Sunset Vista Realty

Positive News on Interest Rates and Existing Home Sales

2011-12-22T10:27:00.000-08:00

30-year mortgage rates fell to their lowest in 40 years this week with Freddie Mac reporting a .04% drop from last week to 3.91% 15-year mortgage rates remained stable week-to-week at 3.21%, an all-time low.

Good news on interest rates was accompanied by growing signs that the housing market may be set for a turnaround. The National Association of Realtors reported that sales of existing homes in November were up 4% over the prior month. Increased sales came in the face of declining inventory with the number of homes on the market in the US at 2.58 million, the fewest since May 2005.

"Falling home prices meeting already low interest rates are driving affordability,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York.“Mix that with higher consumer confidence and job growth, and I can see why home sales appear to be lifting off the bottom.”

Possible Compensation for Homeowners Treated Unfairly in Foreclosure

2011-11-01T13:36:00.000-07:00

Major mortgage servicers have agreed to review foreclosure cases that occurred between January 1, 2009 and December 31, 2010 and determine if borrowers suffered financial losses as a result of any of unfair practices. The reviews are part of a larger enforcement action taken against 14 large mortgage servicers last April by the Office of the Comtroller of the Currency ("OCC"), the Federal Reserve and Office of Thrift Supervision ("OTS") in the wake of the "robo-signing" scandal.

As part of that action, the lenders, which include Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500), Citibank (C, Fortune 500), GMAC Mortgage, HSBC (HBC) Finance, Wachovia, Washington Mutual and Wells Fargo (WFC, Fortune 500), agreed to clean up their foreclosure practices and repay victims.

More than 4 million mortgage borrowers who were foreclosed on between 2009 and 2010 will have a chance to request an independent review of how their foreclosure process was handled, according to Joe Evers, the deputy comptroller for large banks at the Office of the Comptroller of the Currency (OCC).

Should the review find that "financial injury" occurred as a result of an error or other deficiencies in the way the foreclosure process was handled, the homeowner may receive compensation for their losses. However, just how much money the borrower will receive has yet to be determined, said Evers.

"The independent foreclosure review is a significant component of the mortgage servicers' compliance with our enforcement actions," said acting Comptroller of the Currency John Walsh.

When foreclosures flooded the system after the housing bust, many mortgage servicers became more cavalier in the way they handled foreclosures. Affidavits and other documents were signed by low-level employees who had little or no knowledge of what they were attesting to, attorneys hired to manage the foreclosure process were providing inadequate oversight and many bank employees were ignoring requirements to halt foreclosure procedures if loans were in the modification process.

Letters will be sent to borrowers starting Tuesday that will explain how to request case reviews. Foreclosures must have been on primary residences. Borrowers have until April 30, 2012 to request reviews. If you don't receive a letter, but think you may qualify, check for more info at http://independentforeclosurereview.com/

Expanded Refinance Assistance for Underwater Borrowers

2011-10-27T10:08:00.000-07:00

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.

Update on Foreclosure Pipeline

2011-10-08T16:07:00.000-07:00

A recent report by the leading federal bank regulator, the Office of the Comptroller of the Currency ("OCC") reveals some interesting trends in the 2nd quarter of 2011. The OCC's mortgage performance report covers about 63 percent of all first-lien mortgages in the United States, worth $5.7 trillion in outstanding balances.

In a nutshell, foreclosures are continuing to increase, although at a seemingly slower rate as mortgage servicers pursue alternatives to foreclosure. Unfortunately, nearly half of the loans modified since 2008 have subsequently gone into delinquency. Looking ahead, the OCC anticipates an increase in REOs coming onto the market as stalled foreclosures work their way through the system.

Here's a look at the numbers:

Increase in early stage (30-59 days) delinquencies rose by .04% from the previous quarter. This increase is attributed to the sluggish economy and continued high unemployment, as well as seasonal variations.
The number of late stage delinquencies (60+ days) also increased slightly in the 2nd quarter after having decreased in each of the previous five quarters.
Completed foreclosures increased by 1.2% from the previous quarter were up 27% from the quarter prior to that (Q4 2010).
A brighter note is that newly initiated foreclosures have declined for the past three straight quarters as lenders seek alternatives to foreclosure for delinquent borrowers:

There were 56,403 new short sales reported during Q2, up 12% from the previous quarter
Mortgage servicers implemented 456,397 home retention actions, including loan modifications, trial-period plans, and payment plans durign the 2nd quarter of 2011.

Of loans modified since the beginning of 2008, nearly half – 48.7 percent – have since gone delinquent

What Solar Power Can Mean For Your Home

2011-10-08T15:13:00.000-07:00

We all know that having a solar system can help reduce your utility bills, but what does it mean for the value of your home? According to a recent article posted on Earth911.com, having a solar system can add 3% to 4% to your market value, based on data collected by the National Bureau of Economic Statistics.

These results are supported by another study by the Department of Energy's Lawrence Berkeley National Laboratory which found that solar panels increased home prices by about $3.90 to $6.40 per watt, which translates to around $17,000 for a 3,100-watt system.

More Approvals for Short Sales

2011-08-26T09:04:00.000-07:00

Sales of homes in the process of being foreclosed increased to 12% of total sales of homes in the 2nd quarter of 2011 as banks have increased their approvals of short sales. RealtyTrac reported both an increase in the number approvals and shorter average time to conclude short sale transactions. They also noted bigger discounts being approved relative to standard sales, indicating that banks are getting more efficient at clearing inventories.

"This is a glimmer of hope that lenders are getting more realistic," Rick Sharga, senior vice president of RealtyTrac, said in a telephone interview with Bloomberg News. "It's a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers."

Mortgage Rates at 50-Year Low!

2011-08-19T11:40:00.000-07:00

The roller coaster stock market is pushing investors into bonds, forcing yeilds down and translating into lower mortgage rates. Freddie Mac has reported the average rate for a 30-year fixed loan dropped to 4.15 percent in the week ended Thursday from 4.32 percent last week. That was the lowest in more than 50 years. The average 15-year rate fell to 3.36 percent, down from from 3.5 percent

Lower rates aren't doing much to improve the housing market, but have created a boom in refinancing with Mortgage Banker's Association reporting an 8% rise in refinance applications. The share of refinancings rose to 79% of all mortgage applications.

Excess Foreclosure Inventory Solution

2011-08-11T10:08:00.000-07:00

Tne Federal Housing Finance Agency is considering options for selling foreclosed homes to investors who would rent them out. The sale in bulk of 10s of thousands of forclosures returned to Freddie Mac and Fannie Mae to institutional investors that would renovate and manage them as rentals could aid the housing market by reducing forclosed inventory, stablilize neighborhoods, and even keep financially-troubled owners in their homes as renters. Interesting idea from the Obama administration. Read more at U.S. moves to sell, rent 92,000 foreclosures.

Fewer CA Homeowners Facing Foreclosure

2011-07-21T08:04:00.000-07:00

Home Mortgage defaults dropped a whopping 19% in the 2nd quarter of 2011 from the same period in 2010. The decrease was attributed to changes in lenders' foreclosure policies and slowdown in the drop home values. The decrease also represents a 17% drop from the 1st quarter of 2011. A total of 56,633 default notices were recorded statewide in the three months ending June 30th; the lowest number since the 2nd quarter of 2007.

There's still a significant pool of bank owned properties waiting to hit the market which will continue to keep home prices down, but at least it looks as though the supply of additional distressed inventory may be slowing down.

New Help for Unemployed Homeowners with FHA Mortgages

2011-07-08T09:08:00.000-07:00

The Federal Housing Administration (FHA) announced that starting August 1, 2011, it will increase the grace period where unemployed borrowers can skip making payments to a full year; an increase from the current 3-4 month currently allowed. This will allow qualified homeowners to forego making payments for a full 12 months before the foreclosure process will be started.

FHA officials stated that nationwide approximately 3,500 homeowners with FHA loans fall behind on their payments every month and that some 10,000 have already taken advantage of the current 3-4 month grace period. This new policy is part of the Obama Administrations efforts to revamp its foreclosure prevention programs.

The Administration would like to see Fannie Mae and Freddie Mac adopt similar policies for their borrowers, but no new policies have been announced by those institutions. There are new rules going into effect on October 1st that will require the two mortgage insurers to allow longer grace periods in cases where a home has been destroyed, the borrower has a long term disability or illness or if the borrower has died and the property is in probate. In those cases, mortgage payments will be able to be put off for up to a year.

Carbon Monoxide Poisoning Prevention Act

2011-07-04T10:04:00.000-07:00

This new California law, formally known as SB 183, went into effect on July 1st 2011 and it requires that homeowners install carbon monoxide detectors if their home has an attached garage, fossil fuel appliances, wood stoves or fireplaces. Carbon monoxide is an odorless, colorless and tasteless gas that results from imperfect combustion, making it a common product of motors, barbecues and faulty appliances that run off fossil fuels.

Here are some things you need to know to meet this requirement:

Devices: It can be battery powered, a plug-in device with battery backup, or a device installed as recommended by Standard 720 of the National Fire Protection Association that is either wired into the alternating current power line of the dwelling unit with a secondary battery backup or connected to a system via a panel. If the carbon monoxide device is combined with a smoke detector, it must emit an alarm or voice warning in a manner that clearly differentiates between a carbon monoxide alarm warning and a smoke detector warning.
Locations: For minimum security, manufacture's recommend that a CO Alarm should be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents
Compliance: Failure to install the device(s) as required under the law is an infraction punishable by a maximum fine of $200 for each offense. However, a property owner must receive a 30-day notice to correct first. If an owner who receives such a notice fails to correct the problem within the 30-day period, then the owner may be assessed the fine.
Selling Your Home: There are no separate disclosure forms regarding Carbon Monoxide Detectors; any disclosure obligations are satisfied when providing a buyer with a Transfer Disclosure Statement. If the seller is exempt from giving a TDS, the law doesn’t require any specific disclosures regarding carbon monoxide detector devices. The Homeowners’ Guide to Environmental Hazards also includes information regarding carbon monoxide.

City of Oroville Building Permit Amnesty Program

2011-06-01T17:14:00.000-07:00

The City of Oroville started a new program offering amnesty for people who didn't get permits for building projects — even going back a few decades. The program began June 1st, 2011 and will run through September 30th.

The Building Amnesty Program is an opportunity for property owners to apply for building permits for buildings, additions and remodels that were not previously permitted. The program also applies to past projects done without a permit.

One incentive for property owners to participate in the program is that many lenders now require proof of permits, so this is an opportunity to make a property more saleable and thereby increase its value.

The benefits of the program include:

* No double building permit penalty fee.

* Use of codes in effect at the time of construction. For example, if an unpermitted building addition was made in 1999, codes in effect that year can be applied to the new permit.

* No civil penalties assessed for site development work without permits.

* Removal of recorded Violation for Noncompliance on a property's files.

* Assignment of a staff member to assist the property owners through the application project.

The amnesty program applies to unpermitted construction work or an unpermitted commercial occupancy within incorporated limits of the city

The program only applies to uses allowed within the zoning classification of the parcel. For example, if someone converted a garage illegally into an auto repair shop in an area zoned residential, the program won't apply.

Building official Craig Griesbach says the city will attempt to expedite any permit applications from the program as quickly as possible. "This is designed to help the city, clear properties and give people an opportunity to make everything right and code compliant," he said.

Hard Pressed Homeowners Using Bankruptcy Option to Eliminate 2nd Mortgages

2011-05-15T12:31:00.000-07:00

Some struggling homeowners are using a little know, but increasing popular, provision of the bankruptcy code to eliminate their 2nd mortgages, giving them the possibility to stay in their homes.

Here's how it works: bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, also known as being under water. When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts -- which typically takes three to five years. Once the repayment plan is completed, the debtor emerges from bankruptcy and the second mortgage is eliminated.

In many cases, homeowners are able to afford the payments under their first mortgage and are able to keep their homes.

Handyman versus Contractor

2011-04-28T16:47:00.000-07:00

A recent sting operation in Butte County that nabbed unlicensed tradesmen is a good reminder of what to remember when considering who to hire for your projects. Under California law, a contractor's license is required for work totalling more than $500 for labor and materials. State law requires that contractors note their license numbers in any advertising and those without a license must state that they do not have a license.

When hiring a contractor, remember that they are prohibited from soliciting a down payment larger than $1,000 or 10 percent of the contract price, whichever is less. You can also check out the license status of a contractor when making your decision.

Worst of Foreclosures May Be Over

2011-04-28T16:39:00.000-07:00

Bank filings of Notices of Default, the first step in the foreclosure process, were down 15.8% in the first quarter of 2011 from a year ago in California. Analysts say that the feared "second wave" of foreclosures probably won't happen, instead they expect that we'll see a constant stream of foreclosures coming on the market in the next several years as banks continue to try and clean up their balance sheets. In other words, foreclosures are going to be part of the real estate market for the foreseeable future.

Supervisors Repeal Sprinkler Requirement

2011-04-13T07:43:00.000-07:00

New California building codes require that newly constructed residences in areas where the state shares fire safety responsibility ("State Responsibility Areas") have sprinkler systems. But, mobile homes and manufactured housing are not covered by the state building code and are specifically exempt from the sprinkler requirement.

Butte County was considering extending the sprinkler requirement to manufactured homes, but on April 12, 2011, the Board voted unanimously to let manufactured dwellings and mobile homes remain exempt from the sprinkling regulation.

This will significantly reduce the cost of moving and installing used manufactured homes onto new sites in the county.

Positive News for Home Sales

2011-02-20T21:09:00.000-08:00

If you're considering selling a home, sales have been rising in the past quarter after a slump when the homebuyer's tax credit expired. On the flip side, buyers, single family home prices have stabilized, so wait no longer!

Check out "Home sales grow, aided by more stable prices" at CNNMoney.com.

Update on California Program for Unemployed Homeowners

2011-01-11T19:21:00.000-08:00

The California Housing Finance Agency, which is sponsoring the federally funded program, has just posted a quick screening tool homeowners can use to see if they meet the major requirements at . Homeowners can also call (888) 954-5337 to be referred to a housing counselor who will help determine eligibility for the Keep Your Home California program.

Kathleen Pender of the San Francisco Chronicle has written an excellent Q&A article which looks at common questions from her readers.

Help For Unemployed Calfiornia Homeowners

2011-01-09T13:33:00.000-08:00

Nearly $2 billion in aid for homeowners struggling with their purchase mortgages is on the way in California under the “Keep Your Home California Program”. Funding for the program, which was announced last February, comes from federal dollars.

Phase 1 of the program is expected launch on Monday, January 10th. This phase includes provisions for the government to make direct mortgage payments for eligible unemployed Californians. Unemployed homeowners can get up to six months' worth of payments, at up to $3,000 a month.

The rest of the program – including a "buydown" feature that would reduce loan balances – is expected to begin Feb. 7. This portion of the program sets out $800 million to reduce outstanding loan balances. For every $1 the lenders agree to reduce on a borrower's balance, they'll get a $1 match from the state, meaning the borrower's principal will be reduced by $2. The state will only put in cash if the lenders agree to reduce loan principals.

So far no lenders or loan servicers have committed to the reduction phase of the program. A spokesman for the California Mortgage Bankers Association, Dustin Hobbs said he thinks lenders will go along with the balance reduction. "You keep the borrowers in the house, and you get the matching dollars." Hobbs said the entire program will help whittle away at the foreclosure crisis but shouldn't be viewed "as a cure-all, a one-size-fits-all solution."

State officials have estimated there's enough cash, nearly $2 billion, to help an estimated 100,000 low- to moderate-income borrowers. The program is limited to mortgages that were used to purchase home only, no refinance or cash-out mortgages will be eligible.

More information is available at the Keep Your Home California website.

Improving Economy Stabilizing Real Estate Demand

2011-01-03T08:01:00.000-08:00

The Western region led the country in pending resales of existing homes in November, up 18% compared to 3.5% nationally. This was the fourth of the last five months to see an increase in the number of sales contracts on existing homes.

Overall it appears that the economy is improving which, coupled with low mortgage interest rates, would normally bode well for the housing market. The fly in the oinment is the unknown inventory of distressed properties (REO's and Short Sales) that will come onto the market in 2011. Yelena Shulyatyeva, an economist at BNP Paribas in New York, said in an e-mail to clients that "Housing demand should continue its uneven recovery entering 2011 as housing oversupply should keep pushing housing prices down."

Exising Home Sales Up - Mortgage Rates Down

2010-12-23T09:06:00.000-08:00

The National Association of Realtors reported this week that existing homes sales rose in November to an annualized rate of 4.68 million, up 5.6% from the prior month.

Meanwhile, Freddie Mac reported mortgage rates fell back from six weeks of increases to an average of 4.81% for a 30-year fixed loan, down from 4.83% the previous week. Rates have been on the increase as underlying bond yields have been boosted by speculation that signs of improvement in the economy will lead to a rise in inflation.

Home Ownership In Reach for More People

2010-12-09T11:34:00.000-08:00

The percentage of Butte County residents who could afford to purchase an entry level home increased to 64% in the 3rd quarter of 2010, up from 32% in 2007, according to a recent study by the National Association of Home Builders. This follows a state-wide trend as reported by the California Association of Realtors which reported that the percentage of first-time buyers who could afford to purchase an entry-level home in California stood at 66 percent in the third quarter of 2010, according to C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI).

C.A.R.’s FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is considered the most-fundamental measure of housing well-being for first-time buyers in the state.

“With interest rates at historic lows, which have led to lower monthly mortgage payments, affordability continues to remain at near record-high levels in California,” said C.A.R. President Beth L. Peerce. “Another high point for first-time buyers is the current ratio between the California median price and the California median household income. During the third quarter, the ratio stood at 5 to 1 and was at a level we haven’t seen in the last 10 years. This is opening many doors for potential first-time buyers.”

First-time buyers, who tend to purchase homes equal to 85 percent of the prevailing median price, needed to earn a minimum annual income of $42,300 to qualify for an entry-level home of $266,620 during the third quarter of 2010. The monthly payment, including taxes and insurance, was $1,410, assuming a 10 percent down payment and an adjustable effective interest rate of 3.66.

“Nearly every region in the state experienced an increase in first-time buyer housing affordability,” added C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Much of the increase in affordability can be attributed to the slight decrease in the state’s median home price during the third quarter.”

Existing Home Sales Continue to Climb In The West

2010-11-06T09:36:00.000-07:00

Sales of existing homes in the West bucked the national trend in September with pending sales in the region up 3.5%, as opposed to a national decrease of -1.8%, according to an index produced by the National Assocation of Realtors. The NAR index is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.

Home sales had been increasing in volume steadily since their dramatic drop in June after the expiry of the Federal tax credit. The decrease in volume across the country was attributed to foreclosure moratoriums which reduced the supply of available homes.

The NAR's chief economist, David Yun, said "Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead". Looking ahead, the NAR is forecasting an increase of 300,000 sales nationwide in 2011. "We've added 30 million people to the U.S. population over the past 10 years, but sales are where they were in 2000, so there appears to be a sizable pent-up demand that could come to the market once the economy gathers momentum," Yun said.

Mortgage Rates Lowest in Decades

2010-10-10T08:40:00.000-07:00

Freddie Mac reported on Thursday that average rates for 30-year fixed mortgages fell to 4.27%, that's the lowest since 1971 and down from 4.32% the previous week.

3.72% rates on 15-year mortgages were also down from 3.7% the prior week and are at their lowest point since 1991.

Moratorium on Some Foreclosures in California

2010-10-03T09:44:00.000-07:00

You may have read recently that some major banks, including BofA, GMAC and Chase are suspending their foreclosures, in some states, due to possible deficiciencies in their documentation. This applies to states that have what are called judicial foreclosures; in short, that means that a lender has to get court approval to foreclose on a property. Here in California, the process is non-judicial foreclosure, which means that a lender can initiate the foreclosure when a borrower defaults on their loan without going to court.

While most banks in California won't be directly impacted by these freezes on foreclosures, Attorney General Jerry Brown has ordered a moratorium on foreclosures by Ally Financial's GMAC unit and J.P. Morgan Chase, calling their review of key foreclosure documents a "ruse."

We may see a wider slow down in the processing of foreclosures as lenders review their practices across the board. Additionally, some title companies, including Old Republic, have announced that they will not issue title policies on properties foreclosed on by GMAC and Chase. Other title companies, such as Fidelity National, have issued statements saying they don't believe the problems with the foreclosure process would have a "material adverse impact".

This slow down in new foreclosures hitting the market may be good news for housing by providing some greater stability in property prices.