Real Estate Blog

"So, how's the market?" This seems to be the question of the day! In an effort to keep our valued clients up-to-date on the "Market" we're providing the attached (link) to the California Association of Realtor's Economic Report just issues as of August, 2008. It contains revealing statistics on the overall residential market in both the Los Angeles and San Bernardino Counties. As always, feel free to call for more details about this report, or to discuss in detail your own buying, selling or investing strategy.

San Bernardino County

Los Angeles County

Good News for those considering investing, buying or selling! Sales volume is up in most areas of the Inland Empire as previously unaffordable homes are now within reach.  Families are entering the market seeking affordably-priced homes and finding lots of great opportunities in a market now flooded with REOs. And, of course, an increase in demand foretells of future price appreciation.
 
Click on the link below for a great article on the State of the Inland Empire Housing Market by regional economist Dr. John Husing.

Quarterly Report

The Senate passed "housing rescue bill" may into effect on October 1, 2008.

Here are some KEY provisions of the law:

1. Qualified borrowers may be eligible for the "rescue" package if they have at least 31% of their gross monthly income on mortgage debt.

2. They can be up to date on their mortgage or in DEFAULT, but in either way they must prove that they will not be able to keep paying their existing mortgage payments.

3. The existing mortgage lender will have to voluntary agree to write down the current Note amount to 90% of the NEW value of the home (appraisal will be ordered).

4. If there is a 2nd mortgage the lien has to be satisfied by the borrower's.

So, if all the criteria above are met; the borrower(s) new mortgage payment can be significantly lower!!!

On Tuesday Indymac began dismantling most of its business amid heavy losses from mortgage defaults. IndyMac was one of the largest federally insured financial companies to fail and is now one of three (Countrywide and Bear Sterns) large banks to fall short of expectations in the ongoing subprime mortgage crises.

On Friday, Federal regulators stepped in and seized IndyMac It will reopen fully on Monday (July 14) as IndyMac Federal Bank under Federal Deposit Insurance Corp supervision. They will also reduce its work force by 53% to about 3,400 and stop making most types of mortgage loans.

There have been 266 financial institutions that have gone out of business since the mortgage market crises. This is due to unethical practices and risky loans. We have been in the business for 20 years and are a HUD-approved lender (US Department of Housing and Urban Development). If you’re having a problem getting questions answered, help or need assistance in qualified, do not hesitate to cal my lender Ray Adams – Your Mortgage Geek.

Measure seen to bring stability to home values and accelerate sale of vacant properties

WASHINGTON - In an effort to stabilize declining home values in certain neighborhoods, the Bush Administration today announced a temporary policy that will extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.

"A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community's recovery," said Brian D. Montgomery, Assistant Secretary of Housing-Federal Housing Commissioner. "The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country."

FHA's new temporary policy will help stabilize neighborhoods experiencing high rates of foreclosure by reducing the inventory of unsold properties. Many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It's reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This prohibition is intended to prevent property "flipping," a predatory practice that strips a home of its equity before being quickly resold at an inflated price to an unsuspecting buyer. FHA's new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing.

To read the full text of this new temporary policy, visit FHA's website.

Unless you drive a hybrid car or ride your bike to work, there’s no way to escape the high gas prices. But there are ways you can get better gas mileage out of our vehicles – which will save you money in the long run, according to Edmunds.com, an online resource for automotive information.

Here are 10 to help you get better gas mileage:

1. Follow the Recommended Maintenance - A well-maintained vehicle will operate more efficiently. Fouled spark plugs, dirty air filters and clogged fuel filters will diminish fuel economy.
2. Keep Tires Properly Inflated - Under-inflated tires require more energy to roll; properly inflated tires can improve fuel economy by as much as 3 percent.
3. Take a Load Off - Heavier vehicles require more energy to move. Pack light and remove unnecessary items from the car.
4. Don't Drive Aggressively - Hitting the gas pedal hard after stopping, slamming on the brakes and speeding all decrease fuel efficiency.
5. Use the Highest Gear Possible - Lower gears use more power, so manual transmission drivers should switch to a higher gear when driving at a steady speed, and automatic transmission drivers should avoid using "sport" mode.
6. Use Cruise Control Selectively - Cruise control is a great asset on flat roads, but isn't the most efficient on hilly terrain.
7. Think Clean - Keeping your car washed and waxed improves its aerodynamics, thereby improving fuel efficiency. On a long trip, a quick run through a gas station car wash might more than pay for itself.
8. Avoid Excessive Idling - An idling car burns fuel. Whenever possible, turn your car off while waiting, and try to avoid drive-through windows and long toll booth lines.
9. Think Before You Ventilate - Air conditioning consumes more fuel, while rolled down windows decreases aerodynamics. Roll down windows when in slow-moving traffic; use the air conditioner when traveling at high speeds.
10. Combine Your Errands - Cold engines use more fuel than warm engines. Combining errands means the engine will be warmer for more of the trip.

We all know the importance of being informed before taking out any loan, and as more and more people take out FHA Loans it’s critical to understand your obligations before starting the process. A simple way to do this is by using a mortgage calculator. One of these such tools can be found at the Mortgage Loan website. You plug in your information and the calculator provides an estimate of the loan amount you could be approved for and your monthly payments. The information to be plugged in includes:

• Yearly Salary
• Other Income
• Property Tax
• Hazard Insurance
• Monthly Auto Payment
• Credit Cards and Other Payments

The Calculator already has the Loan Term (30) and Interest Rate (6) plugged in, but these can be changed to fit your plans. Tools like this one are a great way of understanding what you can expect before starting the FHA lending process.

WITH DECLINING real estate values in many parts of the country, now is the time for home owners to explore opportunities that may exist to reduce their occupancy cost through a reduction in their real-property taxes.

Our nation's current economic woes have translated into a tax-revenue shortfall for many local and regional governments throughout the country. Stagnant or shrinking tax bases are also putting pressure on these public entities' budgets. When property values are declining, chances for tax rates to drop also decline. However, constant vigilance and an understanding of market conditions can ensure that home owners don't overpay.

Here are a few points to keep in mind:

1. Property tax valuation will only be reduced IF the fair market value of the property has dropped to below the tax basis for that property. If you purchased a home for $1,500,000 last year (so tax basis is $1,500,000) and it is now only worth $1,300,000, you almost certainly would be granted a reduced tax basis. But if you purchased your property for $800,000 ten years ago and the basis has increased the full 2% per year allowed in each of those ten years, your tax basis will still only be $975,196 and your property value would have to drop below that amount to qualify for a reassessment;
2. The reduced valuation is temporary. If prices go back up again, your tax basis will go back up again;
3. As property values start to increase again (and they will!!) reassessments are not limited by the 2% rule until you basis gets back to where it was before, at which time the 2% annual cap is reinstated. So, if there is a dramatic upturn in home values it is possible your tax relief may be short lived. Still, nobody likes paying taxes and even temporary relief is welcome.

Please contact me if you need comps in your area.

With the right combination of programs, banks and mortgage consultant; you can still obtain 105% financing.

Capitalize on opportunities to meet the home financing needs of your borrowers looking for low down payments and flexible sources of funds, including first-time homebuyers, and move-up borrowers.

With Our Home Possible Mortgages, you can do just that by offering your borrowers:

• Low down payments and flexible sources of funds
• Flexible credit terms, including expanded ratios
• Options for less-than-perfect credit and/or non-traditional credit

What’s more, you have even greater flexibilities to serve borrowers who work in your community—like teachers, firefighters, healthcare workers, law enforcement officers and military personnel—so that they can live in the communities they support so well.

More Choices to Reach More Borrowers

• Borrower Contribution not required for 1-unit Primary Residences (excluding Manufactured Homes)
• Flexible credit terms, including expanded ratios and options for borrowers with less-than-perfect credit
• Secondary financing including Affordable Seconds
• Low mortgage insurance coverage levels

For mor information please feel free to contact me or go to my lender of choice at www.YourMortgageGeek.com

The Federal Reserve has cut its key interest rate from 2.25% to 2.0%, It is the seventh rate cut since last September. Commercial banks immediately announced that they were cutting their prime lending rate to 5 percent. That will mean cheaper credit for the millions of business and consumer loans tied to the prime. This impacts how much consumers pay on credit card debt, home equity lines of credit and auto loans.

The Fed will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability