Certified Distressed Property Expert- Linda Hess
LINDA HESS of GREATWEST GMAC REAL ESTATE, 2235 Douglas Blvd.#520, Roseville, Ca. has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when the area is ravaged by “distressed” homes in the foreclosure process.
Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.
In the Sacramento, Placer and El Dorado Counties, more homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.
“This CDPE designation has been invaluable as I work with sellers and lenders on complicated short sales,” said REALTOR HESS. “It is so rewarding to be able to help sellers save their homes from foreclosure.”
Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as LINDA HESS with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys the credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.
The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.
“Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.
Linda can be reached at (916)709-1419 or visit www. ShortSellersHelpers.net
For more information about CDPE designation or to find a certified distressed Realtor in your area, please call 1-800-482-0335.Articles above have been provided by the listed author immediately following the article. For additional resources and information to the authors, please visit the following sites.Resource Links:Bill Fields All Star Coaching Program: http://www.AllStarCoaching.netGreatWest GMAC Search all MLS Listings: http://www.LocalHomeLink.comGreatWest GMAC Consumer Buyer/Seller Blog: http://www.GreatWestBlog.comT. Sami Siddiqui (Broker/ Owner) Buzz About Sacramento Blog: http://www.samisiddiquiblog.comBrodie Stephens (Executive Vice President) One Stop Blog: http://www.brodiestephensblog.comGreatWest Podcasts- Weekly Updates on new REO, Short Sale, Bank Owned Foreclosure Listings: http://www.HouseTalkOnline.comGreatWest Videos: http://www.youtube.com/brodiestephensFacebook Brodie Stephens Profile Page: http://www.facebook.com/brodiestephensFacebook GreatWest Profile Page: http://www.facebook.com/searchmlshomesforsaleMySpace Brodie Stephens Blog: http://www.myspace.com/brodiestephensMySpace GreatWest Blog: http://www.myspace.com/greatwestPicasa Web Album: http://picasaweb.google.com/brodiestephensGreatWest Real Estate Careers- GMAC is looking for Professional Realtors to Join Us: http://www.CareersWithUs.comGlobal Employee Relocation: http://www.employeerelocation.blogspot.comApply for a Loan: http://www.choice1funding.com
Friday, October 30, 2009
Wednesday, October 28, 2009
Do your homework on reverse mortgages
Ask the Experts: Do your homework on reverse mortgages
Our three new "Ask the Experts" writers have been busily answering financial questions this month from online readers.
Here's a sample of their advice on personal finance, wills/estates and investing.
To see more questions or to get advice from our other financial experts on taxes, banking and investment clubs, go to: www.sacbee.com/ask.
Pamela Christensen, Certified financial planner
I expect to retire in about four years and will have a small Sacramento County retirement. We also have about $150,000 in CDs to live on. My parents got a reverse mortgage a couple years ago for the extra cash to live on and to have no mortgage payment. It seems to be working for them and we are considering it as well. Is this type of mortgage safe?
As with most financial planning, these issues are very individual. I like reverse mortgages in some situations, although it's always wise to get lots of counsel on your particular circumstances and the ramifications. For instance, do you have heirs in line to inherit your house? Do they want or need it? How much equity do you have in the home?
Do your homework and learn as much as you can. Start by going to the federal Department of Housing and Urban Development Web site (www.hud.gov) and search for "Reverse Mortgages." There's also information on the state Department of Real Estate Web site (www.dre. ca.gov). Click on "Consumers", then "Home Buyers/Borrowers," then "DRE Publications and Resources." Talk to your estate planning attorney and other financial professionals to get their opinions. Talk with family and friends only if you know they are well educated in reverse mortgages.
Gina Lera Estate planning attorney
My brother passed away, with no assets other than his car, which has a salvaged pink slip. He has credit card debt of about $15,000. Do I have to sell the car to pay off his debt? He'd said he wanted my son to have the car if anything ever happened to him. A couple credit card companies have already cleared him of the debt he owed. He lived with me, has no children and no other assets. What do I need to do?
I am sorry about your loss. Since your brother died without a will, his assets will pass as provided by the laws of the state where he resided at the time of death. Assuming he died in California and was not survived by a wife, children or grandchildren, his estate would pass to his parents (or, if both parents are deceased, to his siblings in equal shares).
Because the estate's value is less than $100,000, the heir(s) can assume the vehicle's title by making an appointment with the DMV, completing a "small estate affidavit" form and providing a copy of the death certificate.
The heir can then assign the car to your son without gift tax consequences, assuming the car's value is less than $13,000. Your brother's statements about wanting your son to have the car after his death have no effect, since California does not recognize oral wills.
Be careful in this process. The credit card company can collect up to one year following your brother's death. You indicated some debts were voluntarily discharged by several card companies, which is common in more modest estates. Be sure to get this confirmed in writing, to ensure you are not taking on additional problems. Even after the car is transferred to your son, the heirs are still liable for any debt up to the value of the car.
Cameron I. Beck, Investment adviser
I've read that people with defined pension plans should consider them as the short-term or fixed part of their asset mix, in terms of an overall retirement portfolio.
For instance, if 60 percent of your retirement income was in a defined pension, the other 40 percent could be placed in more aggressive investments to round out the portfolio.
Because of the recent market meltdown where investments may have shrunk 40 percent or more, is it still wise to think that way? Or should the rest of the portfolio be invested totally separate from the pension? I guess it goes back to how much risk I should be willing to accept.
In this day and age, you are very fortunate to have a defined benefit pension plan. Many employers find them too costly and are switching to employee-directed plans or defined contribution plans. At retirement, most of those fortunate enough to have a traditional defined benefit pension plan can expect to receive a fixed-income stream for their lifetime. It can be considered a fixed-income part of an asset mix. Unlike stocks, which fluctuate in value, pension plan distributions usually remain steady.
Whether your income comes from a pension plan run by your employer or from interest-bearing investments like CDs, it is important to practice diversification, which includes both growth and fixed-interest investments. Diversification, if practiced wisely, can lead to a prosperous retirement regardless of where your income comes from.
Our three new "Ask the Experts" writers have been busily answering financial questions this month from online readers.
Here's a sample of their advice on personal finance, wills/estates and investing.
To see more questions or to get advice from our other financial experts on taxes, banking and investment clubs, go to: www.sacbee.com/ask.
Pamela Christensen, Certified financial planner
I expect to retire in about four years and will have a small Sacramento County retirement. We also have about $150,000 in CDs to live on. My parents got a reverse mortgage a couple years ago for the extra cash to live on and to have no mortgage payment. It seems to be working for them and we are considering it as well. Is this type of mortgage safe?
As with most financial planning, these issues are very individual. I like reverse mortgages in some situations, although it's always wise to get lots of counsel on your particular circumstances and the ramifications. For instance, do you have heirs in line to inherit your house? Do they want or need it? How much equity do you have in the home?
Do your homework and learn as much as you can. Start by going to the federal Department of Housing and Urban Development Web site (www.hud.gov) and search for "Reverse Mortgages." There's also information on the state Department of Real Estate Web site (www.dre. ca.gov). Click on "Consumers", then "Home Buyers/Borrowers," then "DRE Publications and Resources." Talk to your estate planning attorney and other financial professionals to get their opinions. Talk with family and friends only if you know they are well educated in reverse mortgages.
Gina Lera Estate planning attorney
My brother passed away, with no assets other than his car, which has a salvaged pink slip. He has credit card debt of about $15,000. Do I have to sell the car to pay off his debt? He'd said he wanted my son to have the car if anything ever happened to him. A couple credit card companies have already cleared him of the debt he owed. He lived with me, has no children and no other assets. What do I need to do?
I am sorry about your loss. Since your brother died without a will, his assets will pass as provided by the laws of the state where he resided at the time of death. Assuming he died in California and was not survived by a wife, children or grandchildren, his estate would pass to his parents (or, if both parents are deceased, to his siblings in equal shares).
Because the estate's value is less than $100,000, the heir(s) can assume the vehicle's title by making an appointment with the DMV, completing a "small estate affidavit" form and providing a copy of the death certificate.
The heir can then assign the car to your son without gift tax consequences, assuming the car's value is less than $13,000. Your brother's statements about wanting your son to have the car after his death have no effect, since California does not recognize oral wills.
Be careful in this process. The credit card company can collect up to one year following your brother's death. You indicated some debts were voluntarily discharged by several card companies, which is common in more modest estates. Be sure to get this confirmed in writing, to ensure you are not taking on additional problems. Even after the car is transferred to your son, the heirs are still liable for any debt up to the value of the car.
Cameron I. Beck, Investment adviser
I've read that people with defined pension plans should consider them as the short-term or fixed part of their asset mix, in terms of an overall retirement portfolio.
For instance, if 60 percent of your retirement income was in a defined pension, the other 40 percent could be placed in more aggressive investments to round out the portfolio.
Because of the recent market meltdown where investments may have shrunk 40 percent or more, is it still wise to think that way? Or should the rest of the portfolio be invested totally separate from the pension? I guess it goes back to how much risk I should be willing to accept.
In this day and age, you are very fortunate to have a defined benefit pension plan. Many employers find them too costly and are switching to employee-directed plans or defined contribution plans. At retirement, most of those fortunate enough to have a traditional defined benefit pension plan can expect to receive a fixed-income stream for their lifetime. It can be considered a fixed-income part of an asset mix. Unlike stocks, which fluctuate in value, pension plan distributions usually remain steady.
Whether your income comes from a pension plan run by your employer or from interest-bearing investments like CDs, it is important to practice diversification, which includes both growth and fixed-interest investments. Diversification, if practiced wisely, can lead to a prosperous retirement regardless of where your income comes from.
Monday, October 26, 2009
Deposit Your Check... From Home?
Deposit Your Check...From Home?
First, we didn't need to visit the bank teller anymore. Then we were able to stick our checks right into the ATM without an envelope. Now we won't have to leave the house to make deposits.
Earlier this month, Sacramento-based Schools Financial Credit Union became the latest bank to allow customers to scan checks at home and deposit them over the Internet. Golden 1 Credit Union introduced scanner-based check deposits in July.
"Banking's not the way it was five or 10 years ago," said Nathan Schmidt, a vice president at Schools Financial. "With any type of technology, it becomes more convenient to self-service."
Another lender, USAA Federal Savings Bank, has gone even further down the convenience road. It allows customers to deposit checks with their iPhones by taking pictures of both sides of the check with the phone's camera.
According to an Oct. 6 article in American Banker, USAA customers have deposited more than 100,000 checks totaling $61 million with their iPhones since the service became available in August.
The article went on to say that giant Bank of America is expected to start testing mobile phone deposits soon.
Even with the widespread use of direct deposit and online banking, Americans still write and receive millions of paper checks each year.
A 2008 press release from the U.S. Treasury Department said that one in three Americans don't use direct deposit, including 10.5 million Social Security recipients.
And for the most part, when we have to deposit a paper check, we still need to go to an ATM to do it.
Businesses have been making deposits over the Internet for longer, ever since the passage in 2004 of the federal Check 21 Act.
Crafted in response to the banking system's paralysis in the wake of the terror attacks of September 2001, the act made a digital image of a check legally acceptable for payment.
Wednesday marks the act's fifth anniversary.
Businesses quickly saw the benefits of the new law. Sending checks as digital images eliminated courier costs and paperwork.
More than 60 percent of U.S. banks now offer merchant remote deposit – up from 50 percent in 2008, according to a June study by the Washington, D.C.-based Independent Community Bankers of America. Some 78 percent of banks plan to adopt the technology by 2011, the study found.
The extension of the service to consumers has come much more slowly. Cary Whaley, a director at the bankers group, said financial institutions have been wary about potential fraud.
"For many banks, it remains a business application," Whaley said. "The next step is the consumer side, but a lot of community banks are a little wary. When you're getting into thousands of consumers, the challenge for banks and credit unions is not only monitoring risk, but monitoring for changes in transactions and transaction amounts."
But some bankers said consumers are increasingly demanding the same convenience given to their business counterparts, and it's simply a matter of time before remote deposits become much more widespread.
Fewer than 1 million residential bank customers currently make deposits remotely over the Internet. But that number is expected to explode as more consumers catch on, and more banks make it available.
"It's clearly on the upswing," said John Leekley, founder and chief executive officer of the Georgia-based industry Web site RemoteDepositCapture.com. "The question is not whether we're going to reach 5 million, it's when. It's a matter of convenience and efficiency. I don't know anyone who enjoys going to a bank branch.
"If you can just scan a check on a phone or a home computer, it's really about getting that check sooner so you can get your money sooner."
When Schools Financial Credit Union decided to take the plunge, it included safeguards to prevent abuse. Customers must use their existing secure online banking log-in, and can't transmit items more than twice a day.
Users have a time limit to scan and deposit the check online and checks must meet specific requirements before they are deposited. Post-dated, damaged or lightly printed checks, for instance, will not scan properly and cannot be deposited.
Schools is rolling the program out over time. It will be available to all 40,000 members who bank online by mid-November.
All it requires to make a deposit is a digital scanner and a computer with an Internet connection.
In Sacramento, Golden 1 rolled out its Z@piT online deposit service in July to a customer base comfortable with doing business online. About 200 members are enrolled.
"So many people prefer to do self-service. They choose to go online – maybe they're parents with small kids, or they might not want to go to an ATM at 3 a.m.," said Golden One's chief executive officer, Teresa Halleck.
"People are already online," she said. "They're comfortable with electronic delivery and they're looking for more."
First, we didn't need to visit the bank teller anymore. Then we were able to stick our checks right into the ATM without an envelope. Now we won't have to leave the house to make deposits.
Earlier this month, Sacramento-based Schools Financial Credit Union became the latest bank to allow customers to scan checks at home and deposit them over the Internet. Golden 1 Credit Union introduced scanner-based check deposits in July.
"Banking's not the way it was five or 10 years ago," said Nathan Schmidt, a vice president at Schools Financial. "With any type of technology, it becomes more convenient to self-service."
Another lender, USAA Federal Savings Bank, has gone even further down the convenience road. It allows customers to deposit checks with their iPhones by taking pictures of both sides of the check with the phone's camera.
According to an Oct. 6 article in American Banker, USAA customers have deposited more than 100,000 checks totaling $61 million with their iPhones since the service became available in August.
The article went on to say that giant Bank of America is expected to start testing mobile phone deposits soon.
Even with the widespread use of direct deposit and online banking, Americans still write and receive millions of paper checks each year.
A 2008 press release from the U.S. Treasury Department said that one in three Americans don't use direct deposit, including 10.5 million Social Security recipients.
And for the most part, when we have to deposit a paper check, we still need to go to an ATM to do it.
Businesses have been making deposits over the Internet for longer, ever since the passage in 2004 of the federal Check 21 Act.
Crafted in response to the banking system's paralysis in the wake of the terror attacks of September 2001, the act made a digital image of a check legally acceptable for payment.
Wednesday marks the act's fifth anniversary.
Businesses quickly saw the benefits of the new law. Sending checks as digital images eliminated courier costs and paperwork.
More than 60 percent of U.S. banks now offer merchant remote deposit – up from 50 percent in 2008, according to a June study by the Washington, D.C.-based Independent Community Bankers of America. Some 78 percent of banks plan to adopt the technology by 2011, the study found.
The extension of the service to consumers has come much more slowly. Cary Whaley, a director at the bankers group, said financial institutions have been wary about potential fraud.
"For many banks, it remains a business application," Whaley said. "The next step is the consumer side, but a lot of community banks are a little wary. When you're getting into thousands of consumers, the challenge for banks and credit unions is not only monitoring risk, but monitoring for changes in transactions and transaction amounts."
But some bankers said consumers are increasingly demanding the same convenience given to their business counterparts, and it's simply a matter of time before remote deposits become much more widespread.
Fewer than 1 million residential bank customers currently make deposits remotely over the Internet. But that number is expected to explode as more consumers catch on, and more banks make it available.
"It's clearly on the upswing," said John Leekley, founder and chief executive officer of the Georgia-based industry Web site RemoteDepositCapture.com. "The question is not whether we're going to reach 5 million, it's when. It's a matter of convenience and efficiency. I don't know anyone who enjoys going to a bank branch.
"If you can just scan a check on a phone or a home computer, it's really about getting that check sooner so you can get your money sooner."
When Schools Financial Credit Union decided to take the plunge, it included safeguards to prevent abuse. Customers must use their existing secure online banking log-in, and can't transmit items more than twice a day.
Users have a time limit to scan and deposit the check online and checks must meet specific requirements before they are deposited. Post-dated, damaged or lightly printed checks, for instance, will not scan properly and cannot be deposited.
Schools is rolling the program out over time. It will be available to all 40,000 members who bank online by mid-November.
All it requires to make a deposit is a digital scanner and a computer with an Internet connection.
In Sacramento, Golden 1 rolled out its Z@piT online deposit service in July to a customer base comfortable with doing business online. About 200 members are enrolled.
"So many people prefer to do self-service. They choose to go online – maybe they're parents with small kids, or they might not want to go to an ATM at 3 a.m.," said Golden One's chief executive officer, Teresa Halleck.
"People are already online," she said. "They're comfortable with electronic delivery and they're looking for more."
Friday, October 23, 2009
For Mortgages, 620 is The New Magic Number
For Mortgages, 620 is The New Magic Number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.
Wednesday, October 21, 2009
Real Estate - A Great Long Term Investment
Real Estate - A Great Long Term Investment
GreatWest GMAC Real Estate professionals know real estate is a good long-term investment. Although home values have stalled or experienced decline in recent years, longer snapshots in time have proved real estate to be a fantastic investment.Let’s consider one scenario provided by a real estate professional. If someone were fortunate enough to buy a home even in 2002 and paid $500,000. If they put 20% down, there mortgage was $400,000. That home went all the way up to $800,000 in 2005 and is now only worth $560,000. They likely refinanced when it was worth $800,000 and their note went to $600,000. They received a 200% return on their original investment, tax-free. Their original investment was not the price of the house but the amount of money they brought to the table. $100,000. Many folks used their home as an ATM machine with a roof. And many more homeowners are in trouble today because of it. Sadly, too many got caught in the free money craze. The good news is that fortunately many of these homeowners are holding onto their homes and some day when we see a return to annual appreciation, they will see their property values rise once again.Understanding that housing markets are cyclic is key. For homebuyers, our current cycle offers excellent home buying opportunities.
GreatWest GMAC Real Estate professionals know real estate is a good long-term investment. Although home values have stalled or experienced decline in recent years, longer snapshots in time have proved real estate to be a fantastic investment.Let’s consider one scenario provided by a real estate professional. If someone were fortunate enough to buy a home even in 2002 and paid $500,000. If they put 20% down, there mortgage was $400,000. That home went all the way up to $800,000 in 2005 and is now only worth $560,000. They likely refinanced when it was worth $800,000 and their note went to $600,000. They received a 200% return on their original investment, tax-free. Their original investment was not the price of the house but the amount of money they brought to the table. $100,000. Many folks used their home as an ATM machine with a roof. And many more homeowners are in trouble today because of it. Sadly, too many got caught in the free money craze. The good news is that fortunately many of these homeowners are holding onto their homes and some day when we see a return to annual appreciation, they will see their property values rise once again.Understanding that housing markets are cyclic is key. For homebuyers, our current cycle offers excellent home buying opportunities.
Monday, October 19, 2009
Quarterly home sales worst yet for Sacramento area
Home Front: Quarterly home sales worst yet for Sacramento area
Sacramento-area home builders just keep singing the blues.July, August and September brought their worst quarter yet in this long housing crash: just 616 sales in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, the Folsom-based Gregory Group reports today.Actually, nearly all the region's sales were in Placer and Sacramento counties alone. The suburban cities of Placer County accounted for 44 percent of third-quarter sales of new homes in the region. Sacramento County's outer suburban rings comprised 43 percent.The tough numbers reflect California's expired $10,000 tax credit for buyers of new, unoccupied homes – and the imminent end of an $8,000 federal tax credit for first-time homebuyers, said Gregory Group President Greg Paquin. "All the evidence was that people were coming in asking how to use the tax incentive," he said. "That was a big selling point."Wednesday, however, the state Senate voted to extend the state's $10,000 tax credit to another 4,300 buyers. The Assembly is expected to vote on it next week.The newest sales numbers bring the year's new-home tally to just 2,286 through Sept. 30. At that pace, sales may fall below 3,000 this year in the six-county capital region, a level not seen since the 1960s. Statistics this year from researcher MDA DataQuick show that closed escrows for new houses are about 9 percent of all home sales. In 2005, home builders claimed 25 percent.Top five cities for sales in July, August and September:• Roseville, 167 sales.• Elk Grove west of Highway 99, 88 sales.• Rancho Cordova, 79 sales.• Lincoln, 57 sales.• Rocklin, 52 sales.No more up-front feesHere's mortgage news worth repeating: As of last Sunday, it's illegal in California for loan modification companies or attorneys to charge up-front fees to help you get your loan modified.Last Sunday, Gov. Arnold Schwarzenegger signed SB94, by Sen. Ron Calderon, D-Montebello, to ban up-front fees. No exceptions. The game now requires a loan modification firm or attorney to clearly spell out what steps will be taken on your behalf with lenders. A struggling borrower does not pay until the firm or attorney has performed all those steps. If, however, the lender declines to modify a loan after those steps have been taken, you must still pay.Before you sign anything, the loan modification firm must tell you, in your own language, that you can get these same services free from government-approved nonprofit loan counseling firms. More information: www.dre.ca.gov.Free foreclosure workshopsThe Sacramento Mutual Housing Association will hold a pair of free foreclosure prevention workshops next week for people struggling with mortgages.The workshops will explain the federal Making Home Affordable loan modification program and other options to keep your house. It will also explain steps of the foreclosure process and how to avoid scams. During sessions, people can schedule a free individual session with a foreclosure prevention specialist.First session: Monday at 6 p.m. at Mutual Housing at Lemon Hill, South Sacramento. Address: 6000 Lemon Hill Ave.Second session: Thursday, Oct. 22 at 6 p.m. at the Sacramento Association of Realtors. Address: 2003 Howe Ave., Sacramento.Preregistration is required. Call Tara at Sacramento Mutual Housing Association, (916) 453-8400, extension 43, or e-mail: tara@mutualhousing.com.
Sacramento-area home builders just keep singing the blues.July, August and September brought their worst quarter yet in this long housing crash: just 616 sales in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, the Folsom-based Gregory Group reports today.Actually, nearly all the region's sales were in Placer and Sacramento counties alone. The suburban cities of Placer County accounted for 44 percent of third-quarter sales of new homes in the region. Sacramento County's outer suburban rings comprised 43 percent.The tough numbers reflect California's expired $10,000 tax credit for buyers of new, unoccupied homes – and the imminent end of an $8,000 federal tax credit for first-time homebuyers, said Gregory Group President Greg Paquin. "All the evidence was that people were coming in asking how to use the tax incentive," he said. "That was a big selling point."Wednesday, however, the state Senate voted to extend the state's $10,000 tax credit to another 4,300 buyers. The Assembly is expected to vote on it next week.The newest sales numbers bring the year's new-home tally to just 2,286 through Sept. 30. At that pace, sales may fall below 3,000 this year in the six-county capital region, a level not seen since the 1960s. Statistics this year from researcher MDA DataQuick show that closed escrows for new houses are about 9 percent of all home sales. In 2005, home builders claimed 25 percent.Top five cities for sales in July, August and September:• Roseville, 167 sales.• Elk Grove west of Highway 99, 88 sales.• Rancho Cordova, 79 sales.• Lincoln, 57 sales.• Rocklin, 52 sales.No more up-front feesHere's mortgage news worth repeating: As of last Sunday, it's illegal in California for loan modification companies or attorneys to charge up-front fees to help you get your loan modified.Last Sunday, Gov. Arnold Schwarzenegger signed SB94, by Sen. Ron Calderon, D-Montebello, to ban up-front fees. No exceptions. The game now requires a loan modification firm or attorney to clearly spell out what steps will be taken on your behalf with lenders. A struggling borrower does not pay until the firm or attorney has performed all those steps. If, however, the lender declines to modify a loan after those steps have been taken, you must still pay.Before you sign anything, the loan modification firm must tell you, in your own language, that you can get these same services free from government-approved nonprofit loan counseling firms. More information: www.dre.ca.gov.Free foreclosure workshopsThe Sacramento Mutual Housing Association will hold a pair of free foreclosure prevention workshops next week for people struggling with mortgages.The workshops will explain the federal Making Home Affordable loan modification program and other options to keep your house. It will also explain steps of the foreclosure process and how to avoid scams. During sessions, people can schedule a free individual session with a foreclosure prevention specialist.First session: Monday at 6 p.m. at Mutual Housing at Lemon Hill, South Sacramento. Address: 6000 Lemon Hill Ave.Second session: Thursday, Oct. 22 at 6 p.m. at the Sacramento Association of Realtors. Address: 2003 Howe Ave., Sacramento.Preregistration is required. Call Tara at Sacramento Mutual Housing Association, (916) 453-8400, extension 43, or e-mail: tara@mutualhousing.com.
Friday, October 16, 2009
Foreclosure flood fails to materialize in Sacramento area
Foreclosure flood fails to materialize in Sacramento area
People who watch housing prices have predicted for months that another deluge of foreclosed homes would soon hit the market – once again crushing Sacramento-area property values.But the flood of bank repos hasn't materialized. And now, a leading California foreclosure analyst says it probably won't."From the things I'm seeing, there's not going to be a wave any time soon," said Sean O'Toole, president of ForeclosureRadar, a Contra Costa County firm that tracks mortgage defaults and foreclosures.Despite a growing number of loan defaults and delinquencies, O'Toole said banks are now selling more homes than they're repossessing – and political pressure on them to work with homeowners is slowing foreclosure rates. Other market watchers also see banks slowly dribbling out their supply of repossessed homes."From all appearances, it does look like they're managing it better," said Charlene Singley, president of the Sacramento Association of Realtors.If the supply of homes for sale remains in balance with demand, the danger of another sharp downturn in prices is lessened, at least in the short run, O'Toole and others said Thursday.The prospect of another wave of new foreclosures has long threatened to destabilize a capital-area market precariously balanced by massive repo sell-offs, curtailment of new-home production and buyers enticed by lower prices, low interest rates and tax credits.Even as disaster scenarios remain easy to imagine, the number of area for-sale signs is now at an encouraging 52-month low.Still, the downside to this relative steadiness in the near term, O'Toole acknowledged, may be that it will take longer to work through the mortgage crisis and recover.On Thursday, La Jolla researcher MDA DataQuick offered fresh evidence of the market's tenuous balance.Regional home sales in September ticked up slightly from August, with 3,454 new and existing homes changing hands in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Yet September marked a fourth straight month in which sales fell below the same time last year.That's because recent sales have been unable to match last year's sharp rise as banks unloaded thousands of repos, a phenomenon that also put downward pressure on area home values. O'Toole said banks have cut their statewide repo inventory by 41 percent in the past year.Now that the repo sales pace has slowed in Sacramento County – from 70 percent of sales in February to 53 percent in September – median sales prices have quickly stabilized.DataQuick reported a September median price of $176,000 in Sacramento County. Median is that point where half the homes cost more and half less. That was down from a 2009 high of $180,000 in August, but still well above February's housing bust low of $160,000.Fewer repo listings this year brought another phenomenon not seen since the boom: bidding wars. The phenomenon so frustrated state employee Lauri Lathrop that she finally bought a new house in Elk Grove in September."I was putting in offers $15,000 above the asking price, and I was getting outbid," she said Thursday. "I saw this new house and nobody could outbid me. It was like it was mine," she said.Lathrop obtained a favorable interest rate and an $8,000 federal tax credit for first-time buyers – though she missed the window for a $10,000 state tax credit for buyers of new homes.Such perks combined with affordability to prod more buyers off the fence this year. Sales of new and existing homes combined from January through September this year total 30,231, beating 29,751 during the same period in 2008 and 26,777 from January through September 2007.As a result, the number of for-sale signs in El Dorado, Placer, Sacramento and Yolo counties has fallen to May 2005 lows, according to Sacramento researcher TrendGraphix.The affiliate of Lyon Real Estate counted 6,129 listings in the four counties at the end of September. The numbers have fallen for 25 straight months since peaking at 16,262 in August 2007.TrendGraphix said 13.4 percent of current listings are bank repos and 27 percent are short sales, in which owners hope lenders will accept a sales price below what they owe. That means 40 percent are so-called "distress sales."That's scary, but real estate agents like Singley and Carey Covey of Cook Real Estate maintain there is an ample supply of buyers. And sales statistics from the Sacramento Association of Realtors show that banks are faster to approve short sales now than months ago.As the repo share of the sales mix has continued to decline, short sales rose to almost 20 percent of sales in September in Sacramento County and the city of West Sacramento, SAR reported.Covey, who specializes in selling bank-owned homes, said he believes the supply of repos will remain steady. But he expects no trouble selling them at such a pace."As of right now, we're still short on supply, and there's still a lot of demand," he said.
People who watch housing prices have predicted for months that another deluge of foreclosed homes would soon hit the market – once again crushing Sacramento-area property values.But the flood of bank repos hasn't materialized. And now, a leading California foreclosure analyst says it probably won't."From the things I'm seeing, there's not going to be a wave any time soon," said Sean O'Toole, president of ForeclosureRadar, a Contra Costa County firm that tracks mortgage defaults and foreclosures.Despite a growing number of loan defaults and delinquencies, O'Toole said banks are now selling more homes than they're repossessing – and political pressure on them to work with homeowners is slowing foreclosure rates. Other market watchers also see banks slowly dribbling out their supply of repossessed homes."From all appearances, it does look like they're managing it better," said Charlene Singley, president of the Sacramento Association of Realtors.If the supply of homes for sale remains in balance with demand, the danger of another sharp downturn in prices is lessened, at least in the short run, O'Toole and others said Thursday.The prospect of another wave of new foreclosures has long threatened to destabilize a capital-area market precariously balanced by massive repo sell-offs, curtailment of new-home production and buyers enticed by lower prices, low interest rates and tax credits.Even as disaster scenarios remain easy to imagine, the number of area for-sale signs is now at an encouraging 52-month low.Still, the downside to this relative steadiness in the near term, O'Toole acknowledged, may be that it will take longer to work through the mortgage crisis and recover.On Thursday, La Jolla researcher MDA DataQuick offered fresh evidence of the market's tenuous balance.Regional home sales in September ticked up slightly from August, with 3,454 new and existing homes changing hands in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Yet September marked a fourth straight month in which sales fell below the same time last year.That's because recent sales have been unable to match last year's sharp rise as banks unloaded thousands of repos, a phenomenon that also put downward pressure on area home values. O'Toole said banks have cut their statewide repo inventory by 41 percent in the past year.Now that the repo sales pace has slowed in Sacramento County – from 70 percent of sales in February to 53 percent in September – median sales prices have quickly stabilized.DataQuick reported a September median price of $176,000 in Sacramento County. Median is that point where half the homes cost more and half less. That was down from a 2009 high of $180,000 in August, but still well above February's housing bust low of $160,000.Fewer repo listings this year brought another phenomenon not seen since the boom: bidding wars. The phenomenon so frustrated state employee Lauri Lathrop that she finally bought a new house in Elk Grove in September."I was putting in offers $15,000 above the asking price, and I was getting outbid," she said Thursday. "I saw this new house and nobody could outbid me. It was like it was mine," she said.Lathrop obtained a favorable interest rate and an $8,000 federal tax credit for first-time buyers – though she missed the window for a $10,000 state tax credit for buyers of new homes.Such perks combined with affordability to prod more buyers off the fence this year. Sales of new and existing homes combined from January through September this year total 30,231, beating 29,751 during the same period in 2008 and 26,777 from January through September 2007.As a result, the number of for-sale signs in El Dorado, Placer, Sacramento and Yolo counties has fallen to May 2005 lows, according to Sacramento researcher TrendGraphix.The affiliate of Lyon Real Estate counted 6,129 listings in the four counties at the end of September. The numbers have fallen for 25 straight months since peaking at 16,262 in August 2007.TrendGraphix said 13.4 percent of current listings are bank repos and 27 percent are short sales, in which owners hope lenders will accept a sales price below what they owe. That means 40 percent are so-called "distress sales."That's scary, but real estate agents like Singley and Carey Covey of Cook Real Estate maintain there is an ample supply of buyers. And sales statistics from the Sacramento Association of Realtors show that banks are faster to approve short sales now than months ago.As the repo share of the sales mix has continued to decline, short sales rose to almost 20 percent of sales in September in Sacramento County and the city of West Sacramento, SAR reported.Covey, who specializes in selling bank-owned homes, said he believes the supply of repos will remain steady. But he expects no trouble selling them at such a pace."As of right now, we're still short on supply, and there's still a lot of demand," he said.
Wednesday, October 14, 2009
SMUD demo house in Fair Oaks shows how to save energy
SMUD demo house in Fair Oaks shows how to save energy
The 26-year-old house in Fair Oaks was a product of its time, all-electric and power hungry, built in an era of Rancho Seco nuclear power.Remodeled in 2009, the house is now the product of a new time, and it's all about energy conservation.Tucked away on a quiet, pleasant street near Hazel Avenue, the house is the Sacramento Municipal Utility District's newest demonstration of how Californians will use energy more sparingly in the future.It's also a showcase of products and techniques representing potential green growth for the capital region's battered construction sector, which is building barely any new houses these days.The remodeled house on Quail Hill Way is designed to use 60 percent less power than it did before."It's not strange. It's not goofy. It's not an earthship made of car tires," said Jim Bayless, who has transitioned from struggling home builder to green retrofitter. "It's a normal house," he said.Bayless, owner of now-idled Treasure Homes, bought the three-bedroom, two-bath house in May as a $150,000 short sale. He and partners in Folsom-based GreenBuilt Construction spent $141,000 to reroof it, install leading-edge appliances, solar power, the newest windows and other emerging systems known to vigorously slash kilowatt-hours.SMUD, which signed on as a partner, will rent the house for a year, at $1,700 a month, to show its features to the public and area building contractors. It's part of the utility's shifting focus to retrofitting existing homes. Deals with home builders to add solar power systems to thousands of newly built area homes have stalled with the housing crash."If we can duplicate this in some fashion by the tens of thousands, how much energy could we save?" asked Mike Keesee, a project manager at SMUD. Keesee said mass retrofits of existing homes could spare SMUD the costs of building power plants and take pressure off peak demand situations such as heat waves.Homeowners, too, may find it easier soon to finance such improvements. As a result of Assembly Bill 811, a law adopted last year, local governments throughout the capital region are considering making loans to pay for the upfront costs of home energy improvements. The loans would be wrapped into property tax bills with repayments spread over years and multiple owners.Financial incentives and rebates also can help with the upfront costs needed to save money later. SMUD estimates the costs of energy efficiency upgrades in the Fair Oaks home at about $32,000.When tours start Oct. 24, visitors will see a house filled with simple fixes that range from a radiant barrier beneath the roof � somewhat like a car's reflective windshield sunshade � to a 40-gallon rooftop water tank where the sun warms water for the house. There is a water faucet above the kitchen sink that turns off with a tap of the hand, and new ways to seal the house tight to prevent leakage of heated and cooled air.New dual-pane windows also keep out hot exterior air in summer and keep warm interior air in during winter."Windows," said Keesee, "have come so far."An Internet-based monitoring system in the house is reminiscent of the futuristic 1960s cartoon, the "Jetsons," allowing the homeowner to adjust interior temperatures with a remote control at home or from a desktop computer at work. The computer even shuts the garage door if it perceives that the owner has left it open after leaving for work."There are lots of little details, and that's what it's all about, getting the little details right," said Bayless during a tour this week.SMUD helped fund some of the work as a demonstration project aimed at spurring others to act. Manufacturers offered deals on energy efficient products in return for the expected exposure during tours. Colorado's National Renewable Energy Laboratory, a U.S. Department of Energy affiliate, is also a partner, providing technical support and analyzing the energy savings.NREL's manager for residential research, Ren Anderson, said Tuesday the laboratory's goal in Fair Oaks is to help "enable utilities in California to meet their long-term mandated goals for renewable energy and energy efficiency." By 2020, California aims to build homes that generate the power they consume. The state aims for all buildings to do the same by 2030.The Fair Oaks remodel comes a year after Keesee and SMUD teamed with a Folsom firm to build a so-called "House of the Future" near downtown Folsom. That demonstration house, touted as a model for large-scale home builders to imitate, was declared one of the most energy efficient houses built in the United States. It sold in January for $625,000.Keesee said his research shows the Fair Oaks retrofit and demonstration house is among 20 to 30 of the most efficient homes nationally."There are maybe five to six in California at this extreme that I could find," he said. "That doesn't include the people who have quietly done it on their own.
The 26-year-old house in Fair Oaks was a product of its time, all-electric and power hungry, built in an era of Rancho Seco nuclear power.Remodeled in 2009, the house is now the product of a new time, and it's all about energy conservation.Tucked away on a quiet, pleasant street near Hazel Avenue, the house is the Sacramento Municipal Utility District's newest demonstration of how Californians will use energy more sparingly in the future.It's also a showcase of products and techniques representing potential green growth for the capital region's battered construction sector, which is building barely any new houses these days.The remodeled house on Quail Hill Way is designed to use 60 percent less power than it did before."It's not strange. It's not goofy. It's not an earthship made of car tires," said Jim Bayless, who has transitioned from struggling home builder to green retrofitter. "It's a normal house," he said.Bayless, owner of now-idled Treasure Homes, bought the three-bedroom, two-bath house in May as a $150,000 short sale. He and partners in Folsom-based GreenBuilt Construction spent $141,000 to reroof it, install leading-edge appliances, solar power, the newest windows and other emerging systems known to vigorously slash kilowatt-hours.SMUD, which signed on as a partner, will rent the house for a year, at $1,700 a month, to show its features to the public and area building contractors. It's part of the utility's shifting focus to retrofitting existing homes. Deals with home builders to add solar power systems to thousands of newly built area homes have stalled with the housing crash."If we can duplicate this in some fashion by the tens of thousands, how much energy could we save?" asked Mike Keesee, a project manager at SMUD. Keesee said mass retrofits of existing homes could spare SMUD the costs of building power plants and take pressure off peak demand situations such as heat waves.Homeowners, too, may find it easier soon to finance such improvements. As a result of Assembly Bill 811, a law adopted last year, local governments throughout the capital region are considering making loans to pay for the upfront costs of home energy improvements. The loans would be wrapped into property tax bills with repayments spread over years and multiple owners.Financial incentives and rebates also can help with the upfront costs needed to save money later. SMUD estimates the costs of energy efficiency upgrades in the Fair Oaks home at about $32,000.When tours start Oct. 24, visitors will see a house filled with simple fixes that range from a radiant barrier beneath the roof � somewhat like a car's reflective windshield sunshade � to a 40-gallon rooftop water tank where the sun warms water for the house. There is a water faucet above the kitchen sink that turns off with a tap of the hand, and new ways to seal the house tight to prevent leakage of heated and cooled air.New dual-pane windows also keep out hot exterior air in summer and keep warm interior air in during winter."Windows," said Keesee, "have come so far."An Internet-based monitoring system in the house is reminiscent of the futuristic 1960s cartoon, the "Jetsons," allowing the homeowner to adjust interior temperatures with a remote control at home or from a desktop computer at work. The computer even shuts the garage door if it perceives that the owner has left it open after leaving for work."There are lots of little details, and that's what it's all about, getting the little details right," said Bayless during a tour this week.SMUD helped fund some of the work as a demonstration project aimed at spurring others to act. Manufacturers offered deals on energy efficient products in return for the expected exposure during tours. Colorado's National Renewable Energy Laboratory, a U.S. Department of Energy affiliate, is also a partner, providing technical support and analyzing the energy savings.NREL's manager for residential research, Ren Anderson, said Tuesday the laboratory's goal in Fair Oaks is to help "enable utilities in California to meet their long-term mandated goals for renewable energy and energy efficiency." By 2020, California aims to build homes that generate the power they consume. The state aims for all buildings to do the same by 2030.The Fair Oaks remodel comes a year after Keesee and SMUD teamed with a Folsom firm to build a so-called "House of the Future" near downtown Folsom. That demonstration house, touted as a model for large-scale home builders to imitate, was declared one of the most energy efficient houses built in the United States. It sold in January for $625,000.Keesee said his research shows the Fair Oaks retrofit and demonstration house is among 20 to 30 of the most efficient homes nationally."There are maybe five to six in California at this extreme that I could find," he said. "That doesn't include the people who have quietly done it on their own.
Monday, October 12, 2009
California Realtors stay busy online
Home Front: California Realtors stay busy online
Where do today's real estate agents go when they go online?
A new survey from their California trade group reveals a new generation of agents obsessed with e-mail, social networking, cruising multiple listing services and publicizing listings on a rising number of Web sites.
Realtors are getting intimate with the Internet (97 percent have high-speed access at home) or getting left behind, says a new California Association of Realtors technology survey conducted in July and August.
Almost half of 400 agents surveyed said they're now using social networking sites "to stay on top of trends in their business." Most popular, with 34 percent using it, was LinkedIn, a network of business contacts. Video site YouTube claimed 13 percent, MySpace 12 percent, Twitter 10 percent and Facebook 4 percent, CAR reported.
Wired agents most consistently seek information on Realtor.com, the Web site of the National Association of Realtors. Ninety-four percent named it as a top site. It's also a top site for homebuyers to look at listings.
After Realtor.com came their local multiple-listing services at 89 percent, their company Web sites at 86 percent and the California Association of Realtors site at 78 percent.
Increasingly, today's agents also appreciate the online valuation site Zillow, classified ad giant Craigslist and Yahoo Real Estate. In surveys three years ago, none of the three was mentioned.
In another break with the past, 70 percent of Realtors now promote listings online:
� 51 percent on Yahoo Real Estate.
� 37 percent on local newspaper Web sites.
� 29 percent on Zillow and 26 percent on Craigslist.
Nearly half the state's 172,000 Realtors carry laptops or tablet computers in the field, mainly to check e-mail and respond quickly, CAR said. Almost 40 percent carry a hand-held wireless device to do the same.
The survey results are based on a random telephone survey of CAR members. The survey has a margin of error of plus or minus ve percentage points. More details: www.car.org.
Mortgage lending bills fate uncertain
We're still waiting on Gov. Arnold Schwarzengger.
As of press time there was no word whether he will sign or veto bills that aim to tighten mortgage lending standards in California and ban loan modification firms from charging up-front fees. Bills to watch include Assembly Bill 260, which bans many risky loans, and Senate Bill 94 and Assembly Bill 764, which prevent loan modification firms from collecting fees before they begin work.
Industry officials and prosecutors are also watching Senate Bill 239, which creates a new felony category in California law for mortgage fraud.
The governor has signed very few bills while awaiting a deal on water issues. He has until Sunday to decide.
While we're addressing deadlines, there's also no word on whether a federal $8,000 homebuyer tax credit will be extended after expiring Nov. 30. (The House voted Thursday to extend for one year the credit for military service members who have served at least three months overseas in 2009).
The fate of the expired $10,000 tax credit for buyers of new California homes also remains uncertain.
Rates stay below 5 percent
It's like spring again for mortgage rates. Much like March, April and May, they've marked two weeks now below 5 percent � just as the sales season begins a fall and winter slowdown.
Mortgage giant Freddie Mac pegged this week's national average at 4.87 percent, plus points, for the benchmark fixed-rate 30-year loan.
That's down from 4.94 percent last week and the year's 14th week below 5 percent.
For Sacramento buyers, locking in a $200,000 loan this week is about $90 a month cheaper than in June, when 2009 rates peaked at 5.59 percent plus points.
Falling rates are generally a sign that investors believe the economy is weak and won't produce an inflationary spiral any time soon.
With rates falling for six straight weeks now, the Mortgage Bankers Association reported a 19-week high in mortgage applications this week.
Most aren't buyers. Two-thirds of applicants nationally want to refinance.
Where do today's real estate agents go when they go online?
A new survey from their California trade group reveals a new generation of agents obsessed with e-mail, social networking, cruising multiple listing services and publicizing listings on a rising number of Web sites.
Realtors are getting intimate with the Internet (97 percent have high-speed access at home) or getting left behind, says a new California Association of Realtors technology survey conducted in July and August.
Almost half of 400 agents surveyed said they're now using social networking sites "to stay on top of trends in their business." Most popular, with 34 percent using it, was LinkedIn, a network of business contacts. Video site YouTube claimed 13 percent, MySpace 12 percent, Twitter 10 percent and Facebook 4 percent, CAR reported.
Wired agents most consistently seek information on Realtor.com, the Web site of the National Association of Realtors. Ninety-four percent named it as a top site. It's also a top site for homebuyers to look at listings.
After Realtor.com came their local multiple-listing services at 89 percent, their company Web sites at 86 percent and the California Association of Realtors site at 78 percent.
Increasingly, today's agents also appreciate the online valuation site Zillow, classified ad giant Craigslist and Yahoo Real Estate. In surveys three years ago, none of the three was mentioned.
In another break with the past, 70 percent of Realtors now promote listings online:
� 51 percent on Yahoo Real Estate.
� 37 percent on local newspaper Web sites.
� 29 percent on Zillow and 26 percent on Craigslist.
Nearly half the state's 172,000 Realtors carry laptops or tablet computers in the field, mainly to check e-mail and respond quickly, CAR said. Almost 40 percent carry a hand-held wireless device to do the same.
The survey results are based on a random telephone survey of CAR members. The survey has a margin of error of plus or minus ve percentage points. More details: www.car.org.
Mortgage lending bills fate uncertain
We're still waiting on Gov. Arnold Schwarzengger.
As of press time there was no word whether he will sign or veto bills that aim to tighten mortgage lending standards in California and ban loan modification firms from charging up-front fees. Bills to watch include Assembly Bill 260, which bans many risky loans, and Senate Bill 94 and Assembly Bill 764, which prevent loan modification firms from collecting fees before they begin work.
Industry officials and prosecutors are also watching Senate Bill 239, which creates a new felony category in California law for mortgage fraud.
The governor has signed very few bills while awaiting a deal on water issues. He has until Sunday to decide.
While we're addressing deadlines, there's also no word on whether a federal $8,000 homebuyer tax credit will be extended after expiring Nov. 30. (The House voted Thursday to extend for one year the credit for military service members who have served at least three months overseas in 2009).
The fate of the expired $10,000 tax credit for buyers of new California homes also remains uncertain.
Rates stay below 5 percent
It's like spring again for mortgage rates. Much like March, April and May, they've marked two weeks now below 5 percent � just as the sales season begins a fall and winter slowdown.
Mortgage giant Freddie Mac pegged this week's national average at 4.87 percent, plus points, for the benchmark fixed-rate 30-year loan.
That's down from 4.94 percent last week and the year's 14th week below 5 percent.
For Sacramento buyers, locking in a $200,000 loan this week is about $90 a month cheaper than in June, when 2009 rates peaked at 5.59 percent plus points.
Falling rates are generally a sign that investors believe the economy is weak and won't produce an inflationary spiral any time soon.
With rates falling for six straight weeks now, the Mortgage Bankers Association reported a 19-week high in mortgage applications this week.
Most aren't buyers. Two-thirds of applicants nationally want to refinance.
Friday, October 9, 2009
Economist expects California existing-home sales to fall in 2010
Economist expects California existing-home sales to fall in 2010
Sales of existing homes will fall slightly next year in California as people lose more jobs and cheap foreclosed homes become a smaller part of the market, California Association of Realtors economists predicted Wednesday.Fewer sales of foreclosed homes may also push median prices a little higher than this year, the group said.Watch, too, for growing trouble in the higher-end home market, which so far has been spared the huge price drops seen at the less expensive end, said CAR chief economist Leslie Appleton-Young.The California trade group for 172,000 real estate agents is predicting sales of 527,500 homes in 2010 - 2.3 percent less than in this year. It also foresees a 2010 median price of $280,000. That's 3.3 percent higher than this year's current estimate of $271,000.But anything could happen in a still-volatile and sluggish economic and housing climate, CAR said. The group, releasing the estimates during a trade show in San Jose on Wednesday, cautioned that numerous wild cards could hurt the real estate market in 2010, including the state budget crisis, rising unemployment and possibly rising interest rates."As we get through this, there are a lot of unknowns," said Appleton-Young.In California, the nation's largest struggling housing market, those wild cards include:• The supply of foreclosed homes. Appleton-Young said prices could be pressed downward again if a heavier-than-expected wave of foreclosures floods the market next year. Foreclosures accounted for slightly more than half the state's sales this year; the estimate for next year is one-third."I don't see a tsunami of foreclosures," said the CAR economist. "I see an elevated level of foreclosures over the next couple of years, and an acceleration of foreclosures at the upper end of the market."Analysts, including Irvine-based John Burns Real Estate Consulting, note that banks have been slow to foreclose and list existing repos, setting up the potential for a new wave of bank-owned properties going up for sale.Burns contends that continued government intervention - including tax credits for buyers - is necessary to stimulate housing demand in a slow economy. CAR is among the real estate groups lobbying Congress to extend a first-time homebuyer tax credit that expires Nov. 30.Sacramento-area real estate agents are also getting "calls to action" to lobby congressional reps for an extended tax credit, said Charlene Singley, president of the Sacramento Association of Realtors.• Sales of higher-end homes. Appleton-Young said many buyers are having trouble financing more expensive houses - and hesitating over fears they will lose value. Those factors, combined with rising joblessness among owners of higher-priced homes, have the potential to bring down prices in the upper segment.• Loan resets: Projections suggest that thousands of new risky adjustable-rate loans - including especially dangerous pay-option mortgages - will reset in 2010 across California, possibly triggering a new stream of loan defaults. Many of those, too, involve owners of more expensive homes.
Sales of existing homes will fall slightly next year in California as people lose more jobs and cheap foreclosed homes become a smaller part of the market, California Association of Realtors economists predicted Wednesday.Fewer sales of foreclosed homes may also push median prices a little higher than this year, the group said.Watch, too, for growing trouble in the higher-end home market, which so far has been spared the huge price drops seen at the less expensive end, said CAR chief economist Leslie Appleton-Young.The California trade group for 172,000 real estate agents is predicting sales of 527,500 homes in 2010 - 2.3 percent less than in this year. It also foresees a 2010 median price of $280,000. That's 3.3 percent higher than this year's current estimate of $271,000.But anything could happen in a still-volatile and sluggish economic and housing climate, CAR said. The group, releasing the estimates during a trade show in San Jose on Wednesday, cautioned that numerous wild cards could hurt the real estate market in 2010, including the state budget crisis, rising unemployment and possibly rising interest rates."As we get through this, there are a lot of unknowns," said Appleton-Young.In California, the nation's largest struggling housing market, those wild cards include:• The supply of foreclosed homes. Appleton-Young said prices could be pressed downward again if a heavier-than-expected wave of foreclosures floods the market next year. Foreclosures accounted for slightly more than half the state's sales this year; the estimate for next year is one-third."I don't see a tsunami of foreclosures," said the CAR economist. "I see an elevated level of foreclosures over the next couple of years, and an acceleration of foreclosures at the upper end of the market."Analysts, including Irvine-based John Burns Real Estate Consulting, note that banks have been slow to foreclose and list existing repos, setting up the potential for a new wave of bank-owned properties going up for sale.Burns contends that continued government intervention - including tax credits for buyers - is necessary to stimulate housing demand in a slow economy. CAR is among the real estate groups lobbying Congress to extend a first-time homebuyer tax credit that expires Nov. 30.Sacramento-area real estate agents are also getting "calls to action" to lobby congressional reps for an extended tax credit, said Charlene Singley, president of the Sacramento Association of Realtors.• Sales of higher-end homes. Appleton-Young said many buyers are having trouble financing more expensive houses - and hesitating over fears they will lose value. Those factors, combined with rising joblessness among owners of higher-priced homes, have the potential to bring down prices in the upper segment.• Loan resets: Projections suggest that thousands of new risky adjustable-rate loans - including especially dangerous pay-option mortgages - will reset in 2010 across California, possibly triggering a new stream of loan defaults. Many of those, too, involve owners of more expensive homes.
Wednesday, October 7, 2009
Mortgage rates below 5 percent fuel re-fi boom
Mortgage rates below 5 percent fuel re-fi boom
Every dollar counts in this economy.
Homeowners hustled last week to refinance their mortgages after interest rates fell below 5 percent for the first time since May.
Refinance applications climbed 18 percent from the previous week, the Mortgage Bankers Association reported Wednesday, as rates on 30-year home loans dropped to their lowest level in four months to 4.89 percent.
With extra cash lining their pockets each month, homeowners could help the economy recover. Since the recession began, American consumers have reined in spending, which accounts for up to 70 percent of the economy. A refinance savings of a couple hundred bucks could go a long way in boosting household finances.
"A lot of people are thinking: "If I can get something right now, let's get it and run,'" said Pava Leyrer, president of Heritage National Mortgage in Michigan.
But more than 16 million homeowners owe more on their mortgages than their properties are worth. To refinance they would have to cover the difference and then some. In some cases, that could mean forking over tens of thousands of dollars. Others simply don't qualify under stricter credit and income standards. And requirements for refinancing certain government loans will get tougher in November.
The Federal Reserve started buying mortgage-backed securities in January to drive down mortgage rates. But it plans to slow its purchases of mortgage-related debt and extend the program through the first three months of 2010, which will likely push rates higher.
Still, current low rates helped borrowers like Kimberly Austin in Kalamazoo, Mich., cut her monthly payment by more than $300 to $934. Austin, a 40-year-old accounts receivable clerk, ticked off a list of where that extra cash will go. A new roof, updating the electrical system and other improvements on the older house she bought in June of last year.
"That money would be a huge help," said Austin, who is set to complete the refinance on Thursday.
For Tanya Schlicht in Greenfield, Wisc., refinancing her mortgage will help cushion the blow from her husband's job loss earlier this year. He's working at a temp agency now, but makes less than before.
Schlicht, who works in a nursing home, is in the process of qualifying with just her income and wants to roll a costly second mortgage into just one loan. The move will save them a much-needed $200 a month.
"We're going to need it for the electric bill," she said.
She's a lucky one.
Many calls mortgage brokers received last week came from borrowers who couldn't qualify for a new loan because of lower incomes, higher credit standards or falling home prices.
New rules designed to limit conflicts of interest in the appraisal industry also are scuttling refinance applications because appraisals are coming in low, said Les Berman of EB Financial in Beverly Hills, Calif.
Lenders are stricter too. Before, Berman said they would accept a refinance application if the mortgage payment, taxes, insurance and all other debt added up to half a borrower's income. Now, the magic number is 41 percent.
The Obama Administration launched a plan in April to help borrowers refinance, even if their home has lost value. Fannie Mae and Freddie Mac are accepting borrowers who owe up to 25 percent more than their home are worth. But so far, only about 85,000 homeowners have had their loans refinanced under the plan, well below original expectations of 5 million.
"I personally haven't seen one yet," Berman said.
And on Nov. 18th, new requirements go into effect for borrowers who want to refinance a loan insured by the Federal Housing Administration. The so-called "FHA streamline" loan will require at least six months of payments before a borrower can take advantage of the program, and verification of assets, job and income. Also, more borrowers will need to come up with more cash to refinance because of new rules to calculate the maximum loan amount relative to the home's value.
"That'll stop up to 85 percent of my streamline borrowers," said Leyrer of Heritage National Mortgage.
Mortgage brokers say a refinancing is worthwhile if you can shave off at least $100 from your monthly payment or get a full percentage point rate reduction.
That's why rates below 5 percent are so appealing. It's only the second time this year they dipped that low. Rates hit a record low of 4.78 percent in the spring.
"The experts say rates are going back up," said John Stearns, vice president at Robbins and Lloyd Mortgage in Mequon, Wis. "We're making hay while we can now."
Every dollar counts in this economy.
Homeowners hustled last week to refinance their mortgages after interest rates fell below 5 percent for the first time since May.
Refinance applications climbed 18 percent from the previous week, the Mortgage Bankers Association reported Wednesday, as rates on 30-year home loans dropped to their lowest level in four months to 4.89 percent.
With extra cash lining their pockets each month, homeowners could help the economy recover. Since the recession began, American consumers have reined in spending, which accounts for up to 70 percent of the economy. A refinance savings of a couple hundred bucks could go a long way in boosting household finances.
"A lot of people are thinking: "If I can get something right now, let's get it and run,'" said Pava Leyrer, president of Heritage National Mortgage in Michigan.
But more than 16 million homeowners owe more on their mortgages than their properties are worth. To refinance they would have to cover the difference and then some. In some cases, that could mean forking over tens of thousands of dollars. Others simply don't qualify under stricter credit and income standards. And requirements for refinancing certain government loans will get tougher in November.
The Federal Reserve started buying mortgage-backed securities in January to drive down mortgage rates. But it plans to slow its purchases of mortgage-related debt and extend the program through the first three months of 2010, which will likely push rates higher.
Still, current low rates helped borrowers like Kimberly Austin in Kalamazoo, Mich., cut her monthly payment by more than $300 to $934. Austin, a 40-year-old accounts receivable clerk, ticked off a list of where that extra cash will go. A new roof, updating the electrical system and other improvements on the older house she bought in June of last year.
"That money would be a huge help," said Austin, who is set to complete the refinance on Thursday.
For Tanya Schlicht in Greenfield, Wisc., refinancing her mortgage will help cushion the blow from her husband's job loss earlier this year. He's working at a temp agency now, but makes less than before.
Schlicht, who works in a nursing home, is in the process of qualifying with just her income and wants to roll a costly second mortgage into just one loan. The move will save them a much-needed $200 a month.
"We're going to need it for the electric bill," she said.
She's a lucky one.
Many calls mortgage brokers received last week came from borrowers who couldn't qualify for a new loan because of lower incomes, higher credit standards or falling home prices.
New rules designed to limit conflicts of interest in the appraisal industry also are scuttling refinance applications because appraisals are coming in low, said Les Berman of EB Financial in Beverly Hills, Calif.
Lenders are stricter too. Before, Berman said they would accept a refinance application if the mortgage payment, taxes, insurance and all other debt added up to half a borrower's income. Now, the magic number is 41 percent.
The Obama Administration launched a plan in April to help borrowers refinance, even if their home has lost value. Fannie Mae and Freddie Mac are accepting borrowers who owe up to 25 percent more than their home are worth. But so far, only about 85,000 homeowners have had their loans refinanced under the plan, well below original expectations of 5 million.
"I personally haven't seen one yet," Berman said.
And on Nov. 18th, new requirements go into effect for borrowers who want to refinance a loan insured by the Federal Housing Administration. The so-called "FHA streamline" loan will require at least six months of payments before a borrower can take advantage of the program, and verification of assets, job and income. Also, more borrowers will need to come up with more cash to refinance because of new rules to calculate the maximum loan amount relative to the home's value.
"That'll stop up to 85 percent of my streamline borrowers," said Leyrer of Heritage National Mortgage.
Mortgage brokers say a refinancing is worthwhile if you can shave off at least $100 from your monthly payment or get a full percentage point rate reduction.
That's why rates below 5 percent are so appealing. It's only the second time this year they dipped that low. Rates hit a record low of 4.78 percent in the spring.
"The experts say rates are going back up," said John Stearns, vice president at Robbins and Lloyd Mortgage in Mequon, Wis. "We're making hay while we can now."
Monday, October 5, 2009
FHA Loans soar in Sacramento area
FHA loans soar in Sacramento area
The number of government-backed FHA loans jumped sharply last year, propping up a local real estate market otherwise saturated by loan denials.
During 2008, lenders issued 8,998 FHA loans in the Sacramento region, up from 649 during 2007, according to statistics released this week by the Federal Financial Institutions Examination Council.
"There's been such a shift in available financing as the market bottoms out," said Larry Bush, a regional spokesman for the U.S. Department of Housing and Urban Development.
FHA loans are primarily used by people who can't afford a big down payment, or who otherwise aren't able to obtain mortgage insurance. FHA buyers need put down only about 3 percent. With the credit market shot, most conventional loans require at least 10 percent down.
Other than FHA loans, there are "very few lenders out there that will even toy with 95 percent financing," said John Arvanitis, owner of Sunrise Vista Mortgage, a Citrus Heights-based company that specializes in FHA loans.
FHA loans fell out of favor during the housing boom, experts said, because it didn't matter much whether borrowers had enough for a substantial down payment. Banks were giving zero down, "no proof" mortgages left and right.
Also during the boom, FHA mortgages were capped locally around $360,000, which didn't buy much back then. Now, prices have plunged, and the cap has been raised to $580,000, covering the vast majority of the local market.
"Even during the subprime era, I was trying to get people to go with FHA loans," Arvanitis said, adding that it was a tougher sell back then.
FHA insures loans; it doesn't make them. Like any insurer, the government tries to be careful before it acts.
There's a pretty long list of standards that a home must meet before an FHA loan will be administered, said Scott Burton, who specializes in FHA homes and runs Burton & Co. Real Estate Appraisals, a local outfit.
For instance, homes often don't pass muster because of lead-based paint, or roof or termite damage, Burton said.
The number of FHA loans issued locally would be even higher if the banks that owned foreclosed properties were willing to fix them up to FHA standards. Instead, "they want to sell them as is," said Burton, adding that banks are slowly coming around.
The 8,998 loans for 2008 also includes a small number of VA loans, which have slightly different terms.
The FHA loans are one of the few bright spots in the new federal report. It showed lenders denying about one-third of home loan applications in the Sacramento region during 2008, roughly double the percentage of denials in 2005 and similar to 2007, another bad year.
Mark Van Winkle and his family recently bought a home in Carmichael using an FHA loan. He's been in the Sacramento area for decades and has owned a house before, but got into some financial trouble around the turn of the century, forcing him to rent.
"We had no choice but to go with an FHA loan because of financial reasons," said Van Winkle, who got his loan through Sunrise Vista.
Despite his hands being tied, "it went really smooth," Van Winkle added.
The number of government-backed FHA loans jumped sharply last year, propping up a local real estate market otherwise saturated by loan denials.
During 2008, lenders issued 8,998 FHA loans in the Sacramento region, up from 649 during 2007, according to statistics released this week by the Federal Financial Institutions Examination Council.
"There's been such a shift in available financing as the market bottoms out," said Larry Bush, a regional spokesman for the U.S. Department of Housing and Urban Development.
FHA loans are primarily used by people who can't afford a big down payment, or who otherwise aren't able to obtain mortgage insurance. FHA buyers need put down only about 3 percent. With the credit market shot, most conventional loans require at least 10 percent down.
Other than FHA loans, there are "very few lenders out there that will even toy with 95 percent financing," said John Arvanitis, owner of Sunrise Vista Mortgage, a Citrus Heights-based company that specializes in FHA loans.
FHA loans fell out of favor during the housing boom, experts said, because it didn't matter much whether borrowers had enough for a substantial down payment. Banks were giving zero down, "no proof" mortgages left and right.
Also during the boom, FHA mortgages were capped locally around $360,000, which didn't buy much back then. Now, prices have plunged, and the cap has been raised to $580,000, covering the vast majority of the local market.
"Even during the subprime era, I was trying to get people to go with FHA loans," Arvanitis said, adding that it was a tougher sell back then.
FHA insures loans; it doesn't make them. Like any insurer, the government tries to be careful before it acts.
There's a pretty long list of standards that a home must meet before an FHA loan will be administered, said Scott Burton, who specializes in FHA homes and runs Burton & Co. Real Estate Appraisals, a local outfit.
For instance, homes often don't pass muster because of lead-based paint, or roof or termite damage, Burton said.
The number of FHA loans issued locally would be even higher if the banks that owned foreclosed properties were willing to fix them up to FHA standards. Instead, "they want to sell them as is," said Burton, adding that banks are slowly coming around.
The 8,998 loans for 2008 also includes a small number of VA loans, which have slightly different terms.
The FHA loans are one of the few bright spots in the new federal report. It showed lenders denying about one-third of home loan applications in the Sacramento region during 2008, roughly double the percentage of denials in 2005 and similar to 2007, another bad year.
Mark Van Winkle and his family recently bought a home in Carmichael using an FHA loan. He's been in the Sacramento area for decades and has owned a house before, but got into some financial trouble around the turn of the century, forcing him to rent.
"We had no choice but to go with an FHA loan because of financial reasons," said Van Winkle, who got his loan through Sunrise Vista.
Despite his hands being tied, "it went really smooth," Van Winkle added.
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