After spiking to six-month highs a couple of weeks ago, mortgage rates fell again last week only to rise again this week.
Interest on 30-year fixed mortgages settled at an average of 5.42 percent this week, reports Freddie Mac, up from 5.38 percent in the previous week but lower than the prevailing rate of 6.45 percent a year ago.
Five-year, hybrid adjustable-rate mortgages also bumped up a couple of notches to 4.99 percent, but 15-year fixed loans and one-year ARMs moved in the opposite direction. The former slipped to 4.87 percent from 4.89 percent, while the latter fell to 4.93 percent from 4.95 percent.
Source: Wall Street Journal (06/26/09)
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
Friday, June 26, 2009
Home Buyer Tax Credit Could Expand
A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive's success by expanding it. A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:
USA Today, Stephanie Armour (06/22/09)
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
- Setting a new cap of $15,000.
- Extending the tax break into mid-2010.
- Making the benefit available to all home buyers, not just first-timers.
- Offering a separate tax credit to $3,000 for borrowers who refinance.
USA Today, Stephanie Armour (06/22/09)
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
Wednesday, June 24, 2009
Fed Leaves Key Interest Rate Unchanged
The Federal Reserve today announced it will “maintain the target range for the federal funds rate at zero to .25 percent, and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
“Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing,” the Fed said in a prepared statement. “Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales.
“Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
“Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing,” the Fed said in a prepared statement. “Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales.
“Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
Tuesday, June 23, 2009
Have We Reached Bottom? 10 Factors to Consider
Want to know if Sacramento's real estate market is diving or thriving? Call Mike (425-6066) or Pat (956-8928) or just email us at info@primohomesearch.com - we would be happy to discuss with you how our region is doing during the ongoing housing crisis.
RISMEDIA, June 24, 2009-Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:
1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.
2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.
3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.
4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.
5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.
6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.
7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.
8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.
9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.
10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.
RISMEDIA, June 24, 2009-Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:
1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.
2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.
3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.
4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.
5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.
6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.
7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.
8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.
9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.
10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.
Hard Times Make Credit Score Key
RISMEDIA, June 23, 2009-(MCT)-Americans’ credit scores, the three-digit number that determines whether you’ll get a loan and how much you’ll pay for it, have taken a beating. Millions of consumers’ scores have dropped, making it more expensive for them to borrow money - or even impossible if the score has sunk low enough.
“You have to watch out for a vicious circle. Now you have a bad credit history, which makes it harder for you to recover,” said Evan Hendricks, a Washington-based expert and author on credit reports and scores.
The falling credit scores are a reflection of the times: plummeting home values, record foreclosures and the overall recession. At the same time, lenders are applying stricter standards to borrowers, including requiring higher credit scores.
“For better or worse, our economy is very dependent on consumer spending,” Hendricks said. “If tougher standards mean that people with good credit can’t get credit … that could choke off the recovery or slow it down.”
Most Americans may not know their actual credit score, but they’ve seen enough marketing by the credit-score companies, including Minneapolis-based Fair Isaac Corp., to know that the number, which can range from 300 to a perfect 850, has become a de facto national ID. Lenders rely on Fair Isaac’s FICO score, but so do employers when screening job candidates, insurers when issuing policies for homes and autos, and landlords when renting an apartment.
And exactly what many people are experiencing now - foreclosures, late credit-card payments - will bring down their credit scores.
Americans carry $2.56 trillion in consumer debt, up 22% just since 2000, according to the Federal Reserve. The average household’s credit-card debt is $8,565, up almost 15% from 2000. And a report out last month said borrowers with good credit now make up the largest share of foreclosures.
“There’s no question a foreclosure can really slam your score,” Hendricks said. “It will easily send you into subprime territory.”
Overall, he said, two major factors are bringing down credit scores: late payments because of the economy and credit-card companies reducing credit limits, meaning people are using a greater percentage of their available credit.
Walking away from a house takes a toll on a foreclosed homeowner’s credit. But so do late payments - in particular those that are more than 90 days overdue. According to Fair Isaac, which created automatic credit scoring, bankruptcy, credit card defaults and foreclosures stay on a person’s credit report for seven years. That said, a single bad account such as a foreclosure would be better than a bankruptcy, which usually involves many defaulted accounts. But if all other bills remain current, Fair Isaac says a foreclosed homeowner’s score could begin to rebound in as little as two years.
Fair Isaac shies away from devising a rating system of what ranges are “good” and which are “bad,” saying each lender has its own standard. In general, a score of 700 or better is a sign the consumer handles credit well. Most lenders say a score of 650 or below indicates a high credit risk that could mean higher interest rates or a tougher time getting credit. Information for the score is based on that person’s credit report.
The top 25 auto lenders and credit-card issuers use some version of the FICO score to make lending decisions, as do 90 of the top 100 U.S. financial institutions. It’s common for mortgage originators to pull credit scores from all three major credit bureaus and average them to help determine a consumer’s interest rate.
For consumers, getting your credit report is easy - and free if you go to the right spot - but getting your score can be more complicated.
The three credit bureaus, Experian, Equifax and TransUnion, sell reports and scores to lenders and consumers. Also, Fair Isaac sells the bureaus’ FICO scores directly to consumers via myfico.com.
Fair Isaac spokesman Craig Watts estimated that the three credit bureaus sell “well over 10 billion” FICO scores each year to businesses.
Asked whether Equifax has seen an increase in consumers seeking credit information, company spokeswoman Demitra Wilson said, “Definitely, especially right now. People are very concerned about their scores. It’s the economic environment, the tightening credit market. People are very concerned about how their credit behavior impacts their financial well-being.”
Under the Fair and Accurate Credit Transactions Act (FACT), consumers can get one free credit report a year from each of the three big credit bureaus. Consumer advocates warn of the many companies that have sprung up that charge consumers for information they can get for free.
Consumers who want their credit score will need to pay a small fee - generally about $15.
Consumer advocates recommend checking your report periodically. If you see inaccurate information on your report, inform the credit reporting company. Those companies must investigate and will generally do so within 30 days.
While Watts said millions have seen their scores drop, a “like” number of savvy consumers have seen their scores go up because they paid off balances and put off big purchases when the economy started to spiral down.
In good times, he said, the distribution is shaped like a bell curve. During a recession, it retains that shape but flattens out. “You have fewer people in the middle … and more people at both ends,” he said.
Watts said the best advice he can offer to consumers is this: “Don’t get too excited about the nuances in credit scores.”
There are no “quick fixes” to repair a bad score.
“The same general rules apply today that have applied for the last 20 years,” Watts said. “Pay your bills on time, keep balances low relative to the limit and take on new credit only … when needed. Those consumer habits are going to steer you in the right direction.”
By Suzanne Ziegler ©2009, Star Tribune (Minneapolis)Distributed by McClatchy-Tribune Information Services.
“You have to watch out for a vicious circle. Now you have a bad credit history, which makes it harder for you to recover,” said Evan Hendricks, a Washington-based expert and author on credit reports and scores.
The falling credit scores are a reflection of the times: plummeting home values, record foreclosures and the overall recession. At the same time, lenders are applying stricter standards to borrowers, including requiring higher credit scores.
“For better or worse, our economy is very dependent on consumer spending,” Hendricks said. “If tougher standards mean that people with good credit can’t get credit … that could choke off the recovery or slow it down.”
Most Americans may not know their actual credit score, but they’ve seen enough marketing by the credit-score companies, including Minneapolis-based Fair Isaac Corp., to know that the number, which can range from 300 to a perfect 850, has become a de facto national ID. Lenders rely on Fair Isaac’s FICO score, but so do employers when screening job candidates, insurers when issuing policies for homes and autos, and landlords when renting an apartment.
And exactly what many people are experiencing now - foreclosures, late credit-card payments - will bring down their credit scores.
Americans carry $2.56 trillion in consumer debt, up 22% just since 2000, according to the Federal Reserve. The average household’s credit-card debt is $8,565, up almost 15% from 2000. And a report out last month said borrowers with good credit now make up the largest share of foreclosures.
“There’s no question a foreclosure can really slam your score,” Hendricks said. “It will easily send you into subprime territory.”
Overall, he said, two major factors are bringing down credit scores: late payments because of the economy and credit-card companies reducing credit limits, meaning people are using a greater percentage of their available credit.
Walking away from a house takes a toll on a foreclosed homeowner’s credit. But so do late payments - in particular those that are more than 90 days overdue. According to Fair Isaac, which created automatic credit scoring, bankruptcy, credit card defaults and foreclosures stay on a person’s credit report for seven years. That said, a single bad account such as a foreclosure would be better than a bankruptcy, which usually involves many defaulted accounts. But if all other bills remain current, Fair Isaac says a foreclosed homeowner’s score could begin to rebound in as little as two years.
Fair Isaac shies away from devising a rating system of what ranges are “good” and which are “bad,” saying each lender has its own standard. In general, a score of 700 or better is a sign the consumer handles credit well. Most lenders say a score of 650 or below indicates a high credit risk that could mean higher interest rates or a tougher time getting credit. Information for the score is based on that person’s credit report.
The top 25 auto lenders and credit-card issuers use some version of the FICO score to make lending decisions, as do 90 of the top 100 U.S. financial institutions. It’s common for mortgage originators to pull credit scores from all three major credit bureaus and average them to help determine a consumer’s interest rate.
For consumers, getting your credit report is easy - and free if you go to the right spot - but getting your score can be more complicated.
The three credit bureaus, Experian, Equifax and TransUnion, sell reports and scores to lenders and consumers. Also, Fair Isaac sells the bureaus’ FICO scores directly to consumers via myfico.com.
Fair Isaac spokesman Craig Watts estimated that the three credit bureaus sell “well over 10 billion” FICO scores each year to businesses.
Asked whether Equifax has seen an increase in consumers seeking credit information, company spokeswoman Demitra Wilson said, “Definitely, especially right now. People are very concerned about their scores. It’s the economic environment, the tightening credit market. People are very concerned about how their credit behavior impacts their financial well-being.”
Under the Fair and Accurate Credit Transactions Act (FACT), consumers can get one free credit report a year from each of the three big credit bureaus. Consumer advocates warn of the many companies that have sprung up that charge consumers for information they can get for free.
Consumers who want their credit score will need to pay a small fee - generally about $15.
Consumer advocates recommend checking your report periodically. If you see inaccurate information on your report, inform the credit reporting company. Those companies must investigate and will generally do so within 30 days.
While Watts said millions have seen their scores drop, a “like” number of savvy consumers have seen their scores go up because they paid off balances and put off big purchases when the economy started to spiral down.
In good times, he said, the distribution is shaped like a bell curve. During a recession, it retains that shape but flattens out. “You have fewer people in the middle … and more people at both ends,” he said.
Watts said the best advice he can offer to consumers is this: “Don’t get too excited about the nuances in credit scores.”
There are no “quick fixes” to repair a bad score.
“The same general rules apply today that have applied for the last 20 years,” Watts said. “Pay your bills on time, keep balances low relative to the limit and take on new credit only … when needed. Those consumer habits are going to steer you in the right direction.”
By Suzanne Ziegler ©2009, Star Tribune (Minneapolis)Distributed by McClatchy-Tribune Information Services.
Thursday, June 18, 2009
My Credit Score Dropped 87 Points Because of Me!!
RISMEDIA, June 10, 2009-Everyone has become more concerned about their credit scores these days, especially when a better score can result in lower credit interest rates and payments saving thousands of dollars from interest. With this in mind, many consumers are paying more attention to their credit and, unfortunately, in the process of trying to make it better, they are harming their credit score.
Take a recent client we will call “Rachel.” Rachel was reviewing her credit and decided to close her eight-year-old VISA credit card with a credit line of $18,000. She didn’t use the card but once or twice a month and had two other major bank cards that provided “rewards points.” So to keep her credit record “clean” she decided to cancel the card. The next month she found out that this one decision cost her 87 points on her credit score, dropping it from 752 to 665.
This story happens way too often and is typical for how most people manage their credit by trial and error. Over a lifetime, many people eventually build up some decent credit, however, that same level of credit could have been achieved so much earlier in life with guidance and help.
A consumer credit score is made up of five key components:
- Payment History - 35% Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
- Amounts Owed - 30% Balances of current loans, debt-to-credit ratio, proportion of installments still owed, etc.
- Length of Credit History - 15% Time since accounts opened, last activity, etc.- New Credit - 10% Recent inquiries, new accounts, etc.
- Types of Credit Used - 10% Mortgages, credit, retail, etc.
In Rachel’s case, the major bank credit card she canceled was paid on time every month for eight years. She didn’t use credit a lot, and this particular credit card represented the best contribution to the amounts owed and length of credit history category. Although Rachel had two other major bank credit cards that offered rewards points, they were only months old and had only been used intermittently, giving them much less value on her credit score. Next to her mortgage loan, the eight-year-old VISA credit card was her strongest piece of credit. Consequently, the other newer cards also had higher interest rates and yearly fees than her VISA card.
Contrary to popular belief, credit scores do not penalize you for having too much available credit. With this in mind, it’s better to preserve your credit score with 15 years of established credit history and old accounts in good standing than to have fewer and newer open accounts. Major bank credit cards have more impact on your credit than, say, a department store card.
Closing a credit card can greatly affect your credit scores; however, sometimes you may have no choice. Credit cards that are unused or rarely used can have their credit line reduced or may even be closed without your approval by the credit card company. This can affect your credit score just as much as canceling the card yourself.
Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.
Take a recent client we will call “Rachel.” Rachel was reviewing her credit and decided to close her eight-year-old VISA credit card with a credit line of $18,000. She didn’t use the card but once or twice a month and had two other major bank cards that provided “rewards points.” So to keep her credit record “clean” she decided to cancel the card. The next month she found out that this one decision cost her 87 points on her credit score, dropping it from 752 to 665.
This story happens way too often and is typical for how most people manage their credit by trial and error. Over a lifetime, many people eventually build up some decent credit, however, that same level of credit could have been achieved so much earlier in life with guidance and help.
A consumer credit score is made up of five key components:
- Payment History - 35% Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
- Amounts Owed - 30% Balances of current loans, debt-to-credit ratio, proportion of installments still owed, etc.
- Length of Credit History - 15% Time since accounts opened, last activity, etc.- New Credit - 10% Recent inquiries, new accounts, etc.
- Types of Credit Used - 10% Mortgages, credit, retail, etc.
In Rachel’s case, the major bank credit card she canceled was paid on time every month for eight years. She didn’t use credit a lot, and this particular credit card represented the best contribution to the amounts owed and length of credit history category. Although Rachel had two other major bank credit cards that offered rewards points, they were only months old and had only been used intermittently, giving them much less value on her credit score. Next to her mortgage loan, the eight-year-old VISA credit card was her strongest piece of credit. Consequently, the other newer cards also had higher interest rates and yearly fees than her VISA card.
Contrary to popular belief, credit scores do not penalize you for having too much available credit. With this in mind, it’s better to preserve your credit score with 15 years of established credit history and old accounts in good standing than to have fewer and newer open accounts. Major bank credit cards have more impact on your credit than, say, a department store card.
Closing a credit card can greatly affect your credit scores; however, sometimes you may have no choice. Credit cards that are unused or rarely used can have their credit line reduced or may even be closed without your approval by the credit card company. This can affect your credit score just as much as canceling the card yourself.
Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.
Guidelines for a Successful Summer Move - Be Prepared
RISMEDIA, June 18, 2009-The market is warming up, the kids are out of school, and more Americans are gearing up to move long distances. A recent survey by relocation.com shows staggering data when it comes to moving:
70% of consumers are moving more than 1,000 miles, up from 38% last year60% listed financial reasons for their move28% are moving for family reasons compared to 18% last year52% of Americans have a high level of fear when moving
This summer’s moving season could be a hectic one for your clients, but there are ways to move and keep your sanity. Here are some things for your clients to keep in mind to make their summer move a success:
Start Early - Allow plenty of time to get estimates from movers. It takes time to get an estimate from different companies, compare, and make a decision. 45 days prior to a move is a good time to begin to ensure the best choices are available.
Be Prepared - If your clients are doing their own packing, advise them to get supplies and start packing early. Not finishing on time and leaving work for the moving company can result in additional costs.
Be Careful - Choosing a mover can be confusing. Comparing estimates from different companies that might reflect different items, terms, and coverage can add considerable time to the process.
The Move Advocate is a great resource to offer your clients to set up a summer move for success. Our dedicated Moving Coach will work with your client to choose the best movers in their area, get multiple estimates, advise them on preparation, and audit and compare movers for them. Best of all this is a free service that you can offer to them with no obligation. Sign up today at http://www.moveadvocate.com/agent/starterkit.asp for an Agent Starter Kit and start giving your clients up to 60% off their next move.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
70% of consumers are moving more than 1,000 miles, up from 38% last year60% listed financial reasons for their move28% are moving for family reasons compared to 18% last year52% of Americans have a high level of fear when moving
This summer’s moving season could be a hectic one for your clients, but there are ways to move and keep your sanity. Here are some things for your clients to keep in mind to make their summer move a success:
Start Early - Allow plenty of time to get estimates from movers. It takes time to get an estimate from different companies, compare, and make a decision. 45 days prior to a move is a good time to begin to ensure the best choices are available.
Be Prepared - If your clients are doing their own packing, advise them to get supplies and start packing early. Not finishing on time and leaving work for the moving company can result in additional costs.
Be Careful - Choosing a mover can be confusing. Comparing estimates from different companies that might reflect different items, terms, and coverage can add considerable time to the process.
The Move Advocate is a great resource to offer your clients to set up a summer move for success. Our dedicated Moving Coach will work with your client to choose the best movers in their area, get multiple estimates, advise them on preparation, and audit and compare movers for them. Best of all this is a free service that you can offer to them with no obligation. Sign up today at http://www.moveadvocate.com/agent/starterkit.asp for an Agent Starter Kit and start giving your clients up to 60% off their next move.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Wednesday, June 17, 2009
New Foreclosure Rules to Start Monday, June 15th
By Jim Wasserman Sacramento Bee, Published: Saturday, Jun. 13, 2009 - 12:00 am Page 6B
After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.
But it doesn't mean foreclosures will stop.
Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.
But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.
Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place – or be denied rights to foreclose on their own schedules.
"You have voluntary programs that they don't have to do," said Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."
The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don't qualify for modifications.
"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.
As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."
"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble … if they can get some assistance, they can stay in their home."
California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.
"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.
Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."
Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.
On the front lines of the crisis it's easy to be wary about yet another new law or program.
"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento.
The new law represents a third evolution of California’s response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.
Last summer, he signed Senate Bill 1137, which temporarily slowed banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.
But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.
The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.
In summary, here's what will happen starting Monday:
• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.
• If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.
• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.
Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.
After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.
But it doesn't mean foreclosures will stop.
Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.
But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.
Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place – or be denied rights to foreclose on their own schedules.
"You have voluntary programs that they don't have to do," said Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."
The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don't qualify for modifications.
"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.
As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."
"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble … if they can get some assistance, they can stay in their home."
California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.
"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.
Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."
Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.
On the front lines of the crisis it's easy to be wary about yet another new law or program.
"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento.
The new law represents a third evolution of California’s response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.
Last summer, he signed Senate Bill 1137, which temporarily slowed banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.
But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.
The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.
In summary, here's what will happen starting Monday:
• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.
• If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.
• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.
Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.
Why Banks Want To Sell Their Foreclosed Properties Quickly - 3 Simple Answers
(1) Non-Performing Assets: Banks are primarily in the business of lending money and have little interest in diverting their resources toward managing the disposition of real property. Consequently, banks are anxious to dispose of their REO bank foreclosures. However, this does not mean that banks want to lose money in the sale process. The banks' goal is to quickly recoup the capital tied up in these non-performing loans and re-deploy it in the form of a new profitable loan.
(2) Carrying Costs: As soon as ownership of the property reverts back to the bank, the expenses of holding the foreclosed property quickly begin to accrue. These costs include property taxes, maintenance expenses and insurance premiums. These costs continue to mount until the property is sold which puts added pressure on the bank to quickly dispose of the asset. In most cases, the longer a bank holds a property the more unprofitable it becomes.
(3) Property Damage: Since most REO bank foreclosures are vacant, there is always risk of property damage from vandals and/or bad weather. The problem grows with every additional REO bank foreclosure added to banks non-performing asset portfolio. Again, this creates additional incentive for a bank to quickly move this foreclosed property out of its possession.
(2) Carrying Costs: As soon as ownership of the property reverts back to the bank, the expenses of holding the foreclosed property quickly begin to accrue. These costs include property taxes, maintenance expenses and insurance premiums. These costs continue to mount until the property is sold which puts added pressure on the bank to quickly dispose of the asset. In most cases, the longer a bank holds a property the more unprofitable it becomes.
(3) Property Damage: Since most REO bank foreclosures are vacant, there is always risk of property damage from vandals and/or bad weather. The problem grows with every additional REO bank foreclosure added to banks non-performing asset portfolio. Again, this creates additional incentive for a bank to quickly move this foreclosed property out of its possession.
Friday, June 12, 2009
Pricing Disagreement: What's a Home Worth?
Homebuyers and the real estate professionals they choose to sell their homes don't always agree over what the property is worth, and many buyers think both of them are setting prices too high, according to a survey by HomeGain.com Inc.
The survey found that 63 percent of home owners believe the price their practitioner recommended is too low. About 45 percent of sellers think prices should be 20 percent to 30 percent higher, while 14 percent believe their home should be priced a whopping 30 percent higher.
Meanwhile, 21 percent of home buyers say the homes they are considering are overpriced by up to 10 percent; 32 percent say prices are 10 percent to 20 percent too high; and 6 percent say homes are more than 21 percent over priced. Only 18 percent believe homes are priced fairly.
Remember: Once you've decided to move, you are no longer selling your "home". It is now just another property that must adhere to the principles of supply and demand. An overpriced home is only going to sell the house down the street.
The survey found that 63 percent of home owners believe the price their practitioner recommended is too low. About 45 percent of sellers think prices should be 20 percent to 30 percent higher, while 14 percent believe their home should be priced a whopping 30 percent higher.
Meanwhile, 21 percent of home buyers say the homes they are considering are overpriced by up to 10 percent; 32 percent say prices are 10 percent to 20 percent too high; and 6 percent say homes are more than 21 percent over priced. Only 18 percent believe homes are priced fairly.
Remember: Once you've decided to move, you are no longer selling your "home". It is now just another property that must adhere to the principles of supply and demand. An overpriced home is only going to sell the house down the street.
Don't Lose Your Home Because You Didn't Pick Up The Phone!
You or someone you know can benefit from the Mortgage Stimulus/Refinance Program and avoid foreclosure! Whether you want to modify your existing loan or work through the short sale process, we can help!
The most important thing is for you to understand the many options available besides allowing a foreclosure sale to ruin your credit. Start to enjoy your life and family again - Remember! You don't want to lose your home because you didn't pick up the phone! Contact Mike, michaeloday@greatwestgmac.com (916-425-6066)/Pat, patrickryan@greatwestgmac.com (916-956-8928 or email 24/7 to info@primohomesearch.com
The most important thing is for you to understand the many options available besides allowing a foreclosure sale to ruin your credit. Start to enjoy your life and family again - Remember! You don't want to lose your home because you didn't pick up the phone! Contact Mike, michaeloday@greatwestgmac.com (916-425-6066)/Pat, patrickryan@greatwestgmac.com (916-956-8928 or email 24/7 to info@primohomesearch.com
Friday, June 5, 2009
First Time Homebuyer's Credit: The Basics
Bringing the Dream of Homeownership Within ReachAs part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Who Qualifies?First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
Who Qualifies?First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at our website, www.primohomesearch.com
The Case for Buying a Home Right Now!
Lower interest rates and very flexible prices make this a good time to be a buyer.
Talk about capitulation! Judging from my mailbag following last week's coverage of the Case-Shiller housing numbers, almost nobody has a good word to say about the real estate market any more.
I'm an instinctive contrarian. So I hope readers don't take it the wrong way when I say that when so many of you agree with me, I start to get nervous.
And where is my hate mail? The brokers must be totally whipped. Even a year ago anyone questioning housing prices could reliably expect a torrent of furious replies from those in the business.
Today? Almost nothing. And the few left are mostly of the "U r an idiot (Sent from my iPhone)" variety. Pitiful.
Maybe the moment of maximum pessimism is at hand after all.
More on HomesHome Prices Low, But No BargainDream Bailout Has a Dark SideSo let me play devil's advocate and consider the positive case for buying a home right now.
The key factor: Interest rates.
If you can borrow at 4.5% or 5% over 30 years, many purchases start to look appealing. Especially if we get a hefty dose of inflation down the line.
If that happens, your monthly payments will be low and you'd get to repay the principal over time with devalued dollars. That's a double win.
Inflation isn't guaranteed: The bond markets are only predicting about 1.4% inflation over the next 10 years, and BCA Research recently reminded clients that deflation, or falling prices, remains a danger. Unemployment is still rising and recent wages actually fell.
Yet if you had to bet from here, you'd bet on inflation in due course. The government is running massive deficits and has the printing presses at full throttle. That's the classic recipe.
And inflation is the debtors' friend -- which is why it is surely going to prove the politically expedient way out of this mess.
Anyone purchasing hard assets like real estate, with a 5% fixed rate loan, ought to make good money if that happens.
When it comes to the house prices, it's true they may not have fallen as far as you might expect.
A recent analysis in the Financial Analysts Journal ("When Will Housing Recover?") suggested prices nationwide still weren't cheap by historical standards in relation to household incomes.
Homes were much cheaper, say, as recently as the 1970s.
Furthermore: the bigger the bubble, the bigger the bust. Considering how sharply home prices climbed from 2002 to 2006, one might expect real estate to end up really, really cheap before bottoming out. And you wouldn't expect a quick rebound either. Japan still hasn't recovered from 1989.
But if you are thinking of buying a home, here's the more positive news: While overall market averages may not be as cheap as you might have expected, you can probably ignore them.
There are plenty of deals taking place far below the official average levels. The indices are masking a huge disparity in prices.
Even the National Association of Realtors concedes distressed sales – including foreclosures and short sales – are closing about 20% below "normal" market rates. (Never mind how to define "normal").
Aggressive buyers are finding some simply terrific deals. And they're paying with cheap debt, too.
Default rates are rising. Lots of sellers are forced. A buyer with options holds all the cards.
Once upon a time, the name of the real estate game was "let's make a deal." Today, it's "take it or leave it." If the seller won't take your offer, his neighbor probably will.
Talk about capitulation! Judging from my mailbag following last week's coverage of the Case-Shiller housing numbers, almost nobody has a good word to say about the real estate market any more.
I'm an instinctive contrarian. So I hope readers don't take it the wrong way when I say that when so many of you agree with me, I start to get nervous.
And where is my hate mail? The brokers must be totally whipped. Even a year ago anyone questioning housing prices could reliably expect a torrent of furious replies from those in the business.
Today? Almost nothing. And the few left are mostly of the "U r an idiot (Sent from my iPhone)" variety. Pitiful.
Maybe the moment of maximum pessimism is at hand after all.
More on HomesHome Prices Low, But No BargainDream Bailout Has a Dark SideSo let me play devil's advocate and consider the positive case for buying a home right now.
The key factor: Interest rates.
If you can borrow at 4.5% or 5% over 30 years, many purchases start to look appealing. Especially if we get a hefty dose of inflation down the line.
If that happens, your monthly payments will be low and you'd get to repay the principal over time with devalued dollars. That's a double win.
Inflation isn't guaranteed: The bond markets are only predicting about 1.4% inflation over the next 10 years, and BCA Research recently reminded clients that deflation, or falling prices, remains a danger. Unemployment is still rising and recent wages actually fell.
Yet if you had to bet from here, you'd bet on inflation in due course. The government is running massive deficits and has the printing presses at full throttle. That's the classic recipe.
And inflation is the debtors' friend -- which is why it is surely going to prove the politically expedient way out of this mess.
Anyone purchasing hard assets like real estate, with a 5% fixed rate loan, ought to make good money if that happens.
When it comes to the house prices, it's true they may not have fallen as far as you might expect.
A recent analysis in the Financial Analysts Journal ("When Will Housing Recover?") suggested prices nationwide still weren't cheap by historical standards in relation to household incomes.
Homes were much cheaper, say, as recently as the 1970s.
Furthermore: the bigger the bubble, the bigger the bust. Considering how sharply home prices climbed from 2002 to 2006, one might expect real estate to end up really, really cheap before bottoming out. And you wouldn't expect a quick rebound either. Japan still hasn't recovered from 1989.
But if you are thinking of buying a home, here's the more positive news: While overall market averages may not be as cheap as you might have expected, you can probably ignore them.
There are plenty of deals taking place far below the official average levels. The indices are masking a huge disparity in prices.
Even the National Association of Realtors concedes distressed sales – including foreclosures and short sales – are closing about 20% below "normal" market rates. (Never mind how to define "normal").
Aggressive buyers are finding some simply terrific deals. And they're paying with cheap debt, too.
Default rates are rising. Lots of sellers are forced. A buyer with options holds all the cards.
Once upon a time, the name of the real estate game was "let's make a deal." Today, it's "take it or leave it." If the seller won't take your offer, his neighbor probably will.
Article is courtesy of Brett Arends - WSJ
Contact Pat at patrickryan@greatwestgmac.com 916-956-8928 or Mike at michaeloday@greatwestgmac.com 916-425-6066 or 24/7 at www.primohomesearch.com
Thursday, June 4, 2009
Property Taxes
Important Notice to New Property Owners
Your Tax Collector's experience had shown that many tax delinquencies occur during the first year of property ownership. As a new property owner, you should be aware of the manner in which real property taxes are currently billed and paid.
It is your responsibility to obtain and pay the real property tax bill. Failure to receive a tax bill does not relieve the imposition of penalties after the delinquencies date. The Tax Collector has no discretion regarding penalties.
County taxes are levied on both real and personal property and become a lien, annually, on the first day in January preceding the fiscal year for which such taxes are levied. The Fiscal year begins on July 1 and ends on June 30 of the following calendar year.
Property taxes are due and payable in two installments, although the property owner, may pay both installments prior to December 10 without penalty.
- The first installment is due November 1 and delinquent at 5:00 pm and December 10.
- The second installment is due February 1 and delinquent at 5:00 pm on April 10.
- If the 10th Day of December or April falls on Saturday, Sunday or Holiday, the time of delinquency is 5:00pm an the next regular business day.
- Penalties of 10% immediately begin accruing if payment is not made when due.
If your deed records after January 1st, the tax bill may be mailed to the prior owner. It is your responsibility to contact the Tax Collector's office if you fail to receive the tax bill in November of each year. If you have made alternate arrangements for the taxes to be paid on your behalf by a lender or agent, you may want to confirm that they are in receipt of the current tax bill to avoid penalties.
In addition, the within described property may be subject to supplemental real property taxes due to the change of ownership taking place through this escrow. Any supplemental real property taxes arising as a result of the transfer of the property to you shall be your sole responsibility. The due dates and delinquency dates may differ.
You are encouraged to contact the Tax Collector if you have any questions or if you wish to confirm your correct address on record to avoid penalties.
Information courtesy of Fidelity National Title Insurance Company
Important Notice to New Property Owners
Your Tax Collector's experience had shown that many tax delinquencies occur during the first year of property ownership. As a new property owner, you should be aware of the manner in which real property taxes are currently billed and paid.
It is your responsibility to obtain and pay the real property tax bill. Failure to receive a tax bill does not relieve the imposition of penalties after the delinquencies date. The Tax Collector has no discretion regarding penalties.
County taxes are levied on both real and personal property and become a lien, annually, on the first day in January preceding the fiscal year for which such taxes are levied. The Fiscal year begins on July 1 and ends on June 30 of the following calendar year.
Property taxes are due and payable in two installments, although the property owner, may pay both installments prior to December 10 without penalty.
- The first installment is due November 1 and delinquent at 5:00 pm and December 10.
- The second installment is due February 1 and delinquent at 5:00 pm on April 10.
- If the 10th Day of December or April falls on Saturday, Sunday or Holiday, the time of delinquency is 5:00pm an the next regular business day.
- Penalties of 10% immediately begin accruing if payment is not made when due.
If your deed records after January 1st, the tax bill may be mailed to the prior owner. It is your responsibility to contact the Tax Collector's office if you fail to receive the tax bill in November of each year. If you have made alternate arrangements for the taxes to be paid on your behalf by a lender or agent, you may want to confirm that they are in receipt of the current tax bill to avoid penalties.
In addition, the within described property may be subject to supplemental real property taxes due to the change of ownership taking place through this escrow. Any supplemental real property taxes arising as a result of the transfer of the property to you shall be your sole responsibility. The due dates and delinquency dates may differ.
You are encouraged to contact the Tax Collector if you have any questions or if you wish to confirm your correct address on record to avoid penalties.
Information courtesy of Fidelity National Title Insurance Company
Wednesday, June 3, 2009
Banks Vow Smoother Short Sale Process
By LESLIE BERKMAN
The Press-Enterprise, May 21, 2009
Lenders, including Bank of America and Wells Fargo, say they are making it easier for delinquent borrowers to avoid foreclosure by selling their homes for less than they owe on them.
Their efforts dovetail with a strategy unveiled last week by the Obama administration to promote such short sales.
Demand for short sales has burgeoned because falling home prices have made it impossible for many homeowners to get high enough prices to repay their lenders if they run into financial trouble, such as a job loss.
A short sale has an advantage over foreclosure for the homeowner because it is less embarrassing and does less damage to his or her credit. And for the lender, it is less costly than having to repossess, market and maintain a vacant property.
Also, keeping a house occupied can help preserve a neighborhood.
However, because of the complexity of such transactions -- including the need for approval of a sales price by lenders, investors and mortgage insurers -- the sales often fall apart. Real estate agents complain that by the time they get an answer from the bank on an offer, the potential buyer has lost interest.
At Bank of America, the nation's largest mortgage servicer, more than 60 percent of approved short sales do not close, which is why the bank wants to streamline the process, said BofA Senior Vice President David Sunlin by telephone Thursday.
Sunlin, who manages short sales for the bank, said the bank's first goal still is to negotiate a mortgage modification that will let a borrower keep his home. But he said during those negotiations the bank can simultaneously obtain the documentation needed to qualify the borrower for a short sale if the modification doesn't work.
In the past, Sunlin said, the bank did not begin the lengthy process of qualifying a borrower for a short sale until it had received a purchase offer.
To expedite short sales, Bank of America has enlarged and updated staff training and set up a phone line dedicated to short sales that borrowers and their agents can use.
Also, Sunlin said, in 60 to 90 days the bank will roll out a Web program it will use to find and track the short sales of houses with mortgages that it services. He said the Web portal also will accept qualifying documentation from clients wishing to do short sales.
Sunlin said it typically takes 45 to 60 days for the bank to tell a client if a short sale offer can be accepted, and up to 90 days if an investor must approve it. The goal, he said, is to shorten the wait to a week.
"By doing this, we should see more private sales instead of more sales of bank-owned (houses)," he said.
Sunlin said short sales will also benefit from an amendment to President Barack Obama's Making Home Affordable program announced last week that will standardize short sale application and acceptance forms. It also provides monetary incentives to servicers and helps cover relocation expense for homeowners.
David Knight, senior vice president at Wells Fargo Home Mortgage, said in an interview that his bank has been working many months to reduce delays in the short sale process. He said the bank is working closely with borrowers' agents to increase the likelihood that the listing prices on a short sale will be accepted.
The lending and real estate industries have been on a crash course to learn about short sales since the housing market bust, Knight said. "The big challenge is none of us really understood the process," he said.
By LESLIE BERKMAN
The Press-Enterprise, May 21, 2009
Lenders, including Bank of America and Wells Fargo, say they are making it easier for delinquent borrowers to avoid foreclosure by selling their homes for less than they owe on them.
Their efforts dovetail with a strategy unveiled last week by the Obama administration to promote such short sales.
Demand for short sales has burgeoned because falling home prices have made it impossible for many homeowners to get high enough prices to repay their lenders if they run into financial trouble, such as a job loss.
A short sale has an advantage over foreclosure for the homeowner because it is less embarrassing and does less damage to his or her credit. And for the lender, it is less costly than having to repossess, market and maintain a vacant property.
Also, keeping a house occupied can help preserve a neighborhood.
However, because of the complexity of such transactions -- including the need for approval of a sales price by lenders, investors and mortgage insurers -- the sales often fall apart. Real estate agents complain that by the time they get an answer from the bank on an offer, the potential buyer has lost interest.
At Bank of America, the nation's largest mortgage servicer, more than 60 percent of approved short sales do not close, which is why the bank wants to streamline the process, said BofA Senior Vice President David Sunlin by telephone Thursday.
Sunlin, who manages short sales for the bank, said the bank's first goal still is to negotiate a mortgage modification that will let a borrower keep his home. But he said during those negotiations the bank can simultaneously obtain the documentation needed to qualify the borrower for a short sale if the modification doesn't work.
In the past, Sunlin said, the bank did not begin the lengthy process of qualifying a borrower for a short sale until it had received a purchase offer.
To expedite short sales, Bank of America has enlarged and updated staff training and set up a phone line dedicated to short sales that borrowers and their agents can use.
Also, Sunlin said, in 60 to 90 days the bank will roll out a Web program it will use to find and track the short sales of houses with mortgages that it services. He said the Web portal also will accept qualifying documentation from clients wishing to do short sales.
Sunlin said it typically takes 45 to 60 days for the bank to tell a client if a short sale offer can be accepted, and up to 90 days if an investor must approve it. The goal, he said, is to shorten the wait to a week.
"By doing this, we should see more private sales instead of more sales of bank-owned (houses)," he said.
Sunlin said short sales will also benefit from an amendment to President Barack Obama's Making Home Affordable program announced last week that will standardize short sale application and acceptance forms. It also provides monetary incentives to servicers and helps cover relocation expense for homeowners.
David Knight, senior vice president at Wells Fargo Home Mortgage, said in an interview that his bank has been working many months to reduce delays in the short sale process. He said the bank is working closely with borrowers' agents to increase the likelihood that the listing prices on a short sale will be accepted.
The lending and real estate industries have been on a crash course to learn about short sales since the housing market bust, Knight said. "The big challenge is none of us really understood the process," he said.
7 Tips for Consumers to Purchase a Home
RISMEDIA, June 3, 2009-June is National Homeownership Month and like many other consumer advocates, the Oregon Bankers Association (OBA) urges consumers to get informed as they prepare to buy a home. Today, there are a growing number of obstacles for home buyers, including a higher credit score standard and more restrictions on credit. Despite current challenges in the secondary mortgage market, home loans are available to credit-worthy buyers and Oregon banks stand ready to assist prospective home buyers.
Whether you live in Oregon or New Jersey, or anywhere else in between, it’s crucial that you have a thorough understanding of the changing market when shopping for a mortgage. Here are seven tips to help you do exactly that:
1. Learn about first-time home buyer programs. Consider taking a first-time home buyers course or visit with your local banker to find out about programs available to you, such as the new federal $8,000 first-time home buyer credit for 2009 home purchases.
2. Get pre-approved. Know the difference between “pre-qualified” and “pre-approved.” Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.
3. Be honest with the lender and yourself. You don’t want to borrow more than you can afford. Your bank can provide a calculator to determine if you can afford to borrow and if so, how much. The American Bankers Association has several home financing calculators available at www.aba.com/aba/static/calculators.htm.
4. Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.
5. Know your credit situation. Obtain a copy of your credit report and FICO score or VantageScore at least six months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that’s hurting your credit score. To obtain a free copy of your credit report, visit www.annualcreditreport.com.
6. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs - there won’t be a landlord to call.
7. Organize your finances before you go to the bank. While each bank may require different documentation, at a minimum you will need:
- Pay stubs.- Tax returns.- Financial statements (one that is less than 60 days old).- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.
RISMEDIA, June 3, 2009-June is National Homeownership Month and like many other consumer advocates, the Oregon Bankers Association (OBA) urges consumers to get informed as they prepare to buy a home. Today, there are a growing number of obstacles for home buyers, including a higher credit score standard and more restrictions on credit. Despite current challenges in the secondary mortgage market, home loans are available to credit-worthy buyers and Oregon banks stand ready to assist prospective home buyers.
Whether you live in Oregon or New Jersey, or anywhere else in between, it’s crucial that you have a thorough understanding of the changing market when shopping for a mortgage. Here are seven tips to help you do exactly that:
1. Learn about first-time home buyer programs. Consider taking a first-time home buyers course or visit with your local banker to find out about programs available to you, such as the new federal $8,000 first-time home buyer credit for 2009 home purchases.
2. Get pre-approved. Know the difference between “pre-qualified” and “pre-approved.” Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.
3. Be honest with the lender and yourself. You don’t want to borrow more than you can afford. Your bank can provide a calculator to determine if you can afford to borrow and if so, how much. The American Bankers Association has several home financing calculators available at www.aba.com/aba/static/calculators.htm.
4. Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.
5. Know your credit situation. Obtain a copy of your credit report and FICO score or VantageScore at least six months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that’s hurting your credit score. To obtain a free copy of your credit report, visit www.annualcreditreport.com.
6. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs - there won’t be a landlord to call.
7. Organize your finances before you go to the bank. While each bank may require different documentation, at a minimum you will need:
- Pay stubs.- Tax returns.- Financial statements (one that is less than 60 days old).- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.
Monday, June 1, 2009
Mortgage Delinquencies continue to rise
Sacramento region mortgage delinquencies on the rise
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By Jim Wasserman jwasserman@sacbee.com
Published: Friday, May. 15, 2009 - 12:00 am Page 6B
An estimated 8.5 percent of mortgages in El Dorado, Placer, Sacramento and Yolo counties were 90 days or more delinquent as March ended, First American CoreLogic reported Thursday.
The number revealed the worsening condition of thousands of borrowers in the capital region over the past 12 months. In March 2008, payments on 6.3 percent of mortgages were three months or more late.
On March 31, 76,229 mortgages in the four counties were in some stage of the foreclosure process that begins with an official warning of late payments and ends with repossession.
On March 31, 2008, 46,936 area mortgages were in some part of that foreclosure process, said Santa Ana-based First American.
The yearlong deterioration, a result of rising unemployment and falling prices that have blocked many from refinancing out of problem loans, spurred an average of 208 foreclosure filings daily in the capital region. Those included notices of default, the first warnings when borrowers fall several months behind; notices of foreclosure sale, when the property is scheduled for auction; and notices after the auction.
In California, 8.8 percent of outstanding mortgages were 90 days or more late in March, the research firm reported. In March 2008, 5.3 percent were three months overdue.
Nationally, the problem is slightly less severe. First American reported 6.2 percent of all U.S. mortgages are 90 days or more late – compared with 3.8 percent in March 2008.
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By Jim Wasserman jwasserman@sacbee.com
Published: Friday, May. 15, 2009 - 12:00 am Page 6B
An estimated 8.5 percent of mortgages in El Dorado, Placer, Sacramento and Yolo counties were 90 days or more delinquent as March ended, First American CoreLogic reported Thursday.
The number revealed the worsening condition of thousands of borrowers in the capital region over the past 12 months. In March 2008, payments on 6.3 percent of mortgages were three months or more late.
On March 31, 76,229 mortgages in the four counties were in some stage of the foreclosure process that begins with an official warning of late payments and ends with repossession.
On March 31, 2008, 46,936 area mortgages were in some part of that foreclosure process, said Santa Ana-based First American.
The yearlong deterioration, a result of rising unemployment and falling prices that have blocked many from refinancing out of problem loans, spurred an average of 208 foreclosure filings daily in the capital region. Those included notices of default, the first warnings when borrowers fall several months behind; notices of foreclosure sale, when the property is scheduled for auction; and notices after the auction.
In California, 8.8 percent of outstanding mortgages were 90 days or more late in March, the research firm reported. In March 2008, 5.3 percent were three months overdue.
Nationally, the problem is slightly less severe. First American reported 6.2 percent of all U.S. mortgages are 90 days or more late – compared with 3.8 percent in March 2008.
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