San Diego real estate blog - Peter Toner

1. A Mello-Roos Community Facilities District (CFD) is formed. Mello-Roos is a method of financing government entities (cities, counties, school districts and other special districts) to fund the cost of public improvements. Before Government entities can form a CFD, they must either obtain permission from area landowners or hold an election of registered voters within the CFD.
2. The municipality sells bonds on behalf of the CFD. These bonds are sold to private investors who purchase them for tax-free interest income. The money raised through the bond sales becomes the debt obligation of the CFD.
3. Bond proceeds are used to pay for public improvements within the CFD. The types of improvements, which can be funded by a CFD, are much broader than those types of improvements, which can be funded by traditional assessment districts. For example, schools, police stations, fire stations and libraries can be constructed with CFD bond proceeds, as well as roadways, water lines, and other traditional types of public improvements. CFD’s can also be formed for purposes of public facility maintenance.
4. Money is repaid to bondholders through the Mello-Roos special tax. The service for the bonds is repaid by the levy of special tax on property within the CFD. The amount of the special tax is determined by each CFD’s Special Tax Formula, and may vary between property types. The special tax revenue is used to pay back the investment, repay principal and interest to bondholders. Taxation and repayment continues each year for the life of the bond issue, usually 20 to 40 years.

Blog entry courtesy of our California Title Representative from the “Ranch-to-Sea Team” Marc Angstead

Would you believe it? In some areas of the nation, it is the city that is the one stepping up to the plate to assist areas hardest hit by the mortgage meltdown. Seems a bit far fetched, but according to many recent reports it is quite true.

While the federal government is dragging their feet trying to agree on what step to take next, across the nation metropolitan areas such as Boston, Philadelphia, Los Angeles, Baltimore and Trenton are taking matters into their own hands.

Communities that were once thriving are now turning into vacant rows of houses, and in some areas criminal activity is further depreciating the neighborhood value. City officials are holding the same lenders who wrote     “liar loans” and other fraudulent mortgages accountable for their bad business and suing the companies in hopes to recoup the monetary losses of their communities.

What’s a City to do in circumstances like this? Assist those who are entering default, those who have lost their home to foreclosure, clean up vacant neighborhoods, assign more neighborhood patrols for areas hit with crime, and even sue the lenders that have caused the economic losses of the community? Will the cities actions be able to help? Better yet, will more cities step up to assist their communities?

For San Diego County the changes in the market have made home prices once again obtainable to many, rather than just a few. There are areas of San Diego where home prices have dropped by 50% compared to sales prices of 2005 and 2006. The areas hardest hit are the inland suburban areas from North to South of San Diego County. Those communities located along the coast are struggling to hold onto their value, but so far have continued to remain steadfast.

Is it a right time to buy, can you find a deal, has the market hit bottom? With financial analyst predicting mortgage rates may be on the rise is it safe to sit and wait for “the bottom,” when now more than ever may be a more “affordable” time for San Diegans to buy…

Summer in San Diego is officially here! It’s that time of year again when the kids are out of school, vacations are in full swing and its time to relax and enjoy the fabulous fun that San Diego County has to offer!

With that being said the first of this summer’s holidays is just around the corner. Yes it is San Diego’s Favorite holiday Fourth of July and it will be here before we know it! Have you got plans in place to celebrate? If not we’ve got a few ideas that may help you get the summer started off right!

Fourth of July in San Diego 2008

• San Diego County Fair ~ Gates open at 10 a.m. and Fireworks will end the day at 9 p.m. There’s plenty of family fun to be had at the County Fair!
• 6th Annual Big Bay Fireworks Show ~ Starts at 9 p.m. best places to view the 4 simultaneous firework shows are Seaport Village, Coronado Landing, Harbor Island, North Embarcadero and Shelter Island.
• Coronado Celebration Parade ~ Starts bright and early on Orange Ave at 7 a.m. with a concert in the park to end the day, band begins at 4:30 p.m.
• Julian’s Old Fashioned 4th ~ starts at 10 a.m. and rumored to bring 10,000 visitors to the small town.
• LEGOLAND Red, White and Boom ~ the fun begins at 9 p.m.
• Rancho Bernardo Spirit of the Fourth ~ Pancake Breakfast at 8 a.m. followed by fun for all with crafts, vendors, food and live entertainment.

For more Fun 4th of July ideas in San Diego view the full list on “San Diego’s Un-Official Website” www.SanDiego.com! Photo of fireworks over the San Diego Harbor courtesy of PD Photo!

Looking to purchase a Foreclosure property? The Bush Administration’s latest announcement just made it easier. For the next year, FHA will be allowed to insure mortgages to purchase foreclosure properties that have been in the seller’s possession for less than 90 days.

Previously, FHA was not able to insure such homes with the intention of preventing “flipping” of homes in distressed neighborhoods. This same rule created a bit of a catch twenty two. The homes taken back by the lender would have to sit and sit creating a larger number of foreclosed homes that could not immediately be put back on the market for sale. The more vacant homes you have, the more the neighborhood value declines and the less likely buyers are going to come into the neighborhood in fear of living in a ghost town.

The Bush Administration’s decision to eliminate the 90 day rule is an attempt to help assist areas that have been hardest hit with foreclosed properties. As the number of foreclosures rise across the nation, it is a bit premature to say whether such a change will be able to make any kind of a positive effect on the market.

If you were watching the enthralling ending to this years US Open tournament and wished you were living here in one of the worlds best climates, let us know! Please post your comments and share your thoughts …

In San Diego we have all come to the reality that a large majority of our market is “distressed” – in the status of Short Sale, Notice of Default or Foreclosure. It is clear from the sales stats that the main areas being affected by the mortgage crisis are those in the outer communities of San Diego County. In an article by San Diego Reader statistics were quoted for areas that are at the highest level of distress. In National City 70 percent of homes listed for sale are in distress, Lemon Grove is also at 70 percent, Spring Valley is hovering at 40 percent and Chula Vista being the hardest hit is at 72.6 percent. North County is also being affected with Oceanside and Escondido being in or above the 70 percent range for distressed homes.

So what does this mean if you are a buyer? Well for the past four months an agent on our team has been searching diligently with their client trying to help them find that “perfect” home. Eureka!! They finally find the home, only to learn a “Notice of Default” had just been recorded on the property. The client’s immediate reaction is great that means I’ll get a “Foreclosure deal!” Reality is that isn’t quite the case, yet.

The recording of a Notice of Default occurs 3 months prior to a formal filing of Foreclosure. What does this mean to our buyer? They either have to try to go through the trials and tribulations of a Short Sale (which in itself can take months to get a lender approval on an offer) or wait out the 3 months after the NOD is filed and hope that in the meantime the lender doesn’t accept an offer. The buyer would then need to wait for the Foreclosure to be filed and the home is released in a Trustee’s Sale…but is it worth the risk and the wait….

It depends on the buyer’s circumstance. Remember once it goes to Foreclosure, the home is sold at a court house auction. The opening bid will be determined by the foreclosing lender which is usually set to the total amount that is owed on the home (ie original loan amount and arrears). Should the starting bid not be met, the status of the home will then change to REO (Real Estate Owned). The bank will then list the home for sale (not always immediately) and hopefully will do so according to the market value of the home. That may be the ideal time for a buyer to step into the sale…. after all the legalities have been completed and the home is at REO status. Bear in mind that you may be also competing with other bargain seekers at this point.

Our advice? It makes the most sense for a buyer to hunt for their “perfect” home with the help of his or her Realtor. A home that has been priced properly according to the market and matches the criteria of a home that the buyer would like it to have. Should you happen to find that home is in distress, make sure that you know all the in’s and out’s involved before jumping into “rough waters.”

The Peter Toner Team is looking for the missing piece to our team… and we’re hoping its YOU!

Are you a highly motivated, internet savvy agent, equipped with your own laptop computer and smart phone? Have you wanted to make a change for the better but don’t know where to start? Do you have a positive attitude about today’s market and are willing to go that extra mile? If this is you then you then you should contact us!

We are The Peter Toner Team an award winning group of individuals all working towards the same goal, continued sales success and client satisfaction. Although many agents are quick to blame the “market” on their slow sales, we are receiving a large volume of leads and need to add to our team in order to keep up. Our high ranking website produces buyers wanting to see homes in all parts of San Diego County, so be ready to hustle! If you live in either North County or South Bay you’d have an advantage over the rest…

No prospecting required, but you do need good organizational skills to follow up on leads assigned exclusively to you.

Are you available to join our team immediately? Would you like to know more about us? Check out our website www.SanDiego-MLS.com or just google us and you’ll see just how high we rank!

Call us at 858 551 3331 or email us at peter@teamtoner.com send us your experience and let’s see if we are a good fit!

A recent study completed by the economic data research company Global Insight Inc. found some very interesting statistics in regards to San Diego Home Values as well as a few other large metropolitan areas. The chart is below, and as you can see the results show that San Diego home values were found to be 9% undervalued. Other areas that were found to be “undervalued” were Boston, Las Vegas, Denver and Houston. (The undervalued homes are represented by a negative sign in front of the percentage.)The statistics were based off of income levels, current interest rates, population density, as well as market premiums and/or discounts.

First Quarter Home Values Chart by Global Insight Inc.

Median Over- Metro Price Valued    Area   

  (thousands)         (%)

N.Y.               $468.8               +0.5

L.A.                 $432.2             +15.2

D.C.                 $403.8             +24.6

S. Diego    $376.6          -9.0

Boston           $332.4             -13.1

Miami             $271.7            +27.0

Phila.              $235.2             +4.1

L. Vegas         $232.6             -3.1

Phoenix        $224.9           +20.0

Denver         $217.9              -6.7

Houston       $120.0           -33.1

SOURCE: Global Insight Inc.

With all the stipulations to Fannie Mae and Freddie Mac loans, many are now feeling frustrated with the loan approval process. There is one type of loan that often gets underestimated and it’s the good ol’ VA loan.

If you are active or retired military, or have served with the National Guard or Reserves don’t overlook your VA loan options! The VA loan is one of the few loans around right now that still are allowing 100% financing as an option! There are just a few requirements needed for VA loans: a Certificate of Eligibility, a VA assigned appraisal and proof of assets.

The benefits of using your VA loan are that you can purchase a home with no money down, no mortgage insurance will be levied and you are allowed to prepay without penalties. Although the VA doesn’t specifically look at your credit score they will review in detail your last two years payment history. If you’d like to learn more about VA loan programs let us know and we can get you in touch with our affiliated lender for further details!

Data Quick Reports for April 2008 show an increase in sales by 22% in Southern California compared to home sales in March of 2008. Last March sales for new and resale homes as well as condos totaled 12,808, this April those same sales hit a total of 15,615… that’s where the 22% comes in. The interesting side note to this is that a little under half, 38% to be exact, of those sales were homes that had been in foreclosure, compare that to the mere 5% of foreclosure home sales from April 2007.

So all of this has data analyst scratching their heads and wondering whether or not the next few months will continue to see an increase in sales and whether or not foreclosures will continue to be the item of choice for buyers.

The rumor is true. Fannie Mae has done away with their previous high          down-payment requirements for distressed markets. They are now          accepting down-payments from 3-5% for all loans that it guarantees for homes in areas of declining value! Fannie Mae hopes that in changing their down-payment policy it will in turn encourage those buyers who are sitting on the fence to go out and place an offer on a home. They also are no longer defining these areas by zip code, but instead are now going off of appraiser recommendations for what areas are considered distressed. This change may come as good news to homeowners who fear their home value may have been declining due to distressed neighborhoods in the same zip code.

Just as you are probably saying right now we too said, “What?” Could it be that the media has finally decided to portray the housing industry in a positive light?? Well now let’s not get ahead of ourselves…notice the key words “Start Your Engines,” as you can see there is no advice to start a road trip!

The gist of the article is this ~ across the nation we are starting to see a drastic reduction of home prices. Finally, sellers are no longer blinded by home values from the past. They are finally starting to see the light… that in order to sell their home they will need to price their home appropriately, according to the right here and now value and dynamics of today’s market.

What got the Wall Street Journal’s writer Brett Arends’ motor running? The report released this past Tuesday by the National Association of Realtors on the statistics of the prices from last quarter. “From Florida to Nevada to the Californian “Inland Empire,” single-family home prices dropped by 20% to nearly 30% in a year,” reads the article. “In certain parts of California, quarter-on-quarter declines are more than 10%.”

To the ears of those in the real estate industry this may not be “good” news, but it is what many feel needs to happen for this “bubble” to finally completely deflate. The market can recover only when home prices are at a value that buyers feel is reasonable and affordable, the prices from yesteryear are irrelevant and that is what many sellers have had a hard time grasping. However, with this latest data from NAR, perhaps we will begin to see values that encourage buyers to actually “start their engines” and get out there and buy!

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)

You have to wonder what an agent was thinking when they posted this picture on the MLS …

To be continued !!

The chart above had writers on Wall Street Journal’s website buzzing 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!

To read the articles discussing the chart online at the Wall Street Journal, view the following links: Is the Housing Slump at a Bottom? and The Housing Crisis is Over?