Real Estate
FORECLOSUES SPIKED IN AUGUST
Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures.
With real estate markets slowing and mortgage rates well above levels of recent years, times are getting tougher for homeowners - the number of homes entering into some stage of foreclosure is surging, according to a survey released Wednesday.
In August, 115,292 properties entered into foreclosure, according to RealtyTrac, an online marketplace for foreclosure sales. That was 24 percent above the level in July and 53 percent higher than a year earlier.
Where foreclosures are jumping Year over year gain in homes in foreclosure. Click for more stats on each state.
Nevada: Up 255%
California: Up 160%
Florida: Up 62%
Buying Foreclosed Homes
The 3 stages of foreclosures
Before you try it, it helps to know the landscape. (more)
It was the second highest monthly foreclosure total of the year; in February, 117,151 properties entered foreclosure.
Some of the bellwether real estate market states are among the leading foreclosure markets. Florida, had more than 16,533 properties in foreclosure in August. That led all states and was 50 percent higher than in July and 62 percent higher than in August 2005.
California foreclosures are increasing at an even faster annual rate, up 160 percent since last year to 12,506. And the formerly red-hot Nevada market recorded a spike of 24 percent compared with July and a whopping 255 percent increase from August 2005.
Rick Sharga, RealtyTrac's vice president of marketing, says the rising foreclosure numbers are in part the result of rising monthly payments on adjustable-rate mortgages, which have a low introductory interest rate that heads higher after an initial period.
"Usually, foreclosures are a lagging [market] indicator," he says. "But we've never had a situation like this with adjustable-rate mortgages amounting to $400 billion to $500 billion coming up for adjustment over the rest of the year."
For a homeowner with a 5/1 ARM (an adjustable rate loan with an initial fixed rate for five years that then adjusts annually) that's now resetting, the adjustment could add at least two percentage points to the interest rate. That could send the payment on a $200,000 loan up from about $950 a month closer to $1,200.
These exotic mortgages, which have been issued by lenders at much higher numbers the past few years, default at a higher rate than do fixed-rate mortgages. And sub-prime loans, which are much more common than in the past, have a higher default rate as well.
But, Sharga says, "The real wild card is the nature of the loans themselves. Historically, ARMs were underwritten pretty conservatively. There has been a loosening of standards with lower credit worthiness and smaller down payments."
Underlying causes
Homeowners are also in Dutch because of underlying economic conditions. Many of the worst hit markets, such as in the Midwest, are in areas hard hit by layoffs or other economic ills.
When housing markets were hot, homeowners could often avoid default through two ready made options, according to Sharga: They could sell to a ready market or they could use the increase through appreciation in their equity to refinance their homes. Increasingly, both those options are evaporating.
Contrary to what many consumers may believe, lenders are not anxious to foreclose on homes and put families out on the streets. Foreclosures tend to be money losers for lenders and are done mostly as a last resort.
Sharga says lenders are beginning to recognize that a problem is brewing and are taking steps to address it. They are much more amenable to a short sale, for example, in which they accept a low-ball, cash bid early in the default process that may not even cover their mortgage, in order to avoid a larger loss later. That can help homeowners by preserving their credit scores and easing their transitions into the rental market.
"Lenders say they're looking for ways to work with homeowners in trouble," reports Sharga. "So for homeowners looking at a default situation, the sooner they talk to their lender - and see what options are available - the better."
More real estate news: Leading home builders lower profit outlook. Companies warning include: Lennar (Charts), KB Home (Charts) and Beazer Homes (Charts).
Wednesday, September 13, 2006
Monday, September 11, 2006
California Home Sales Statistics For July 2006
Real Estate
CALIFORNIA JULY HOME SALES 2006
A total of 44,250 new and resale houses and condos were sold statewide last month. That's down 17.6 percent from 53,700 for June and down 28.8 percent from 62,150 for July 2005.
The median price paid for a home last month was $475,000. That was down 0.6 percent from June's record $478,000, and up 5.3 percent from $451,000 for July a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,353. That was down from $2,362 in June, and up from $1,974 for July a year ago.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
CALIFORNIA JULY HOME SALES 2006
A total of 44,250 new and resale houses and condos were sold statewide last month. That's down 17.6 percent from 53,700 for June and down 28.8 percent from 62,150 for July 2005.
The median price paid for a home last month was $475,000. That was down 0.6 percent from June's record $478,000, and up 5.3 percent from $451,000 for July a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,353. That was down from $2,362 in June, and up from $1,974 for July a year ago.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, August 23, 2006
California Foreclosure Activity in 2006
Real Estate
California Foreclosure Activity Hits Three-Year High
Second quarter California foreclosure activity rose at the fastest pace in at least 14 years, the result of waning home price appreciation.
Lenders sent 20,752 default notices to homeowners statewide during the April-through-June period. That was up 10.5 percent from 18,778 the previous quarter and up 67.2 percent from 12,408 in the second quarter of last year, DataQuick Information Systems reported. Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992. Notices of default are formal documents filed with the county recorder's office and mark the first step in the foreclosure process.
Despite the second quarter surge, defaults remained below historically normal levels. On average, lenders filed 32,762 notices of default each quarter over the past 14 years. Last quarter's 20,752 total was the highest since 25,511 were filed in first quarter 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "The increase was a statistical certainty because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today's level before they would begin to impact home values much."
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice continued. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender."
Other factors that contribute to higher defaults include the amount of equity owners have in their homes, the type of mortgage and how long the mortgage has been held.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Foreclosure activity hit a low during the third quarter of 2004, when lenders filed 12,145 default notices. That year California home prices rose at an annual rate exceeding 20 percent. This year annual price gains have slipped into single digits in many of the state's larger housing markets. Last month San Diego and Sacramento counties saw their median home prices dip about 1 percent compared with a year ago. Second quarter defaults shot up about 99 percent in San Diego County and 109 percent in Sacramento County from last year.
Still, today's statewide foreclosure activity amounts to about one-third of the peak level in the first quarter of 1996, when 59,897 defaults were filed. The state was in a housing slump back then and foreclosure activity tugged home values down by about 10 percent in some areas.
Today, only about seven percent of homeowners who find themselves in default lose their homes to foreclosure. Most stop the process by bringing their mortgage payments current, or by selling their home and paying the home loan(s) off.
Notices of Default houses and condos
County/Region 2005Q2 2006Q2 % Chg
Los Angeles 3157 4587 45.3%
Orange 697 1280 83.6%
San Diego 894 1778 98.9%
Riverside 1121 2287 104.0%
San Bernardino 1093 1839 68.3%
Ventura 250 452 80.8%
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
California Foreclosure Activity Hits Three-Year High
Second quarter California foreclosure activity rose at the fastest pace in at least 14 years, the result of waning home price appreciation.
Lenders sent 20,752 default notices to homeowners statewide during the April-through-June period. That was up 10.5 percent from 18,778 the previous quarter and up 67.2 percent from 12,408 in the second quarter of last year, DataQuick Information Systems reported. Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992. Notices of default are formal documents filed with the county recorder's office and mark the first step in the foreclosure process.
Despite the second quarter surge, defaults remained below historically normal levels. On average, lenders filed 32,762 notices of default each quarter over the past 14 years. Last quarter's 20,752 total was the highest since 25,511 were filed in first quarter 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "The increase was a statistical certainty because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today's level before they would begin to impact home values much."
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice continued. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender."
Other factors that contribute to higher defaults include the amount of equity owners have in their homes, the type of mortgage and how long the mortgage has been held.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Foreclosure activity hit a low during the third quarter of 2004, when lenders filed 12,145 default notices. That year California home prices rose at an annual rate exceeding 20 percent. This year annual price gains have slipped into single digits in many of the state's larger housing markets. Last month San Diego and Sacramento counties saw their median home prices dip about 1 percent compared with a year ago. Second quarter defaults shot up about 99 percent in San Diego County and 109 percent in Sacramento County from last year.
Still, today's statewide foreclosure activity amounts to about one-third of the peak level in the first quarter of 1996, when 59,897 defaults were filed. The state was in a housing slump back then and foreclosure activity tugged home values down by about 10 percent in some areas.
Today, only about seven percent of homeowners who find themselves in default lose their homes to foreclosure. Most stop the process by bringing their mortgage payments current, or by selling their home and paying the home loan(s) off.
Notices of Default houses and condos
County/Region 2005Q2 2006Q2 % Chg
Los Angeles 3157 4587 45.3%
Orange 697 1280 83.6%
San Diego 894 1778 98.9%
Riverside 1121 2287 104.0%
San Bernardino 1093 1839 68.3%
Ventura 250 452 80.8%
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, June 19, 2006
Real Estate
Top 5 Reasons Buyers Won't Commit To Purchase
Spring is the traditional peak sales season for houses and condos. Summer is usually very good until the traditional Agust slump, especially for families who want to relocate before school starts. More prospective home buyers are in the market at this time of the year than during any other season.
But 2006 is proving to be a bit different. Although 2005 was a record home sales volume year, the number or residence sales has slowed this year. There could be several reasons such as adverse weather in many areas and slowly rising mortgage interest rates. In a few communities home sales prices have taken s slight dip so prospective buyers might be waiting to see if desperate home sellers reduce their asking prices.
Another reason for waiting to buy a house or condo is the inventory of available listings is slowly rising, thus offering more homes available for sale.
In summary, for most communities it is definetely a "buyers" market". That means there are more homes listed for sale than there are qualified home buyers.
The result can be a bargain prices for savvy home buyers.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Top 5 Reasons Buyers Won't Commit To Purchase
Spring is the traditional peak sales season for houses and condos. Summer is usually very good until the traditional Agust slump, especially for families who want to relocate before school starts. More prospective home buyers are in the market at this time of the year than during any other season.
But 2006 is proving to be a bit different. Although 2005 was a record home sales volume year, the number or residence sales has slowed this year. There could be several reasons such as adverse weather in many areas and slowly rising mortgage interest rates. In a few communities home sales prices have taken s slight dip so prospective buyers might be waiting to see if desperate home sellers reduce their asking prices.
Another reason for waiting to buy a house or condo is the inventory of available listings is slowly rising, thus offering more homes available for sale.
In summary, for most communities it is definetely a "buyers" market". That means there are more homes listed for sale than there are qualified home buyers.
The result can be a bargain prices for savvy home buyers.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, May 15, 2006
Real Estate
Pricey Homes and Lots of Them
Fewer sales mean more houses to choose from. Buyers have gained breathing room, if not a lot a great deals.
This is the time when buyers have time to shop and compare and cam make a throughful purchase. It is not like a year ago when buyers were walking around with a check in their pocket and writing offers on the hood of their car.
There were 69,499 single family homes sold in the first three months of the year in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties, according to Dataquick Information Systems, a decline of more than 8% from the same period a year earlier.
Buyers don't have that panicked feeling. 'If I don't buy therefore the post goes up, I'll get into the multiple offers and lose out'
Althogh most buyers are focused on specific neighborhoods and follow median sales prices more closely thatn the price per square foot measurements, real estate agents and idustry analyst say the latter number offers the most reliable snapshot of how a market is performing over a wide area. Homes are also clearly lingering longer on the market. Southern California had a six month supply of homes for sale in January 2005.
The lowest performing zip code in Los Angeles County was 91390 in Santa Clarita, which was still up 7.7% for the same period according to Dataquick
Pricey Homes and Lots of Them
Fewer sales mean more houses to choose from. Buyers have gained breathing room, if not a lot a great deals.
This is the time when buyers have time to shop and compare and cam make a throughful purchase. It is not like a year ago when buyers were walking around with a check in their pocket and writing offers on the hood of their car.
There were 69,499 single family homes sold in the first three months of the year in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties, according to Dataquick Information Systems, a decline of more than 8% from the same period a year earlier.
Buyers don't have that panicked feeling. 'If I don't buy therefore the post goes up, I'll get into the multiple offers and lose out'
Althogh most buyers are focused on specific neighborhoods and follow median sales prices more closely thatn the price per square foot measurements, real estate agents and idustry analyst say the latter number offers the most reliable snapshot of how a market is performing over a wide area. Homes are also clearly lingering longer on the market. Southern California had a six month supply of homes for sale in January 2005.
The lowest performing zip code in Los Angeles County was 91390 in Santa Clarita, which was still up 7.7% for the same period according to Dataquick
Thursday, May 11, 2006
Real Estate
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Tuesday, May 02, 2006
Real Estate
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
Friday, April 28, 2006
Real Estate FSBOs ( For Sale By Owners) May Be Losing Millions.
For Sale By Owners, are home owners who sell their own houses without professinal help. It seems that in the desire to save the 5% or 5% fee that real estate brokers charge for their services, The For Sale By Owners earn 16% less than owners of comparable houses who put the transaction into the hands of an experience agent according to a survey conducted by National Association of Realtors.
A poll of 7,813 recent buyers and sellers located through county deed records found that the median price achieved by sellers with agents was $ 230,000 compared with $ 198,200 for those without agents. That's a difference of nearly $ 32,000 or 15%, with no significant diffferences between the types of homes sold.
A research by two intructors at the University of Texas at San Antonio found that sellers realize little gain when they turn to limited service agents to perform some but not all the tasks needed to close a sale.
The study revealed that limited service listings sold for 1.7% less than full service ones and took 17.1% longer to sell. It seems that a limited service brokerage offers "no dollar advantage".
FSBOs who participated in the Realtor survey also said they had more difficulty in undertanding and completing the necessary paperwork, preparing their homes for the marked and setting the proper price that they did in attracting buyers.
FSBOs don't price their property correctly, they don't have the resources to determine a fair and solid asking price.
For Sale By Owners, are home owners who sell their own houses without professinal help. It seems that in the desire to save the 5% or 5% fee that real estate brokers charge for their services, The For Sale By Owners earn 16% less than owners of comparable houses who put the transaction into the hands of an experience agent according to a survey conducted by National Association of Realtors.
A poll of 7,813 recent buyers and sellers located through county deed records found that the median price achieved by sellers with agents was $ 230,000 compared with $ 198,200 for those without agents. That's a difference of nearly $ 32,000 or 15%, with no significant diffferences between the types of homes sold.
A research by two intructors at the University of Texas at San Antonio found that sellers realize little gain when they turn to limited service agents to perform some but not all the tasks needed to close a sale.
The study revealed that limited service listings sold for 1.7% less than full service ones and took 17.1% longer to sell. It seems that a limited service brokerage offers "no dollar advantage".
FSBOs who participated in the Realtor survey also said they had more difficulty in undertanding and completing the necessary paperwork, preparing their homes for the marked and setting the proper price that they did in attracting buyers.
FSBOs don't price their property correctly, they don't have the resources to determine a fair and solid asking price.
Tuesday, February 28, 2006
Real Estate
January Home Sales Lowest For Month in 5 years
Home sales accross Souther California fell 7.4 percent last month to their lowest level for January in five years as the real estate market continued to cool.
Potential buyers morphing into fence sitters accounted for the dip in the market's off-season. Last month buyers scooped up 28,085 new and resale housed and condos in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Sales plunged 30,6 per cent from 28,952 transactions in December, but a monthly decline at this time of year is typical, the company said.
December is one of the year's strongest months and January one of the weakest. Sales last month were the fewest in January since 2001, when there were 18,010. The low point for the month was 1992 with 10,994 sales and the high was in 1989, with 23,379.
We're past the frenzy, and it's kind of normalizing re-reaching a balance. Sales have now fallen for two consecutive months, but this does not signal a trend. It will take until March to get a sense of how the market concludes a long boom cycle.
While sales are following expectations, the median price is not January's median across the six county region rose an anual 13 percent to $ 469,000.00
However the rise was well below the year ago rate of increase. We actually thought it would be lower than that by now. It's just coming down slower than we anticipated. That's because demand continues to be strong. The DataQuick president notes that there are no troubling signs for the market n the horizon.
In Los Angeles County 6,761 propertis changed hands down an annual 11.4 percent. The median price, the point at which half the units cost more and half less, increased 17.6 percent to
$ 487,000.
In Ventura County, sales fell 21.3 percent to 731 transactions, and the median price increase 18,8 percent to $ 608,000.
January Home Sales Lowest For Month in 5 years
Home sales accross Souther California fell 7.4 percent last month to their lowest level for January in five years as the real estate market continued to cool.
Potential buyers morphing into fence sitters accounted for the dip in the market's off-season. Last month buyers scooped up 28,085 new and resale housed and condos in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Sales plunged 30,6 per cent from 28,952 transactions in December, but a monthly decline at this time of year is typical, the company said.
December is one of the year's strongest months and January one of the weakest. Sales last month were the fewest in January since 2001, when there were 18,010. The low point for the month was 1992 with 10,994 sales and the high was in 1989, with 23,379.
We're past the frenzy, and it's kind of normalizing re-reaching a balance. Sales have now fallen for two consecutive months, but this does not signal a trend. It will take until March to get a sense of how the market concludes a long boom cycle.
While sales are following expectations, the median price is not January's median across the six county region rose an anual 13 percent to $ 469,000.00
However the rise was well below the year ago rate of increase. We actually thought it would be lower than that by now. It's just coming down slower than we anticipated. That's because demand continues to be strong. The DataQuick president notes that there are no troubling signs for the market n the horizon.
In Los Angeles County 6,761 propertis changed hands down an annual 11.4 percent. The median price, the point at which half the units cost more and half less, increased 17.6 percent to
$ 487,000.
In Ventura County, sales fell 21.3 percent to 731 transactions, and the median price increase 18,8 percent to $ 608,000.
Monday, February 13, 2006
Sales Up For New Homes
Strong demand and contiune low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California.
Last year consumers bought 136,228 new homes up 4.4% from 130,480 in 2004.
Since the market start slowing down Builders are a bit more careful these days, that's acting as a hedge agains getting caught with an inventory overload that characterized the end of the 1980's market.
Los Angeles County had the state's third strongest market with 10,872 sales up 19.2%. The median price dipped 0.2% to $ 454,000.
These number include condo conversions and (that) activity increased sharply last year. Since they are lower cost homes, they pull down the median price.
Strong demand and contiune low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California.
Last year consumers bought 136,228 new homes up 4.4% from 130,480 in 2004.
Since the market start slowing down Builders are a bit more careful these days, that's acting as a hedge agains getting caught with an inventory overload that characterized the end of the 1980's market.
Los Angeles County had the state's third strongest market with 10,872 sales up 19.2%. The median price dipped 0.2% to $ 454,000.
These number include condo conversions and (that) activity increased sharply last year. Since they are lower cost homes, they pull down the median price.
Home Affordability in 2005
Affordability Still At A Record Low
Housing affordability remain at 14% in December matching its record low label as rising prices and interest rates continued to slow the market.
In December the median price for a home in the state soared 15.6% to $ 548,430.00 and sales plunged 17.6%
In Los Angeles County, where the median price home cost $ 552.760, affordability fell an annual 5 percentage points to 12%
The minimum household income needed to purchase a median price home in California in December was $134,200 based on an average mortgage interest rate of 6.33% and assuming a 20% downpayment.
This is the beginning of a slowdown in the market that's been anticipated. Prices are still going to go up, but below the 10% range, and the volume of sales will slow significantly.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Housing affordability remain at 14% in December matching its record low label as rising prices and interest rates continued to slow the market.
In December the median price for a home in the state soared 15.6% to $ 548,430.00 and sales plunged 17.6%
In Los Angeles County, where the median price home cost $ 552.760, affordability fell an annual 5 percentage points to 12%
The minimum household income needed to purchase a median price home in California in December was $134,200 based on an average mortgage interest rate of 6.33% and assuming a 20% downpayment.
This is the beginning of a slowdown in the market that's been anticipated. Prices are still going to go up, but below the 10% range, and the volume of sales will slow significantly.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Tuesday, December 27, 2005
Some Of The Open House Visitors Are Curious Neighbors
12/27/05
OPEN HOUSES
When there is an open house in a neighborhood, the first ones to appear are the neighbors and the reason is always to compare that house with theirs. This also helps because they may have friends of family members interested in moving to the neighborhood.
Many seller insit their agent hold them, even though in their more candid moments, agents say that open house don´t generally yield a buyer for the featured house. They do, however, help agents bolster their client list of buyers. And those Neighbors Only open houses are a chance for agents to meet future home sellers.
In terms of effectiveness, the Internet and virtual tours may have surpà ssed the open house as an agent frontline
A 2005 California Association of Realtors Study found that 68% of buyers used the internet to preview homes through tours and photos and 75% used it to identify the homes they wanted their agents to show them.
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
OPEN HOUSES
When there is an open house in a neighborhood, the first ones to appear are the neighbors and the reason is always to compare that house with theirs. This also helps because they may have friends of family members interested in moving to the neighborhood.
Many seller insit their agent hold them, even though in their more candid moments, agents say that open house don´t generally yield a buyer for the featured house. They do, however, help agents bolster their client list of buyers. And those Neighbors Only open houses are a chance for agents to meet future home sellers.
In terms of effectiveness, the Internet and virtual tours may have surpà ssed the open house as an agent frontline
A 2005 California Association of Realtors Study found that 68% of buyers used the internet to preview homes through tours and photos and 75% used it to identify the homes they wanted their agents to show them.
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, December 07, 2005
Lead Base Paint Disclosures Mandatory on Homes Constructed Pre-1978
Pre 1978 Housing Requires Lead Disclosure
Landlords and Home sellers have to comply with a federal law requiring that lead information be given to anyone purchasing or renovation housing that was built before 1978. Why 1978? That was the year the federal government banned the use of lead based paint in housing.
Since lead paint was widely used for many years, the older the property the higher the lead paint potential. Years of accumulated paint, stretching back before the law took effect, after lurks in layers below the surface. Landlords are specifically required "to disclose known information on lead base paint hazards before leases take effect."
Lease signing now includes a form on which landlords must indicate whether they have any knowledge of lead based paint in the rental. The law does not not require rental property owners or sellers to have the property inspected or tested for lead, nor does it require them to remove lead based paint. For buyers, the law allows 10 days to conduct lead testing if they desire, at their own expense. The buyer's time limit can be extended if mutually agreeable.
The Environmental Protection Agency publishes the helpful brochure titled "Protect Your Family From Lead in Your Home", the 16 page brochure is full of lead information everyone should know. It details how lead enter the body from various sources, including during renovations that stir up lead. Paint chips, lead dust and lead deposits can lead to lead poisoning in the body either by breathing or swallowing the lead.
Lead exposure is partaker dangerous to children, since their bodies are growing rapidly and absorb more lead than adults. As a result, one out of every 11 children in the United States has dangerous levels of lead in the bloodstream, according to the brochure.
If not detected early, children with high levels of lead in their body may experience slowed growth, behavior or learning problems, hearing problems or headaches. The most extreme cases involve damage to the nervous system and brain. Prevention of lead exposure is important.
In adults lead exposure can cause reproductive problems, high blood pressure, digestive and nerve disorders, memory or concentration problems and joint and muscular problems.
Fortunately, testing for lead in the body is easy and inexpensively A simple blood test can detect lead poisoning and establish levels of lead exposure. Treatments can include diet changes or medication. Extreme cases may require hospitalization.
For more information call The National Lead Information Clearinhouse at (800) 424-LEAD
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Landlords and Home sellers have to comply with a federal law requiring that lead information be given to anyone purchasing or renovation housing that was built before 1978. Why 1978? That was the year the federal government banned the use of lead based paint in housing.
Since lead paint was widely used for many years, the older the property the higher the lead paint potential. Years of accumulated paint, stretching back before the law took effect, after lurks in layers below the surface. Landlords are specifically required "to disclose known information on lead base paint hazards before leases take effect."
Lease signing now includes a form on which landlords must indicate whether they have any knowledge of lead based paint in the rental. The law does not not require rental property owners or sellers to have the property inspected or tested for lead, nor does it require them to remove lead based paint. For buyers, the law allows 10 days to conduct lead testing if they desire, at their own expense. The buyer's time limit can be extended if mutually agreeable.
The Environmental Protection Agency publishes the helpful brochure titled "Protect Your Family From Lead in Your Home", the 16 page brochure is full of lead information everyone should know. It details how lead enter the body from various sources, including during renovations that stir up lead. Paint chips, lead dust and lead deposits can lead to lead poisoning in the body either by breathing or swallowing the lead.
Lead exposure is partaker dangerous to children, since their bodies are growing rapidly and absorb more lead than adults. As a result, one out of every 11 children in the United States has dangerous levels of lead in the bloodstream, according to the brochure.
If not detected early, children with high levels of lead in their body may experience slowed growth, behavior or learning problems, hearing problems or headaches. The most extreme cases involve damage to the nervous system and brain. Prevention of lead exposure is important.
In adults lead exposure can cause reproductive problems, high blood pressure, digestive and nerve disorders, memory or concentration problems and joint and muscular problems.
Fortunately, testing for lead in the body is easy and inexpensively A simple blood test can detect lead poisoning and establish levels of lead exposure. Treatments can include diet changes or medication. Extreme cases may require hospitalization.
For more information call The National Lead Information Clearinhouse at (800) 424-LEAD
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, November 09, 2005
Smoke Dedectors Are Mandatory On Every Home Sale In Los Angeles County
Fire preparedness Is More Than Making Sure The Detector Beeps
It is that time of year again when days grow shorter, nights longer and, most of the US clocks "fell back" an hour last month. This time changes serves as an excellent reminder to replace smoke detector batteries. Through valuable changing the battery in an smoke detector is only one step in ensuring that this life saving device does its job.
A smoke detector should be installed in each bedroom and on every level of your home, if you have them make sure they are in good working order. They should be tested once a month, they are equipped with a test button that, when pressed and held down for a few seconds will activate the alarm.
Use a safe contained source of smoke such as incense or "synthetic smoke" in an aerosol can to test the detector. IF the smoke detector are more than 10 years old, consider replacing them. They work 24 hours a day, seven days a week, that's more than 87,000 hours over 10 year period.
With smoke detectors, cleanliness is important. A dusty or lind-laden unit can't do its job properly. It should be vacuum with an upholstery attachment periodically to remove the dust buildup.
A recent released report by the Consumer Product Safety Commission on the audibility of smoke alarms found that linking or interconnecting smoke alarms could provide an earlier warning to fire and smoke. The study also found that wireless technology could be sa solution to better protecting American homes.
With an interconnected device, when one alarm detects smoke, it triggers all other alarms to sound. The immediate reaction provides more warning in more places. There is, on average, only three minutes to escape a house fire after the first smoke alarm goes off.
Families should create and frequently practice a fire-escape plan. Make sure everyone, including children know what the smoke alarm sounds like. Practice the escape plan during the day and at night when family members are asleep to see if everyone responds. If an older child or adult doesn't wake up, assign an adult to wake and assist that individual in the even of a fire. Always assist younger children.
Alberto Pacheco
818 481 9211
Realtor Calbre 01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
It is that time of year again when days grow shorter, nights longer and, most of the US clocks "fell back" an hour last month. This time changes serves as an excellent reminder to replace smoke detector batteries. Through valuable changing the battery in an smoke detector is only one step in ensuring that this life saving device does its job.
A smoke detector should be installed in each bedroom and on every level of your home, if you have them make sure they are in good working order. They should be tested once a month, they are equipped with a test button that, when pressed and held down for a few seconds will activate the alarm.
Use a safe contained source of smoke such as incense or "synthetic smoke" in an aerosol can to test the detector. IF the smoke detector are more than 10 years old, consider replacing them. They work 24 hours a day, seven days a week, that's more than 87,000 hours over 10 year period.
With smoke detectors, cleanliness is important. A dusty or lind-laden unit can't do its job properly. It should be vacuum with an upholstery attachment periodically to remove the dust buildup.
A recent released report by the Consumer Product Safety Commission on the audibility of smoke alarms found that linking or interconnecting smoke alarms could provide an earlier warning to fire and smoke. The study also found that wireless technology could be sa solution to better protecting American homes.
With an interconnected device, when one alarm detects smoke, it triggers all other alarms to sound. The immediate reaction provides more warning in more places. There is, on average, only three minutes to escape a house fire after the first smoke alarm goes off.
Families should create and frequently practice a fire-escape plan. Make sure everyone, including children know what the smoke alarm sounds like. Practice the escape plan during the day and at night when family members are asleep to see if everyone responds. If an older child or adult doesn't wake up, assign an adult to wake and assist that individual in the even of a fire. Always assist younger children.
Alberto Pacheco
818 481 9211
Realtor Calbre 01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, November 07, 2005
Beware of Fast Cash Home Sales
Beware Of Fast-Cash Home Sale Huckster
The signs are everywhere on big, blaring billboards and pieces of cardboard tacked onto telephone poles: " We Buy Ugly Homes." or sometimes "We Buy Houses."
But if you decided to deal with the "rapid resellers," don't expect to get top dollar. And exactly how much you'll get doesn't depend on the condition of your property, either. If you are willing to take your money over time, for example, you may be able to cut a better deal than if you want all your money immediately.
Ken Channa, HomeVestors director of training, says his people look to earn anywhere from 10% to 18% of the value of the house after it is fixed up and sold. That translates into offer to owners typically in the 55% to 65% range of fixed-up market value.
HomeVestors look for 3 kind of sellers:
- People who have owned adn lived in their homes for at least a decade but have not maintained their properties.
- Heirs who recently have inherited houses from a deceased loved one, houses thay may have been vacant or not well maintained for a long time, or houses that may be difficult to part with.
- Investors who are tired of being landlords and have not kept their places inf good repair.
Financially strapped owners who have not been able to make their house payments and are facing foreclosure are "not a big part" of HomeVestors' customer base says Channal. There are numerous honest investors engaged in short-term residential resales.
So, if you want or need to sell quickly, don't want to lift a finger to make your place more attractive to a wider pool of buyers, or perhaps just don't like the idea of putting a for-sale sign in your frontyard or having strangers tramping through your castle, selling to an investor may be the easiest way out.
Be forewarned, though, that choosing the right one takes as much effort as picking a good real estate agent. Start by checking them out with with your local Better Business Bureau, county consumer affairs agency or state attorney general's office.
Another tip: Look for an identifiable name and place of business with a phone number that answers during regular business hours.
Be sure your buyer has the ability to close quickly, certainly as quickly as original promised. Beware of hidden charges too. No one should charge a fee to view your property or make you an offer and there should be no sales commission, either.
The signs are everywhere on big, blaring billboards and pieces of cardboard tacked onto telephone poles: " We Buy Ugly Homes." or sometimes "We Buy Houses."
But if you decided to deal with the "rapid resellers," don't expect to get top dollar. And exactly how much you'll get doesn't depend on the condition of your property, either. If you are willing to take your money over time, for example, you may be able to cut a better deal than if you want all your money immediately.
Ken Channa, HomeVestors director of training, says his people look to earn anywhere from 10% to 18% of the value of the house after it is fixed up and sold. That translates into offer to owners typically in the 55% to 65% range of fixed-up market value.
HomeVestors look for 3 kind of sellers:
- People who have owned adn lived in their homes for at least a decade but have not maintained their properties.
- Heirs who recently have inherited houses from a deceased loved one, houses thay may have been vacant or not well maintained for a long time, or houses that may be difficult to part with.
- Investors who are tired of being landlords and have not kept their places inf good repair.
Financially strapped owners who have not been able to make their house payments and are facing foreclosure are "not a big part" of HomeVestors' customer base says Channal. There are numerous honest investors engaged in short-term residential resales.
So, if you want or need to sell quickly, don't want to lift a finger to make your place more attractive to a wider pool of buyers, or perhaps just don't like the idea of putting a for-sale sign in your frontyard or having strangers tramping through your castle, selling to an investor may be the easiest way out.
Be forewarned, though, that choosing the right one takes as much effort as picking a good real estate agent. Start by checking them out with with your local Better Business Bureau, county consumer affairs agency or state attorney general's office.
Another tip: Look for an identifiable name and place of business with a phone number that answers during regular business hours.
Be sure your buyer has the ability to close quickly, certainly as quickly as original promised. Beware of hidden charges too. No one should charge a fee to view your property or make you an offer and there should be no sales commission, either.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Thursday, November 03, 2005
Invest in Income Properties Like Duplexes Triplexes or Fourplexes
Enter To Hot Market Could Be A Duplex
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Wednesday, November 02, 2005
Watts Home Vales Appreciation
WATTS Home Values Appreciated More Than 40 %
Watts was the once predominantly African American community, which gained international notoriety during 1965 riots, saw resale-homes values increase by more than 40% last year, according to Data Quick Information Systems, a real estate research firm. Countrywide median rose 24.8%.
Fueled by demand from latino home buyers, Watts is on target this year to fulfill analysts' predictions that the Southland entry level market still has room for hefty appreciation. A comparison sales in August for this year and last, the latest period for which figures are available, showed an increase of 41.3% in the price of single family resale homes to a median of $ 325,000.
The prices have made it a hot spot for property flippers. Nearly 10% of Watts buyers this year have resold within three months, compared with an average of 3% throughout Southern California during the last decade.
In today's Watts, latinos make up the majority. African Americans leaving Los Angeles for the Inland Empire, Palmdale, Lancaster and the Southern United States.
Watts was the once predominantly African American community, which gained international notoriety during 1965 riots, saw resale-homes values increase by more than 40% last year, according to Data Quick Information Systems, a real estate research firm. Countrywide median rose 24.8%.
Fueled by demand from latino home buyers, Watts is on target this year to fulfill analysts' predictions that the Southland entry level market still has room for hefty appreciation. A comparison sales in August for this year and last, the latest period for which figures are available, showed an increase of 41.3% in the price of single family resale homes to a median of $ 325,000.
The prices have made it a hot spot for property flippers. Nearly 10% of Watts buyers this year have resold within three months, compared with an average of 3% throughout Southern California during the last decade.
In today's Watts, latinos make up the majority. African Americans leaving Los Angeles for the Inland Empire, Palmdale, Lancaster and the Southern United States.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Tuesday, November 01, 2005
Non Performing Mortgage Loans
Lenders Work Out Payment Deals For Borrowers In Jams
Many folks who get behind on their loans often trash unopened envelopes from their lenders because they figure it's just another dunning notice. But when they opened and get in touch with their lender then they discover the world of loss mitigation, a relatively new cosmos in which most mortgage investors bend over backward to keep financially troubled owners in their homes.
They help you if you have a legitimate reason for not being able to meet your obligation - illness, for example or some other major catastrophe, they want to help. Where is economically feasible, we do whatever we can to get "nonperforming loans reperforming again," said Bill Merrill director of nonperforming loans at Freddie Mac.
Most companies that administer Freddie Mac mortgages have what are variously known as work-out departments or portfolio retention sections. Their goal is to help those who want to remain in their homes and not because they are paid to do so. "Profit isn't the motive, at least is not intended to be," Merrill said.
Servicers want to keep things running smoothly because they don't earn any fees when things are not running smoothly. Loans in default are much more expensive to administer. Everybody loses not just the homeowner but the investor as well, when a loan goes into foreclosure.
Help doesn't come automatically however, you have to get in touch with your servicer, unfortunately studies show that most people don't. About 56% of all delinquent borrowers allow their homes to go all the way to foreclosing without ever taking to the lender accodring to merrill. When borrowers do call, though, four out of five go on to be happy homeowners. Early intervention is key, because you are not in arrears as much, Merrill said
Here are some of the options lenders can make available to delinquent borrowers.
forbearance: An agreement that temporarily allows borrowers to pay less than a full payment, or no payment at all, for a set period. Forbearance is an option when you can show that funds from bonus, tax refund or other source will let you bring the mortgage current at specific time in the future.
Reinstatement: Sometimes combined with a forbearance, this allows the borrowert to pay the amount they are behind in one lump sum by specific date.
Repayment Plan: An agreement that gives a fixed amount of time to repay what is owed by combining a portion of what is past due with the regular monthly payment.
Loan Modification: An agreement that permanently changes one or more terms of the original mortgage so the payment is more affordable. The borrower and lender may agree to add the missed payments to the loan balance.
A lender might be able to help homeowners who do not want or cannot keep their home. Indeed there are different ways to avoid foreclosing and reduce the impact on credit standing.
A buyer could be allowed to take over the mortgage debt, even if the loan is considered non-assumable. Or if the house can be sold for less than what is owed, the lender might agree to a "short payoff" in which the lender writes off the portion of the mortgage that exceed the proceeds from the sale. A third choice allows the transfer of the title of the home to the lender in exchange for canceling the debt.
Many folks who get behind on their loans often trash unopened envelopes from their lenders because they figure it's just another dunning notice. But when they opened and get in touch with their lender then they discover the world of loss mitigation, a relatively new cosmos in which most mortgage investors bend over backward to keep financially troubled owners in their homes.
They help you if you have a legitimate reason for not being able to meet your obligation - illness, for example or some other major catastrophe, they want to help. Where is economically feasible, we do whatever we can to get "nonperforming loans reperforming again," said Bill Merrill director of nonperforming loans at Freddie Mac.
Most companies that administer Freddie Mac mortgages have what are variously known as work-out departments or portfolio retention sections. Their goal is to help those who want to remain in their homes and not because they are paid to do so. "Profit isn't the motive, at least is not intended to be," Merrill said.
Servicers want to keep things running smoothly because they don't earn any fees when things are not running smoothly. Loans in default are much more expensive to administer. Everybody loses not just the homeowner but the investor as well, when a loan goes into foreclosure.
Help doesn't come automatically however, you have to get in touch with your servicer, unfortunately studies show that most people don't. About 56% of all delinquent borrowers allow their homes to go all the way to foreclosing without ever taking to the lender accodring to merrill. When borrowers do call, though, four out of five go on to be happy homeowners. Early intervention is key, because you are not in arrears as much, Merrill said
Here are some of the options lenders can make available to delinquent borrowers.
forbearance: An agreement that temporarily allows borrowers to pay less than a full payment, or no payment at all, for a set period. Forbearance is an option when you can show that funds from bonus, tax refund or other source will let you bring the mortgage current at specific time in the future.
Reinstatement: Sometimes combined with a forbearance, this allows the borrowert to pay the amount they are behind in one lump sum by specific date.
Repayment Plan: An agreement that gives a fixed amount of time to repay what is owed by combining a portion of what is past due with the regular monthly payment.
Loan Modification: An agreement that permanently changes one or more terms of the original mortgage so the payment is more affordable. The borrower and lender may agree to add the missed payments to the loan balance.
A lender might be able to help homeowners who do not want or cannot keep their home. Indeed there are different ways to avoid foreclosing and reduce the impact on credit standing.
A buyer could be allowed to take over the mortgage debt, even if the loan is considered non-assumable. Or if the house can be sold for less than what is owed, the lender might agree to a "short payoff" in which the lender writes off the portion of the mortgage that exceed the proceeds from the sale. A third choice allows the transfer of the title of the home to the lender in exchange for canceling the debt.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Monday, October 24, 2005
Private Mortgage Insurance
A reap Isn't The Only Way To Rein In Costs
Now is good time to cancel Private Mortgage Insurance, before a slowdown or even a dip in home prices makes it difficult.
Based largely on the run-up in housing values many homeowners have taken advantage of a 7 year old federal law that lasts them jettison private mortgage insurance also known as PMI.
But the laggards among those still paying PMI, which can add $100 or more to the monthly house payments, had better get on the stick. A Slowdown in appreciation or perhaps even a decline in house prices, could preclude dumping PMI for several more years. Do it now.
Private morrgage insurance is a necessary evil for many first time home buyers. Nearly 12 million families nationwide in the last 12 months alone were unable to scrape together 20% down payment that lenders traditional require. So lenders, accept the insurance as substitute for the part of the down payment that is missing.
The less money the borrower puts down, the more expesive the coverage, even though the borrower pays the premium the insurance protects the lender in case of default on the loan.
The good news is that the coverage can be terminated, a fact that has not been lost on some borrowers. Through the first eight months of this year, appraisals has ordered more than 10,000 appraisals on behalf of borrowers waiting to end coverage. That's a 110% increase over the same period a year ago.
Under the Homeowner Protection Act of 1998, lenders must cancel private mortgage insurance at the borrowers request when a mortgage is paid down to 80% of the properties original value. Policies must be terminated when the loan balance reaches 78% of the homes value at the time it was purchase.
Coverage can't be canceled until the loan is at least 2 years old unless the owner has made significant improvements to the property.
Now is good time to cancel Private Mortgage Insurance, before a slowdown or even a dip in home prices makes it difficult.
Based largely on the run-up in housing values many homeowners have taken advantage of a 7 year old federal law that lasts them jettison private mortgage insurance also known as PMI.
But the laggards among those still paying PMI, which can add $100 or more to the monthly house payments, had better get on the stick. A Slowdown in appreciation or perhaps even a decline in house prices, could preclude dumping PMI for several more years. Do it now.
Private morrgage insurance is a necessary evil for many first time home buyers. Nearly 12 million families nationwide in the last 12 months alone were unable to scrape together 20% down payment that lenders traditional require. So lenders, accept the insurance as substitute for the part of the down payment that is missing.
The less money the borrower puts down, the more expesive the coverage, even though the borrower pays the premium the insurance protects the lender in case of default on the loan.
The good news is that the coverage can be terminated, a fact that has not been lost on some borrowers. Through the first eight months of this year, appraisals has ordered more than 10,000 appraisals on behalf of borrowers waiting to end coverage. That's a 110% increase over the same period a year ago.
Under the Homeowner Protection Act of 1998, lenders must cancel private mortgage insurance at the borrowers request when a mortgage is paid down to 80% of the properties original value. Policies must be terminated when the loan balance reaches 78% of the homes value at the time it was purchase.
Coverage can't be canceled until the loan is at least 2 years old unless the owner has made significant improvements to the property.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Sunday, October 16, 2005
No Where To Go But Up
No Where To Go But Up
Single story architecture sits right at the confluence of two trends driving the home building industry: consumer demand for bigger homes and the increasing price of open land.
The near disappearance of the single level style in a new construction is a milestone in regional land use a deviation from decades of building that emphasized one story homes. An one that seems ironic as the large baby boomer population is aging and more likely to be seeking out places without stairs.
About 44% of all new single family homes in the U.S. had two or more stories in 2004, up from 30% in 1978 according to U.S. Census Bureau statistics. This upward movement is not limited to urban setttings. There are entire developments being built in the Inland Empire where the bulk of Southern California's new home growth is, that don't have a single level home in them.
It's only the senior citizens who want a single-story homes. Homes with second story adds square footage without taking up more space on the ground.
Twenty years ago the average lot in California was more than 7,500 square feet, now is about 6,417 square feet.
Single story architecture sits right at the confluence of two trends driving the home building industry: consumer demand for bigger homes and the increasing price of open land.
The near disappearance of the single level style in a new construction is a milestone in regional land use a deviation from decades of building that emphasized one story homes. An one that seems ironic as the large baby boomer population is aging and more likely to be seeking out places without stairs.
About 44% of all new single family homes in the U.S. had two or more stories in 2004, up from 30% in 1978 according to U.S. Census Bureau statistics. This upward movement is not limited to urban setttings. There are entire developments being built in the Inland Empire where the bulk of Southern California's new home growth is, that don't have a single level home in them.
It's only the senior citizens who want a single-story homes. Homes with second story adds square footage without taking up more space on the ground.
Twenty years ago the average lot in California was more than 7,500 square feet, now is about 6,417 square feet.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
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