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Thursday, September 24, 2009
Sacramento County Median Home Price Down 53.5 Percent From 2005 high
Last month, Sacramento County marked the fourth anniversary of its housing boom high with a median sales price of $180,000 – a whopping 53.5 percent less than in August 2005, property researcher MDA DataQuick said Thursday.
The county's August sales tally of 2,061 new and existing homes likewise fell well short of 3,800 in August 2005.
Now, four years later, these DataQuick numbers reveal the long, hard fall taken by the capital region, a descent defined by billions of dollars in lost home equity, more than 42,000 foreclosures and a marked slowdown in home sales.
A reversal of fortune that began in Sacramento County during the late summer of 2005, then quickly spread to seven other area counties, made Sacramento one of the first big U.S. housing markets to spin out of control. The aftermath still plays out in 2009.
"Everybody says buy a house. It's the best investment of your life," said Scott Seacrist, 30, who bought a small home in Sacramento's Elmhurst neighborhood in March 2006. "If I lived here 20 years, it would be the best investment."
Seacrist, like thousands of area buyers four years after the boom crested in Sacramento County, owns a home that's worth less than he paid.
"We love our house," said the married schoolteacher, noting that "it has a lot of charm." But a sustained housing downturn that came after moving in has provided its occasional bouts of anxiety.
No wonder, economists say.
"The bubble we saw was a once-in-a-century kind of event," said Dr. Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento. "You seldom see all the conditions in place simultaneously that allowed it."
DataQuick reported another month of uncertainty on the housing front. The researcher counted 3,375 closed escrows in August on new and existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That was down sharply from 3,815 in July and marked a third straight month of lower sales than the same time last year.
There were 3,998 closed escrows in August 2008, DataQuick reported.
The firm noted that sales similarly fell from July in the Bay Area and Southern California. Its analysts attributed the drop to "a thinning inventory of foreclosure properties and financial uncertainty among potential homebuyers."
For months, first-time buyers in the capital region have expressed increasing frustration at being outbid on a dwindling supply of bank repos.
"In Sacramento County, foreclosure resales were 50.4 percent of sales in August," said DataQuick analyst Andrew LePage. "That's the lowest since 43.8 percent in December 2007."
Would-be buyers are nervous, too, about jobs as capital-area unemployment has reached 11.8 percent. LePage said, "It's not as if the job market is creating huge demand."
Four years ago, such a bleak scenario seemed improbable to experts at all levels. But it became real as median sales prices peaked at $387,000 in Sacramento County – after doubling in four years – and then rolled backward. The median, a point where half sell for more and half less, has fallen by more than 50 percent in Sacramento, Sutter, Yuba and Amador counties and more than 40 percent in El Dorado, Placer and Yolo counties.
The steepest peak-to-trough mark in Sacramento County came in February, when the median price fell to $160,000, down 58.6 percent.
DataQuick records show 2005 highs of $501,000 in Nevada County and $474,000 in Yolo County. Yuba County reached $351,500, while Placer County touched a boom high of $525,000. Sutter County peaked at $339,000. El Dorado County's high was $531,250. Amador County crested at $425,000. Sacramento Bee 9/18/09
For more information contact Pat at 916-956-8928, patrickryan@greatwestgmac.com or Mike at 916-425-6066, michaeloday@greatwestgmac.com or visit our website, www.primohomesearch.com
The county's August sales tally of 2,061 new and existing homes likewise fell well short of 3,800 in August 2005.
Now, four years later, these DataQuick numbers reveal the long, hard fall taken by the capital region, a descent defined by billions of dollars in lost home equity, more than 42,000 foreclosures and a marked slowdown in home sales.
A reversal of fortune that began in Sacramento County during the late summer of 2005, then quickly spread to seven other area counties, made Sacramento one of the first big U.S. housing markets to spin out of control. The aftermath still plays out in 2009.
"Everybody says buy a house. It's the best investment of your life," said Scott Seacrist, 30, who bought a small home in Sacramento's Elmhurst neighborhood in March 2006. "If I lived here 20 years, it would be the best investment."
Seacrist, like thousands of area buyers four years after the boom crested in Sacramento County, owns a home that's worth less than he paid.
"We love our house," said the married schoolteacher, noting that "it has a lot of charm." But a sustained housing downturn that came after moving in has provided its occasional bouts of anxiety.
No wonder, economists say.
"The bubble we saw was a once-in-a-century kind of event," said Dr. Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento. "You seldom see all the conditions in place simultaneously that allowed it."
DataQuick reported another month of uncertainty on the housing front. The researcher counted 3,375 closed escrows in August on new and existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That was down sharply from 3,815 in July and marked a third straight month of lower sales than the same time last year.
There were 3,998 closed escrows in August 2008, DataQuick reported.
The firm noted that sales similarly fell from July in the Bay Area and Southern California. Its analysts attributed the drop to "a thinning inventory of foreclosure properties and financial uncertainty among potential homebuyers."
For months, first-time buyers in the capital region have expressed increasing frustration at being outbid on a dwindling supply of bank repos.
"In Sacramento County, foreclosure resales were 50.4 percent of sales in August," said DataQuick analyst Andrew LePage. "That's the lowest since 43.8 percent in December 2007."
Would-be buyers are nervous, too, about jobs as capital-area unemployment has reached 11.8 percent. LePage said, "It's not as if the job market is creating huge demand."
Four years ago, such a bleak scenario seemed improbable to experts at all levels. But it became real as median sales prices peaked at $387,000 in Sacramento County – after doubling in four years – and then rolled backward. The median, a point where half sell for more and half less, has fallen by more than 50 percent in Sacramento, Sutter, Yuba and Amador counties and more than 40 percent in El Dorado, Placer and Yolo counties.
The steepest peak-to-trough mark in Sacramento County came in February, when the median price fell to $160,000, down 58.6 percent.
DataQuick records show 2005 highs of $501,000 in Nevada County and $474,000 in Yolo County. Yuba County reached $351,500, while Placer County touched a boom high of $525,000. Sutter County peaked at $339,000. El Dorado County's high was $531,250. Amador County crested at $425,000. Sacramento Bee 9/18/09
For more information contact Pat at 916-956-8928, patrickryan@greatwestgmac.com or Mike at 916-425-6066, michaeloday@greatwestgmac.com or visit our website, www.primohomesearch.com
Backlash Against Banks Growing Over Mortgage Modifications
James Seeley, a machine shop supervisor at the University of California, Davis, just wants a modified mortgage that he and his wife, Sandi, can better afford.
It's a common quest in this economy. Seeley's wages are being cut. His house in Natomas has lost almost half its value. And he owes more than it's worth, even with a $125,000 down payment in 2006.
"We want to get payments down to 31 percent of our income," said Seeley.
In Curtis Park, Hilary Egan is trying to do the same. Her contractor husband has seen a considerable drop in business. She wants a modification before their interest-only loan resets next year to higher payments.
The Seeleys and Egans, both current with their mortgages, have something else in common: Both their modification requests were denied.
Their rejections have aligned them with a broad and growing swath of public opinion: sore that a U.S. banking industry that has received billions of dollars in taxpayer support in the past year hasn't reciprocated on their behalf.
"I don't know a single person who has benefited from the money that was given to lenders," said Egan.
Added Seeley, "The taxpayers are the largest investor in these companies, so I would think they would be taking care of us first."
Banks and financial institutions aren't usually adored even in best of times. But after absorbing much blame for exuberant lending that created the housing bubble, they are increasingly absorbing a backlash for their response to the subsequent foreclosure crisis.
It's not hard to see why. While banks and loan servicers have promised for almost three years to better address rising stresses on their home loan borrowers, foreclosures and defaults still haven't seriously slowed.
The eight-county Sacramento region has counted more than 42,000 foreclosures since the start of 2007. Many area neighborhoods are scarred by vacant repos and dead lawns that pull down property values of other homeowners. Statewide, the foreclosure tally has passed 410,000, and it's believed thousands more are inevitable.
As a result, it's not just borrowers griping about the inability of banks to contain the crisis. Elected officials, besieged by complaints from constituents, are increasingly applying pressure as well.
This month, the League of California Cities, convening in San Jose, will consider a resolution urging 480 cities to yank deposits from banks that "fail to cooperate with foreclosure prevention efforts."
"If you count up the money cities have in banks, that's an amazing amount of power," said Los Angeles City Council member Richard Alarcon, a former state lawmaker. "We have never tried to seize it. I'm trying to seize it. If you're not a good player on the foreclosure front, we're not going to put our money in your bank."
Last week, the Elk Grove City Council voted 4-0 to back the notion and lobby for it at this month's convention. The city of 141,000, one of the fastest growing in California during the housing boom, in the bust became an epicenter of defaults and foreclosures.
"It's time. It's past due. We should have done this some time ago," said Vice Mayor Sophia Scherman, who lives next to a foreclosed home. "It's going to send a very strong message to these institutions."
Others aren't so sure. Tony Cherin, professor of finance at San Diego State University, said, "I can understand the frustration."
But he said cities would have fewer choices for investing because of bank failures and mergers during the meltdown. He said cities' options "may be limited even though they would like to divest themselves."
Two weeks ago, U.S. Rep. Doris Matsui, D-Sacramento, and more than a dozen other California House members applied their own pressure. They wrote Shaun Donovan, secretary of the U.S. Housing and Urban Development Department, urging him to turn up the heat on mortgage lenders to modify more loans. Matsui and others wrote that homeowners who use HUD-approved counselors to contact loan servicers are often "rebuffed or told they couldn't be helped until they were behind on their payments." Sacramento Bee 9/6/09
For more information contact Pat at 916-956-8926, patrickryan@greatwestgmac.com or Mike at 916-425-6066, michaeloday@greatwestgmac.com or visit our website, www.primohomesearch.com
It's a common quest in this economy. Seeley's wages are being cut. His house in Natomas has lost almost half its value. And he owes more than it's worth, even with a $125,000 down payment in 2006.
"We want to get payments down to 31 percent of our income," said Seeley.
In Curtis Park, Hilary Egan is trying to do the same. Her contractor husband has seen a considerable drop in business. She wants a modification before their interest-only loan resets next year to higher payments.
The Seeleys and Egans, both current with their mortgages, have something else in common: Both their modification requests were denied.
Their rejections have aligned them with a broad and growing swath of public opinion: sore that a U.S. banking industry that has received billions of dollars in taxpayer support in the past year hasn't reciprocated on their behalf.
"I don't know a single person who has benefited from the money that was given to lenders," said Egan.
Added Seeley, "The taxpayers are the largest investor in these companies, so I would think they would be taking care of us first."
Banks and financial institutions aren't usually adored even in best of times. But after absorbing much blame for exuberant lending that created the housing bubble, they are increasingly absorbing a backlash for their response to the subsequent foreclosure crisis.
It's not hard to see why. While banks and loan servicers have promised for almost three years to better address rising stresses on their home loan borrowers, foreclosures and defaults still haven't seriously slowed.
The eight-county Sacramento region has counted more than 42,000 foreclosures since the start of 2007. Many area neighborhoods are scarred by vacant repos and dead lawns that pull down property values of other homeowners. Statewide, the foreclosure tally has passed 410,000, and it's believed thousands more are inevitable.
As a result, it's not just borrowers griping about the inability of banks to contain the crisis. Elected officials, besieged by complaints from constituents, are increasingly applying pressure as well.
This month, the League of California Cities, convening in San Jose, will consider a resolution urging 480 cities to yank deposits from banks that "fail to cooperate with foreclosure prevention efforts."
"If you count up the money cities have in banks, that's an amazing amount of power," said Los Angeles City Council member Richard Alarcon, a former state lawmaker. "We have never tried to seize it. I'm trying to seize it. If you're not a good player on the foreclosure front, we're not going to put our money in your bank."
Last week, the Elk Grove City Council voted 4-0 to back the notion and lobby for it at this month's convention. The city of 141,000, one of the fastest growing in California during the housing boom, in the bust became an epicenter of defaults and foreclosures.
"It's time. It's past due. We should have done this some time ago," said Vice Mayor Sophia Scherman, who lives next to a foreclosed home. "It's going to send a very strong message to these institutions."
Others aren't so sure. Tony Cherin, professor of finance at San Diego State University, said, "I can understand the frustration."
But he said cities would have fewer choices for investing because of bank failures and mergers during the meltdown. He said cities' options "may be limited even though they would like to divest themselves."
Two weeks ago, U.S. Rep. Doris Matsui, D-Sacramento, and more than a dozen other California House members applied their own pressure. They wrote Shaun Donovan, secretary of the U.S. Housing and Urban Development Department, urging him to turn up the heat on mortgage lenders to modify more loans. Matsui and others wrote that homeowners who use HUD-approved counselors to contact loan servicers are often "rebuffed or told they couldn't be helped until they were behind on their payments." Sacramento Bee 9/6/09
For more information contact Pat at 916-956-8926, patrickryan@greatwestgmac.com or Mike at 916-425-6066, michaeloday@greatwestgmac.com or visit our website, www.primohomesearch.com
Mortgage-Relief Program Helps Relatively Few Troubled Homeowners
WASHINGTON – Major mortgage service companies boosted the number of trial modifications they offered to distressed homeowners in August, the government reported Wednesday, but the workouts still cover only a small fraction of the delinquent loans that are eligible for help.
The Treasury Department released its second monthly report on loan modifications under the Obama administration's Making Home Affordable Program. It said that servicers had started 360,165 trial modifications through August, up by 124,918 from the modifications reported through July. The number of offers for trial modifications rose by 164,812, to 571,354 through August.
The total number of trial modifications started represented 12 percent of all loans that are 60 days late on payments and considered eligible for the Obama administration's program. That's up from 9 percent through the end of July.
"We think all the servicers could do more than they are doing now," Assistant Treasury Secretary Michael Barr told the housing subcommittee of the House Financial Services Committee on Wednesday.
The program is on track to meet its target of 500,000 trial modifications by November, Barr said. That number, however, is a small percentage of the more than 6 million potential foreclosures over the next three years that many analysts forecast.
Mortgage servicers, many of them large banks like Wells Fargo and Bank of America, are essentially middlemen that collect mortgage payments on behalf of investors who own securities backed by pools of mortgages. Although borrowers negotiate with servicers as if they were the lenders, the servicers represent the interests of investors, not homeowners.
From 2005 to 2008, servicers modified just 3 percent of all delinquent loans, according to documents reviewed by the House panel.
That low number led the Obama administration to create the servicer performance report, dubbed "Name and Shame," in a bid to pressure investors and servicers to do more. Forty-seven servicers now participate in the administration's program, up from 38 in July.
Wells Fargo and Bank of America improved on their July numbers but are still modifying a low percentage of eligible loans under the government program. Bank of America increased from 4 percent of eligible loans to 7 percent; Wells Fargo improved from 6 percent to 11 percent.
CitiMortgage, part of troubled Citibank, boosted its trial modification numbers to 23 percent of eligible loans in August from 15 percent in July. JPMorgan Chase, thought to be the nation's healthiest large bank, improved to 25 percent of eligible loans in August from 20 percent a month earlier.
The government's trial modification program seeks, through financial incentives to servicers and the investors they represent, to get borrowers into loans whose monthly payments are equivalent to 31 percent of their before-tax incomes.
Industry representatives said in testimony that their modification numbers were much higher than the report indicated, but there are no reliable breakdowns of individual servicer numbers to distinguish between, say, allowing a borrower to skip a payment vs. modifying an adjustable-rate loan into a low-cost fixed-rate mortgage.
"There may be other things going on out there, but to comply with our program rules and to count as a real modification you've got to get people down to an affordable (payment) level," Barr told McClatchy.
The administration will ratchet up pressure on servicers, he said, requiring new data on why loans weren't modified.
"We are requiring next month the implementation of denial codes by each servicer, and at that point we will be able to have good empirical data on reasons for denial," Barr said.
Representatives of JPMorgan Chase, Bank of America and Wells Fargo acknowledged in testimony that they fold legal fees and other foreclosure-processing costs into reworked loans, upping the balance that borrowers owe.
Only Wells Fargo said it had a special program to help borrowers with strong payment histories should they lose their jobs.
Bank of America's executive in charge of credit loss mitigation, Jack Schakett, acknowledged to the panel something long suspected but rarely spoken about publicly. Distressed borrowers who have equity built up in their homes, he said, are more likely to get foreclosed on, because there's a greater likelihood that servicers and investors who hold pools of mortgages will profit from the sales of the homes.
"The more equity that is in the house, the more the market will actually walk away with money, the less likely you will actually modify the loan," Schakett confirmed in an interview after the hearing. Sacramento Bee 9/10/09
For more information on short sales or foreclosures contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
The Treasury Department released its second monthly report on loan modifications under the Obama administration's Making Home Affordable Program. It said that servicers had started 360,165 trial modifications through August, up by 124,918 from the modifications reported through July. The number of offers for trial modifications rose by 164,812, to 571,354 through August.
The total number of trial modifications started represented 12 percent of all loans that are 60 days late on payments and considered eligible for the Obama administration's program. That's up from 9 percent through the end of July.
"We think all the servicers could do more than they are doing now," Assistant Treasury Secretary Michael Barr told the housing subcommittee of the House Financial Services Committee on Wednesday.
The program is on track to meet its target of 500,000 trial modifications by November, Barr said. That number, however, is a small percentage of the more than 6 million potential foreclosures over the next three years that many analysts forecast.
Mortgage servicers, many of them large banks like Wells Fargo and Bank of America, are essentially middlemen that collect mortgage payments on behalf of investors who own securities backed by pools of mortgages. Although borrowers negotiate with servicers as if they were the lenders, the servicers represent the interests of investors, not homeowners.
From 2005 to 2008, servicers modified just 3 percent of all delinquent loans, according to documents reviewed by the House panel.
That low number led the Obama administration to create the servicer performance report, dubbed "Name and Shame," in a bid to pressure investors and servicers to do more. Forty-seven servicers now participate in the administration's program, up from 38 in July.
Wells Fargo and Bank of America improved on their July numbers but are still modifying a low percentage of eligible loans under the government program. Bank of America increased from 4 percent of eligible loans to 7 percent; Wells Fargo improved from 6 percent to 11 percent.
CitiMortgage, part of troubled Citibank, boosted its trial modification numbers to 23 percent of eligible loans in August from 15 percent in July. JPMorgan Chase, thought to be the nation's healthiest large bank, improved to 25 percent of eligible loans in August from 20 percent a month earlier.
The government's trial modification program seeks, through financial incentives to servicers and the investors they represent, to get borrowers into loans whose monthly payments are equivalent to 31 percent of their before-tax incomes.
Industry representatives said in testimony that their modification numbers were much higher than the report indicated, but there are no reliable breakdowns of individual servicer numbers to distinguish between, say, allowing a borrower to skip a payment vs. modifying an adjustable-rate loan into a low-cost fixed-rate mortgage.
"There may be other things going on out there, but to comply with our program rules and to count as a real modification you've got to get people down to an affordable (payment) level," Barr told McClatchy.
The administration will ratchet up pressure on servicers, he said, requiring new data on why loans weren't modified.
"We are requiring next month the implementation of denial codes by each servicer, and at that point we will be able to have good empirical data on reasons for denial," Barr said.
Representatives of JPMorgan Chase, Bank of America and Wells Fargo acknowledged in testimony that they fold legal fees and other foreclosure-processing costs into reworked loans, upping the balance that borrowers owe.
Only Wells Fargo said it had a special program to help borrowers with strong payment histories should they lose their jobs.
Bank of America's executive in charge of credit loss mitigation, Jack Schakett, acknowledged to the panel something long suspected but rarely spoken about publicly. Distressed borrowers who have equity built up in their homes, he said, are more likely to get foreclosed on, because there's a greater likelihood that servicers and investors who hold pools of mortgages will profit from the sales of the homes.
"The more equity that is in the house, the more the market will actually walk away with money, the less likely you will actually modify the loan," Schakett confirmed in an interview after the hearing. Sacramento Bee 9/10/09
For more information on short sales or foreclosures contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
Long-Term Rates Down for the Third Consecutive Week
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.04 percent with an average 0.7 point for the week ending September 17, 2009, down from last week when it averaged 5.07 percent. Last year at this time, the 30-year FRM averaged 5.78 percent. The last time the 30-year FRM was lower was the week ending May 28, 2009, when it averaged 4.91 percent.
The 15-year FRM this week averaged 4.47 percent with an average 0.6 point, down from last week when it averaged 4.50 percent. A year ago at this time, the 15-year FRM averaged 5.35 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.51 percent this week, with an average 0.5 point, up from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 5.67 percent.
The one-year Treasury-indexed ARM averaged 4.58 percent this week with an average 0.5 point, down from last week when it averaged 4.64 percent. At this time last year, the 1-year ARM averaged 5.03 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Interest rates for fixed-rate mortgages eased for the third consecutive week and remained at 3-month lows,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates for 30-year fixed-rate mortgages have averaged just above 5 percent through mid-September, which is roughly a percentage point below last year’s average and suggests that 2009 may reach a record annual low since the survey began in 1971.
“Low mortgage rates are aiding new home construction. Housing starts for single family homes have increased consecutively over the five past months ending in July, although starts eased slightly in August. Moreover, homebuilder confidence improved for the third straight month in September, with all four regions showing positive gains, according to the National Association of Home Builder’s Housing Market Index.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, http://www.primohomesearch.com/
The 15-year FRM this week averaged 4.47 percent with an average 0.6 point, down from last week when it averaged 4.50 percent. A year ago at this time, the 15-year FRM averaged 5.35 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.51 percent this week, with an average 0.5 point, up from last week when it averaged 4.51 percent. A year ago, the 5-year ARM averaged 5.67 percent.
The one-year Treasury-indexed ARM averaged 4.58 percent this week with an average 0.5 point, down from last week when it averaged 4.64 percent. At this time last year, the 1-year ARM averaged 5.03 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Interest rates for fixed-rate mortgages eased for the third consecutive week and remained at 3-month lows,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates for 30-year fixed-rate mortgages have averaged just above 5 percent through mid-September, which is roughly a percentage point below last year’s average and suggests that 2009 may reach a record annual low since the survey began in 1971.
“Low mortgage rates are aiding new home construction. Housing starts for single family homes have increased consecutively over the five past months ending in July, although starts eased slightly in August. Moreover, homebuilder confidence improved for the third straight month in September, with all four regions showing positive gains, according to the National Association of Home Builder’s Housing Market Index.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, http://www.primohomesearch.com/
Friday, September 11, 2009
Condo Purchases Require Extra Steps
Homebuyers contemplating purchasing a condominium should review a long list of documents and other information to make sure that the property they are considering is a solid buy in this challenging market.
The following information is a the top of the must-consider list:
Budget - Examine the current budget, a year-to-date statement of income and expenses, and a couple of previous years’ budgets to see how they’ve changed.
Reserve study - Understand the plan for maintenance and how it will be paid for.
Special assessments - Ask if there have been any and whether more are planned.
Delinquencies - How many owners are behind in their payments? Many lenders say no more than 15 percent of owners can be in arrears or they won’t write mortgages in the complex.
Source: Chicago Tribune, Lew Sichelman (08/23/2009)
For more real estate news and information, contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
The following information is a the top of the must-consider list:
Budget - Examine the current budget, a year-to-date statement of income and expenses, and a couple of previous years’ budgets to see how they’ve changed.
Reserve study - Understand the plan for maintenance and how it will be paid for.
Special assessments - Ask if there have been any and whether more are planned.
Delinquencies - How many owners are behind in their payments? Many lenders say no more than 15 percent of owners can be in arrears or they won’t write mortgages in the complex.
Source: Chicago Tribune, Lew Sichelman (08/23/2009)
For more real estate news and information, contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
10 Housing Markets Likely to Rebound Soon
Real estate forecasting service Local Market Monitor, which predicts housing market trends for investors and banks, forecasts that housing prices will decline an average of 5 percent through 2010. This prediction includes double-digit decreases in Phoenix, Miami, and Las Vegas.
But then the worst could be over, says CEO Ingo Winzer. As the recession eases, “We’ll see good price increases in many markets,” he reports.
In the following markets, home values are expected to remain level this year but increase in value next year:
Baton Rouge, La.
Buffalo-Niagara Falls, N.Y.
Dallas-Plano-Irving, Texas
Fort Worth-Arlington, Texas
Houston-Sugar Land-Baytown, Texas
Little Rock-North Little Rock-Conway, Ark.
Omaha-Council Bluffs, Neb.-Iowa
Pittsburgh, Pa.
San Antonio, Texas
Syracuse, N.Y.
Here are the 10 largest markets where prices are expected to continue to decline through 2010:
Fresno, Calif.
Las Vegas-Paradise, Nev.
Miami-Miami Beach-Kendall, Fla.
Orlando-Kissimmee, Fla.
Phoenix-Mesa-Scottsdale, Ariz.
Portland-Vancouver-Beaverton, Ore.-Wash.
San Jose-Sunnyvale-Santa Clara, Calif.
Stockton, Calif.
Tacoma, Wash.
Tucson, Ariz.
Source: Local Market Monitor (09/09/2009)
For more real estate news and information contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
But then the worst could be over, says CEO Ingo Winzer. As the recession eases, “We’ll see good price increases in many markets,” he reports.
In the following markets, home values are expected to remain level this year but increase in value next year:
Baton Rouge, La.
Buffalo-Niagara Falls, N.Y.
Dallas-Plano-Irving, Texas
Fort Worth-Arlington, Texas
Houston-Sugar Land-Baytown, Texas
Little Rock-North Little Rock-Conway, Ark.
Omaha-Council Bluffs, Neb.-Iowa
Pittsburgh, Pa.
San Antonio, Texas
Syracuse, N.Y.
Here are the 10 largest markets where prices are expected to continue to decline through 2010:
Fresno, Calif.
Las Vegas-Paradise, Nev.
Miami-Miami Beach-Kendall, Fla.
Orlando-Kissimmee, Fla.
Phoenix-Mesa-Scottsdale, Ariz.
Portland-Vancouver-Beaverton, Ore.-Wash.
San Jose-Sunnyvale-Santa Clara, Calif.
Stockton, Calif.
Tacoma, Wash.
Tucson, Ariz.
Source: Local Market Monitor (09/09/2009)
For more real estate news and information contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
Tuesday, September 8, 2009
90-Day Notice to Tenants - Mandatory?
Q. I heard that I now must give my tenants a 90-day notice to terminate a month-to-month tenancy. Is that correct?
A. Not necessarily. You may be referring to the new Protecting Tenants at Foreclosure Act of 2009 (effective May 20, 2009; expires 2012). This new federal law provides that all “bona fide” tenants on a month-to-month tenancy must get a 90-day notice prior to eviction after a foreclosure has taken place. A “bona fide” tenancy is one where the tenant is not the mortgagor or a member of the mortgagor’s family, the tenancy is the result of an arm’s-length transaction, and the tenancy requires rent that is not substantially lower than fair market rent or is not reduced or subsidized due to a federal, state, or local subsidy.
However, if there hasn’t been a foreclosure, then a tenant must be given either a 30-day or a 60-day notice to terminate a month-to-month tenancy. The 30-day notice is required for a tenancy of less than one year. The 60-day notice is required for a tenancy of one year or longer. Note: A Section 8 tenancy requires a 90-day notice.
Sonia M. Younglove, Esq., is C.A.R. senior counsel.
Contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
A. Not necessarily. You may be referring to the new Protecting Tenants at Foreclosure Act of 2009 (effective May 20, 2009; expires 2012). This new federal law provides that all “bona fide” tenants on a month-to-month tenancy must get a 90-day notice prior to eviction after a foreclosure has taken place. A “bona fide” tenancy is one where the tenant is not the mortgagor or a member of the mortgagor’s family, the tenancy is the result of an arm’s-length transaction, and the tenancy requires rent that is not substantially lower than fair market rent or is not reduced or subsidized due to a federal, state, or local subsidy.
However, if there hasn’t been a foreclosure, then a tenant must be given either a 30-day or a 60-day notice to terminate a month-to-month tenancy. The 30-day notice is required for a tenancy of less than one year. The 60-day notice is required for a tenancy of one year or longer. Note: A Section 8 tenancy requires a 90-day notice.
Sonia M. Younglove, Esq., is C.A.R. senior counsel.
Contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
SmartZip's New Home Valuation Tool
Move over Zillow.com, here comes SmartZip, a new home valuation analytic that assesses California and Florida properties' potential for growth and income. The site predicts a property's projected 10-year return on investment, monthly cash flow, region's potential for job growth, plus the usual barometers of desirability, schools, safety, and lifestyle ratings. Visit www.smartzip.com to learn more. Better yet, contact Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com. You can also visit our website, www.primohomesearch.com
Mortgage Protection Plan
On April 2, 2009 the Housing Affordability Fund launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations. Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage.
To qualify for the Mortgage Protection Program, Applicants must:
· Be a first-time home buyer – someone who has not owned property in the last three years (includes co-buyer).
· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009 (purchase agreement cannot be dated before April 2, 2009)
· Use a California REALTOR® in the transaction
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)
For more information contact Mike at 916-425-6066/ michaeloday@greatwestgmac.com or Pat at 916-956-8928/ patrickryan@greatwestgmac.com or check our website www.primohomesearch.com
To qualify for the Mortgage Protection Program, Applicants must:
· Be a first-time home buyer – someone who has not owned property in the last three years (includes co-buyer).
· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009 (purchase agreement cannot be dated before April 2, 2009)
· Use a California REALTOR® in the transaction
· Purchase the property in California
· Be a W-2 employee (cannot be self-employed)
For more information contact Mike at 916-425-6066/ michaeloday@greatwestgmac.com or Pat at 916-956-8928/ patrickryan@greatwestgmac.com or check our website www.primohomesearch.com
Thursday, September 3, 2009
When Does a Foreclosure Begin?
Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.
A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.
Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.
Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
Copyright © 2008 Inman News
All Rights Reserved
Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrick ryan@greatwestgmac.com or visit our website, www.primohomesearch.com
A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.
Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.
Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
Copyright © 2008 Inman News
All Rights Reserved
Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrick ryan@greatwestgmac.com or visit our website, www.primohomesearch.com
California Housing Fast Facts
Calif. median home price - July 09: $285,480 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region July 09: Santa Barbara So. Coast $885,000 (Source: C.A.R.)Calif. lowest median home price by C.A.R. region July 09: High Desert $110,650 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 2009: 67 percent (Source: C.A.R.)
Mortgage rates - week ending 8/27/09 30-yr. fixed: 5.14% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.69% Fees/points: 0.6% (Source: Freddie Mac)
Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
Calif. highest median home price by C.A.R. region July 09: Santa Barbara So. Coast $885,000 (Source: C.A.R.)Calif. lowest median home price by C.A.R. region July 09: High Desert $110,650 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 2009: 67 percent (Source: C.A.R.)
Mortgage rates - week ending 8/27/09 30-yr. fixed: 5.14% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.69% Fees/points: 0.6% (Source: Freddie Mac)
Mike at 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
Delinquencies Continue to Climb, Foreclosures Flat
The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 64 basis points from 8.22 percent in the first quarter of 2009 to 8.86 percent this quarter.
Top Line Results
The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 4.30 percent, an increase of 45 basis points from the first quarter of 2009 and 155 basis points from one year ago. The combined percentage of loans in foreclosure and at least one payment past due was 13.16 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the second quarter was 1.36 percent, down one basis point from last quarter and up 28 basis points from one year ago.
The percentages of loans 90 days or more past due and loans in foreclosure both set new record highs, breaking records set last quarter. The percentage of loans 30 days past due is still well below the record set in the second quarter of 1985.
Increases Driven by Prime Fixed-Rate Loans
“While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime ARM loans. The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase. As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five. While 41 states had increases in the foreclosure start rate for prime fixed-rate loans, 43 states had decreases in that rate for subprime adjustable-rate loans,” said Jay Brinkmann, MBA’s Chief Economist.
“The states of California, Florida, Arizona and Nevada continue to have a disproportionately high share of foreclosure starts, although the share has fallen slightly from last quarter. Those four states had 44 percent of all of the nation’s new foreclosures during the second quarter of this year, down from 46 percent in the first quarter.
“Florida continues to establish itself as the worst state in the union for mortgage performance, closely followed only by Nevada. In Florida 12 percent of mortgages were somewhere in the process of foreclosure, the highest in the nation, and another 5 percent were at least 90 days past due as of the end of June. A total of 22.8 percent were delinquent at least one payment or in the process of foreclosure, which is almost twice the national percentage if the Florida numbers are excluded. In contrast, the next highest states are Nevada at 21.3 percent, Arizona at 16.3 percent and Michigan at 15.8 percent.
“We also saw a major jump in FHA foreclosures. The percentage of loans with foreclosures started, the percentage of loans in foreclosure and the percentage of loans 90 days or more past due are all records for FHA. While the foreclosure starts rate for FHA loans at 1.15 percent is lower than all other loan types with the exception of prime fixed-rate loans, the FHA percentages have remained low due to a large increase in the number of loans outstanding, the so-called “denominator effect”. If the number of FHA loans had stayed the same as a year ago and we saw the same number of foreclosures, the FHA foreclosure rate would be almost 1.5 percent.
“As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves. In addition, in some areas where a number of borrowers have mortgages that are larger than the current value of their homes, any life events such a divorce or loss of a job are likely to translate into foreclosures until prices in those areas recover, not just flatten.
“Finally, while the various loan modification programs continue to have an impact on holding foreclosure rates below where they otherwise would be, the issue is that many of the foreclosures involve homes that are vacant, borrowers who no longer have jobs, or loans where there was fraud involved. Therefore, in measuring the effectiveness of industry or government loan modification programs it is necessary to compare the results not with the total foreclosure and delinquency numbers reported here but with the smaller subset of borrowers who can and want to qualify,” Brinkmann said
Information courtesy of the Mortgage Bankers Association (MBA), a national association representing the real estate finance industry.
Mike @ 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
Top Line Results
The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 4.30 percent, an increase of 45 basis points from the first quarter of 2009 and 155 basis points from one year ago. The combined percentage of loans in foreclosure and at least one payment past due was 13.16 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the second quarter was 1.36 percent, down one basis point from last quarter and up 28 basis points from one year ago.
The percentages of loans 90 days or more past due and loans in foreclosure both set new record highs, breaking records set last quarter. The percentage of loans 30 days past due is still well below the record set in the second quarter of 1985.
Increases Driven by Prime Fixed-Rate Loans
“While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime ARM loans. The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase. As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five. While 41 states had increases in the foreclosure start rate for prime fixed-rate loans, 43 states had decreases in that rate for subprime adjustable-rate loans,” said Jay Brinkmann, MBA’s Chief Economist.
“The states of California, Florida, Arizona and Nevada continue to have a disproportionately high share of foreclosure starts, although the share has fallen slightly from last quarter. Those four states had 44 percent of all of the nation’s new foreclosures during the second quarter of this year, down from 46 percent in the first quarter.
“Florida continues to establish itself as the worst state in the union for mortgage performance, closely followed only by Nevada. In Florida 12 percent of mortgages were somewhere in the process of foreclosure, the highest in the nation, and another 5 percent were at least 90 days past due as of the end of June. A total of 22.8 percent were delinquent at least one payment or in the process of foreclosure, which is almost twice the national percentage if the Florida numbers are excluded. In contrast, the next highest states are Nevada at 21.3 percent, Arizona at 16.3 percent and Michigan at 15.8 percent.
“We also saw a major jump in FHA foreclosures. The percentage of loans with foreclosures started, the percentage of loans in foreclosure and the percentage of loans 90 days or more past due are all records for FHA. While the foreclosure starts rate for FHA loans at 1.15 percent is lower than all other loan types with the exception of prime fixed-rate loans, the FHA percentages have remained low due to a large increase in the number of loans outstanding, the so-called “denominator effect”. If the number of FHA loans had stayed the same as a year ago and we saw the same number of foreclosures, the FHA foreclosure rate would be almost 1.5 percent.
“As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves. In addition, in some areas where a number of borrowers have mortgages that are larger than the current value of their homes, any life events such a divorce or loss of a job are likely to translate into foreclosures until prices in those areas recover, not just flatten.
“Finally, while the various loan modification programs continue to have an impact on holding foreclosure rates below where they otherwise would be, the issue is that many of the foreclosures involve homes that are vacant, borrowers who no longer have jobs, or loans where there was fraud involved. Therefore, in measuring the effectiveness of industry or government loan modification programs it is necessary to compare the results not with the total foreclosure and delinquency numbers reported here but with the smaller subset of borrowers who can and want to qualify,” Brinkmann said
Information courtesy of the Mortgage Bankers Association (MBA), a national association representing the real estate finance industry.
Mike @ 916-425-6066, michaeloday@greatwestgmac.com or Pat at 916-956-8928, patrickryan@greatwestgmac.com or visit our website, www.primohomesearch.com
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