Feeds:
Posts
Comments

FHA loans increase as funds decline

February 6, 2010 by Carol VanAusdal

The amount of borrowers all over the country who are falling seriously behind on loans backed by FHA have increased considerably since last year. According to most of the lenders I work with in Santa Cruz County, they rarely made an FHA loan due to the high prices in our area and therefore didn’t qualify.

As a Realtor®, who also helps homeowners by consulting with them for ways to help save their homes, I am finding that more and more had purchased or refinanced their homes in late 2006 thru 2008. This was the time period with the greatest increase in price and availability of low interest rates and easy to secure loans. 

Now these same homeowners are caught up in losing their homes.  Since prices have dropped 40% in some areas of Santa Cruz County, these new buyers are now using the FHA’s home-buying program in the past year causing the agency to utilize it’s reserves. In other parts of the country, I would believe there is even greater demand. What will this lead to? Is FHA the new sub-prime? Stay tuned.

Rising FHA default rate foreshadows a crush of foreclosures

Posted in Uncategorized | Tagged , , | Leave a Comment »

Many still need loan modifications, but are they getting help?

January 31, 2010 by Carol VanAusdal

More than 900,000 homeowners have begun trial modifications under the new foreclosure prevention program, but documentation issues are hampering efforts to convert those to permanent fixes. Last month, the administration gave many borrowers in the program an extension until Jan. 31 to provide the documents. But the administration said last week that it doesn’t plan to extend the deadline further. 

Administration officials haven’t said how many borrowers in the program would be affected by the approaching deadline. “We expect to issue guidance to servicers next week to expedite conversions of current trial modifications and provide guidance on documentation,” Assistant Treasury Secretary Michael Barr said. 

Some officials on Wednesday called on the administration to loosen documentation requirements and expand the use of principal reductions. A report issued by state attorneys general and state banking regulators found that more than 70% of loan modifications resulted in an increase in the principal amount owed as unpaid interest, fees and other charges were rolled into the loan amount. 

Only four in 10 borrowers who are at least two months behind on their payments are involved in any sort of loss-mitigation effort. Despite efforts of servicers, homeowners and the government, the foreclosure crisis continues to worsen. These signs point to more foreclosures in 2010 than in 2009.

My experience in working with many homeowners under-water, behind on their payments and experiencing true hardship is they are so frustrated with the amount of times they have had to contact the bank, the loss of doucmentation and the frustration of getting a different answer from everyone they speak to. In addition, the great majority don’t know where to begin and are losing their homes because of it. The whole system is so confusing to the average person.

I also find it troubling that the banks choose to remove a homeowner from their home just to replace it with another borrower who couldn’t have bought it previously when the market was high. There has to be a way to restructure these loans so that the current homeowner can remain in their home without being displaced.

Excerpts from an article at WSJ here.

Posted in Uncategorized | Tagged , , | Leave a Comment »

Repeat Buyers Need to Act Fast

January 25, 2010 by Carol VanAusdal

By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.

This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.

To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.

Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline.

Read the complete story at RISMEDIA, January 23, 2010—…….

Posted in Government Housing Updates, Housing Market Updates | Tagged , , | Leave a Comment »

Rising defaults lead FHA to make changes

January 22, 2010 by Carol VanAusdal

Rising defaults on loans insured by the Federal Housing Administration (FHA) have led the agency to impose future policy changes to its home loan program.  

The FHA is federally mandated to maintain reserve funds at 2 percent or greater.  As of November, the agency reported that its fund had declined to .53 percent.  The funding is used to cover losses on mortgages insured by the FHA that go into default.

Loans insured by the FHA generally are less expensive to borrowers because of the lower down payment requirements.  However, these loans also have fees, such as up-front mortgage insurance.  To help the agency raise its cash reserves, the FHA is increasing the up-front mortgage insurance premium from its current 1.75 percent to 2.25 percent.  HUD released a Mortgagee Letter today making the premium increase effective in the spring.

The agency also is raising the minimum credit score requirements.  Currently, borrowers with FICO scores as low as 500 have been approved for FHA-insured loans.  Under the policy changes, new borrowers will be required to have a minimum FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program.  New borrowers with less than a 580 FICO score will be required to put down at least 10 percent.  FHA expects this to take effect in early summer once it passes the normal regulatory process.

The new policy also will reduce the amount of money sellers can provide to home buyers at closing to 3 percent, down from its current 6 percent, of the home’s price.  The change brings the agency in line with industry standards and removes the incentive to inflate appraisals.  The FHA expects this to take effect in early summer after it passes the normal regulatory process.

Stay tuned for continuing updates and read the complete article here:

Posted in Uncategorized | Tagged , , , | Leave a Comment »

HOME RETENTION WORKSHOP in SANTA CRUZ

January 15, 2010 by Carol VanAusdal

Is your home worth less than you owe? Do you qualify for a short pay refinance? Are you headed toward a foreclosure?

IT’S NOT TOO LATE…YOU STILL HAVE OPTIONS. 

Take control and get the answers you need to keep your home or avoid foreclosure .

HOME RETENTION WORKSHOP, January 21st, 5:45PM – 7PM

Learn about: Short Pay Refinance, Mortgage Modification, Short Sale, Deed In Lieu, Bankruptcy, Foreclosure, Credit and Tax Consequences

LOCATION: Keller Williams Realty office
1414 Soquel Ave #100, Santa Cruz 95062

Presented by these local experts:
Donald Dimitruk, Mortgage Banker
Jeanette Anderson, CPA
Carol VanAusdal, Realtor
Micah Fox, Home Retention Consultant

Make the call…Register now at 831-457-5510

Posted in Calendar of Monthly Events, Foreclosure Info, Happenings in Santa Cruz, Housing Market Updates, Santa Cruz CA Real Estate | Tagged , , , | Leave a Comment »

Home prices slashed nationwide and in Santa Cruz

January 14, 2010 by Carol VanAusdal

Wow, some very interesting stats announced by Trulia.com this week. They state that 21% of homes currently on the market in the United States as of January 1, 2010 have experienced at least one price cut. The total amount slashed from home prices amounted to $21.2 billion compared to $24.7 billion in December. 

 In Santa Cruz County 40% of the homes currently on the market have had at least one price cut  and totals $32M.

The average discount for price-reduced homes nationally continues to hold at 11% off of the original listing price. This was also the second straight month where inventory levels have dropped for single family homes and condos across the United States.  

The upper end or luxury homes continue to be hit the hardest by price reductions. These properties represent less than 2% of all current listings on the site, but are responsible for 24 percent of the $21.2 billion in home price reductions.

In Santa Cruz County the luxury homes inventory is 29% of the total and the average price reduction is 16.5%.

Consumers have a wonderful opportunity to find a great home and take advantage of the tax credit before mortgage rates start to rise again.  As most experts agree, rates will rise this spring.

Posted in Housing Market Updates, Santa Cruz CA Real Estate | Tagged , | Leave a Comment »

Will housing decline over the winter?

January 8, 2010 by Carol VanAusdal

According to MSNBC this week, a recent real estate report indicates that consumers may be taking their time house hunting this winter, which some economists believe could lead to a “double dip” in home prices.

A recent report from the NATIONAL ASSOCIATION OF REALTORS® (NAR) showed that its pending home sales index declined 16 percent in November to a reading of 96, the first decline after nine consecutive months of gains. Could this be because the initial tax incentive was due to expire at the end of November and people stopped buying? In addition, the available inventory is drying up significantly and it has become a sellers market in some areas.

KEEP THIS IN MIND

• NAR’s Pending Home Sales Index (PHSI) is a barometer of future sales. Typically, there is a one- to two-month lag between the signing of a sales contract and the close of escrow. Although government incentives, low interest rates, and affordable home prices have lured many buyers, especially first timers, to the market, historically sales decline during the winter months and begin to rise in the spring. The sales high in Santa Cruz County was July 2009 at 185, sales in December were 137 but still higher than December of 2008 at 113.

• Because of the government’s efforts to stimulate the housing market, some economists believe that housing prices will decline once the incentives come to an end. However, the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) closely watched “2010 California Housing Market Forecast,” projected that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.

• According to C.A.R.’s Vice President and Chief Economist Leslie Appleton-Young, unlike the rest of the nation, home sales in California already bottomed out more than two years ago, and the median home price reached its trough in February 2009 (here in Santa Cruz it was March 20o9).

• Although home buyers should not focus solely on future home price appreciation, according to data collected by C.A.R. over the last 40 years, homeowners who purchase a median-priced house, live in their home for at least five years, and sell it at the current median price, have averaged an annual rate of return of more than 11 percent. Santa Cruz has averaged 5.52% over the last 30 years.

Read the full story..

Posted in Housing Market Updates, Santa Cruz CA Real Estate | Tagged , , , | Leave a Comment »

Older Posts »