Assets: Borrower must have 6 months of qualifying income as liquid assets.
* Work info: Self employed only. (Sorry, no real estate professionals.)
* Property info: SFR only, home cannot be on a slope, 5 acres max.
To learn more, call us at (909) 702-3220.
While the program is available, it is not the "one size fits all" stated programs that we are used to. We need premium borrowers. Even the location and details of the property are important.
Loans are available for Owner, Investor and Second homes.
Rates/Terms
Rates for Owner Occupied PURCHASE loans come in two varieties:
1.) 5.875% 3/1 ARM, or
2.) 6.75% 5/1 ARM.
Either option is available as Interest Only for 0.125% rate increase.
Refi rates are 0.75% higher, and Cash Out are 1.0% higher.
Add 1.0% to rate for Investor loans or Second Homes.
Rental Units: add 0.25%
All rate adds are cumulative.
* Down payment requirements: 30% for Owner Occupied, 35% for Second Homes 40% for Investors.
* Loan limits: In Santa Barbara, Ventura, Orange, Los Angeles, and San Diego counties the minimum loan amount is $400,000, maximum of $3,000,000.
* Loan costs: 2 points plus $995.
* Assets: Borrower must have 6 months of qualifying income as liquid assets.
* Work info: Self employed only. (Sorry, no real estate professionals.)
* Property info: SFR only, home cannot be on a slope, 5 acres max.
To learn more, call us at (909) 702-3220.
Wednesday, January 14, 2009
Study Predicts Riskiest Markets for Price Drops
From Realtor Magazine Online, Daily Real Estate News January 14, 2009
Home prices are likely to fall still more, according to a new study by mortgage insurer PMI Group Inc.
The study predicts that home prices will be lower than they are now in 97 percent of 381 metro areas by the third quarter of 2010.
The riskiest markets for falling home prices are:
* California’s Inland Empire;
* the greater Miami, Fla. area;
* Lake Havasu City-Kingman, Ariz.; and,
* the Cape Coral-Fort Myers, Fla. areas.
The cities with the lowest risk of further declines include the Dallas-Fort Worth area, greater Houston and Pittsburgh.
Home prices showed signs of recovery in the third quarter of 2008, but with rising unemployment rates, home prices fell further in the fourth quarter, says PMI chief economist David Berson.
Source: The Wall Street Journal, Ruth Simon (01/13/09)
Home prices are likely to fall still more, according to a new study by mortgage insurer PMI Group Inc.
The study predicts that home prices will be lower than they are now in 97 percent of 381 metro areas by the third quarter of 2010.
The riskiest markets for falling home prices are:
* California’s Inland Empire;
* the greater Miami, Fla. area;
* Lake Havasu City-Kingman, Ariz.; and,
* the Cape Coral-Fort Myers, Fla. areas.
The cities with the lowest risk of further declines include the Dallas-Fort Worth area, greater Houston and Pittsburgh.
Home prices showed signs of recovery in the third quarter of 2008, but with rising unemployment rates, home prices fell further in the fourth quarter, says PMI chief economist David Berson.
Source: The Wall Street Journal, Ruth Simon (01/13/09)
Obama, Fed Ask Congress to Help Home Owners
From Realtor Magazine Online, Daily Real Estate News January 14, 2009
Fed officials along with President-Elect Obama spent Tuesday working the halls of Congress trying to drum up support for the release of the next phase of TARP rescue funds.
Part of the plan includes helping home owners facing foreclosure. Among the strategies under discussion is one designed by the Federal Deposit Insurance Corp. to pay mortgage servicers to modify loans and offer to share in losses if the loans default. Another plan would be for the Treasury to buy loans in default and then modify the mortgages to fit existing government housing programs.
According to the Fed, the “bulk” of the remaining TARP funds would be used to invest in financial institutions and banks with the government matching investments from the private sector.
Obama is making personal calls on Democrats and Republications to urge them to release the money. If the vote doesn’t go his way, he promised to veto the action and asked Democrats to save him from having to make a veto his first official action.
Source: Washington Post, Neil Irwin and David Cho (01/14/09)
Fed officials along with President-Elect Obama spent Tuesday working the halls of Congress trying to drum up support for the release of the next phase of TARP rescue funds.
Part of the plan includes helping home owners facing foreclosure. Among the strategies under discussion is one designed by the Federal Deposit Insurance Corp. to pay mortgage servicers to modify loans and offer to share in losses if the loans default. Another plan would be for the Treasury to buy loans in default and then modify the mortgages to fit existing government housing programs.
According to the Fed, the “bulk” of the remaining TARP funds would be used to invest in financial institutions and banks with the government matching investments from the private sector.
Obama is making personal calls on Democrats and Republications to urge them to release the money. If the vote doesn’t go his way, he promised to veto the action and asked Democrats to save him from having to make a veto his first official action.
Source: Washington Post, Neil Irwin and David Cho (01/14/09)
NAR Reiterates Plan to Jumpstart Housing Market
From Realtor Magazine Online, Daily Real Estate News January 14, 2009
To move the country out of this economic crisis, Congress and the next administration must place significant emphasis on restoring confidence in the housing market, Charles McMillan, the National Association of Realtors® president, testified to the House Financial Services Committee Tuesday.
“The housing sector is at the core of the current economic crisis,” McMillan says. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”
McMillan said he was glad to see that Chairman Barney Frank, D-Mass., introduced last week H.R. 384, the TARP Reform and Accountability Act. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current home owners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available.
The principle focus of NAR’s plan is to ensure that the Troubled Asset Relief Program does what it was originally intended to do—end the credit crisis and jumpstart mortgage lending.
“It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” McMillan said. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry.”
NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.
“Low interest rates are only effective if people can get a loan," McMill said. "We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system.”
NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that are preventing consumers from getting or modifying home loans.
“These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.
NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.
Source: NAR
To move the country out of this economic crisis, Congress and the next administration must place significant emphasis on restoring confidence in the housing market, Charles McMillan, the National Association of Realtors® president, testified to the House Financial Services Committee Tuesday.
“The housing sector is at the core of the current economic crisis,” McMillan says. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”
McMillan said he was glad to see that Chairman Barney Frank, D-Mass., introduced last week H.R. 384, the TARP Reform and Accountability Act. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current home owners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available.
The principle focus of NAR’s plan is to ensure that the Troubled Asset Relief Program does what it was originally intended to do—end the credit crisis and jumpstart mortgage lending.
“It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” McMillan said. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry.”
NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.
“Low interest rates are only effective if people can get a loan," McMill said. "We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system.”
NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that are preventing consumers from getting or modifying home loans.
“These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.
NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.
Source: NAR
Mortgage Applications Climb as Rates Fall
From Realtor Magazine Online, Daily Real Estate News January 14, 2009
Mortgage loan applications bounced back last week as rates fell and end-of-the-year holiday hoopla faded.
The Mortgage Bankers Association weekly index of application volume rose to 1,324.8, an increase of 15.8 percent on a seasonally adjusted basis from 1,143.8 the previous week.
On an unadjusted basis, the index rose 95.7 percent compared to the previous week and was up 52.4 percent compared with the same week a year ago.
Refinances continued to dominate the applications with 85.3 percent of the loans being refinances, up from 79.8 percent the previous week. Lenders have nearly stopped offering adjustable rate mortgages with the ARM share representing 1.1 percent compared to 0.9 percent the previous week.Interest rates continued to decrease:
* 30-year fixed-rate mortgages decreased to 4.89 percent from 5.07 percent;
* 15-year fixed-rate mortgages decreased to 4.63 percent from 4.67 percent;
* 1-year ARMs decreased to 5.89 percent from 5.90 percent.
Source: Mortgage Bankers Association (01/14/09)
Mortgage loan applications bounced back last week as rates fell and end-of-the-year holiday hoopla faded.
The Mortgage Bankers Association weekly index of application volume rose to 1,324.8, an increase of 15.8 percent on a seasonally adjusted basis from 1,143.8 the previous week.
On an unadjusted basis, the index rose 95.7 percent compared to the previous week and was up 52.4 percent compared with the same week a year ago.
Refinances continued to dominate the applications with 85.3 percent of the loans being refinances, up from 79.8 percent the previous week. Lenders have nearly stopped offering adjustable rate mortgages with the ARM share representing 1.1 percent compared to 0.9 percent the previous week.Interest rates continued to decrease:
* 30-year fixed-rate mortgages decreased to 4.89 percent from 5.07 percent;
* 15-year fixed-rate mortgages decreased to 4.63 percent from 4.67 percent;
* 1-year ARMs decreased to 5.89 percent from 5.90 percent.
Source: Mortgage Bankers Association (01/14/09)
Tuesday, January 13, 2009
What about 3.5 % down FHA Loans?
FHA loans are the easiest type of real estate mortgage loan for which to qualify. Plus, rates are at historic lows. Our government is making it possible for almost anybody to buy real estate!
The current maximum FHA loan amount for San Diego County is $546,250, and for Orange County is $625,000.
Here's a summary of FHA loans:
Loan Applicant/Borrower at a Glance
* Only 3.5% downpayment is required (e.g.: $14,000 on a $400,000 purchase).
* The entire downpayment may be a gift from a friend or family member.
* The Seller cannot credit anything toward the downpayment (no carry-backs).
* You can add as many co-borrowers as you need to qualify for the mortgage.
* No reserves required.
* Two Years of steady employment, preferably with same employer.
* Last two years Income should be the same, or increasing.
* Credit report should typically have less than two thirty-day late payments in last two years.
* Minimum credit score of 580 or higher – or, no credit score at all.
* Bankruptcy's must be at least two years old, with perfect credit since discharge.
* Foreclosure's must be at least three years old, with perfect credit since.
* New mortgage payment should be approximately 30% of your gross (before taxes) income.
* The Seller can credit you 6% towards ALL costs due at closing.
* If you require mortgage insurance (PMI), your payments are lower with FHA.
Condition of Property Being Purchased
* A termite report is required.
* The appraiser may comment on health & safety repairs needed.
Refinancing
* If rates drop, refinance! FHA does not require a new credit, new appraisal, new income documentation, etc.
Income to Debt Ratios
In addition to your income, an FHA lender will look at your minimum monthly debts to calculate your income to debt ratios. The debt ratio is what will determine "how much" of a FHA loan you can afford. The two types of debt ratio's will be use:
(1) Front-End Ratio - your gross income divided by the new PITI mortgage payment. The standard guideline is 29%.
(2) Back-End Ratio - your gross income divided by the new PITI mortgage payment plus the minimum monthly payments from you liabilities. The standard guideline is 41%.
Following are the typical debts used to determine your qualifying ratio's:
Front-End Ratios
· Your current and or future house payment
Back-End Ratios - the minimum required monthly payments on all of the following:
· Auto Loans - (except if there is less than 9 months left to pay off)
· Student Loans - (except if there is less than 9 months left to pay off)
· Personal Loans (except if there is less than 9 months left to pay off)
· Charge Cards - minimum required payments only.
· Child Support - (except if there is less than 9 months left to pay off)
· Alimony - (except if there is less than 9 months left to pay off)
· Federal Tax Lien Repayment Schedules - (if less than 9 months not calculated)
Following are monthly liabilities that are NOT used to calculate debt ratio's:
· Utility Bills
· Car & Health Insurance
· Cell Phone Bills
· Any bills not reflected on your credit report.
The percentage of debt to income is called the debt-to-income (a.k.a.: back-end) ratio. A good goal is to spend no more than 38% of your income on all debts, including house payment. However, under FHA home loan guidelines you're allowed to spend up to 41% of your monthly income on housing and other debts -- if the rest of your loan application shows you can handle it.
An example of the income to debt calculation is as follows:
· Income = $3,000
· New Mortgage Payment = $900.
· Minimum Monthly Payments = $300
· "Mortgage" divided by "Income" = 30%
· "Mortgage + Monthly Payments" divided by "Income" = 40%
In this scenario, your front-end is 30% and back-end is 40% which is acceptable for a FHA loan.
These ratios can also adjusted or exceeded if there are item(s) you can payoff, if the interest rate drops, the loan amount drops, etc.
Documents Required for FHA Application
The loan approval process is 100% dependant on the documentation you provide. Here's what you will need:
* Employment Information
* Most recent two years complete tax returns with all schedules.
* Most recent two years W-2's, 1099's, etc.
* Most recent pay stubs covering one month period.
* If Applicable: Self-Employed will need Three years Tax Returns and YTD Profit & Loss Statement.
Savings Information
* Most recent three months complete bank statements for any and all accounts with all pages.
* Most recent statement from retirement, 401k, mutual funds, money market, stocks, etc.
Credit Information
* Most recent statements from your bills, indicating minimum payments and account numbers.
* Name, Address, and Phone number of your landlord, or 12 months cancelled rent checks.
* If Applicable: Should you have no credit, copies or your most recent utility bills will be needed.
* If Applicable: Copy of complete Bankruptcy and Discharge Papers.
* If Applicable: If you co-signed for a mortgage, car, credit card, etc, need 12 months cancelled checks. front and rear, indicating you are not making payments.
Personal Information
* Copy of Drivers License.
* Copy of Social Security Card.
* If Applicable: Copy of complete Divorce, Palimony, Alimony Papers.
* If Applicable: Copy of Green Card or Work Permit.
* If Applicable: If you own another home(s) - see below
If you are refinancing, or if you own Rental Property, you will also need:
* Copy of Note & Deed from current loan.
* Copy of Property Tax Bill.
* Copy of Hazard (homeowners) Insurance Policy.
* Copy of Payment Coupon for current Mortgage.
* If Applicable: If property is multi-unit, need Rental Agreements.
* Additional documents may also be needed - on a case-by-case basis.
Conclusion: FHA is the most flexible lender regarding debt ratio's. Never rule yourself out. Buying a home may be more affordable than you know.
Call us! (909) 702-3220. Explore your real estate purchase options. The government is doing everything possible to help you!
The current maximum FHA loan amount for San Diego County is $546,250, and for Orange County is $625,000.
Here's a summary of FHA loans:
Loan Applicant/Borrower at a Glance
* Only 3.5% downpayment is required (e.g.: $14,000 on a $400,000 purchase).
* The entire downpayment may be a gift from a friend or family member.
* The Seller cannot credit anything toward the downpayment (no carry-backs).
* You can add as many co-borrowers as you need to qualify for the mortgage.
* No reserves required.
* Two Years of steady employment, preferably with same employer.
* Last two years Income should be the same, or increasing.
* Credit report should typically have less than two thirty-day late payments in last two years.
* Minimum credit score of 580 or higher – or, no credit score at all.
* Bankruptcy's must be at least two years old, with perfect credit since discharge.
* Foreclosure's must be at least three years old, with perfect credit since.
* New mortgage payment should be approximately 30% of your gross (before taxes) income.
* The Seller can credit you 6% towards ALL costs due at closing.
* If you require mortgage insurance (PMI), your payments are lower with FHA.
Condition of Property Being Purchased
* A termite report is required.
* The appraiser may comment on health & safety repairs needed.
Refinancing
* If rates drop, refinance! FHA does not require a new credit, new appraisal, new income documentation, etc.
Income to Debt Ratios
In addition to your income, an FHA lender will look at your minimum monthly debts to calculate your income to debt ratios. The debt ratio is what will determine "how much" of a FHA loan you can afford. The two types of debt ratio's will be use:
(1) Front-End Ratio - your gross income divided by the new PITI mortgage payment. The standard guideline is 29%.
(2) Back-End Ratio - your gross income divided by the new PITI mortgage payment plus the minimum monthly payments from you liabilities. The standard guideline is 41%.
Following are the typical debts used to determine your qualifying ratio's:
Front-End Ratios
· Your current and or future house payment
Back-End Ratios - the minimum required monthly payments on all of the following:
· Auto Loans - (except if there is less than 9 months left to pay off)
· Student Loans - (except if there is less than 9 months left to pay off)
· Personal Loans (except if there is less than 9 months left to pay off)
· Charge Cards - minimum required payments only.
· Child Support - (except if there is less than 9 months left to pay off)
· Alimony - (except if there is less than 9 months left to pay off)
· Federal Tax Lien Repayment Schedules - (if less than 9 months not calculated)
Following are monthly liabilities that are NOT used to calculate debt ratio's:
· Utility Bills
· Car & Health Insurance
· Cell Phone Bills
· Any bills not reflected on your credit report.
The percentage of debt to income is called the debt-to-income (a.k.a.: back-end) ratio. A good goal is to spend no more than 38% of your income on all debts, including house payment. However, under FHA home loan guidelines you're allowed to spend up to 41% of your monthly income on housing and other debts -- if the rest of your loan application shows you can handle it.
An example of the income to debt calculation is as follows:
· Income = $3,000
· New Mortgage Payment = $900.
· Minimum Monthly Payments = $300
· "Mortgage" divided by "Income" = 30%
· "Mortgage + Monthly Payments" divided by "Income" = 40%
In this scenario, your front-end is 30% and back-end is 40% which is acceptable for a FHA loan.
These ratios can also adjusted or exceeded if there are item(s) you can payoff, if the interest rate drops, the loan amount drops, etc.
Documents Required for FHA Application
The loan approval process is 100% dependant on the documentation you provide. Here's what you will need:
* Employment Information
* Most recent two years complete tax returns with all schedules.
* Most recent two years W-2's, 1099's, etc.
* Most recent pay stubs covering one month period.
* If Applicable: Self-Employed will need Three years Tax Returns and YTD Profit & Loss Statement.
Savings Information
* Most recent three months complete bank statements for any and all accounts with all pages.
* Most recent statement from retirement, 401k, mutual funds, money market, stocks, etc.
Credit Information
* Most recent statements from your bills, indicating minimum payments and account numbers.
* Name, Address, and Phone number of your landlord, or 12 months cancelled rent checks.
* If Applicable: Should you have no credit, copies or your most recent utility bills will be needed.
* If Applicable: Copy of complete Bankruptcy and Discharge Papers.
* If Applicable: If you co-signed for a mortgage, car, credit card, etc, need 12 months cancelled checks. front and rear, indicating you are not making payments.
Personal Information
* Copy of Drivers License.
* Copy of Social Security Card.
* If Applicable: Copy of complete Divorce, Palimony, Alimony Papers.
* If Applicable: Copy of Green Card or Work Permit.
* If Applicable: If you own another home(s) - see below
If you are refinancing, or if you own Rental Property, you will also need:
* Copy of Note & Deed from current loan.
* Copy of Property Tax Bill.
* Copy of Hazard (homeowners) Insurance Policy.
* Copy of Payment Coupon for current Mortgage.
* If Applicable: If property is multi-unit, need Rental Agreements.
* Additional documents may also be needed - on a case-by-case basis.
Conclusion: FHA is the most flexible lender regarding debt ratio's. Never rule yourself out. Buying a home may be more affordable than you know.
Call us! (909) 702-3220. Explore your real estate purchase options. The government is doing everything possible to help you!
IRS Tax Relief Options for Homeowners
The Internal Revenue Service (IRS) announced an expedited process that will make it easier for financially strapped homeowners to sell or refinance a home burdened with a federal tax lien.
Homeowners looking to sell a home when a federal tax lien has been filed have options:
Certificate of Lien Subordination: http://www.irs.gov/. Taxpayers can request that the IRS make a tax lien secondary to the primary home loan.
Certificate of Discharge: http://www.irs.gov/. If homeowners are selling their home for a lesser value than the mortgage loan, they may apply for a tax credit if the mortgage is in first position.
The IRS may also issue a discharge if the taxpayer has sufficient equity in other assets or can pay the IRS its equity in the property.
Homeowners looking to sell a home when a federal tax lien has been filed have options:
Certificate of Lien Subordination: http://www.irs.gov/. Taxpayers can request that the IRS make a tax lien secondary to the primary home loan.
Certificate of Discharge: http://www.irs.gov/. If homeowners are selling their home for a lesser value than the mortgage loan, they may apply for a tax credit if the mortgage is in first position.
The IRS may also issue a discharge if the taxpayer has sufficient equity in other assets or can pay the IRS its equity in the property.
Bankruptcy Judges Support Modifying Mortgages
From Realtor Magazine Online, Daily Real Estate News January 13, 2009
Federal bankruptcy judges support proposals to allow them to restructure first mortgages for struggling debtors.
"The bankruptcy system depends on people making deals, but the deal-making piece of it has disappeared when it comes to mortgages because of the way mortgages were sold and packaged," says Samuel L. Bufford, a U.S. bankruptcy judge in Los Angeles. "There's nobody on the lender side to do the deal unless you [get permission] from investors, and that's impossible."
Until 1979, when the U.S. bankruptcy code went into affect, judges overseeing bankruptcy cases could modify primary-home mortgages. Judges who recall those days say the system worked fine then and would be beneficial now.
A. Jay Cristol, a federal bankruptcy judge in Miami, says that changing the bankruptcy law is the right thing to do because "after foreclosure, families get broken up and lenders hold on to nonperforming assets that they sell at a loss."
Source: The Wall Street Journal, Amir Efrati and Jennifer S. Forsyth (01/12/09)
Federal bankruptcy judges support proposals to allow them to restructure first mortgages for struggling debtors.
"The bankruptcy system depends on people making deals, but the deal-making piece of it has disappeared when it comes to mortgages because of the way mortgages were sold and packaged," says Samuel L. Bufford, a U.S. bankruptcy judge in Los Angeles. "There's nobody on the lender side to do the deal unless you [get permission] from investors, and that's impossible."
Until 1979, when the U.S. bankruptcy code went into affect, judges overseeing bankruptcy cases could modify primary-home mortgages. Judges who recall those days say the system worked fine then and would be beneficial now.
A. Jay Cristol, a federal bankruptcy judge in Miami, says that changing the bankruptcy law is the right thing to do because "after foreclosure, families get broken up and lenders hold on to nonperforming assets that they sell at a loss."
Source: The Wall Street Journal, Amir Efrati and Jennifer S. Forsyth (01/12/09)
Shop Carefully for Home Warranties
From Realtor Magazine Online, Daily Real Estate News January 13, 2009
Home warranties can reassure nervous buyers and help a real estate practitioner seal the deal, but if ultimately the buyer feels cheated by the insurer, the policy could be more trouble than it is worth.
The key to consumer satisfaction is picking a reputable insurer and reading the fine print.
"Any industry that deals with the public is going to have complaints," says Art Chartrand, a lawyer for the trade organization, National Home Service Contract Association. "It's important for people to understand these are limited benefit contracts."
Home owners who are about to purchase a home warranty contract should consider these issues, says Georgia Insurance commissioner John Oxendine.
* Get an opinion from the state insurance commission. While most state insurance commissions don’t police these kinds of policies, they are usually aware of companies that have a poor reputation.
* Read the contract carefully before signing. If the company won’t give the customer a contract in advance, don’t buy.
* Pre-existing conditions. If the system or appliance wasn’t working when the policy was purchased, the insurer won’t cover it.
* Is there proof that required maintenance was done? Most insurers have clauses in their contracts that require specific routine maintenance for the systems or appliances to be covered.
* Who will do the work? Find out how many approved contractors there are and where they are located.
* Ask about service fees. Fees to determine the extent of the problem and whether it is covered can be high and buyers should know that in advance.
Source: The Atlanta Journal-Constitution, Alison Young (01/11/09)
Home warranties can reassure nervous buyers and help a real estate practitioner seal the deal, but if ultimately the buyer feels cheated by the insurer, the policy could be more trouble than it is worth.
The key to consumer satisfaction is picking a reputable insurer and reading the fine print.
"Any industry that deals with the public is going to have complaints," says Art Chartrand, a lawyer for the trade organization, National Home Service Contract Association. "It's important for people to understand these are limited benefit contracts."
Home owners who are about to purchase a home warranty contract should consider these issues, says Georgia Insurance commissioner John Oxendine.
* Get an opinion from the state insurance commission. While most state insurance commissions don’t police these kinds of policies, they are usually aware of companies that have a poor reputation.
* Read the contract carefully before signing. If the company won’t give the customer a contract in advance, don’t buy.
* Pre-existing conditions. If the system or appliance wasn’t working when the policy was purchased, the insurer won’t cover it.
* Is there proof that required maintenance was done? Most insurers have clauses in their contracts that require specific routine maintenance for the systems or appliances to be covered.
* Who will do the work? Find out how many approved contractors there are and where they are located.
* Ask about service fees. Fees to determine the extent of the problem and whether it is covered can be high and buyers should know that in advance.
Source: The Atlanta Journal-Constitution, Alison Young (01/11/09)
Fed Official: Housing is Key to End Recession
From Realtor Magazine Online, Daily Real Estate News January 13, 2009
While the current recession will be longer and more severe than predicted, housing will help lead the country out of the downturn, Boston Federal Reserve Bank President Eric Rosengren told the Massachusetts Mortgage Bankers Association at its annual meeting.
Rosengren said the housing market could stabilize this year, which he sees as a prerequisite for recovery.
"The recent reductions in mortgage rates, in part due to monetary policy actions, have enabled more borrowers than would otherwise have done so to purchase or refinance homes," Rosengren said."
Expansion of this effort and encouraging greater [Fannie Mae and Freddie Mac] participation, should encourage borrowers who have equity and reasonable credit scores to purchase or refinance homes," he added.
Once the market stabilizes, mortgage securitization should be restructured to prevent future upheavals, Rosengren said.
Source: Reuters News, Kristina Cooke (01/08/09)
While the current recession will be longer and more severe than predicted, housing will help lead the country out of the downturn, Boston Federal Reserve Bank President Eric Rosengren told the Massachusetts Mortgage Bankers Association at its annual meeting.
Rosengren said the housing market could stabilize this year, which he sees as a prerequisite for recovery.
"The recent reductions in mortgage rates, in part due to monetary policy actions, have enabled more borrowers than would otherwise have done so to purchase or refinance homes," Rosengren said."
Expansion of this effort and encouraging greater [Fannie Mae and Freddie Mac] participation, should encourage borrowers who have equity and reasonable credit scores to purchase or refinance homes," he added.
Once the market stabilizes, mortgage securitization should be restructured to prevent future upheavals, Rosengren said.
Source: Reuters News, Kristina Cooke (01/08/09)
Builder Outrage Delays RESPA Rule Change
From Realtor Magazine Online, Daily Real Estate News January 13, 2009
In response to a suit over the Real Estate Settlement Procedures Act (RESPA) by the National Association of Home Builders, Housing and Urban Development has delayed implementation of a controversial rule change for 90 days until April 16.
The new rule would have barred home builders from offering incentives to buyers when they agree to use builders’ affiliated mortgage and title companies. It was set to take effect Jan. 16.
NAHB argues that the new rule is arbitrary because it only applies to businesses operated by home builders. Affiliated businesses run by title insurers could still offer discounts.
Home builders say their incentives programs increase competition and offer consumers "a full range of options to explore the best possible deal to purchase a home."
William P. Killmer, vice president of NAHB's advocacy group, said in a court filing that the new rule would "greatly obstruct NAHB's members from stimulating consumer demand and moving excess supply."
Source: Inman News, Matt Carter (01/12/09)
In response to a suit over the Real Estate Settlement Procedures Act (RESPA) by the National Association of Home Builders, Housing and Urban Development has delayed implementation of a controversial rule change for 90 days until April 16.
The new rule would have barred home builders from offering incentives to buyers when they agree to use builders’ affiliated mortgage and title companies. It was set to take effect Jan. 16.
NAHB argues that the new rule is arbitrary because it only applies to businesses operated by home builders. Affiliated businesses run by title insurers could still offer discounts.
Home builders say their incentives programs increase competition and offer consumers "a full range of options to explore the best possible deal to purchase a home."
William P. Killmer, vice president of NAHB's advocacy group, said in a court filing that the new rule would "greatly obstruct NAHB's members from stimulating consumer demand and moving excess supply."
Source: Inman News, Matt Carter (01/12/09)
Monday, January 12, 2009
Emergency Economic Stabilization Act
Program 3648, a nationwide initiative based on HR 3648 the Mortgage Forgiveness Debt Relief Act of 200 7, to help as many homeowners avoid foreclosure as possible with a primary focus on short sales, has been extended due to the Emergency Economic Stabilization Act until 2013.
Friday, January 9, 2009
Mortgage Rates Continue Falling to Record Lows
From Realtor Magazine Online, Daily Real Estate News January 9, 2009
For the fourth consecutive week, mortgage rates have fallen to all-time lows. The 30-year mortgage rates averaged 5.01 percent this week, which is a drop from last week's 5.1 percent. Last year at this time, rates averaged 5.87 percent.
"Interest rates for 30-year fixed-rate mortgages fell for the 10th week ... due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," says Freddie Mac Chief Economist Frank Nothaft.
Other rates also dropped for the week:
* 15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
* 5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week.
The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year's 5.37 percent.
Freddie Mac began tracking rates in 1971.
Source: The Wall Street Journal, Amy Hoak (1/09/09)
For the fourth consecutive week, mortgage rates have fallen to all-time lows. The 30-year mortgage rates averaged 5.01 percent this week, which is a drop from last week's 5.1 percent. Last year at this time, rates averaged 5.87 percent.
"Interest rates for 30-year fixed-rate mortgages fell for the 10th week ... due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae," says Freddie Mac Chief Economist Frank Nothaft.
Other rates also dropped for the week:
* 15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
* 5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week.
The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year's 5.37 percent.
Freddie Mac began tracking rates in 1971.
Source: The Wall Street Journal, Amy Hoak (1/09/09)
Fannie Tries Short Sales Over Foreclosures
From Realtor Magazine Online, Daily Real Estate News January 9, 2009
Fannie Mae has launched pilot projects in Phoenix and Orlando intended to reduce foreclosures by pre-approving short sales, agreeing on a price and the loss it will take prior to a deal even being made. It is hoped the program will improve the popularity of short sales among real estate agents.
Property professionals initially had welcomed short sales but soon found the process to be a frustrating one--due to squabbling about the sale price and slow approval times by the mortgage companies--that often ended with no sale at all.
"Short sales have received such a bad reputation among real-estate agents that, as a portion of the overall mortgage market, they have gone down," says Tom Popik of the research firm Campbell Communications, whose November survey of realty practitioners found that agents had to wait as long as 8.1 weeks to receive a response from the lender on a short sale. That was nearly double the 4.5 weeks the process took earlier in the year.
Fannie Mae's pilot will focus on homes that are listed at less than the mortgage balance and carry a Fannie Mae-backed loan serviced by Countrywide Financial Corp. If it proves successful, the concept could be expanded to other geographical areas and additional lenders. There are concerns, in the meantime, about the program's success, with real estate agents noting that property prices could decline before the pre-approval is issued.
Source: The Wall Street Journal, Nick Timiraos (01/09/09)
Fannie Mae has launched pilot projects in Phoenix and Orlando intended to reduce foreclosures by pre-approving short sales, agreeing on a price and the loss it will take prior to a deal even being made. It is hoped the program will improve the popularity of short sales among real estate agents.
Property professionals initially had welcomed short sales but soon found the process to be a frustrating one--due to squabbling about the sale price and slow approval times by the mortgage companies--that often ended with no sale at all.
"Short sales have received such a bad reputation among real-estate agents that, as a portion of the overall mortgage market, they have gone down," says Tom Popik of the research firm Campbell Communications, whose November survey of realty practitioners found that agents had to wait as long as 8.1 weeks to receive a response from the lender on a short sale. That was nearly double the 4.5 weeks the process took earlier in the year.
Fannie Mae's pilot will focus on homes that are listed at less than the mortgage balance and carry a Fannie Mae-backed loan serviced by Countrywide Financial Corp. If it proves successful, the concept could be expanded to other geographical areas and additional lenders. There are concerns, in the meantime, about the program's success, with real estate agents noting that property prices could decline before the pre-approval is issued.
Source: The Wall Street Journal, Nick Timiraos (01/09/09)
Freddie Extends Foreclosure Moratorium
From Realtor Magazine Online, Daily Real Estate News January 9, 2009
Freddie Mac is extending the suspension of foreclosure sales and evictions on occupied single family and two- to four-unit properties covered by mortgages it owns until Jan. 31.
The suspension doesn’t include vacant single-family properties.
The extension will provide extra time to loan servicers to help troubled borrowers find alternatives to foreclosure. It will also allow extra time to implement the Streamlined Modification Program, which went into effect on Dec. 15, 2008, and sets out to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.
Source: Freddie Mac (01/08/09)
Freddie Mac is extending the suspension of foreclosure sales and evictions on occupied single family and two- to four-unit properties covered by mortgages it owns until Jan. 31.
The suspension doesn’t include vacant single-family properties.
The extension will provide extra time to loan servicers to help troubled borrowers find alternatives to foreclosure. It will also allow extra time to implement the Streamlined Modification Program, which went into effect on Dec. 15, 2008, and sets out to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.
Source: Freddie Mac (01/08/09)
Thursday, January 8, 2009
Looking Ahead, Builders See More 'Man-Caves'
From Realtor Magazine Online, Daily Real Estate News January 8, 2009
When the National Association of Home Builders convenes its annual trade show in Las Vegas beginning Jan. 20, attendees will be considering these and other trends in home design and amenities.
Indoor-Outdoor Living. Since 1992, the number of U.S. homes with porches and patios has doubled. New homes in warm climates are being built with courtyards that offer shelter and privacy while still offering an outdoor feel.
The Basement is Back. With lots getting smaller, underground space is growing more valuable for everything from family rooms to “man caves” to underground garages.Say Goodbye to the Living Room. Great rooms continue to hold sway, while formal living rooms grow ever more passé.
Home Offices Go Solo. No more offices in spare bedrooms. The latest is to have a separate space where the mobile workforce member can receive work-related visitors or seat assistants without traipsing these folks through the home.
No More Computer Work Stations. Wireless has made every space a workspace, so that desk under the steps or in the kitchen has been rechristened a charging station or a baby-changing center.
Wall Up the Lofts. "Architects love to show these wide-open floor plans, but the reality is people want some privacy," says Los Angeles architect Jonathan Watts.
Green Is In. Solar panels and lots of natural light let more people go green.
Age in Place. Wider doors and first-floor masters help aging baby boomers stay home as they grow old.
Source: Business Week, Christopher Palmeri (01/06/2009)
When the National Association of Home Builders convenes its annual trade show in Las Vegas beginning Jan. 20, attendees will be considering these and other trends in home design and amenities.
Indoor-Outdoor Living. Since 1992, the number of U.S. homes with porches and patios has doubled. New homes in warm climates are being built with courtyards that offer shelter and privacy while still offering an outdoor feel.
The Basement is Back. With lots getting smaller, underground space is growing more valuable for everything from family rooms to “man caves” to underground garages.Say Goodbye to the Living Room. Great rooms continue to hold sway, while formal living rooms grow ever more passé.
Home Offices Go Solo. No more offices in spare bedrooms. The latest is to have a separate space where the mobile workforce member can receive work-related visitors or seat assistants without traipsing these folks through the home.
No More Computer Work Stations. Wireless has made every space a workspace, so that desk under the steps or in the kitchen has been rechristened a charging station or a baby-changing center.
Wall Up the Lofts. "Architects love to show these wide-open floor plans, but the reality is people want some privacy," says Los Angeles architect Jonathan Watts.
Green Is In. Solar panels and lots of natural light let more people go green.
Age in Place. Wider doors and first-floor masters help aging baby boomers stay home as they grow old.
Source: Business Week, Christopher Palmeri (01/06/2009)
Banks Offer Mortgage Rates Below 5 Percent
From Realtor Magazine Online, Daily Real Estate News January 8, 2009
The Federal Reserve earlier this week began purchasing $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The move, to bolster the crippled residential property market, has resulted in some of the nation's biggest banks--including JPMorgan Chase & Co. and Wells Fargo & Co.--to offer fixed home loans under 5 percent.
While analysts expect the lower rates to prompt more borrowers to refinance, it may not kick-start home buying due to the bleak employment picture.
Source: Bloomberg, Dan Levy (01/08/09)
The Federal Reserve earlier this week began purchasing $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae.
The move, to bolster the crippled residential property market, has resulted in some of the nation's biggest banks--including JPMorgan Chase & Co. and Wells Fargo & Co.--to offer fixed home loans under 5 percent.
While analysts expect the lower rates to prompt more borrowers to refinance, it may not kick-start home buying due to the bleak employment picture.
Source: Bloomberg, Dan Levy (01/08/09)
Wednesday, January 7, 2009
10 Tips for Generating Buyer Interest
From Realtor Magazine Online, Daily Real Estate News January 7, 2009
Distraught sellers who need to generate more interest in house that has been languishing on the market for months should consider 10 steps from MSNBC financial guru Laura T. Coffey
* Can the clutter. Pack up knickknacks, pictures, piles of paper and furniture that makes the place look crowded.
* Let the light in. Take down any heavy drapes.
* Scrub-a-dub-dub. Shampoo soiled carpets, Scrub the front door. Repaint scuffed walls. Tidy up the lawn and trim the shrubs.
* Get moving on the "honey do" list. Fix everything that is in need of repair.
* Enhance the view. Erect a fence or plant shrubbery to improve or obscure the view of unattractive nearby properties or streets.
* Try weeknights. Holding an open house on Wednesday may attract a different crowd.
* Ask for criticism. Consult with buyers’ agents for their feedback.
* Send the owners away. Ask them to vacate when potential buyers come around so they can talk freely.
* Rent to own. Give a potential buyer a little credit. Becoming a landlord may keep you from having to shoulder two mortgages.
* Drop the asking price. And figure out the lowest amount you're willing or able to accept.
Source: MSN Money, Laura T. Coffey (01/06/2009)
Distraught sellers who need to generate more interest in house that has been languishing on the market for months should consider 10 steps from MSNBC financial guru Laura T. Coffey
* Can the clutter. Pack up knickknacks, pictures, piles of paper and furniture that makes the place look crowded.
* Let the light in. Take down any heavy drapes.
* Scrub-a-dub-dub. Shampoo soiled carpets, Scrub the front door. Repaint scuffed walls. Tidy up the lawn and trim the shrubs.
* Get moving on the "honey do" list. Fix everything that is in need of repair.
* Enhance the view. Erect a fence or plant shrubbery to improve or obscure the view of unattractive nearby properties or streets.
* Try weeknights. Holding an open house on Wednesday may attract a different crowd.
* Ask for criticism. Consult with buyers’ agents for their feedback.
* Send the owners away. Ask them to vacate when potential buyers come around so they can talk freely.
* Rent to own. Give a potential buyer a little credit. Becoming a landlord may keep you from having to shoulder two mortgages.
* Drop the asking price. And figure out the lowest amount you're willing or able to accept.
Source: MSN Money, Laura T. Coffey (01/06/2009)
Mortgage Applications Slipped Last Week
From Realtor Magazine Online, Daily Real Estate News January 7, 2009
Mortgage applications slipped a little last week from the frenzied pace of the previous few weeks following Federal Reserve action that drove mortgage rates down nearly a full percentage point.
The weekly index calculated by the Mortgage Bankers Association fell to 1143.8, down 8.2 percent on a seasonally adjusted basis from 1245.7, the previous week. The results are adjusted to reflect the New Year’s Day holiday.
On an unadjusted basis, the index decreased 8.9 percent compared with the previous week and was up 28.3 percent compared with the same week a year ago.
Refinances accounted for 79.8 percent of the applications.
Orawin Velz, associate vice president of economic forecasting at the MBA, speculated that many potential borrowers held off in hopes that rates will fall further. "With all the talk that the Fed is buying, rates could drop further and (borrowers) may say, 'Why not wait a little more,” he said.
* 30-year fixed-rate mortgages increased to 5.07 percent from 5.03 percent;
* 15-year fixed-rate mortgages decreased to 4.67 percent from 4.79 percent;
* 1-year ARMs decreased to 5.90 percent from 6.15 percent.
Source: Mortgage Bankers Association (01/07/2009)
Mortgage applications slipped a little last week from the frenzied pace of the previous few weeks following Federal Reserve action that drove mortgage rates down nearly a full percentage point.
The weekly index calculated by the Mortgage Bankers Association fell to 1143.8, down 8.2 percent on a seasonally adjusted basis from 1245.7, the previous week. The results are adjusted to reflect the New Year’s Day holiday.
On an unadjusted basis, the index decreased 8.9 percent compared with the previous week and was up 28.3 percent compared with the same week a year ago.
Refinances accounted for 79.8 percent of the applications.
Orawin Velz, associate vice president of economic forecasting at the MBA, speculated that many potential borrowers held off in hopes that rates will fall further. "With all the talk that the Fed is buying, rates could drop further and (borrowers) may say, 'Why not wait a little more,” he said.
* 30-year fixed-rate mortgages increased to 5.07 percent from 5.03 percent;
* 15-year fixed-rate mortgages decreased to 4.67 percent from 4.79 percent;
* 1-year ARMs decreased to 5.90 percent from 6.15 percent.
Source: Mortgage Bankers Association (01/07/2009)
Tuesday, January 6, 2009
Buyers Lured to Bargain Luxury Properties
From Realtor Magazine Online, Daily Real Estate News January 6, 2009
Prices for luxury second-home markets are falling out of the stratosphere–and attracting buyers who were previously priced out of the market.
Prices in the Caribbean have dropped by $500,000 and European retreats in Spain, Malta, and Portugal are down 30 percent, says Lucy Russell, managing director of Quintessentially Estates.
“The second-home market has suffered considerably,” says Marc Cohen, director of Ledbury Research, the London-based luxury consultancy.
He says active buyers have changed from the typical 65-year-old retiree who has sold his business or retired from a high-salaried job to a younger person who sees opportunity in declining markets.
“Those who need to sell will do so for substantially less than they would have six months ago,” says Charles Weston-Baker, managing director of Savills, U-K real estate services provider.
Source: Newsweek International, Ginanne Brownell (01/12/09)
Prices for luxury second-home markets are falling out of the stratosphere–and attracting buyers who were previously priced out of the market.
Prices in the Caribbean have dropped by $500,000 and European retreats in Spain, Malta, and Portugal are down 30 percent, says Lucy Russell, managing director of Quintessentially Estates.
“The second-home market has suffered considerably,” says Marc Cohen, director of Ledbury Research, the London-based luxury consultancy.
He says active buyers have changed from the typical 65-year-old retiree who has sold his business or retired from a high-salaried job to a younger person who sees opportunity in declining markets.
“Those who need to sell will do so for substantially less than they would have six months ago,” says Charles Weston-Baker, managing director of Savills, U-K real estate services provider.
Source: Newsweek International, Ginanne Brownell (01/12/09)
Top 10 U.S. Rental Markets for 2009-2013
From Realtor Magazine Online, Daily Real Estate News January 6, 2009
It will likely be a challenging year for all kinds of commercial real estate, according to the real estate services company and investment firm Grubb & Ellis Co., which released its 2009 forecast Monday.
Office space. The report found that 90 million square feet of office space was under construction at the end of 2008, most of which will be available for use in 2009. This new space combined with a projected 45 million square feet coming available as tenants vacate and a big jump in subleased space, will push vacancy rates up by 2 percentage points to end 2009 at 16.5 percent, the report predicted.
Retail. The retail real estate market will be hard hit by the downturn. Grocery store-anchored centers in mature trade areas will hold their ground in 2009, the report said, while centers on the urban fringe, where housing construction has stalled will suffer.
Industrial. The quest for cost-saving efficiencies should sustain demand for industrial space in 2009, despite the weak economy, according to the report. Nevertheless, the vacancy rate will rise slightly to end 2009 at 9.4 percent.
Apartments. Apartments will have a tough year, even with the addition of renters who have lost their homes to foreclosure, because of the increasing supply of unsold condos and homes now available for rental.
The top-10 rental housing markets from 2009-2013 will be:
Los Angeles
San Francisco
Orange County, Calif.
Oakland/East Bay, Calif.
Washington, D.C.
San Diego
New York City
San Jose, Calif.
Long Island, N.Y.
Portland, Ore.
Source: Grubb & Ellis (01/05/09)
It will likely be a challenging year for all kinds of commercial real estate, according to the real estate services company and investment firm Grubb & Ellis Co., which released its 2009 forecast Monday.
Office space. The report found that 90 million square feet of office space was under construction at the end of 2008, most of which will be available for use in 2009. This new space combined with a projected 45 million square feet coming available as tenants vacate and a big jump in subleased space, will push vacancy rates up by 2 percentage points to end 2009 at 16.5 percent, the report predicted.
Retail. The retail real estate market will be hard hit by the downturn. Grocery store-anchored centers in mature trade areas will hold their ground in 2009, the report said, while centers on the urban fringe, where housing construction has stalled will suffer.
Industrial. The quest for cost-saving efficiencies should sustain demand for industrial space in 2009, despite the weak economy, according to the report. Nevertheless, the vacancy rate will rise slightly to end 2009 at 9.4 percent.
Apartments. Apartments will have a tough year, even with the addition of renters who have lost their homes to foreclosure, because of the increasing supply of unsold condos and homes now available for rental.
The top-10 rental housing markets from 2009-2013 will be:
Los Angeles
San Francisco
Orange County, Calif.
Oakland/East Bay, Calif.
Washington, D.C.
San Diego
New York City
San Jose, Calif.
Long Island, N.Y.
Portland, Ore.
Source: Grubb & Ellis (01/05/09)
West: Nov Pending Home Sales UP 19% vs '07
From Realtor Magazine Online, Daily Real Estate News January 6, 2009
After holding fairly stable for a year, pending home sales declined in the face of job losses and an eroding economy, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 4 percent to 82.3 from a downwardly revised reading of 85.7 in October. It is 5.3 percent below November 2007 when it was 86.9. The current index is the lowest since the series began in 2001.
Lawrence Yun, NAR chief economist, says a weakening was inevitable. “Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November,” he says. “December’s housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed.”
A Look By RegionHere's a closer look at how Pending Home Sales Index fared regionally.
* Northeast: dropped 7.2 percent to 63.2 in November and is 14.6 percent below a year ago.
* Midwest: fell 6.7 percent to 74.2 and is 10.1 percent below November 2007.
* South: declined 2.2 percent to 85.3 in November and is 12.7 percent below a year ago.
* West: down 2.4 percent to 101.2 but remains 19.3 percent higher than November 2007.
NAR: Stimulus Package Needed
Yun says the outlook will depend heavily on the stimulus package. “With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10 percent to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country," Yun says.
In turn, stable home prices will lessen foreclosure pressures and lay the foundations for a solid economic recovery so that the nation’s 75 million home owners regain confidence, he adds.
NAR President Charles McMillan says there can’t be an economic recovery without a focus on housing.
“It’s crucial for Congress and the new administration to move quickly to remove impediments and offer home buyers the incentives they need to tap into today’s historic low mortgage interest rates,” he says.
NAR advocates expanding a $7,500 tax credit to all home buyers and eliminating the repayment feature, and permanently raising loan limits to bring down interest rates for many buyers in high-cost areas.
"We also need to expedite short sales and unclog the mortgage pipeline,” McMillan says.
The 30-year fixed-rate mortgage should hold fairly steady through the first half of the year and rise slightly in the second half, according to NAR's forecast. NAR’s housing affordability index, which looks at the relationship between home prices, mortgage interest rates and family income, is on track to match a record high set in 1972.
The impact of mortgage interest rates declining to near 50-year lows in December is not reflected in current PHSI data.
“The unique housing affordability conditions in today’s market underscore the opportunity in giving consumers the necessary incentives to stimulate our economy through a housing recovery,” Yun says.
Source: NAR
After holding fairly stable for a year, pending home sales declined in the face of job losses and an eroding economy, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 4 percent to 82.3 from a downwardly revised reading of 85.7 in October. It is 5.3 percent below November 2007 when it was 86.9. The current index is the lowest since the series began in 2001.
Lawrence Yun, NAR chief economist, says a weakening was inevitable. “Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November,” he says. “December’s housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed.”
A Look By RegionHere's a closer look at how Pending Home Sales Index fared regionally.
* Northeast: dropped 7.2 percent to 63.2 in November and is 14.6 percent below a year ago.
* Midwest: fell 6.7 percent to 74.2 and is 10.1 percent below November 2007.
* South: declined 2.2 percent to 85.3 in November and is 12.7 percent below a year ago.
* West: down 2.4 percent to 101.2 but remains 19.3 percent higher than November 2007.
NAR: Stimulus Package Needed
Yun says the outlook will depend heavily on the stimulus package. “With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10 percent to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country," Yun says.
In turn, stable home prices will lessen foreclosure pressures and lay the foundations for a solid economic recovery so that the nation’s 75 million home owners regain confidence, he adds.
NAR President Charles McMillan says there can’t be an economic recovery without a focus on housing.
“It’s crucial for Congress and the new administration to move quickly to remove impediments and offer home buyers the incentives they need to tap into today’s historic low mortgage interest rates,” he says.
NAR advocates expanding a $7,500 tax credit to all home buyers and eliminating the repayment feature, and permanently raising loan limits to bring down interest rates for many buyers in high-cost areas.
"We also need to expedite short sales and unclog the mortgage pipeline,” McMillan says.
The 30-year fixed-rate mortgage should hold fairly steady through the first half of the year and rise slightly in the second half, according to NAR's forecast. NAR’s housing affordability index, which looks at the relationship between home prices, mortgage interest rates and family income, is on track to match a record high set in 1972.
The impact of mortgage interest rates declining to near 50-year lows in December is not reflected in current PHSI data.
“The unique housing affordability conditions in today’s market underscore the opportunity in giving consumers the necessary incentives to stimulate our economy through a housing recovery,” Yun says.
Source: NAR
Monday, January 5, 2009
203(K) PROGRAM: Rehab Foreclosed Home
The 203(k) home loan is a rehabilitation loan offered to home buyers looking to purchase a foreclosed home in need of improvements, or home owners looking to rehabilitate their current property.
With the 203(k) factored in, the borrower actually finances the cost of these improvements into their new 30 year fixed rate home loan.
No second, equity line, or other financing is used.
Improvements can be major, such as a room addition, or cosmetic for items like new appliances, kitchen, bath remodels and much more.
In some cases the mortgage payment (up to 6 months) may be financed back into the 203(k) loan.
There are no first-time home buyer requirements.
The borrower may hire a contractor, or do the work themselves.
With the 203(k) factored in, the borrower actually finances the cost of these improvements into their new 30 year fixed rate home loan.
No second, equity line, or other financing is used.
Improvements can be major, such as a room addition, or cosmetic for items like new appliances, kitchen, bath remodels and much more.
In some cases the mortgage payment (up to 6 months) may be financed back into the 203(k) loan.
There are no first-time home buyer requirements.
The borrower may hire a contractor, or do the work themselves.
Federal Reserve Drives Rates Even Lower
From Realtor Magazine Online, Daily Real Estate News January 5, 2009
The Federal Reserve announced a plan last week to spend a half-trillion dollar buying up mortgage-backed securities.
As the new year dawns, the Fed's action has driven down interest rates on new mortgages and rates are expected to fall further.
The Fed said that it would start buying mortgage bonds early this month.
“The program stands to drive mortgage rates even lower, possibly to 4.5 percent," said Derek Chan and Nicholas Strand, strategists at Barclays Capital in a note."That's a huge deal for this mortgage market," said Kevin Cavin, a mortgage strategist with FTN Financial.
Source: The Wall Street Journal, Prabha Nataraian (01/02/2009)
The Federal Reserve announced a plan last week to spend a half-trillion dollar buying up mortgage-backed securities.
As the new year dawns, the Fed's action has driven down interest rates on new mortgages and rates are expected to fall further.
The Fed said that it would start buying mortgage bonds early this month.
“The program stands to drive mortgage rates even lower, possibly to 4.5 percent," said Derek Chan and Nicholas Strand, strategists at Barclays Capital in a note."That's a huge deal for this mortgage market," said Kevin Cavin, a mortgage strategist with FTN Financial.
Source: The Wall Street Journal, Prabha Nataraian (01/02/2009)
Jumbo Loans Still Have High Interest Rates
From Realtor Magazine Online, Daily Real Estate News January 5, 2009
While borrowers of conventional fixed mortgages are paying interest in the 5-percent range, jumbo loan borrowers are paying around 7 percent interest.
It's not just an issue for luxury-home buyers. In some high-cost housing areas, jumbo loans are necessary simply because home prices are high, experts say.
The NATIONAL ASSOCIATION OF REALTORS® is pushing for the Federal Reserve to include jumbo loans in its purchases of mortgages and mortgage-backed securities.
Meanwhile, House Financial Services Committee Chairman Barney Frank (D-Mass.) plans to include language in an upcoming economic stimulus bill that would raise conforming loan limits and alter calculations of these limits to take into account real market conditions.
Source: Boston Globe, Jennifer B. McKim (01/05/09)
While borrowers of conventional fixed mortgages are paying interest in the 5-percent range, jumbo loan borrowers are paying around 7 percent interest.
It's not just an issue for luxury-home buyers. In some high-cost housing areas, jumbo loans are necessary simply because home prices are high, experts say.
The NATIONAL ASSOCIATION OF REALTORS® is pushing for the Federal Reserve to include jumbo loans in its purchases of mortgages and mortgage-backed securities.
Meanwhile, House Financial Services Committee Chairman Barney Frank (D-Mass.) plans to include language in an upcoming economic stimulus bill that would raise conforming loan limits and alter calculations of these limits to take into account real market conditions.
Source: Boston Globe, Jennifer B. McKim (01/05/09)
Low Gas Prices Haven't Shrunk Heating Bills
From Realtor Magazine Online, Daily Real Estate News January 5, 2009
The cost of heating homes is up this winter, and many Americans are wondering why they aren’t feeling the decline in energy prices.
"Because gasoline [prices] has gotten so low, everyone's expecting their home heating bill to be low as well," says Mark Wolfe, executive director of the National Energy Assistance Directors' Association, a nonprofit that represents state fuel assistance programs. "It's not going to be as low as people expect."
That’s because both oil and gas prices were at record highs during the summer when utilities and dealers stock up. They continue to pass along those costs to their customers.
Customers will get the benefit of this year’s low prices next winter, experts say.
Source: The Wall Street Journal, Ben Casselman (01/03/2009)
The cost of heating homes is up this winter, and many Americans are wondering why they aren’t feeling the decline in energy prices.
"Because gasoline [prices] has gotten so low, everyone's expecting their home heating bill to be low as well," says Mark Wolfe, executive director of the National Energy Assistance Directors' Association, a nonprofit that represents state fuel assistance programs. "It's not going to be as low as people expect."
That’s because both oil and gas prices were at record highs during the summer when utilities and dealers stock up. They continue to pass along those costs to their customers.
Customers will get the benefit of this year’s low prices next winter, experts say.
Source: The Wall Street Journal, Ben Casselman (01/03/2009)
Helping Buyers Narrow Their Options
From Realtor Magazine Online, Daily Real Estate News January 5, 2009
With so many homes for sale, some potential home buyers simply don’t know where to begin, says Sid Davis, a real estate practitioner and author of “A Survival Guide for Buying a Home.”
Here are some things Davis says shoppers can think about, so they don’t waste either their own time or that of their real estate professional by looking at every property.
* Consider square footage. On a square footage basis, small homes tend to cost more than large ones. In general, mid-size homes offer buyers the most space for the money.
* The more baths the better. The ideal is to give every member of the family his or her own bathroom.
* Curb appeal counts. Look at the address on a map and see how close it is to busy streets, big-box retailers and other neighbors that may not be attractive.
* Instincts matter, so trust them. If the buyer doesn’t like what they see in the first five minutes, it probably isn’t the home for them.
Source: Universal Press Syndicate, Ellen James Martin (01/02/2009)
With so many homes for sale, some potential home buyers simply don’t know where to begin, says Sid Davis, a real estate practitioner and author of “A Survival Guide for Buying a Home.”
Here are some things Davis says shoppers can think about, so they don’t waste either their own time or that of their real estate professional by looking at every property.
* Consider square footage. On a square footage basis, small homes tend to cost more than large ones. In general, mid-size homes offer buyers the most space for the money.
* The more baths the better. The ideal is to give every member of the family his or her own bathroom.
* Curb appeal counts. Look at the address on a map and see how close it is to busy streets, big-box retailers and other neighbors that may not be attractive.
* Instincts matter, so trust them. If the buyer doesn’t like what they see in the first five minutes, it probably isn’t the home for them.
Source: Universal Press Syndicate, Ellen James Martin (01/02/2009)
Rising Property Taxes Really Hit a Nerve
From Realtor Magazine Online, Daily Real Estate News January 5, 2009
Politicians all over the country are preparing legislation in response to angry homeowners who are demanding property tax rollbacks even as municipalities move to raise those same taxes.
State government in New York, Georgia, Oklahoma and Wyoming are about to consider proposals in their 2009 sessions to put the brakes on property tax increases.
Indiana already enacted a cap on property taxes and is considering a state constitutional amendment that would permanently cap property taxes at 1 percent of the property value.
Florida last year amended the state’s constitution to add property tax-related amendments. Citizens groups in Nevada and Arizona are working to get the same sort of measures on the ballot.
In New York, Gov. David Paterson is supporting a 4 percent statewide cap on property-tax increases.
"People are just astounded that this year, of all years," the assessed value "of their property has increased," said Georgia Rep. Larry O'Neal, a Republican and chair of the state’s House Ways and Means Committee.
Source: The Wall Street Journal, Jennifer Levitz (01/05/2009)
Politicians all over the country are preparing legislation in response to angry homeowners who are demanding property tax rollbacks even as municipalities move to raise those same taxes.
State government in New York, Georgia, Oklahoma and Wyoming are about to consider proposals in their 2009 sessions to put the brakes on property tax increases.
Indiana already enacted a cap on property taxes and is considering a state constitutional amendment that would permanently cap property taxes at 1 percent of the property value.
Florida last year amended the state’s constitution to add property tax-related amendments. Citizens groups in Nevada and Arizona are working to get the same sort of measures on the ballot.
In New York, Gov. David Paterson is supporting a 4 percent statewide cap on property-tax increases.
"People are just astounded that this year, of all years," the assessed value "of their property has increased," said Georgia Rep. Larry O'Neal, a Republican and chair of the state’s House Ways and Means Committee.
Source: The Wall Street Journal, Jennifer Levitz (01/05/2009)
Friday, January 2, 2009
Home Prices in the U.K. Also Face Steep Fall
From Realtor Magazine Online, Daily Real Estate News January 2, 2009
Americans aren’t the only ones struggling with falling home prices and slowing sales.
The price of homes in Britain fell by nearly 9 percent in 2008 and they are likely to fall further in 2009, says housing analyst Hometrack’s monthly national housing survey.
U.K. home prices fell 8.7 percent in 2008 to 159,900 pounds, about $235,694. Prices fell the most in London, where the decline averaged 10.1 percent.
Hometrack’s director of research Richard Donnell predicts that Britain’s house prices will fall still more in 2009.
"The onset of recession and the prospect of rising unemployment over 2009 will continue to damp confidence and in turn demand, which will inevitably lead to further house price falls over the next 12 months," said Donnell.
Source: The Associated Press (12/29/2008)
Americans aren’t the only ones struggling with falling home prices and slowing sales.
The price of homes in Britain fell by nearly 9 percent in 2008 and they are likely to fall further in 2009, says housing analyst Hometrack’s monthly national housing survey.
U.K. home prices fell 8.7 percent in 2008 to 159,900 pounds, about $235,694. Prices fell the most in London, where the decline averaged 10.1 percent.
Hometrack’s director of research Richard Donnell predicts that Britain’s house prices will fall still more in 2009.
"The onset of recession and the prospect of rising unemployment over 2009 will continue to damp confidence and in turn demand, which will inevitably lead to further house price falls over the next 12 months," said Donnell.
Source: The Associated Press (12/29/2008)
Mortgage Deals Abound, For Some Borrowers
From Realtor Magazine Online, Daily Real Estate News January 2, 2009
Now’s the time to get a great deal on a mortgage, but borrowers should shop around.
Rates are changing constantly and they differ widely among lenders. Borrowers typically need a FICO score of at least 720 for the best interest rates, although for a fee Fannie Mae and Freddie Mac will guarantee loans with FICO scores as low as the mid-600s. Having enough cash for a 20 percent down payment is also important. But borrowers can get loans with lower downpayment requirements. FHA, for instance, makes loans available for a minimum 3.5 percent down.
For a conforming loan, monthly mortgage payments can’t exceed 28 percent of gross income, while all debt payments, including student loans, can’t exceed 36 percent of gross income.
Source: Business Week, Peter Coy (12/31/2008)
Now’s the time to get a great deal on a mortgage, but borrowers should shop around.
Rates are changing constantly and they differ widely among lenders. Borrowers typically need a FICO score of at least 720 for the best interest rates, although for a fee Fannie Mae and Freddie Mac will guarantee loans with FICO scores as low as the mid-600s. Having enough cash for a 20 percent down payment is also important. But borrowers can get loans with lower downpayment requirements. FHA, for instance, makes loans available for a minimum 3.5 percent down.
For a conforming loan, monthly mortgage payments can’t exceed 28 percent of gross income, while all debt payments, including student loans, can’t exceed 36 percent of gross income.
Source: Business Week, Peter Coy (12/31/2008)
Where Buyers are Picking Up Housing Bargains
From Realtor Magazine Online, Daily Real Estate News January 2, 2009
Smart investors in all parts of the country are picking up fabulous housing bargains.
Bill Leon, president of Florida’s Broward (County) Real Estate Investors Association, has been buying and selling investment property for years, but he thinks today’s deals are unprecedented. “People are afraid not to sell because they don’t know where the bottom of the market is,” he says.
David Dweck, a hard-money lender, believes the best buys are in what he calls “workforce housing,” aging bungalows on small lots. They are selling for as little as 10 cents on the dollar compared to what they were going for in 2006, he says, then fixed up and resold or rented quickly.
"People have been beaten down by fear, negativity, constant media bombardment," says Dweck. "There is a silver lining. The future looks bright."
Sheresa Pompay, an associate with Hunt Real Estate ERA in Chandler, Ariz., says bad publicity is good for real estate investors. "I love the people who read about all the gloom and doom, because they stay on the sidelines and go, 'It hasn't hit bottom.' Whatever. By the time everyone jumps back in, we'll be out and doing something else."
Fortune magazine predicts that these will be the 10 worst-performing real-estate markets – and the best places for finding bargains – in 2009:
Los Angeles, down -24.9 percent
Stockton, Calif., -24.7 percent
Riverside, Calif. -23.3 percent
Miami-Miami Beach, -22.8 percent
Sacramento, -22.2 percent
Santa Ana-Anaheim, Calif., -22 percent
Fresno, Calif., -21.6 percent
San Diego, Calif., 21.1 percent
Bakersfield, Calif., -20.9 percent
Washington, D.C., -19.9 percent
Source: Fortune, David Whitford (12/23/2008)
Smart investors in all parts of the country are picking up fabulous housing bargains.
Bill Leon, president of Florida’s Broward (County) Real Estate Investors Association, has been buying and selling investment property for years, but he thinks today’s deals are unprecedented. “People are afraid not to sell because they don’t know where the bottom of the market is,” he says.
David Dweck, a hard-money lender, believes the best buys are in what he calls “workforce housing,” aging bungalows on small lots. They are selling for as little as 10 cents on the dollar compared to what they were going for in 2006, he says, then fixed up and resold or rented quickly.
"People have been beaten down by fear, negativity, constant media bombardment," says Dweck. "There is a silver lining. The future looks bright."
Sheresa Pompay, an associate with Hunt Real Estate ERA in Chandler, Ariz., says bad publicity is good for real estate investors. "I love the people who read about all the gloom and doom, because they stay on the sidelines and go, 'It hasn't hit bottom.' Whatever. By the time everyone jumps back in, we'll be out and doing something else."
Fortune magazine predicts that these will be the 10 worst-performing real-estate markets – and the best places for finding bargains – in 2009:
Los Angeles, down -24.9 percent
Stockton, Calif., -24.7 percent
Riverside, Calif. -23.3 percent
Miami-Miami Beach, -22.8 percent
Sacramento, -22.2 percent
Santa Ana-Anaheim, Calif., -22 percent
Fresno, Calif., -21.6 percent
San Diego, Calif., 21.1 percent
Bakersfield, Calif., -20.9 percent
Washington, D.C., -19.9 percent
Source: Fortune, David Whitford (12/23/2008)
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