Saturday, May 29, 2010

Foreclosed homeowners could owe ‘tens thousands of dollars’ to lenders

from the Los Angeles Business Journal

Facing the possibility of foreclosure, California homeowners may be hit with more than just losing their homes. Due to a loophole in state law, they also can be sued by their lender. To prevent this, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is sponsoring Senate Bill 1178 by State Sen. Ellen Corbett (D-San Leandro), which will extend anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure.

Currently, if a homeowner defaults on a mortgage used to purchase his or her home -- known as a “purchase money mortgage” -- the homeowner's liability on the mortgage is limited to the property itself. Unfortunately, the original law did not extend the purchase money protection to loans that refinance the original purchase debt, even if the refinance only was to obtain a lower interest rate.

Californians who refinance a property currently do not have protection if they default on a mortgage greater than the property’s value. Called a “deficiency” liability, under current California law, the lender can sue the former homeowner for the amount of the deficiency even after taking back the property.

Recent years of low interest rates and aggressive marketing campaigns by lenders have induced tens of thousands to refinance mortgages. Few homeowners realized that by refinancing their mortgage, they were forfeiting their protections and now are personally liable.

Click here for the entire article.

Wednesday, May 26, 2010

5 Reasons to Move in the Summer

Home buying and selling activity is typically hottest during the summer months. Here are five top reasons you should take advantage of the season and make the move this summer.

1. More homes to choose from
More people choose to sell during the summer due to nicer weather and school schedules. With a larger number of homes on the market, you’re more likely to find a home that suits your lifestyle and budget. If you’re thinking of selling, you’ll find a greater number of potential buyers in the summer.

2. Easier on the kids
The variety of summer programs available makes it easier for your children to meet future schoolmates. Kids are also playing outside more, which gives them lots of opportunities to make friends in their own neighborhood. Not to mention they’ll be able to start in the beginning of the school year and avoid the obvious new-kid syndrome.

3. More daylight
This is a plus for both sides of a transaction—buying and selling. It’s more appealing to show your house in the daylight.

4. Flowers are in bloom
As long as you water regularly, your curb appeal will be maximized by the lush and fragrant summer-blooming flowers. This also gives buyers a good idea of the amount of maintenance to expect to keep your yard looking beautiful.

5. Garage sale season
This is the perfect time to get rid of clutter. Your house will appear more spacious to your potential buyers, plus you’ll have less stuff to haul to your new home. Invite your neighbors to participate and make it a block sale for better attendance.

If you’re planning on buying this summer, get an advantage over the competition by getting pre-approved now. Whether you’re buying your first home, or selling your current home and buying another, the summer is an ideal time to make YOUR move.

Saturday, May 22, 2010

Fannie Mae extends seller assistance program

Fannie Mae recently announced it is extending its seller assistance incentive on all Fannie Mae-owned HomePath properties. Buyers will receive 3.5 percent of the final sales price, to be used toward closing cost assistance or their choice of selected appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on by June 30.

Properties listed on are owned by Fannie Mae and include a variety of homes, including single-family homes, condominiums, and town houses. HomePath properties also may be eligible for HomePath Mortgage and HomePath Renovation Mortgage financing, which offers prospective buyers an opportunity to purchase properties with as little as 3 percent down.

Wednesday, May 19, 2010

Nationwide home values decline in first quarter

Home values in most U.S. markets continued to decline in the first quarter of 2010, according to the Zillow Home Value Index which decreased 3.8 percent year-over-year, and 1 percent quarter-over-quarter. However, home values in several California markets showed signs of improvement, according to the report.

Housing market conditions varied across the country, with 106 of the 135 areas tracked by Zillow continuing to decline on a year-over-year basis. Negative equity rose to 23.3 percent in the first quarter nationwide compared with 21.4 percent in the fourth quarter of 2009, Zillow reported. Foreclosures reached a new peak in March, with more than one out of every 1,000 U.S. homes entering into foreclosure during the month.

Home values in the Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura MSAs have stabilized significantly in the past year, marking what may be a bottom, according to the report. Home values in those markets have risen significantly for the past 10 months, following lows set in April or May 2009.

Foreclosure resales nationwide accounted for more than one-fifth (22.2 percent) of all U.S. home sales. Foreclosure resales also accounted for the majority of sales in several MSAs, including 66.3 percent in the Merced MSA; 63 percent in the Madera MSA); and 61.7 percent the Modesto MSA.

Saturday, May 15, 2010

Most homes to begin building positive equity by late 2015

The typical U.S. homeowner in a negative equity position will begin to build positive home equity by late 2015 or early 2016, according to a forecast by First American CoreLogic. In some depressed markets, typical borrowers with negative equity may not experience positive equity until 2020 or later, according to the report. Research conducted by First American CoreLogic indicates more than 11.3 million, or 24 percent, of all residential properties with mortgages, had negative equity at the end of the fourth quarter of 2009.

Although house price appreciation will, over time, offset negative equity, in most cases, amortization will be a more significant remedy to negative equity. According to the report, over the next 10 years, the average loan balance will decrease by an annual rate of 3.3 percent, while home price are expected to increase at a three-percent annual rate over the next decade.

Wednesday, May 12, 2010

Private mortgage insurance companies return to market

from the Los Angeles Times

Private mortgage insurance companies return to marketGenerally, private lenders require borrowers with down payments of less than 20 percent to purchase private mortgage insurance. It is typically paid for by the borrower and protects lenders against default. However, mortgage insurance does not protect the borrower. The Federal Housing Administration (FHA) insures lenders against losses incurred when borrowers default on their home loans. However, because the FHA insured nearly 30 percent of all single-family loans—higher than the 10 percent share considered optimal by government officials—the FHA is tightening its requirements for borrowers with small down payments. This has resulted in private companies that provide lenders with similar protection against defaults entering the market.

Traditionally, the FHA enabled low- to moderate-income borrowers to put down as little as 3.5 percent as a down payment on a home. Beginning this month, down-payment requirements on loans insured by the FHA have increased to 10 percent for borrowers with credit scores below 580. Borrowers with credit scores of 580 or above still will be able to put down the traditional 3.5 percent.

Other changes to the FHA mortgage program include increasing the upfront mortgage insurance premium from 1.75 percent to 2.25 percent and reducing permissible seller concessions from 6 percent of the loan amount to 3 percent. The FHA also has asked Congress for authority to increase the maximum monthly insurance fee from the current 0.5 percent level to 1.55 percent.

Resulting from the more-stringent FHA policies, fewer borrowers qualify for government-insured mortgages and are turning to private mortgage insurers, who also have made changes to their borrower requirements. For example, one private mortgage insurance company now will insure five-percent down-payment loans to borrowers nationwide. Previously, such mortgages were not available to borrowers in markets with declining home prices, which included California.

Premiums for both private mortgage insurance and government-insured FHA loans may be tax deductible. Additionally, in most instances, coverage can be canceled when the borrower’s equity reaches 20 percent of the original loan amount. Borrowers are advised to review both options to decide which one works best for their situation.

Tuesday, May 11, 2010—One Central Resource Guide for SF Homeowners

The San Francisco Realtor Association’s web site for homeowners,, contains more than 130 articles on subjects important to owners. From “Adding a Room” to “Zoning Districts,” it’s all there, making the site the most robust resource guide for San Francisco homeowners on the web.

Want to know more about sidewalk repair? What to do about barking dogs? Confused about who’s responsible for repairing the fence between your backyard and your neighbor’s? Aren’t sure if you need a permit to remodel your bathroom? The answers to all these questions and many more can be found on the Association’s very informative and unique site.

Topics are separated into three easy-to-navigate sub-headings: Your House, Your Neighborhood and Your City.In addition, the site contains a fourth, separate category—Your Government—which provides descriptions of legislative proposals and ballot measures affecting the interests of property owners at the local, State and federal levels.

Sometimes accompanying these descriptions are letters supporting or opposing legislative proposals (as the case might be) that site visitors can send to selected legislators, with their name attached to the letters with a single mouse click. To view the political content, however, you must click on the separate Your Government link.

Visit the site regularly for information on how to make homeownership and living in San Francisco even more rewarding.

Saturday, May 8, 2010

How to buy a foreclosure

Many buyers, especially first-timers, hope to purchase a foreclosed property at a bargain price. While purchasing a foreclosed home can be a wise choice for some buyers, it is important that buyers understand the differences in buying at different stages of foreclosure and be prepared to take on the challenges typically associated with each.

There are three basic stages of foreclosure in California: Pre-foreclosure (aka short sales), trustee’s sale, and repossession, often called an REO or real estate owned by the bank.

Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned. Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth. Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage. Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.

The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale. Homes in this stage often are well priced, but also come with challenges to buy. These homes may not be available for inspection and buyers may later discover the property needs numerous repairs. As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.

If a home does not sell to a third party at the trustee’s auction, the bank takes the property--the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.

Saturday, May 1, 2010

Foreclosure sales nearly double from prior year

Foreclosure sales increased 92.3 percent in March 2010 compared with March 2009 and 24.2 percent compared with February according to ForeclosureRadar’s March foreclosure report. Nearly 80 percent of foreclosure sales in February were for properties returning to lenders; the remaining properties were sold to third parties, primarily investors.

Notices of Default declined significantly in March compared with the prior year, when filings reached record levels as lenders caught up on a backlog of filings. Third-party purchases of foreclosure sales set a new record in March, surpassing 4,000 properties for the first time.