A new video was just released by the California Association of Realtors:

“In response to numerous misleading and unbalanced news reports about Fannie Mae and Freddie Mac, C.A.R. created a new video to educate consumers about the importance of Fannie Mae and Freddie Mac, and how the Government Sponsored Enterprises operate in the market. The video, which features C.A.R.’s Executive Vice President Joel Singer, explains the crucial countercyclical role the GSEs serve, and the likely consequences should they be nationalized or eliminated.”

The video is available by clicking HERE.

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

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

If you’re buying a house right now in Riverside County, you are probably looking at bank-owned or short sale listings. Buying these properties can be a whole new ball-game where rules are re-written, unpublished or even non-existent. Here are some tips:

1. Don’t expect move-in condition on a bank-owned. Typically, the banks are not fixing up the homes before putting them on the market. You might find ripped out appliances, holes in drywall, green pools, etc., not to mention stained carpet and scuffed walls.

2. Don’t expect the bank to do any repairs. Even if your Home Inspector finds items needing repair, don’t expect the bank to do anything about it. These homes are usually sold AS-IS. They still have to disclose problems with the home, yet they don’t have to do anything about it. An exception might be items that are code violations relating to safety.

3. Don’t expect the bank to work in your time-frame. Depending on the bank or asset management company, they might respond to your offer in a day (rarely) or 1-2 weeks. They might be considering other offers.

4. The highest offer might not get acceptance. Banks look at more than price in an offer. They might look closely at your credit score, type of loan, and speed in which you can close the transaction. A cash buyer might be more appealing when they can close in 7-14 days, versus a FHA or VA buyer who needs 30-45 days. Time is of the essence to the banks.

5. Don’t give up too easily. Even if there are multiple offers on a property, you could still get your offer accepted. Buyers often make offers on more than one house. Buyers change their mind. If the bank asks for your BEST AND FINAL OFFER, give it to them. Be careful not to offer more than you want to just because there are other offers. (The auction syndrome!) Stick to your budget.

6. If the house has been stripped of appliances, toilets, etc., talk to your lender before making an offer. For example, (I’m not a lender so check this out) FHA loans aren’t available on houses that aren’t live-in ready. Estimate your repair, rehab costs with at least an extra 10% cushion just in case there is more repair needed than meets the eye. Get professional help with your estimate.

7. Don’t expect the bank to pay for extras like a home warranty. In the past, sellers almost always offered a one-year home warranty to the buyer. It was expected. Banks don’t see it that way. It’s an extra that impacts their bottom line, so many of them are not willing to buy one. (Even when you get one, it doesn’t mean all repairs are covered. Read your policy carefully.)

Bottom Line—you can great a great deal on a bank-owned home. Yesterday I showed an estate home listed for $529,900. In September 2006, it sold for $1,160,000. If a buyer is willing to replace all missing appliances, including pool equipment, paint, re-carpet and re-landscape, they can move into a great neighborhood for a bargain price. Just be patient and work with an experienced realtor, who can help you play with the banks and WIN!

with blessings,
Claudia