Real Estate Information

The U.S. government is now working to make the mortgage process a bit easier for consumers.  Since May, officials have been trying to simplify and combine two required forms that show would-be-borrowers their final loan terms and costs before closing.  The "Know Before You Owe" campaign has started to sweep financial reforms, and has produced two drafts of the merged documents that are still in the testing phase.  The campaign is looking to help get rid of the legal and technical wording on certain forms that many borrowers do not understand.  When you take out a loan to purchase a home or refinance your mortgage, you generally receive two key federal mortgage disclosures with your final loan terms:  the Truth in Lending Disclosure, and the HUD-1 Settlement Statement.  The terms and costs on these disclosures should be similiar to the ones you received when you first applied for the loan.  Being able to compare these terms and costs is what it means to "know before you owe".  By merging these documents and certain other federal disclosures into a single form, it is believed the lending process will be simplified for borrowers.  This same committee plans on simplifying additional forms in the months to come. 

To read the full article, please visit:

http://www.consumerfinance.gov/knowbeforeyouowe/

Recently Congress voted to restore the previously increased loan limits for Federal Housing Administration loans.  This is considered to be a major victory, as higher loan limits will make mortgages more accessible for hard-working, middle class families throughout the country.  This action reinstates the loan limit at 125 percent of the area median price up to $729,750 for 2 years, and extends the National Flood Insurance Program until later in December with no lapse.  There have been some mixed reviews regarding loan limit issues.  One argument made from the opposition is that only wealthy borrowers benefit from the maximum cost limits.  In 2010, the FHA was used by 56% of all first-time homebuyers, and 85% of borrowers obtaining homes at the higher loan limits had incomes below $150,000.  An important factor to consider when making that argument is to take the geograhpic area into consideration, as this often impacts what qualifies as "affordable housing".  This new loan limit will give equal opportunity to benefit consumers no matter where they choose to live.  Last year's statistics showed a decline in mortgages for higher priced homes, in spite of historically low interest rates.  The restoration of loan limits is definitely good news for homebuyers, especially in areas like Southern California. 

To view the full article, please visit:

http://voiceofrealestate.blogs.realtor.org/2011/11/18/the-sky%E2%80%99s-the-loan-limit/?cid=WR11222011:35430&ed_rid=2381254

After a dramatic increase in foreclosures in the state of California for August, and a subsequent fall in September; there was little change in foreclosure activity for the month of October.  Foreclosure investors were able to gain traction with 9.9 percent more properties sold to third parties in October.  This number represented a record 28.8 percent of all foreclosure sales throughout the state.  Just one year ago, only 16.9 percent of all foreclosures were purchased by third parties. 

Other states showed mixed data on foreclosure rates.  For example, Nevada saw foreclosure starts drop as a result of the passing of AB 284.  This brought stricter requirements on filing Notices of Default, and seems to have specifically targeted Recon Trust, (a trustee that handles all Bank of America and Countrywide foreclosures) by prohibiting a trustee from being owned by the foreclosing lender.  In Washington, foreclosure started continued their decline since being impacted by a lawsuit.  This lawsuit, filed by the State Attorney General, alleged Recon Trust was illegally foreclosing on properties in the state.  Since the lawsuit filing in April, foreclosing numbers have dramatically dropped.  Arizona is also now seeing its lowest levels of foreclosure starts since the spring of 2009, with just 6,133 Notice of Sale filings in October.  In Oregon, foreclosure starts have also continued their drop after an increase in April; they are now down 20.6% in October.  

To view the full article, please visit:

www.marketwatch.com/story/foreclosure-starts

If you have been debating or are on the fence about home ownership, it may just be the time to take the next step toward buying a home!  Although there are some advantages to renting, owning a home can be one of life's greatest joys, and it does not have to be as overwheling as it may seem.  I recently read an article about the simple joys of owning a home, and I think it's worth checking out!

1.  Equity:  When you rent, you never see that money again.  Yes, purchasing a home does come with hefty inital cost; however, renting is simply at the advantage of the landlord.  When buying a home, you earn that money back over time as equity built into the home.  Historically, homes appreciate by about 4 - 6 percent per year (although in today's market, it is likely to be less than that).  Although some areas have experienced harder times, experts strongly believe the housing market will recover.  Home ownership is about building long-term wealth. 

2.  Relationships:  Renters often only see their neighbors coming and going.  Apartment complexes tend to have less space for people to meet, greet and socialize.  Neighbors tend to not stay for very long, usually only leasing a property for about a year.  Neighborhoods occupied by owners tend to build relationships.  People enjoy getting to know each other, as these are probably going to be your neighbors for a long while.  

3.  Predictability:  As long as you have a fixed-rate term on your mortgage, it is predictable.  Most people buying homes today realize that a fixed rate mortgage is the way to go.  This means your payment amount is fixed for the life of the loan term.  This allows for people to budget and make solid financial plans for the future.  Home ownership generally comes with a predictable table of expenditures. 

4.  Ownership:  Owning a home (as opposed to renting) comes with one of the greatest perks: feedom!  This includes creative freedom to renovate, update, paint, and expand; the possibilities are endless.  The bottom line is, it's your home and you are able to personalize it your exact tastes and liking.  Renters are often stuck with the standard beige walls, beige carpet, and are often only allowed strict guidelines to anything outside of that. 

5.  Great deals!  It is a great time to buy.  Interest rates are at historic lows.  This means big saving for today's buyers.  Home prices have also taken a dip, which means homes are more affordable than ever.  If you have a steady income and money for a down payment, now is the time to buy!

To see more from this article, click:

http://realtytimes.come/rtpages/20111102_great.htm

A state-run program to help struggling homeowners is now offering broader eligibility guidelines in order to help homeowners pay their mortgage.  This program is set to help borrowers who did 'cash-out' refinancing, and those who own multiple properties.  The mortgage aid effort, called 'Keep Your Home California,' has helped almost 8,000 low- and moderage-income households that are behind on their loan payments or close to a default mortgage.  With the new expanded eligibility, more families will qualify and be able to receive assistance.  The program is continuously evaluating and making adjustments to better serve the maximum amount of families.  'Keep Your Home California' has four parts which include: mortgage help for the unemployed, mortgage aid for homeowners with documented financial hardship, relocation help for those in the midst of a short sale or deed-in-lieu of foreclosure, and reduction of principal.  The new changes to this program allow homeowners who completed 'cash-out' mortgage refinancing to take part, as they were excluded before.  This change will be particularly helpful to those who have co-signed on properties for family members.  This program also offers aid to unemployed borrowers for nine months, as opposed to previously offering assistance for just six months.  To qualify for this aspect of the program, you must be receiving unemployment benefits.  New changes to the program now reinstate up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.  With these new adjustments, households should find more relief in getting back on track with their mortgage.  To see if you qualify for this program, please contact your mortgage service provider and ask if they take part in 'Keep your Home California'.

Please view the full article at:

http://www.signonsandiego.com/news/2011/nov/08/mortgage-aid-open-more-calif-borrowers/

This week, President Obama is expected to announce new plans to help struggling homeowners.  These new policies would allow borrowers to refinance their mortgage with the current low rates, no matter how much their home values have dropped.  President Obama's announcements are expected to unveil looser terms for the House Affordable Refinance Programs (HARP), a program that helps borrowers remain up to date on their mortgage payments, despite the drop in the value of their home.  The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, is also expected to end a cap that excluded home owners from HARP who have mortgages that were higher than 125 percent of the home's value.  Although the mortgage rates have been unusually low, many borrowers have still experienced trouble being able to qualify for refinancing, and are still underwater on their properties.  The administration's plan is expected to eliminate appraisals and extensive underwriting requirements for most borrowers who are up to date on their mortgage and want to refinance at a lower rate.  Obama is also expected to announce a reduction in Fannie Mae and Freddie Mac loan fees as well as a 'waiving of fees' for borrowers looking to refinance their mortgages into shorter terms.  This policy could be taken into effect as early as December 1, 2011.  Mortgages that are more than the current loan-to-value limit may have to wait until early next year.  Housing experts believe that allowing underwater home owners to refinance at the current low rates will allow many homeowners to shave hundreds of dollars from their monthly mortgage bills, and possibly help avoid future foreclosures.  This in turn will free up household cash and possibly help spur economic recovery in other areas. 

To read the full article, please visit:

http://realtormag.realtor.org/daily-news/2011/10/24/obama-expected-unveil-housing-aid

   On September 30, 2011 federal home-loan limits will change across the country, which concerns some lenders who believe this shift will adversely affect the housing market.  This change in the mortgage sector may affect potential homebuyers in San Diego County.  Jonathon Jerotz, Vice President of mortgage lending at 'Guaranteed Rate' in San Diego, shares his thoughts on how the adjustments may impact individuals seeking home loans.  He notes that San Diego should expect to see changes in high-balance, conforming loan limits for FHA, Fannie Mae, and Freddie Mac; these are loans backed by government-sponsered enterprises.  The loan limit has now dropped from $697,500 to $546,250 in San Diego County.  These changes will adversely affect homebuyers in the mid to higher-price range, as a basic 20 percent down rule, as well as higher interest rates for a true jumbo loan product, will be needed to close these transactions.  An FHA buyer with a 3.5 percent down payment will now be limited to a purchase price of $566,062, and a conventional loan buyer with 10 percent down will now be limited to a purchase price of $606,944 - and with a 15 percent down payment - a purchase price of $642,647.  The long term effects of this new loan limit could mean a stall in appreciation in the higher-priced home market.  Without the financing available for consumers to purchase these homes, this could mean a slight slowdown for that particular market.  It is also possible that this new loan limit may only stay around for one year, as these loan limits get reviewed, and possibly changed again, next year.  Buyers should take advantage of the current loan limits, knowing they could be lowered again in the near future. 

To read the full article, please visit:

http://www.signonsandiego.com/news/2011/sep/30/what-would-be-borrowers-should-know-about-new-loan/

Home prices in San Diego County fell for the month of August, which meant there was also a spike in the number of sales.  The median sales price dropped about 1.5 percent from July, and is down 5 percent from just one year ago at this same time.  The month of August marked the 27th straight month the country's median point dropped significantly.  With home prices falling, a trend of buyers pursuing purchases was consistent throughout all of Southern California.  The county recorded 3,249 transactions in the month of August, up from 6.8 percent in July, and up from 4.4 percent from the same time last year.  This marked the first time since November of 2009 that all six Southern California counties showed an increase in sales data.

To read the full article, please visit:

http://www.signonsandiego.com/news/2011/sep/14/august-housingnumbers-are-san-diego/-

    Freddie Mac recently reported that U.S. mortgage rates have dropped to new all-time lows throughout the country.  The 30-year fixed rate averaged about 4.12 percent, the lowest it has been since 1971, when Freddie Mac first began to collect home loan survey data.  The 15-year fixed rate is now averaging about 3.33 percent; the lowest recorded level since April of 1991.  Just one year ago these rates were around 3.83 percent.  Why do these rates continue to fall?  The current economy and job market obviously play huge roles; however, the Federal Reserve Report also stated that the U.S. market appears to be expanding 'at a modest pace'.  Consumer spending and tourism have also seen an increase, which means that things could be looking up for our country. 

To read the full articule please visit:

http://www.federalreserve.gov/fomc/beigebook/2011/20110907/default.htm

U.S. Home Loan Rates Fall - 50 Year Low

   Mortgage rates in the United States have reached record lows.  On Thursday August 18, 2011 Freddie Mac officials reported the average 30-year fixed mortgage rate was about 4.15 percent, the lowest it has been in more than 50 years.  Many homeowners have taken advantage of this low rate and have refinanced their loans.  The 15-year fixed mortgage rate has also dropped down to 3.36 percent, which is down from 3.5 percent last week, and down from 3.9 percent just one year ago.  With the rates slipping, now appears to be a great time to refinance your current loans, or make an offer on the property of your dreams! 

To view the full article please visit:

http://www.signonsandiego.com/news/2011/aug/19/us-home-loan-rates-fall-50-year-low/