Tag Archives: sold

Rise in Home Sales Signifies Strengthening Market

The long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.

While admitting home sales “are still very low,” Paul Dales, chief economist at Capital Economics, says “it is clear that housing recovery is now well underway.”

The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), concurs with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”

Yun suggests consumers are gaining confidence from “record low mortgage interest rates, job growth and bargain home prices.”

In addition to the 5 percent increase in December, NAR reported a 1.7 percent annual increase in existing-home sales in 2011, a total of 4.26 million homes for the year.

Distressed homes made up 32 percent of sales in December, according to NAR’s existing home sales report for the month.
Foreclosed home sales closed at about 22 percent below market rate in December, a discount 2 percent higher than that recorded a year earlier.

Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.

Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.

Purchases by first-time home buyers declined in December – both from the previous month and the previous year. First-time home buyers accounted for 31 percent of purchases in December, down from 35 percent in November and 33 percent in December 2010.

Housing inventory is on the decline and fell to its lowest level since March 2005 last month, according to NAR. Approximately 2.3 million homes are available for sale currently.

“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.

However, listed inventory is only part of the equation, and according to CoreLogic’s latest numbers, shadow inventory stands at about 1.6 million.

Regardless, Dales believes sales will rise this year. “Housing still won’t contribute much to GDP growth over the next few years, but at least it will no longer subtract from it,” Dales says.

Mortgage Reform, Refinance, Really?

My Thoughts on the Current Real Estate Market: Mortgage Reform, Refinance, Really?

With interest rates at the lowest rate in history, and foreclosures bursting through the ceiling still at this writing, I ask myself, why is this still happening?  How does the 1-in-4 upside-down homeowner out there, staring at their bank and scratching their head, get help to avoid walking away?

The empty promises, or the so-called “helping hand” being offered by the banks and the government, is still a joke to say the least. For the people who sold their home in recent years, they are in a position to buy or have already bought another home and recovered from that stress of “What do I do?” while taking advantage of the low interest rates and prices.

upside-downIt still is not too late to make that leap and start over–because the faster you do, the faster you will recover. Property values are not expected to go anywhere for at least two more years, and the laws for selling short sales that protect homeowners will expire at the end of this year. Laws allow a purchase after two years of selling a short sale. With a consultation with me and strategy, you could pay off most of your unsecured debt, while not paying your mortgage. This can only be done with someone who has had experience with this. I have done this with clients that have recouped while living in their home for over 3 years without paying a mortgage.

The latest reform laws are offering a glimmer of hope; however, when and how these guidelines are implemented by the banks and government is clear to not happen for awhile.  The state governments will have to also be on board. At this time, California is weighing the settlement being offered for unlawful foreclosure practices from five of the larger banks that have agreed to pay a settlement.

My opinion is that any settlement should accompany a mandate that the banks must reduce every upside-down property out there to fair market values, to allow the homeowner an opportunity to keep their home; granted that the home is not dilapidated to the point that the owner does not have the funds to repair the home or care for it after the refinance. This exclusion is warranted to the extent that a home that is in bad shape is only dropping or keeping the values low in the neighborhood and should be taken care of. In a perfect world, the banks would allow the homeowner funds after the refinance to repair the home–heck, let’s go for it all!

As always, my gratitude to you for reading my blog.  Please share your opinions or questions–I look forward to any questions I can answer or help I can give!

John A. Silva, Realtor

(619) 890-3648 | www.JohnASilva.com

New Modification Law & Avoiding Foreclosure

A new law that will be implemented on November 15, 2011 is yet another slap in the face to the American Homeowner regarding modifications.

Making Home AffordableThe basic eligibility requirements for an enhanced HARP (Home Affordable Refinance Program) loan are as follows:

  • Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to MakingHomeAffordable.gov’s page on “Look up your loan“.
  • Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
  • Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
  • Current loan-to-value (LTV) ratio must be more than 80%.
  • Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from the Federal Housing Finance Agency (FHFA) on the agency’s website: www.fhfa.gov.

The reason why HARP is not good, is the same basic reason that HAMP (Home Affordable Modification Program) and the traditional modification is as follows:

It is strictly voluntary with all lenders; even though they say they participate.  Of course, there are factors with the seller or borrower that have an affect on being put in a modification plan that eliminate many from it.  This problem could be avoided if the banks would just lower the loan amount to the fair market value and a greater percent of people would have been able to keep their homes.  Even a future shared equity with the lender would have been acceptable if the property was sold for a profit in the future. Few banks are offering this program as well.

In conclusion, it is obviously important that we talk ASAP to go over your situation. I have several associates waiting to help: accountants, attorneys, and credit repair company.  If you’re moving on, getting back on track with your credit, staying in your home with an extended time without payments due in order to recoup finances, and most importantly receiving thousands from your bank at closing are all opportunities within your grasp!  I am just a phone call away!

John | (619) 890-3648

Namaste!

Obama casts lifeline to underwater homeowners

With interest rates at record lows, any homeowner with good enough credit and enough equity to can lower his or her mortgage payment by refinancing the loan.

But that option isn’t available to millions of “underwater” homeowners — people who bought their homes at or near the top of the home-price bubble, only to see their homes’ value drop below the amount they owe after home prices collapsed.

Now, the Obama Administration has unveiled a plan that will let some homeowners refinance their mortgages — and take advantage of lower interest rates — even when they owe more than their home is worth.

Among the provisions will be a measure increasing loan amounts made above the value of the home. The program is being offered under the federal government’s two-year-old Home Affordable Refinance Plan, the Federal Housing Finance Agency announced today.

Currently, the ceiling for refinancing a loan is 125% of a home’s value — for example, a $125,000 mortgage on a home worth $100,000. That ceiling would be removed for fixed-rate mortgages backed by Fannie Mae and Freddie Mac, the FHFA statement said.

Typically, you can only refinance your loan and take advantage of lower interest rates if your home is worth more than the amount you owe. After all, lenders need to have enough collateral in the home to pay off the mortgage if you stop making payments.

This has been a bind for many underwater borrowers who managed to make payments until now, but have been unable to take advantage lower rates. And being able to refinance may help many avoid foreclosure — and reduce housing’s drag on the overall economy.

According to news reports, the new plan likely will help 600,000 to 1 million borrowers refinance their mortgages. MSNBC reported, however, that is only a fraction of the estimated 11 million homeowners who are underwater.

FHFA said that details about the program should be released by Nov. 15.

But highlights include:

  • Eliminating fees for borrowers who refinance into shorter-term loans (for example, converting a 30-year loan into a 15-year).
  • Eliminating the need for a new property appraisal where there is a reliable computer-generated value estimate.
  • Waiving warranties that lenders make on loans sold to or guaranteed by Fannie Mae and Freddie Mac — so Fannie and Freddie won’t force them to buy back loans that go bad.
  • Removing the current ceiling that limits eligibility to those who owe a maximum of 25% more than their home is worth.

Two local mortgage brokers hailed the proposal as a way to help both homeowners and the overall economy.

Paul Scheper, regional manager of Greenlight Financial in Irvine, said the plan will provide a “snorkel” for underwater homeowners with good incomes and credit scores.

“Such a measure would boost the hopes of the homeowner while reducing the credit risk via lower payments of the bank,” Scheper said. “It also helps the economy because this frees up additional funds to inject back into the economy. It’s a classic Win-Win-Win.”

The best news is no appraisal and nominal underwriting rules, added Laguna Niguel mortgage broker Jeff Lazerson.

“There is a great chance each participating borrower is going to save hundreds of dollars per month on his or her house payments,” he said.

Lazerson said the program will encourage more lenders to participate because FHFA essentially promised lenders that Fannie and Freddie won’t have recourse if these loans go bad. That, he said, will increase price competition among lenders.

Lazerson believes the program will be “the single greatest program” to stabilize the housing market.

“Fewer homeowners will be mailing their keys back to their lenders,” Lazerson said. “Next thing you know, we’ll actually be spotting buyers at weekend open houses again.”

Here’s more on the proposed refinancing plan …

This article is from the Orange County Register: Obama casts lifeline to underwater homeowners