A recent article online at RISMedia provided some very valuable information regarding recent guideline changes for Fannie Mae loans… We have posted the full article below for your review. The fourth change will come as “good” news to those considering purchasing a home in San Diego. If you have any questions on the material feel free to contact us, we’d be happy to chat!
“4 Must-Know Mortgage Guideline Changes RISMEDIA, May 13, 2008″
“Fannie Mae recently announced four key initiatives that will have a huge positive impact for home owners and buyers. “When Fannie Mae changes their policies and procedures, it has a wide-spread impact on homeowners,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “This is because over 60 percent of US home mortgages are securitized, meaning that they are owned by investors like Fannie Mae and Freddie Mac who issue bonds on the bond market using these mortgages as collateral.”
The four changes are:
1. Fannie Mae will allow borrowers to refinance up to 120% of their home value if they are currently paying their mortgages on time.
“This is a huge positive development for responsible homeowners who are faithfully making their payments, but simply find themselves in a negative equity situation due to declining real estate values,” said Nicholas.
2. Fannie Mae is renewing and expanding their partnership with the state Housing Finance Agencies to provide $10 billion in financing for qualified first-time home buyers.
“This is important because it gives first time home buyers access to more financing options, thereby increasing the amount of eligible buyers in the marketplace,” Nicholas said.
3. Fannie Mae is teaming up with the Self-Help Credit Union, one of their long-time partners, in order to help families in hard-hit real estate markets get into foreclosed properties through a rent-to-own program.
This will stabilize communities by enhancing the options available to renters.
4. Effective immediately, Fannie Mae will buy new jumbo-conforming loans at the same price that they buy other conforming loans throughout the remainder of 2008.
“This is an enormous benefit for mortgage borrowers in high cost areas who have been largely disappointed with the persistently high rates on jumbo loans,” said Nicholas. As part of the much touted Economic Stimulus Package of 2008, limits on jumbo mortgages were increased from $417,000 to up to $729,750 in high cost areas. “The reality of the situation is that these higher loan limits have not really been effective because Fannie Mae has charged higher interest rates and fees on these loans versus traditional conforming loans at or below the $417,000 limit,” said Nicholas. The new rules abolish this pricing difference, and allow jumbo-conforming loans to priced exactly the same as traditional conforming loans. “These low interest rates expire at the end of 2008, so now is a perfect time for borrowers in these higher-priced markets to buy homes,” said Nicholas.” (article courtesy of RISMedia May 13, 2008)
The chart above had writers on Wall Street Journal’s websitebuzzing this week about whether or not it’s a sign our housing market has bottomed…. and will it now begin to slowly recover?
How you ask? Well… the chart above was created by one of the housing market’s leading experts, Professor Karl E. Case, who has studied in detail the ups and downs of the housing market during the last 50 years. As you can see from the chart, the areas highlighted as “recession” periods slumped to the one million mark and then somewhat magically began to recover after hitting it. The key here is to check out this year’s numbers in 2008… that’s right we’ve hit that “magical million mark” and it’s this data that has everyone waiting to see what the market will do now. Will our housing market seem to miraculously recover as it has in past years… or are we in for a longer slump then seen in the past 50 years? Only time will tell, we’ll just have to see if Professor Karl E. Case’s theory holds true!
This Saturday May 10th, marks the First Annual San Diego Home Expo 2008, being held by San Diego Association of Realtors and San Diego County’s Building Industry Association. The San Diego Home Expo’s goal is to inform the consumer on important things they should know about buying a home, selling a home, as well as maintaining a home. It will have a little bit of everything regarding each topic. The cool part is we were able to get a limited number of free tickets for our readers! Just shoot us an email or call us and we’ll get them off to you asap!
Here’s just a few of the topics that will be covered in the informational seminars:
BUYERS - Home Buying In’s and Out’s
What type of loan option is best for you?
What you can afford to purchase?
Knowing when the time is right for you to purchase?
Benefits to working with a Realtor.
What you should know about Home Owner’s Associations before you buy?
SELLERS - How to get your home “For Sale Ready” Should you go Green?
Home Staging Tips
Refinancing advice
What to do if you begin to have problems paying your mortgage, how to prevent the problem before it happens by seeking lending advice etc?
These are just a few of the topics you will find at the San Diego Home Expo 2008, we have a limited number of free tickets for the Home Expo … shoot us an email or call us at 858-551-3331 and we’ll get the tickets to you asap! The Expo will be held this Saturday May 10th at the San Diego Convention Center, Hall D from 10 am – 6pm.
This has been a rather busy week in the office!! We have had multiple phone calls and emails from our clients wanting to view homes and our agents have been running around like mad! Its been a few days since our last post and this morning we found a pleasant surprise in our “inbox”…. We were asked to join a Real Estate Blog Contest by FHA Mortgage Center! After reading the details of the contest we thought, well why not?! So we have entered the contest and are excited to see how the results pan out. In the meantime, if you’d like to cast your vote for us you can do so by clicking on the below blue voting box, they allow you to vote once a day, so if you find you’d like to come back and vote again we’d be honored! Have a great weekend… we gotta run… need to prepare for the competition! :)
We blogged already about the new FHA loan limits ~ Before you get too excited to use an FHA loan, be sure to check and see if the condo community of interest has been HUD approved!
We can do the research for you to find out if a condo has made the approved list. Just drop us an email or leave us a comment and we’ll do the ground work. Not all condo communities have been approved by HUD, so if you are planning on using an FHA loan it is important to know if the condo you want to purchase has made the list.
The Bush camp announced more news of government assistance to homeowners struggling with their mortgage payments. HUD’s Federal Housing Administration (FHA) and its new product FHASecure is the government’s latest attempt to relieve some of the pain being felt by those homeowners that have had their mortgage rates adjust from their original teaser rates. The word from the Federal Housing Commissioner-Assistant Secretary for Housing Brian D. Montgomery is that the government “wants to be able to help families who are in the right house, but the wrong mortgage.”
The hope is that FHASecure will slow down the foreclosure rate and in doing so help to “save” the market from depreciating as quickly as it has been in some areas of the country. How FHASecure is different from previous FHA attempts is that it will now be opening eligibility up to homeowners who haven’t been making proper payments on their mortgages. The FHASecure plan will assist homeowners who have had two consecutive late payments or two different late payments in the last twelve months and have up to a 97% loan-to-value or three consecutive late payments or three different late payments in a twelve month period and have up to a 90% loan-to-value.
The government is estimating that these new eligibility guidelines will allow approximately 500,000 families to refinance into more viable loan options rather than choosing foreclosure.
A new plan of attack for Market Relief is being discussed on Capitol Hill. The latest proposed plan is estimated to provide $15 billion dollars in “relief”. The plan is still in its infancy and many of the details still need to be agreed upon and approved between the House and the White House.
Here are the current details of the proposed Market Relief:
When Dec 31st 2008 hits, the new FHA loan max’s set from the previous bill will become null and will change to a permanent new loan limit of $550,000.
$4 Billion to go to neighborhoods hit hard by foreclosure and other elements of a struggling market. It is purposed that the local governments would use the money to rehabilitate the areas by purchasing the homes that are vacant and foreclosed upon, renovating as needed and then turning around and selling them…. in reality this money would really be just a “drop in the bucket.”
The sum of one hundred million would be provided to those services that work to provide relief to homeowners that haven’t been making mortgage payments and stand to loose their home.
Stricter penalties to lenders who do not provide the truth-in-lending disclosure to their clients in a timely manner during the loan transaction.
A potential $7,000 tax credit incentive to buyer’s who purchase a foreclosed home.
Write off options for home builders, a potential $6 billion dollar tax benefit.
New Federal Tax deductions for homeowners who do not have itemized income taxes.
A potential $10 billion dollar tax-exempt bond to local and state housing agencies to assist with the refinancing of those subprime borrowers facing payment increases they won’t be able to cover once their loans reset.
Many are skeptical of this proposed plan, they feel as though there is too much being done to assist the banks and the builders rather than the struggling homeowners. Any thoughts from our readers?
Are you one of those just waiting for that perfect bank owned or foreclosure property?
Let me tell you - you are not alone! There are many poised for that “must have” deal which just do not materialize that often. It can be very frustrating for buyers who think that they will be the only lucky person who finds that so called deal killer …
…. case in point is the property that came on the market on LA JOLLA RANCHO RD at a great price … $999,000 - they received 19 (yes, nineteen) offers and it was in escrow on day 2… and those were the offers received, let alone the untold inquires.
Yes, the real estate market has declined, but not to the degree everyone was hoping for in the coastal areas, like La Jolla, Del Mar, and Coronado …
Far better to find the area you like and rather than play the lotto and be constantly overbid on a Bank Owned property look for a motivated seller… you just need to find a good agent who will do the leg work for you to find the right property at the right price…
We have added an option that allows you to email your friends and family a link of homes that you have selected as “Favorites” and ask that they let you know what they think. You can also ask one of our Agent’s to comment and you can add to your own personal comments too.
Your friend “Ruth” may comment that she’s not sure about the color of the living room walls, while one of our agents may comment, “I just previewed the home on Brokers Caravan and the sellers made a really nice job of painting the walls!” It is very interactive and really helpful when trying to narrow down which of the houses truly is your favorite.
If you were actively using the “Favorites” page before, you will notice that the page has a new look with a lot of great new features. Your saved favorites can still be sorted according to “price”, “bedrooms” and “year built.” - you can also choose to see an improved “full listing sheet” that is great for future reference. It’s also much easier to request more information or to schedule an appointment to view one or several homes at the same time.
Think of the revision as “social networking for homes” or even collaborative real estate!
To learn more about “Saved Favorites” on our website simply go to our FAQ page.
All markets are cyclical, they are rarely stable - this video from a Southern California real estate consulting group adds explanations. Includes graphs about San Diego real estate.
From the BBC Online: “Swiss financial giant UBS has reported that its writedowns as a result of the sub-prime crisis have more than doubled to about $37bn (£18.5bn). It is the largest writedown by any bank since the credit crunch began.”
Is this nuts or what? Maybe they have just decided to take the hit and move on!
Writedown definition: Reducing the book value of an asset because it is overvalued compared to the market value. This is usually reflected in the company’s income statement as an expense, thereby reducing net income.
A recent article on Forbes.com discusses which metro areas in the nation they consider to be the “Riskiest” buys for home purchases. They evaluated multiple sources of data regarding foreclosure statistics, employment growth, volume of sales, vacancy as well as inventory in order to determine which metro areas had the “riskiest” statistics.
Forbes “Riskiest” areas included Detroit, Cleveland, Denver, Orlando, Miami, and sadly our state’s capital Sacramento. Interestingly enough they felt as though the market in San Diego may be holding on, unlike some of these other areas in the nation. But come to think of it our property market here in San Diego was one of the first to suffer.
According to Forbes, if our market conditions continue in the direction they are currently headed we may see a gradual increase in prices over the next 6 months. How so, you ask? San Diego recently experienced an increase in transactions, which can be a good sign of confidence in the market. Another key factor to a market gaining back its confidence is the accessibility of loans. With the recent changes in Fannie Mae and Freddie Mac loan limits, there are more options available to home buyers. According to the Forbes article “Radar Logic, a real estate research firm, estimates that 18% of the market will see improved lending conditions” due to the latest changes made by Fannie Mae and Freddie Mac. The last key piece to a market revival, or resuscitation, is job availability and job security.
It’s one of those early Spring Friday’s when the weather forecast calls for a slight rain over the weekend, but the sun is high in the sky and it couldn’t be more gorgeous out! Perhaps the weather forecasters are just bored of reporting that San Diego is sunny, sunny and more sunny so they mix it up with a “potential” shower over the weekend! Perhaps you have a list of open homes you plan to visit this weekend, and are looking for something to do before they start. Whether you want to call it safe and do something indoors or defy the forecast and plan an outdoor excursion, we’ve got a great list of things that should keep you busy in the meantime! We haven’t been to all of the places on the list, so feel free to share your experiences should you venture out this weekend on one of our suggestions we’d love to hear your feedback!
Indoor Activities:
Mission Valley YMCA 5505 Friars Road, is the twenty-fifth largest facility of its kind in the US and host to the largest summer camp program in North America. Aquatics, Fitness, Sports, Babysitting, Youth Organizations, and endless options for Summer Camps are available at the YMCA view their website for more details http://www.missionvalley.ymca.org.
Gillespie Field Annex 335 Kenney Street, Do you have an airplane enthusiast in your family? Then check this place out, the San DiegoAir & SpaceMuseum’s annex, located at Gillespie Field, is used primarily to restore and replicate aircraft of bygone times. The planes are restored by dedicated volunteers, many of whom actually flew or worked on the original aircraft. http://www.aerospacemuseum.org/gillespie/
The WorldBeat Cultural Center located at 2100 Park Blvd., is an African and African American Cultural Center in BalboaPark that promotes diversity through multiple mediums: dance, music, and the arts. During the week and on weekends, classes are offered in dances of the world - such as rumba, samba, capoeira, and African dance - and music classes, including African and Caribbean drumming. Many of these are offered for children and families. http://www.worldbeatcenter.org
IMAX theater at Reuben H. Fleet Science Center located in BalboaPark at 1875 El Prado. “The giant tilted IMAX® Dome screen, combined with the world’s largest film format, create a super-realistic cinematic experience sure to entertain!” http://www.rhfleet.org/imax.html
Outdoor Activities:
Legoland which is located in Carlsbad at One Legoland Driveis the perfect option if you want to have a lot of interactive fun with the family. The park is full of rides, shows and attractions to keep you busy all day! http://www.legoland.com/california.htm
The Flower Fields at Carlsbad Ranch, 5704 Paseo Del Norte, is a sight of vibrant waves of color that covers the hillsides you can’t help but enjoy taking it in! http://www.theflowerfields.com/
Hornblower Cruises & Events Enjoy a relaxing champagne brunch or take in a day of whale watching, you name it, Hornblower has it! Check out what they have to offer on their website http://www.hornblower.com/
With all the talk about FHA, CalHFA and Conventional-Conforming loans, one can get a bit confused on all the details. To make it a bit easier to compare the three we have a list below that shows the main points of the three types of loans.
These details are current as of today, but should you like to know details again down the road, we would suggest getting in touch with a lender you can trust to explain the details… our affiliate lender Home Services Lending is always willing to talk to our clients about what’s available to them in this ever changing market, so don’t hesitate to ask!
Loan Type
FHA
Max Loan Amount - $697,500
Income Limitations - N/A
Loan to Value Allowed - 97%
Down Payment Required - 3%
Credit Requirements - Not FICO driven, clean credit for last 12 months
Assets Needed - N/A
Condition of Property - HUD inspector approval needed, any health issues with condition of home must be repaired prior to closing CalHFA
CalHFA – First Time Home Buyer’s Only
Max Loan Amount - $697,500
Income Limitations - Low Vs. Moderate Guidelines to be Followed
Loan to Value Allowed - 100% - min 680 FICO and 95% -min 620 FICO
Down Payment Required - 5% only necessary if FICO is under 680
Credit Requirements - Min FICO of 620, FICO determines LTV as well
Assets Needed - At least 2 months Principal Interest Taxes and Insurance, can use gift money for assets
Condition of Property – Health/Safety issues will be addressed
Conventional – Conforming
Max Loan Amount - $697,500
Income Limitations - Cannot exceed 120% of area’s median income
Loan to Value Allowed – 95%
Down Payment Required – 5%
Credit Requirements – 620 FICO or Higher
Assets Needed - 2 months Principal Interest Taxes and Insurance
Condition of Property – Health/Safety issues will be addressed
…. case in point is the property that came on the market on LA JOLLA RANCHO RD at a great price … $999,000 - they received 19 (yes, nineteen) offers and it was in escrow on day 2… and those were the offers received, let alone the untold inquires.
