Denise's Blog

Lenders to Offer Reprieves To Delinquent Borrowers

Denise Wells (San Diego Real Estate Specialists) — Tue, 19 Feb 2008 17:50:59 -0600

By Renae Merle
Washington Post Staff Writer
Wednesday, February 13, 2008; D01

The Bush administration and six large mortgage lenders unveiled a plan yesterday to offer some homeowners facing foreclosure 30-day reprieves to work out alternatives.

The program, which will target homeowners who are 90 or more days late on payments, is the industry's latest attempt to untangle the mess caused by years of lax mortgage standards.

These homeowners will receive a letter offering a "pause" in the foreclosure process to try to work out a repayment schedule.

Delinquent borrowers have always had the option of calling their lender for help in advance of a foreclosure. But the foreclosure process typically continued during those talks. Under this plan, there would be a 30-day freeze in the process.

Unlike a government-endorsed rescue effort announced last year, the new program, called Project Lifeline, is not limited to subprime mortgages, home loans given to borrowers with weak credit. It also includes foreclosures triggered by home-equity loans, prime loans and second liens.

Modifications to loans would be made on a case-by-case basis, and not all eligible loans are expected to be salvageable, industry officials said.

Homeowners in bankruptcy protection will not be eligible for the program, which also excludes vacant and investment properties. The offer also will not apply to borrowers whose homes are scheduled for a foreclosure sale within 30 days.

"None of these efforts are a silver bullet that will undo the excesses of the past years," said Treasury Secretary Henry M. Paulson Jr. For example, the program won't help borrowers who put down little or no money and who don't want to continue to live in the house, he said.

Countrywide Financial, Bank of America, Citigroup, J.P. Morgan Chase, Washington Mutual and Wells Fargo are participating in Project Lifeline. They are also members of the Hope Now Alliance, the industry-financed nonprofit group that has been coordinating efforts to reach struggling subprime mortgage borrowers.

"For some homeowners, that extra time will make the difference," said Floyd Robinson, president of consumer real estate at Bank of America.

The plan is a good-faith effort by lenders to reach out to delinquent borrowers, said Alex J. Pollock, a resident fellow at the American Enterprise Institute, a conservative policy research and advocacy group. "It seems to be a quite a reasonable, sensible program to be done along with other things," he said. "There is obviously a lot of thinking going on.".

Critics said the plan is still far short of what is needed to stem the tide of foreclosures, which cost lenders millions of dollars and are expected to increase as subprime borrowers face interest rate increases on adjustable-rate mortgages. The national foreclosure rate rose more than 50 percent last year.

"The industry and the Administration are running to catch up as fast as they can to a problem that is getting broader and deeper by the day, but they seem to be falling further and further behind," Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said in a statement.

Giving borrowers an extra 30 days is prudent but a common measure, said John Taylor, president of the National Community Reinvestment Coalition.

"A lot of the industry under normal circumstances tries to avoid foreclosure and work with the borrower," he said. "The real problem is that most of these borrowers are in properties that are not worth what the mortgage is. They are locked into a loan they can no longer afford. This program doesn't get at any of that."

He said: "You can give them 60 more days, or 90 days. If there isn't a product that they can be refinanced into that matches their ability to pay, then we're really not going to be helping eight out of 10 people."

The plan will probably assist only a small percentage of the estimated 425,000 homeowners who are 90 days or more delinquent on their loans, said Mark Zandi, chief economist at Moody's Economy.com. These homeowners are already under stress, and lenders would have to be willing to make significant changes, including reducing mortgage balances substantially, he said. "I would be surprised if we're talking more than tens of thousands of homeowners that are helped."

The mortgage industry has been fighting the perception that it is not doing enough to help troubled homeowners, pointing out that the number of loans modified, including freezing and lowering interest rates, has doubled in the past year. During the fourth quarter of last year, lenders modified 141,000 loans, up from 76,000 in the previous three months, according to the Hope Now Alliance.

Those numbers are likely to increase as lenders implement the program announced last year to freeze the interest rates of qualified subprime borrowers, industry officials said yesterday.

But Taylor said the industry has targeted the "low-hanging fruit" for modifications -- "those borrowers who have a strong financial condition, who with slight modifications would be able to continue under their mortgage."

30-Year Mortgage Rates Continue to Climb

Denise Wells (San Diego Real Estate Specialists) — Tue, 19 Feb 2008 17:36:21 -0600

Freddie Mac reports a jump in the 30-year fixed mortgage rate to 5.72 percent during the week ended Feb. 14, from 5.67 percent the prior week.

Interest on 15-year fixed loans, meanwhile, climbed to 5.25 percent from 5.15 percent over the same period.

Rates dropped, however, for five-year adjustable mortgages to 5.19 percent from 5.21 percent; while the one-year ARM held steady at 5.03 percent.

Freddie Mac chief economist Frank Nothaft says economic uncertainty is responsible for the movement in mortgage rates, noting that some borrowers are finding it difficult to obtain mortgages due to stricter credit standards.

Source: San Jose Mercury News, Martin Crutsinger (Calif.) (02/15/08)

Narrow Refinance Plan Will Help Few

Denise Wells (San Diego Real Estate Specialists) — Wed, 06 Feb 2008 23:32:04 -0600

The current Federal Housing Administration (FHA) Secure program is expected to help only 44,000 subprime borrowers, or 5 percent of those who are more than two months behind in their payments.

A study circulated by the American Securitization Forum suggests that one way around this poor showing is by allowing borrowers delinquent for any reason to refinance into an FHA loan. Currently, the option is available only to borrowers facing a rising interest rate.

Another problem with the program is that the FHA Secure program is unattractive to lenders because they may have a hard time selling the loans. That's because the agency's own securitization arm, facing pressure from traders, pledged to keep its FHA Secure loans out of standard Ginnie Mae bonds.

Source: Reuters News (02/05/2008)

FICO Scoring System Gets Redesign

Denise Wells (San Diego Real Estate Specialists) — Wed, 30 Jan 2008 14:19:27 -0600

Fair Isaac Corp., the company that devised the ubiquitous FICO credit scores, announced this week that it plans to roll out a suite of tools designed to predict future default risk.

Fair Isaac says the new products will predict how lenders can offer even more debt to consumers without taking on undue risk.

The update revamps the old credit-scoring formula so that it penalizes consumers with a high debt load more than the earlier version. FICO 08 should increase predictive strength by 5 to 15 percent, according to Fair Isaac's vice president of scoring, Tom Quinn.

FICO 08 is also expected to do a better job of determining which consumers with past defaults are "more on the road to recovery and should have more of a higher score," Quinn says.

The new index can look at three consumers with a 700 FICO score and determine which of the three could take on additional debt without defaulting, according to the company.

Source: Star-Tribune, Kara McGuire (01/22/08)

2007 Existing-home Sales Fifth Highest

Denise Wells (San Diego Real Estate Specialists) — Thu, 24 Jan 2008 12:24:22 -0600

Existing-home sales declined in December following several months of stable activity, with total sales in 2007 at the fifth highest on record, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales - including single-family, townhomes, condominiums and co-ops - slipped 2.2 percent to a seasonally adjusted annual rate of 4.89 million units in December from a pace of 5.00 million in November, and are 22.0 percent below the 6.27 million-unit level in December 2006.

For all of 2007 there were 5,652,000 existing-home sales, the fifth highest year on record; however, the total was 12.8 percent below the 6,478,000 transactions recorded in 2006.

Lawrence Yun, NAR chief economist, said the market is experiencing uncharacteristic weakness."Home sales remain weak despite improved affordability conditions in many parts of the country, but we could get a quick boost to the market if loan limits are raised in combination with the bold cut in the Fed funds rate," he said. "Home prices are lower, mortgage interest rates continue to decline and incomes are higher, but many potential buyers are delaying a purchase."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.10 percent in December from 6.21 percent in November; the rate was 6.14 percent in December 2006. Last week, Freddie Mac reported the 30-year fixed rate dropped to 5.69 percent. "Although interest rates on jumbo loans have fallen somewhat, they remain well above conventional mortgage rates," Yun said. "It isn't surprising that the share of single-family homes selling for more than $500,000 fell to 12.4 percent of transactions in December from 14.2 percent a year ago."

Total housing inventory fell 7.4 percent at the end of December to 3.91 million existing homes available for sale, which represents a 9.6-month supply3 at the current sales pace, down from a 10.1-month supply in November. "The fall in inventory in December is encouraging, but inventories remain elevated and buyers have a clear edge over sellers in many markets," Yun said.The national median existing-home price2 for all housing types was $208,400 in December, down 6.0 percent from a year earlier when the median was $221,600. Because home sales have slowed the most in higher cost markets, there is a downward distortion to the national median as the mix of closed sales has changed over the past year. For all of 2007, the median price was $218,900, down 1.4 percent from a median of $221,900 in 2006.

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that raising the loan limit on conventional financing is urgently needed. "The most effective way to stimulate housing and minimize the potential for a recession is for lawmakers to raise the limit on conforming mortgages to $625,000, which would open safe and affordable financing to buyers in high-cost areas," he said. "It is grossly unfair that some Americans do not have access to low-interest rate loans. This would help people as they move away from risky subprime mortgages and high-interest rate jumbo loans."

NAR projects the higher loan limit would increase annual home sales by nearly 350,000, reduce foreclosures by 140,000 to 210,000, and increase economic activity by $44 billion. "What's more, this would come at no cost to taxpayers - it's a policy change that could really boost the economy," Gaylord said.

Other projections of NAR's analysis show raising the loan limit would reduce the supply of homes on the market by 1.0 to 1.5 months, and strengthen home prices by 2.0 to 3.0 percentage points. In addition, as many as 500,000 jumbo loans would be refinanced to lower interest rates.

Gaylord said current housing conditions vary widely. "Many local areas continue to have healthy or improving local housing markets," he said. "For example, we saw higher home sales last month in diverse areas such as San Antonio; Syracuse; Springfield, Ill.; and Sarasota, Fla. If you're thinking about getting into the market as a buyer or a seller, consult a Realtor® to learn about conditions in your area - they may be considerably different from the composite national picture."

Single-family home sales declined 2.0 percent to a seasonally adjusted annual rate of 4.31 million in December from 4.40 million in November, and are 21.6 percent below 5.50 million-unit level in December 2006. In all of 2007, single-family sales fell 13.0 percent to 4.94 million.

The median existing single-family home price was $206,500 in December, down 6.5 percent from a year earlier. For all of 2007, the single-family median was $217,800, down 1.8 percent from 2006.

Existing condominium and co-op sales fell 3.3 percent to a seasonally adjusted annual rate of 580,000 units in December from 600,000 in November, and are 24.5 percent below the 768,000-unit pace a year ago. Condo sales for all of 2007 fell 11.0 percent to 713,000 units.

The median existing condo price4 was $222,200 last month, which is 2.5 percent below December 2006. In all of 2007, the median condo price was $226,400, up 2.0 percent from 2006.

Source: NAR

Landlords Are Among the Winners in Housing Slump

Denise Wells (San Diego Real Estate Specialists) — Wed, 23 Jan 2008 13:12:43 -0600

It's good news for landlords that mortgage applications fell to their lowest level in a year last month because people have to live somewhere and if they can't or won't buy, they'll have to rent.

Here are the nation's 10-most-expensive cities for renters and the average rents. The data is provided by Marcus & Millichap.

New York, $2,922
San Francisco, $1,904
Boston, $1,658
San Jose, Calif., $1,612
Los Angeles, $1,452
San Diego, $1,304
Washington, $1,302
Miami, $1,080
Philadelphia, $1,014
Chicago, $1,010

Source: Forbes, Matt Woolsey (01/07/2008)

Landlords Are Among the Winners in Housing Slump

Denise Wells (San Diego Real Estate Specialists) — Wed, 23 Jan 2008 13:12:31 -0600

New York, $2,922
San Francisco, $1,904
Boston, $1,658
San Jose, Calif., $1,612
Los Angeles, $1,452
San Diego, $1,304
Washington, $1,302
Miami, $1,080
Philadelphia, $1,014
Chicago, $1,010

Source: Forbes, Matt Woolsey (01/07/2008)

Fed Issues Emergency Rate-Cut

Denise Wells (San Diego Real Estate Specialists) — Wed, 23 Jan 2008 13:08:20 -0600

The Federal Reserve, in an emergency meeting on Tuesday, slashed the key rate to 3.5 percent, citing a weakening economic outlook. The move marks the Fed's biggest rate cut - three quarters of a point - in more than 20 years.

As fears of a recession looms, the Fed said the rate-cut was to help restore confidence in the U.S. economy.

"While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households," the Fed said in a public statement. "Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets."

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun says the 75-basis-point cut in the Fed funds was a good step in giving the economy the boost and sending a clear message to both the market and to consumers. "This strong rate cut will help lower mortgage interest rates and lessen the burden of adjustable-rate loans that are resetting in the current environment," Yun says. "It also could help stimulate business investment in the wake of market uncertainties. We commend the Federal Reserve Board on its bold action, but at the same time we urge it to keep a close watch to see if additional action is needed."

The Fed also approved a decrease in the discount rate - which, among other things, impacts how consumers pay home equity lines of credit - to 4 percent.

The Fed's next scheduled meeting is on Jan. 30, where analysts say another rate-cut may be likely.

Source: Dow Jones Newswire (1/22/08)

Secluded home on 1/3 acre!

Denise Wells (San Diego Real Estate Specialists) — Fri, 24 Aug 2007 11:34:11 -0500

Very Rare 1/3 Acre Lot!

Location: Rancho Carrillo

This exceptional home, built by Taylor Woodrow is located on a very rare and highly desirable 18,000+ square foot lot at the end of a cul-de-sac! Imagine entertaining family and friends in your very own private oasis. The tranquil backyard features expansive rolling lawns, lush landscaping and an outdoor pavilion. Together with the interior courtyard and flowing floor plan, this home offers the best of indoor/outdoor living and entertaining. The stunning gourmet kitchen will delight the family chef with slab granite counters, stainless steel appliances, Sub Zero refrigerator, custom cabinetry w/ glass insets, walk-in pantry, and large center island w/ bar seating. With two bedrooms downstairs and two bedrooms plus master suite upstairs, you will enjoy this highly flexible home! Tons of upgrades include: wood floors w/ custom inlaid medallion in entry, water softener, reverse osmosis system, security system, custom paint, custom window treatments, interior courtyard w/ brick water feature, family room w/ built-in entertainment center and fireplace, lots of French doors, surround sound in family room, dining room and courtyard, and 2-car garage w/ epoxy flooring, built-in storage and work bench. Located in the prestigious community of Rancho Carrillo, this spectacular home enjoys resort-style living year round. The historic Leo Carrillo Park is a short stroll away, surrounded by miles of biking & walking trails. The community also features a swim center w/ clubhouse, lots of social events for adults and children, Kinder Care and the award winning Carrillo Elementary. Buyer to verify all MLS data prior to close of escrow. Please call Agent for appointment to view.

Photo Gallery

Information

Contact Information

Denise

Wells

Denise@DeniseWells.com

Pricing

Asking Price: $1,149,000

Flexibility: Firm

Property Location

6383 Paseo Potrero
Carlsbad, CA 92009

Links

Web site!

Features

Bedrooms: 5

Bathrooms: 3.5

Parking: Garage

Year Built: 2000

Subdivision: Rancho Carrillo

Lot Size: 18,217

Garage Size: 2-Car

School District: San Marcos

Square Footage: 3,479

Agent Name: Denise Wells

Broker: Village Properties of SD

MLS #: 071053997

Attributes

Appliances

Range/Oven

Full Refrigerator

Dishwasher

Sink Disposal

Microwave

Interior Amenities

Fireplace

Hardwood Floors

Kitchen Island

Vaulted Ceilings

Exterior Amenities

Patio

Fenced Yard

Grass Lawn

Secluded setting

EQUAL HOUSING OPPORTUNITY

VFLYER ID: 1255519

Encinitas Home on over 1/2 Acre!

Denise Wells (San Diego Real Estate Specialists) — Fri, 24 Aug 2007 11:12:18 -0500

Single level living on over 1/2 acre!

Location: Leucadia

Blending casual family comfort with elegant coastal living, this spectacular single-level home truly is a residential work-of-art. Located on over a half an acre in the prestigious Leucadia community of Maravu, every detail of this home has been carefully crafted to create a masterpiece. As you pass through the custom entry door, you will be greeted by distressed hickory hardwood floors throughout the halls and living areas. As you enter, you will notice the oversized library with double French doors. The living room and dining room are ideal for entertaining guests with fireplace, built-in speakers and French doors leading to an expansive outdoor patio. The highly upgraded kitchen includes slab granite counters and backsplash, custom cabinetry, stainless steel GE Monogram appliances (including six-burner stove with griddle), pasta faucet, 190 degree In-Sink-Erator instant hot water tap, and butler s pantry. The adjoining family room is an ideal family gathering place featuring built-in entertainment center, upgraded stone hearth and fireplace surround, and built-in speakers. The master suite offers plenty of storage with two walk-in closets and upgraded built-in cabinetry. The master bath is highly upgraded with Torreon stone counters, tub surround and shower. The pool-sized, private yard features an expansive patio with custom waterfall/fountain, fire pit, built-in barbeque with side burners and lush, mature landscaping. Yard maintenance is made easy with an automatic fertilizer injector system, with drip system. The three-car tandem garage offers plenty of built-in storage, workbench, and epoxy floors. Additional upgrades include solid wood interior doors, custom plantation shutters throughout, oversized baseboards, security system, motion sensing exterior lights on all sides, and custom paint. This state-of-the-art energy efficient home also includes a tankless hot water heater and Solar Voltaic Electric Panels. Welcome home!

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Information

Contact Information

Denise Wells

877-750-2150

Denise@DeniseWells.com

Pricing

Asking Price: $1,449,000.00

Flexibility: Negotiable

Additional Pricing Information: Seller will entertain offers between $1,449,000 - $1,525,000

Property Location

708 Caudor Street
Encinitas, CA 92024

Features

Bedrooms: 5

Bathrooms: 3.5

Parking: Garage

Year Built: 2003

Subdivision: Maravu

Lot Size: .53 acres

Garage Size: 3 car

School District: Encinitas

Square Footage: 3,345

Agent Name: Denise Wells

Broker: Village Properties

MLS #: 071023649

Attributes

Appliances

Range/Oven

Full Refrigerator

Dishwasher

Sink Disposal

Microwave

Interior Amenities

Fireplace

Hardwood Floors

Kitchen Island

Vaulted Ceilings

Exterior Amenities

Patio

Grass Lawn

EQUAL HOUSING OPPORTUNITY

VFLYER ID: 1165162

Two Bedroom, Two Bathroom View Condo!

Denise Wells (San Diego Real Estate Specialists) — Fri, 24 Aug 2007 10:01:32 -0500

Two bedroom, two bathroom view condo in University Heights!

Location: University Heights

Great location! Great view! With more than 1100 square feet, this two bedroom, two bathroom ground floor condo is light and airy and has a spacious feel. Featuring three private balconies, full size laundry, dual pane windows, lots of storage, wood burning fireplace, and secure underground parking. Walk to the restaurants and clubs on Park Blvd or the park and antique shops on Adams Avenue - this home is conveniently located in the heart of University Heights!
See www.2323AdamsAve.com for more information.

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Information

Contact Information

Denise Wells

619-917-8725

Pricing

Asking Price: $320,000.00

Flexibility: Negotiable

Additional Pricing Information: Seller will entertain offers between $320,000 and $340,000. Note: this is a potential short sale and Seller acceptance is contingent upon lender approval of price, terms, and conditions.

Homeowner Dues: 200.00 per month

Property Location

2323 Adams Avenue, #105
San Diego, CA 92116

Links

Property Web site

Features

Bedrooms: 2

Bathrooms: 2

Parking: 2 secure spaces

Year Built: 1982

Subdivision: Casa Monterey

Located on Floor #: 1

Floors in Bldg: 2

Square Footage: 1162

Agent Name: Denise Wells

Broker: Village Properties of San Diego

MLS #: 76046803

Attributes

Appliances

Range/Oven

Full Refrigerator

Washer/Dryer

Dishwasher

Sink Disposal

Interior Amenities

Fireplace

EQUAL HOUSING OPPORTUNITY

VFLYER ID: 1112203