Now That You've Put In Your Offer, Here's 8 Things That Can Sabotage Your Mortgage Approval - 03/31/09 02:57 PM
With mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities. 
The downside of today's unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business. 
As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete. 
This is double the time needed as recently as six months ago.
Because there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals can be revoked at … (1 comments)

Whatever happened to “Sell high, buy low”? - 03/28/09 02:33 PM
Hello again, I was just looking at the listing inventory of available houses for some potential buyer clients of mine, and was struck by the thought in my headline - Whatever happened to the old adage of "Sell high, and buy low"?  That has always been a preferred position to be in, with regard to just about any financial investment, including that of your residence. 
For the past couple of years though, that - selling high - has not been a realistic goal for most home sellers.  The adage IS working fine now, for most buyers, especially with the number of … (0 comments)

FHA Cash Out Refinances Getting More Strict As Of April 1, 2009 - 03/27/09 11:16 AM
If you're in want of a cash out refinance, the most liberal cash-out program in town is about to make qualification more difficult. 
Effective April 1, 2009, the FHA is reducing the maximum loan-to-value on cash-out refinances by 10 percent, dropping the loan size limit from 95% of the home's value to 85%.
In its official press release, the FHA days it's making the change to "limit its exposure to undue risk". 
It also lists the following cash-out requirements:
With less than 12 months since the purchase date, a home's value cannot exceed its original purchase price -- even … (0 comments)

More Signs Of A Bottom : New Home Sales Unexpectedly Rise - 03/26/09 09:21 AM
The national housing market got its third piece of good news in 3 days:
Monday: Existing Home Sales up Tuesday: Home values appear higher nationally Wednesday: New Home Sales up And although national real estate statistics are irrelevant to the local markets in which real estate transactions happen, to a country of would-be and wanna-be home buyers, repeated positive news on housing can be a strong signal that it's time to get off the sidelines.
At least, that's what the data is showing us.  According to an industry trade group, first-time home buyers accounted for half of all sales of previously-owned homes.  … (1 comments)

Watch Out For Mortgage Rates When Gas Prices Rise - 03/25/09 10:54 AM
Don't look now but oil prices are climbing.
This should worry today's home buyers and would-be refinancers because some of the same forces that helped to push crude past $50 for the first time in 4 months also cause mortgage rates to rise.
March 18, the Federal Reserve committed an additional $1.15 trillion to support the economy. 
Since the announcement, investors have questioned whether the Fed is purposefully spurring inflation.  The Fed's total debt purchases now total $1.75 trillion.
And to finance its purchases, the Federal Reserve is printing new money, devaluing the U.S. dollar along the way.  This then leads to … (0 comments)

Orange County Housing Report: 21% Fewer Distressed Homes on the Market - 03/25/09 06:40 AM
I've just read the latest Orange County Market Report, by my friend Steven Thomas, the President of Altera Real Estate Services.  Steven has a degree in quantum economics and for the past couple of years his bi-weekly report has been the most comprehensive compilation of real estate activity and data for our area - regularly cited by all the major news media in Southern California, as a source for excellent, up to the minute real estate information.  Here is a link to his latest report: 
Orange County Housing Report: 21% Fewer Distressed Homes on the Market 
My conclusions upon reading it … (0 comments)

Monthly Home Sales Rise 230,000 In February 2009 - 03/24/09 10:50 AM
Each month, the National Association of REALTORS® releases the Existing Home Sales report.  It's a detailed look at "used" home sale data from all four regions of the country. Among the key findings of each Existing Home Sales report is something called the "median sales price", the statistical price point at which half of the homes in the U.S. sold for more, and half sold for less. 
Last month, the median sales price in the United States fell to $165,400, down 15.5 percent from a year ago.
Nevertheless, just because the median sales price is lower from last year doesn't mean that the … (0 comments)

The 9-Step Spring Cleaning Checklist - 03/23/09 07:01 AM
With the official start of Spring last week comes the official start of Spring Cleaning Season nationwide.
In some homes, Spring Cleaning is an annual ritual, tackled within one sweat-filled, rubber-gloved weekend.  In other homes, it's a less serious endeavor. 
Either way, it helps to have a game plan.
Courtesy of Martha Stewart's website, the Spring Cleaning Organizer is a 9-step checklist covering all of the basics. 
Clean shades and windows Sort through wardrobes Clean and rotate mattresses and cushions Most of the checklist items can be retired with household cleansers and vacuums.  A few, however, require heavy-duty appliances that … (2 comments)

History As A Teacher: What To Do When Mortgage Rates Plummet - 03/20/09 10:26 AM
For the fifth time in a year, rate shoppers learned an important lesson this week: When mortgage rates plummet unexpectedly, they often recover just as fast.
Wednesday, the Federal Reserve's newest $750 billion mortgage market pledge helped to push conforming mortgage rates near their lowest levels since WWII. 
24 hours later, however, those rates were expired.
After considering the long-term implications of the Federal Reserve -- literally -- printing new money to service the recession, markets grew fearful that the Fed's interventions will eventually lead to inflation.  Inflation, of course, is the enemy of mortgage rates.
So, if you're looking for … (1 comments)

Explaining What The Federal Reserve Did In Plain English (March 18, 2009 Edition) - 03/18/09 07:27 PM

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn't mean the Fed stood pat, however.
On plan to resurrect the economy using "all available tools", today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets.
The stimulus will likely be Thursday morning's headline story.
In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load:
Job losses and wealth loss are dragging … (0 comments)

Today's Signal That Home Prices May Have Already Bottomed: Building Permits - 03/18/09 07:40 AM
There's a mixed message in February's Housing Starts data and it may be a good sign for home sellers in the near-term.
As reported by the government, new home construction rose by 22 percent last month.  The press is running with the headline number, calling it evidence of a market bottom.
A more thorough inspection, however, reveals a different story. 
The 22 percent figure applies to all homes built -- including apartment building units.  Isolating residential units, February's housing starts rose by just 1 percent.  Furthermore, the data's margin of error is 11 percent. 
Statistically, we can't know if residential … (0 comments)

The Federal Reserve Is Meeting And What It Means To Your Mortgage Rate - 03/17/09 03:33 PM
The Federal Open Market Committee begins a scheduled, 2-day meeting today to discuss the country's monetary policy.  As is custom, the group will issue a press release to the markets upon adjournment.
There are 8 scheduled FOMC get-togethers annually and the post-meeting press releases are among the most powerful market-moving events of the year.
It's not the Fed's actual policy changes that causes fortunes to be won or lost, though.
These changes can predicted and traded -- and, therefore, hedged -- on Wall Street using Fed Funds Rate Futures.  For example, Wall Street predicts with 97% certainty that the Federal Reserve will … (0 comments)

4 Minutes Of Guidance For Soon-To-Be Real Estate Investors - 03/13/09 09:50 AM

"Most of the biggest real estate fortunes were not made in good times, but in bad times like this" Barbara Corcoran reminds us in this talk with NBC. 
It's important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating.
In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing,
"Everyone who loses their shirt loses it somewhere else." "Every big shark started small." "The house on the corner sets the tone for the block." She also lends some personal perspective to rent rolls, the … (1 comments)

Mark-To-Market : How An Obscure Corporate Accounting Rule Might Impact Your Mortgage Rate - 03/12/09 10:43 AM
You know you're in the middle of an economic crisis when an accounting issue become Front Page News, and that's exactly where we're at today.
Mark-to-market accounting is having its day in the sun and people in need of mortgage sometime soon would do well to pay attention. 
If you've never heard of mark-to-market accounting, don't worry. Not many people have.  Mark-to-market is a method of valuing an asset based on its what-if-it-was-sold-today value.  Mark-to-market is officially known as FASB Statement 157.
Mark-to-market is one reason why bank balance sheets look so awful right now.  Banks have to assign firesale-like values to … (0 comments)

Simple Real Estate Definitions : FICO - 03/11/09 08:40 AM
The basis of most mortgage lending is credit scoring.  In general, the higher a person's credit score, the lower his offered mortgage interest rate.
Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners:
The Equifax BEACON® score The Experian Fair Isaac Risk Model The TransUnion EMPIRICA® Generically, these scoring models generate what are commonly known as "FICO" scores.
FICO scores are measurements of probability.  The higher a person's credit score, by definition, the less likely a person is to default on his home loan.  This is one reason why credit scoring has added importance lately … (1 comments)

The Half-Truth Of The Headline "1 In 8 U.S. Homes Are Late Paying Or In Foreclosure" - 03/10/09 11:26 AM

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.
According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press. 
However, as the heatmap plainly shows, in stripping out just 35 of the nation's 3,232 counties, we can decrease the number of foreclosures nationally by half. 
In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In your neighborhood, though, … (0 comments)

Orange County Housing Report: A Stimulating Pause - 03/10/09 12:28 AM
Hello again,  Wow!  The tidal wave of information coming in on the various stimulus programs is practically overwhelming - for everyone.  Buyers, sellers, prospective borrowers, as well as Realtors and lenders.
The effect this has had is a brief slow-down of what had been an increasingly active spring market here in Orange County, to a pause, to stop and figure out whether any of these programs might be helpful to us.
The fact is, depending on your situation, if you're thinking of buying, or thinking of refinancing, or worried about the mortgage you're paying on, there is something for everyone.  Just … (0 comments)

Homes Listed For Sale Plummet Across 96% Of Major U.S. Markets - 03/06/09 10:11 AM
If you asked an economist why home prices have broadly fallen over the past 2 years, you'd get a short lesson in Supply and Demand.
Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached.
Looking at the chart at right, that balance point may be fast approaching.
According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets. 
This is an especially important data point because home inventories typically rise in February, ahead of … (0 comments)

Some Homeowners Are Eligible For Mortgage Relief. Are You One Of Them? - 03/05/09 10:17 AM
When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:
To help financially-needy homeowners get mortgage relief To help homeowners who've lose equity qualify for today's low rates Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable. 
It also created an "Am I Eligible For Making Home Affordable" form on its website.
In the press release, the Treasury detailed the President's original blueprint.  Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.  
… (0 comments)

From The IRS : The First-Time Homebuyer Credit Form - 03/04/09 09:57 AM
As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.
True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.
Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.
For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".
In addition, Form 5405 highlights the math behind the tax credit.  In general, the First-Time Homebuyer Credit is equal to the lesser … (0 comments)

Can You Guess What Percentage Of Mortgages Are Still Paid On-Time? - 03/03/09 09:53 AM
Mortgage delinquencies are on the rise nationwide, but the news may not be as bad as it appears at first glance.
Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.
Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent.
Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don't seem nearly as menacing.
Consider: In the last quarter of … (0 comments)