Here’s an article excerpt from Yahoo News courtesy of the California Association of Realtors:

Primarily a result of lower gas prices, consumer confidence increased in August, with The Conference Board’s consumer conference index rising to 56.9, up from the revised 51.9 reading in July. Following a six-month decline, August was the second consecutive month that the index increased. A reading of 100 is considered the highest rating possible. In a separate report, new home sales posted an unexpected increase in July, while the Standard & Poor’s/Case-Shiller U.S. National Home Price Index showed prices declined at a slower rate in the second quarter, indicating that some areas may have reached the trough in home price declines.

MAKING SENSE OF THE STORY FOR CONSUMERS

· The Conference Board’s consumer conference index measures how consumers perceive the current conditions and future expectations of the US economy. The index is based on a survey of 5,000 U.S. households.

· The monthly survey details consumer attitudes and buying intentions. Increased consumer confidence generally indicates that consumers are more willing to make purchases. Decreased confidence indicates that consumers are likely to slow their spending.

· Although The Conference Board’s Present Situation Index declined to 63.2 in August, compared with 65.8 in July, consumers expect the economy to improve over the next six months, as indicated by The Conference Board’s Expectations Index. The Expectations Index increased by 10 points, the largest increase since November 2005.

with blessings,
Claudia

Al, “The Loan Guy” Rivera, Senior Loan Officer at GMAC Mortgage in Corona, sends me good info about the mortagage industry. Here’s the latest:

“The Term “Buy Now” is making more sense than ever with a $7,500 credit. Declining home prices and historically low interest rates have created a favorable buyers market! Recent headlines have been touting that many real estate markets have turned to the point that homeowners would be paying less per month for their home owning it rather than renting it. On top of this, the Housing and Economic Reform Act of 2008 does actually have some provisions that could make a difference in our housing markets.

$7,500 FROM THE GOVERNMENT?

“One really interesting piece that was included in this legislation is that for first-time homebuyers (Definition of a First Time Buyer: Someone who has not owned a property in the last 3 years.), they have a window to qualify for up to a $7,500 tax credit. The tax credit will be 10% of the purchase price of a home, up to a maximum of the full $7500 credit. Basically, if the house is over $75,000 they would get the $7,500 maximum. The tax credit will have to be paid back over a period of 15 years which is interest free. It breaks down to about $500 per year. Washington just provided first time homebuyers a 15-year interest free loan to motivate them to buy a home!

“Another factor to consider is that mortgage guidelines will probably tighten more over the next year and mortgage prices will likely rise due to increased delivery fees. Therefore, now is the Time!

TIME TO GET OFF THE FENCE!

“Any potential buyers out there need to get off the fence and act now while all these positive factors are in place at the same time because it won’t last forever. For parents or grandparents that would consider helping their kids buy a new home this is also a perfect time to jump on board and help out.

“It should also be noted that most of the news stories have gone way overboard on new lending guidelines by portraying a market where there is almost no way to get a mortgage. THIS IS NOT TRUE! We can still do loans with as little as 3% down and close them with no problem in 30 days or less. Debt to Income ratios of 55% are still being approved. Fixed rates, interest only and adjustable rate products are all still available.”

You can reach AL “the Loan Guy” on his cell phone: 562-587-5284.

with blessings,
Claudia

This is an excerpt of an article from USA Today provided by the California Association of Realtors:

Although home prices decreased 15.4 percent during the second quarter compared with the same period a year ago, in month-over-month comparisons, home sales are increasing, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index. According to the Office of Federal Housing Enterprise Oversight’s home price index, states with the largest annual declines include California at 16 percent; Florida at 12 percent; Arizona at 9 percent; and Rhode Island at 5 percent. Existing home sales increased in July and exceeded many economists’ expectations, while new home sales also increased 2.4 percent for the same time period.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Although home prices are decreasing, existing home sales are increasing nationwide and in California. In California, single-family, existing home sales increased 43.4 percent in July compared with the same period a year ago. Sales in July remained above the 400,000 level for the third consecutive month, with deeply-discounted, distressed sales continuing to drive volume in many regions of the state.

· The state’s Unsold Inventory Index (UII) for existing, single-family detached homes decreased to 6.7 months in July 2008, compared with 10 months (revised) for the same period a year ago. The UII indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

with blessings,
Claudia

This morning I read a news item in the Press-Enterprise. Though the words “SHORT SALE” were never mentioned, it appears that Ed McMahon will save his Los Angeles hilltop home from foreclosure with a short sale.

He tried for many months to sell the home, to no avail. He received a Notice of Default (as I understand from news reports) and was at a loss as to what to do.

Comedian Phyllis Diller publicized his plight and asked the entertainment community to bail out the TV icon.

Then Donald Trump offered to buy the McMahon home and rent it back to Ed and his wife. Now I read today that a buyer came forward and the McMahon’s will move out of their home in the gated community at the close of escrow.

This is a Short Sale! There could be many reasons why The Donald’s offer didn’t go through. 1. The defaulting lender must approve any arrangement for the homeowner to remain in possession of the home. 2. If Ed McMahon is financially strapped, it is doubtful that he could pay rent that would come close to covering Trump’s PITI (mortgage, interest, taxes, and insurance payments). If Trump bailed McMahon out with all-cash, it would really be a bad investment for Trump and not one he could write-off.

So…SHORT SALES can happen to the best of us. If you are unsure how to proceed, give us a call or send us an email and we’ll help you make the best decision for you and your family.

with blessings,
Claudia

Here’s an article excerpt from the L.A. Times courtesy of the California Association of Realtors:

Home sales in Southern California increased in July compared with a year ago, while foreclosures decreased in month-over-month comparisons, according to a recent report. The California Legislature also is working with consumer and lending groups on a bill that would protect consumers from predatory lending and establish guidelines and restrictions on brokers and lenders.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Although the foreclosure rate is approximately double what it was a year ago, in month-over-month comparisons, it is 8 percent lower, indicating that foreclosures could be reaching a plateau. In a report released by RealtyTrac, default notices, which are the first phase in foreclosure proceedings, declined 4 percent from June.

· If signed, the bill will prohibit lenders from offering pick-a-payment loans to subprime borrowers; establish limits and timeframes on prepayment penalties to subprime borrowers; and prohibit brokers from leading subprime borrowers into loans with higher interest rates if they can qualify for one with a lower interest rate. The bill also would prohibit lenders from paying a financial incentive to brokers for steering borrowers into loans with prepayment penalties or higher interest rates. Additionally, mortgage brokers would be required to place the consumer’s financial interests above their own.

with blessings,
Claudia

Reuters news service recently posted a story picked up by the California Association of Realtors. Here’s an excerpt:

“Although economists cannot predict when the housing market will end its decline, many believe that there are enough indicators to determine the bottom may be near, especially in California. Home prices in many regions are declining at slower rates, and some areas have actually experienced price increases. Some analysts predict that California may be the first state to plateau, as a result of a vast number of foreclosures, which translated to a decline in home prices.

MAKING SENSE OF THE STORY FOR CONSUMERS

· New housing starts fell to 975,000 in April, from a peak of 2.27 million in January 2006. In the past 35 years, new housing starts have dropped from more than two million to less than one million only three other times. In each of those cases, the housing market rebounded within one quarter, according to Karl Case, co-developer of The Standard and Poor’s S&P/Case-Shiller Home Price Indices.

· Although home prices decreased 15.8 percent year-over-year in May, they have only decreased 0.9 percent on a month-over-month comparison. This is the smallest monthly decrease since September 2007 and another sign that the housing market is in recovery mode, according to Case.”

with blessings,
Claudia

I love helping homeowners avoid foreclosure. It give me a lot of satisfaction when we close a short sale and they can move on with their lives with credit intact.

Yet, there is more to know about short sales than how to get the buyers to make offers and how to get the lender to approve one of the offers.

If you are contemplating selling your house with lender approval because you have no equity, do some homework first.

1. Talk to your tax expert or CPA. There is an IRS form that can be filed with your taxes which will address the consequences of selling at a loss. If the lender issues you a 1099, what impact will that have on your tax liability? If you handle your own taxes, feel free to contact me. My husband is a tax professional, who is happy to answer your questions. (No obligation, of course!)

2. Talk to an attorney to learn about your legal rights, the difference between short selling your home, declaring bankruptcy, and foreclosure. Every state is different. In some states, the lender has the right to “come after you” with a deficiency judgment.

3. Put a call into your lender. Find out if they approve short sales. If you have a 2nd mortgage that is not purchase money, but a line of credit, ask if it is a HELOC. If it is, the lender will not be willing to discharge your debt. It’s like a credit card debt that is not tied to the house. You might be asked to sign a note for the debt and make payments.

Get the facts before you have a realtor list your home as a short sale. It will make the whole process a lot easier in the end.

with blessings,
Claudia

Here’s an excerpt from Bloomberg.com courtesy of California Association of Realtors:

“Recent economic developments indicate that California may be the first state to find the bottom, based on the increase in sales volume in the previous three months. In June, home sales rose for the third consecutive month, following a 30-month decline. Although approximately 40 percent of the transactions were foreclosure sales, the increase is allowing the market to stabilize by depleting some of the excess inventory. Some experts believe that once a neighborhood’s median home price declines to 50 percent from the peak value that the homes in that neighborhood will no longer depreciate.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Although California leads the nation in foreclosures, the state’s foreclosure process is more efficient than other states, which likely will lead to a quicker rebound. Foreclosed properties are receiving multiple bids and financial institutions are selling these homes quicker than the market would typically allow.

· The Unsold Inventory Index in June decreased to 7.7 months from 10.2 months a year earlier, demonstrating that the market is improving.”

I love passing on good news!

with blessings,
Claudia

Here’s an excerpt from the LA Times courtesy of the California Association of Realtors:

“With home prices in California declining by 37.7 percent in June compared with a year ago, some consumers are wondering if now is the right time to purchase a home, or if they should wait for prices to stabilize. Some real estate experts believe that home prices will continue to decline and that buyers should wait, while others recommend that home buyers take factors other than price into consideration, such as the benefits of owning versus renting.

MAKING SENSE OF THE STORY FOR CONSUMERS

· Consumers who are hesitant about purchasing a home today because they fear price depreciation, need to understand that real estate is cyclical and that prices will increase again. Home buyers should view a house as a long-term investment and not be fixated on short-term prices. Some economists believe that consumers should purchase a house if they plan to live in or hold the property for at least seven years. This will allow the market to stabilize and homeowners to possibly profit from their investment, if they decide to sell.

· Although a typical monthly mortgage is higher than a rent payment, home buyers who qualify for a fixed-rate mortgage, such as those backed by the Federal Housing Administration, will have consistent monthly payments, while renters are generally subjected to annual rent increases. Mortgages also can be paid off and the house can be owned free and clear, while renters will consistently have a monthly payment.

· To help home buyers lower the financial risk of homeownership, experts recommend that consumers purchase a home within their means and have enough in savings or other assets to cover the mortgage payment for at least six months if they lose their job.”

I’ll continue to share articles as I receive them from trusted sources. Be sure to contact me with any questions.

with blessings,
Claudia

CAR (California Association of Realtors) sent another explanation of the new bill just signed into law by President Bush:

“$300 BILLION IN FHA REFINANCING: Under the HOPE for Homeowners Program, 400,000 distressed homeowners can pay off their troubled mortgages and replace them with more affordable, FHA-insured loans. To qualify, a borrower’s monthly payment on existing mortgage loans must be over 31% of his or her income as of March 1, 2008 (hence demonstrating the borrower’s inability to afford the original loans). The original loans must have been originated before 2008, and secured by the borrower’s principal residence (as well as only residence). Also to qualify, the borrower must satisfy FHA underwriting requirements for the new FHA-insured refinance loan.

The FHA refinance will be a fixed rate loan up to $550,400 for at least 30 years, and will include charges for FHA insurance premiums. The maximum loan-to-value ratio of the FHA refinance is 90% of the appraised value. If the refinance proceeds are insufficient to pay off the existing liens, the refinance will not go through unless the original lenders voluntarily agree to accept a short payoff as payment in full. Rules will be established to allow, among other things, equity sharing for the original junior lienholders.

Upon obtaining the FHA refinance, the borrower must share with the FHA at least 50% of any equity realized through a subsequent sale or refinance. The FHA’s share in equity will be based on a sliding scale of 100% of any equity realized within the first year of the FHA loan, 90% the second year, and so on, but not less than 50%. The HOPE for Homeowners Program shall be in effect from October 1, 2008 to September 30, 2011.”