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Great News for Home Buyers – Interest Rates Remain Low

MARKET UPDATE:

Mortgage bond prices rose last week pushing mortgage interest lower. The data was mixed with stronger than expected consumer sentiment and a disappointing 5 year Treasury note auction. Fortunately the Fed meeting resulted in some positive mortgage interest rate movements and strong foreign demand for the 7 year Treasury auction helped rates improve. For the week interest rates fell by about 1/4 of a discount point.

The employment report will take center stage this week. Consumer confidence, ADP employment, income, outlays, ISM Index, and factory orders data have the potential to move the financial markets. The recent economic data has been mixed. Remember that the bond market typically likes to see weaker figures with very little price pressures.

Good News

The housing sector of the economy has been hard hit during these troubled economic times. In an effort to stablize things the Federal Reserve implemented a system to keep mortgage interest rates low through the purchasing of $1.25 trillion of mortgage-backed securities throughout this year. Few can argue the Fed has not been effective with rates at historically favorable levels. However uncertainty still looms regarding the future of mortgage interest rates after the Fed program stops. The Fed provided some good news last week when they indicated the purchasing of mortgage bonds would be extended into the first quarter of 2010. Prior to the meeting all indications were the program would stop at the end of this year. The bad news is  that they have not increased the amount to be spent as of yet. This still leaves much uncertainty and some view it as just a delay. The Fed also indicated that long term inflation expectations were stable. This is great news for fixed income securities and the stability of mortgage interest rates. Remember, the current goal of the Fed is to keep mortgage interest rates relatively low and stable. They appear to be content with rates in the current historically favorable range. So if you’re thinking of buying a home NOW is a great time – don’t miss out on these great  interest rates.

Market Update from Paul Gonzales @ CountryWide, Mortgage Inc.

Good News For The San Diego Housing Market!

Great News for the Housing Market

Last week, Standard and Poor’s reported that its S&P/Case- Schiller U.S. National Home Price index of real-estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years! Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.

In short, the data suggests that real-estate prices hit bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free-fall. That means if you are a prospective home buyer and have been sitting on the fence, it’s time to act.

We can understand why home buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real-estate prices nationally now down about 30 % from their 2006 peak and showing signs of turning up, home prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy a home than now.

In addition to bargain prices, buyers also should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3 % from June, according to the National Association of Realtors. Mortgage rates this week were at a two-month low of close to 5% according to Zillow. Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. With stricter standards, lenders aren’t going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.

Historically, the mean rate of return on real estate has been around 3%, according to research from Yale economist Robert Schiller, who co-developed the Case-Schiller index. Shares in REITs and other stocks have often done much better.

But there is a good reason homeownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and a decent investment return as a bonus.

content from Valerie Fitzgerald contributed to this article.

Home Sellers and Home Buyers -Arnold Signs Important Short Sale Bill

The California Senate has passed  SB306 …Expediting the Short Sale process

What this means to home owners and the Short Sale process.

1. Lenders or Service Companies must either Deny a Short Sale offer in 4 days from receiving the offer or it is assumed to be “accepted.”
2. Lenders and Service Companies  doing business in the State of California are mandated to respond to a Short Sale offer in 21 days.

Can this actually be true?  I can’t wait to try it on for size!

I will submitting a brand new short sale tomorrow and for the first time, I’m so excited to do so.

It will be interesting to see if the Lender complies with the bill.

The way I understand it is, if the Realtor is working with an escrow officer who has prepared a HUD1, and submits it with the offer, the Lenders or Service Companies must  deny the short sale offer with in 4 days of recieving it or it is assumed to be accepted.

Do you think this will send these lenders and loan servicers into a frantic tailspin?

I hope it doesn’t come back to bite us in the end by putting such pressure on them that they have no choice but to deny simply because they don’t have the man power to handle the masses of Short Sale requests they recieve daily.

Time will tell.  I will keep you updated on my progress with the new one I will be submitting tomorrow….stay tuned.

Can I get an FHA Home Loan if I’m Self Employed?

Can I get an FHA Loan?

Being self employed is not a deal breaker if you are trying to get an FHA Loan. Although it can be more difficult to get approved especially if your business is in the initial start up stage - but it can be done.

One important aspect is to begin keeping good business records if you do not already do this, so that you can prove to your lender that your business is lucrative and provides the income you need to pay your bills on time. If you can’t prove on paper that you have a steady income , FHA can’t conclude that you are a good risk.

Your FHA loan application will require information on the nature of your business, and also what your net income is compared to your business expenses. Self-employed people are often asked to provide a profit-loss statement, which helps the FHA and your lender understand how successful your business is. So make sure you keep detailed records of legitimate business expenses and have your taxes professionally prepared. This will help FHA have confidence in who they are lending to.

If you are considering buying a home, begin to prepare as much as a year in advance, especially if there are issues with credit repair or disputes on credit reports to deal with. If you are self employed you should be able to show a stream of reliable income for two years and have a set of accurate records to back up the information you put on the FHA loan application.

You will also need to be able to answer questions related to periods of inactivity and how this might affect your ability to make your FHA mortgage payments.

So if you keep good business records and can prove your business is working and providing the income you need to obtain your loan you should have success in getting an FHA home loan.

Are You a Home Owner Who Can’t Get Your Home Loan Modification Approved?

Why Can't I Get My Home Loan Modification Approved?

If you are one of the many homeowners thinking about applying for a loan modification on your home loan - before you begin the process  it might be worth your while by asking the question “who owns my note?”  to the bank where you make your mortgage payment.

Many of us are wondering why home loan modifications are being approved for some homeowners and not for others – there seems to be no rhyme or reason why- nobody has an answer-everyone is bewildered.

I have just read a great article written by another realtor ‘Katerina Gasset’ shedding some light on this murky grey questionable area that could affect so many people’s lives.

If Fannie Mae or Freddie Mac owns your home loan – you have a much better chance of getting your loan modification approved if you qualify. If it is a private group of investors, your chances go down considerably.

One in eight homeowners’ loans were sold to  investors on Wall Street. Back in the bad old days a bunch of loans were packaged together – these were called mortgage backed securities. They were then sold off to investors. Many of these borrowers were given loans they did not qualify for, and many did not read the fine print and did not realize how high their mortgage payment might go when adjusted.

The Federal Making Homes Affordable Program states “lenders who participate in the program must modify all homeowners that qualify.” The exception is when the investor has a rule that they do not allow modifications.

So why would investors say NO to your loan modification request? The servicers (the banks who you make the payments to), such as Chase, GMAC, Wells Fargo – the list goes on and on, have agreements, (contracts) that they sign with investors. These agreements contain the rules for modifications. These agreements are called Pooling and Servicing Agreements which are know as PSA’s. The PSA is more often than not the reason for them not being able to do the loan modification or release the deficiency on a short sale. The language in the PSA seems to be the cause of a concern of law suits! It states something to the effect of the servicer can “waive, modify or vary any term” as long as the servicer makes a “reasonable and cautious determination” that the modification is in the investor’s best interest. The language itself in these agreements is enough for the servicers legal counsel to be concerned with the investor suing them for not acting in the best interest of the investor – they cannot put the homeowner ahead of the investor! If they want continued business from the investors they need to make sure they are looking out for the best interest of the investor.

The treasury department has stated that the fear of lawsuits is the greatest stumbling block in getting servicers to approve the loan modification. Their job is to protect the assets to which they have been entrusted with, your mortgage backed security.

The Treasury Department have stated they can relieve some of the pressure of the fear of lawsuits by standardizing requirments for loan modifications and also provide some kind of calculation to figure out if the investor will make more money by the loan modification or by the foreclosure. Lets hope they do this soon, so more people can be allowed to stay in their homes.

These mortgage backed securities were bought by pension funds and retirement plans for people like you and me – so some of us might even be one those ‘investors’ who own the very loan you are trying to get modified!

Katerina Gasset contributed to this article.

San Marcos, CA Homes Sold August 2009

Current Market Trends San Marcos, CA

San Marcos Market Trends August 2009

It has been 3 months since we last looked at the San Marcos area’s market activity.   Our last look was in our article San Marcos Homes Sold May 2009.

At that time we thought  perhaps we had seen the bottom of the market and were beginning to head upward.

In todays report, it looks like we may have been right.   The average sold price of homes in San Marcos in August was $424,490.  In May the average sold price was $405,574. 

That’s a pretty significant increase in just 3 months.   Another significant difference is the number of active listings.  Currently there are 110, in May there were 145.

San Marcos is a very desirable area.  We have several buyers that are looking for a nice family home to settle into here.  The problem is there are just not enough homes to sell.

The majority of buyers are qualifying in the range of $350,000 to $400,000. 

It seems that the popular areas are Santa Fe Hills and Discovery Hills.  Though there  are several really nice communities in San Marcos, these two areas seem to be priced between the high $300,000’s to the low $400,000’s.  Just right for the average buyer.

Many of the first time home buyers are finding their dream homes here.

If you have a home in the San Marcos area, and you have been considering selling, you may be very pleasantly surprised at how quickly your home will sell in this current market, and the price that you may recieve.

Give us a call for if you are curious about the value of your own home or any home in the San Diego County area.

We’re here to help and we answer our phones!

Pam and Joanna
760-580-1615 and 760-580-1630

31253 North Star Way Valley Center, CA 92082

Exquisite Valley Center Home Presented at $625,000

Backyard Paradise

Pride of Ownership exudes from this fabulous Sky Ridge Estates home in Valley Center.

With its Panoramic sunset views extending to the Pacific ocean to the numerous upgrades and designer touches throughout this spacious freeflowing 2748 Square Foot floor plan.   With 4 bedrooms and 3 baths there is plenty of room for everyone.

Forever Views

Enjoy the backyard paradise with lush tropical landscape and solar heated pool and spa.

Positioned on 2.17 acres with 30 Avocado trees and a selection of various fruit trees.  The home is set back off the street down a long driveway, with plenty of parking in the 4 car drive through garage.

Solar Heated Pool

Call today for your private tour of this fabulous home!

Pam and Joanna
760-580-1615 or 760-580-1630

Valley Center, CA Homes Sold August 2009

Current Market Trends For Valley Center, CA August 2009

Homes Sold Valley Center August 2009

Well, it has been about a month since we last looked at market activity in the Valley Center area.

In Our last report, Valley Center Homes Sold July 2009 we recognized a significant increase in the average SOLD price, from $388,278 in May to $416,813 in July. 

The trend for August continues to increase the average sold price for Valley Center to $444,823.  This is good news for Valley Center home sellers and it is still very affordable for home buyers.

The average Days On Market has increased a bit  in the Sold row this month, this could be due to some of those dreaded short sales finally closing escrow.

There isn’t much difference in the amount of inventory  in any catagory in either report, this area remains about the same.

Most properties in Valley Center are very different.  That’s one reason this area is so interesting.

This chart only shows the overall activity.  Every property will have it’s own value based on several different factors.

If you are curious about the value of your own home, give us a call for a free, no obligation personalized Market Analysis.

We’re here to help and we answer our phones!

Pam and Joanna
760-580-1615

Home Appraisals Cause Escrows to Fall Apart in North County San Diego

How to Avoid Home Appraisal Issues

There have been new federal regulations governing the relationship between appraisers, lenders and mortgage brokers which have caused an enormous disruption in the real estate market, causing home sales to fall apart at the 11th hour when they come in far below the accepted purchase price.

So Home Buyers beware when submitting an offer, make sure you are comfortable and  familiar with the comps in the area. Be careful about  making your offer too high, as it will not appraise. Preferably your sold comps should be within the last 90 days.

A listing priced too far above a realistic price will make it more challenging to attract offers or even close escrow if you do get an offer, as it may not appraise. If you are fortunate to get an all cash offer it should be smoother sailing. Read the rest of this entry »