Real Estate Blog

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

This week has brought the latest monthly home sales data from the National Association of Realtors. Once again, prices are dropping sharply.

• Fontana has an average decline of -31% in home prices across three zip codes.
• Ontario has an average decline of -33.46% across three zip codes.
• Rancho Cucamonga has an average decline of -20.25% across four zip codes.
• San Bernardino has an average decline of -41.16% across six zip codes.

There are a few locations with positive numbers: Big Bear Lake, Cedar Glen, Morongo Valley, Needles, and Wrightwood.

Click Here to find your city.

The California Association of Realtors (CAR) has released the San Bernardino County Economic Profile for March 2008. Some of the highlights for January 2008 include:

• Sales were down 40.1% for the month with 227 units sold.
• The average price for San Bernardino County was $283,000, down 23.6%.
• Unsold inventory was at 17.7 months.
• Unemployment was at 6.3%.
• New Housing Permits down 78.1% with 231 units.
• New Home Sales at 595 units (2007 Q4).
• Asking Rents up 1.8% ($1,162) 2007 Q4

HUD has amended the FHA Secure Initiative with additional underwriting guidelines. FHA Mortgagee letter 2008-09 was issued and it basically states:

A second appraisal will be required on FHA loans when:

1. The loan amount exceeds $417,000, AND

2. The LTV equals or exceeds 95%, AND

3. The property is determined as being in a declining market.

The second appraisal must be performed by a FHA approved appraiser and can be done as an exterior-only appraisal using Fannie Mae/Freddie Mac 2055 form. This applies to SFR's only. Condo's and manufactured will require a complete second appraisal. You can use the same case # for both appraisals.

Also, cash-out LTV changes-

If the loan amount is greater than $417,000, the LTV may not exceed 85% of the appraised value.