While doing loans in Hemet, CA we have experienced an increase in volume of refinance mortgages.  Even though values remain constantly strained by perpetual foreclosures some people have enough equity to succesfully complete a refinance transaction.  Rates have been close to all time lows for a long enough period of time for the word to get out and for our customers to react.  I still have more clients in Van Nuys then in Hemet but either way the phone is starting to ring.  This came out today on MortgageNewsDaily.com.

The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 15.5 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 0.4 percent

The Refinance Index increased 17.2 percent from the previous week. The four week moving average is up 1.8 percent for the Refinance Index. The refinance share of mortgage activity increased to 69.1 percent of total applications from 68.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.8 percent from 4.7 percent of total applications from the previous week.

The seasonally adjusted Purchase Index increased 9.0 percent from one week earlier.  The unadjusted Purchase Index increased 11.7 percent compared with the previous week and was 9.8 percent lower than the same week one year ago. The four week moving average is down 2.7 percent for the seasonally adjusted Purchase Index.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.95 percent from 5.03 percent, with points decreasing to 0.99 from 1.34 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.27 percent from 4.35 percent, with points increasing to 1.36 from 1.31 (including the origination fee) for 80 percent LTV loans. This is the lowest 15-year fixed-rate observed in the survey since the week ending November 27, 2009. The average contract interest rate for one-year ARMs decreased to 6.77 percent from 6.80 percent, with points decreasing to 0.29 from 0.33 (including the origination fee) for 80 percent LTV loans.

Michael Fratantoni, MBA’s Vice President of Research and Economics said:

“Mortgage applications rebounded last week, particularly refis, as rates dropped back below 5 percent.... Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months.

Information provided by the Mortgage Bankers Association as reported on Mortgage News Daily.

While thinking about loans and homes in Hemet we have to consider mortgage rates and their inherent ties to the MBS market.  This helps us to lock rates while making loans in Hemet, mortgages in California and Van Nuys.

The 8:15 release of the Dec ADP private jobs report was more losses than what was expected; private job losses were expected to be 75K but were down 84K. Markets didn't make much of it however; its the BLS report coming this Friday that overrides the ADP data. Historically ADP estimates have been more bearish than what the BLS data shows. Markets are still looking for job losses to be negligible in Dec with seasonal hirings boosting and distorting the data.
 
At 9:00 this morning the 10 yr note -3/32, mortgage prices +1/32 and the DJIA index -2 points. At 9:30 the DJIA opened -15, the 10 yr note -1/32 and mortgage prices unchanged.
 
At 10:00 the Dec ISM services sector data; expectations were for the overall index to increase from 48.7 to 50.5, it hit at at 50.1. New orders component 52.1 frm 55.1, prices pd at 58.7 frm 57.8 and the employment index increased to 44.0 frm 41.6. Any reading over 50 is expansion, under 50 contraction. The reaction generated slight selling in the mortgage markets and a bounce in the stock indexes.
 
Earlier this morning, the MBA mortgage applications; for the weeks ending December 25, 2009 and January 1, 2010. For the week ending December 25, 2009, the Market Composite Index, a measure of mortgage loan application volume, decreased 22.8% on a seasonally adjusted basis from the prior week. For the week ending January 1, 2010, this index  increased 0.5% on a seasonally adjusted basis.  Both weeks' results include an adjustment to account for the Christmas and New Year's Day holidays. For the week ending December 25, 2009, the Refinance Index decreased 30.5% from the previous week and the seasonally adjusted Purchase Index decreased 4.0% from one week earlier. The following week, the Refinance Index decreased 1.6% and the seasonally adjusted Purchase Index increased 3.6%. The refinance share of mortgage activity for the week ending January 1, 2010 is 68.2%, a decrease from 69.6% for the week ending December 25, 2009.

For the week ending December 25, 2009, the average contract interest rate for 30-year fixed-rate mortgages increased to 5.08% from 4.92%, with points increasing to 1.48 from 1.23 (including the origination fee) for 80% LTV loans. For the week ending January 1, 2010, the average contract interest rate for 30-year fixed-rate mortgages increased to 5.18% with points decreasing to 1.28. For the week ending December 25, 2009, the average contract interest rate for 15-year fixed-rate mortgages increased to 4.57% from 4.34%, with points decreasing to 0.91 from 1.03 (including the origination fee) for 80% LTV loans. For the week ending January 1, 2010, the average contract interest rate for 15-year fixed-rate mortgages increased to 4.62%, with points increasing to 0.98.

A double dip in 2010? The overwhelming consensus from the majority of analysts and economists----not to mention Wall Street brokers----is that the economy will continue to improve in 2010 and we won't experience a U or W bottom. According to the consensus view, the worst is behind us, jobs will begin to increase and the economy will grow. Well, for many years I used to write our annual forecast for the year about this time of the new year; no more, it is way too sketchy and uncertain to put out a forecast that has little value more than a month or two. With that, what bothers us, and we can't shake it, that the housing sector is not recovering and many are simply ignoring that fact. Foreclosures are not declining, they are increasing and it is now including so-called prime mortgagors. Home values are continuing to decline. Consumers are continuing to pull back on spending (except for Christmas); consumer credit has declined for the each of the past 10 months. As everyone knows, consumer spending accounts for 70% of GDP growth, unless there is a sea change in consumer spending and the housing sector decline, the economy isn't likely to grow as the present consensus implies.

48 hours until the employment report for Dec. Every employment report is critical, this one adds even more to the markets as estimates are for non-farm jobs to come in unchanged with no additional losses in jobs. Seasonal hirings according to analysts will overcome more long lasting job losses according to those that know this for sure. Knowing anything for sure when it comes to employment is a formula for disappointment, all one has to do is consider the market volatility when the data is released----always wild swings in equities and interest rates.

Source:TBWS

As this year closes, I wish all a very happy, blessed and prosperous new year.  We will be watching and reporting on the new SAFE act as well as any issues that affect home loans in California, Van Nuys and Hemet.  May God be with you in the next year and grant your needs.

While doing home loans in Hemet, California and San Jacinto, California we have discovered that knowledge is imperative.  Here are some changes that will affect Van Nuys, CA, Hemet CA, San Jacinto CA and home loans and mortgages in California. 

Realtors some of the changes affect you directly.

NEW CALIFORNIA LAWS FOR 2009-10 AFFECTING REALTORS AND LENDERS

The conclusion of the first half of the 2009-10 legislative session has brought many new laws that may affect California REALTORS® and their clients.  Not surprisingly in the subprime aftermath, prominently featured among the new laws is stricter regulation of the mortgage lending industry.  To view the full text and legislative summary of any of the following new bills, go to www.leginfo.ca.gov.

REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company.  A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations.  An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action.  This law expires on January 1, 2015.  Assembly Bill 957.

No Advance Fee Loan Modifications: Starting October 11, 2009, a new law prohibits anyone from claiming any compensation for negotiating or arranging a loan modification until after that person fully performs each and every service as promised.  Aimed at combating loan modification scams, this ban applies to upfront fees collected by real estate agents and attorneys.  The ban expires on January 1, 2013.  Also effective immediately, anyone who negotiates or arranges a loan modification must give the borrower a specified notice that paying a third-party for loan modification services is unnecessary.  These new requirements apply to mortgage loans secured by residential property up to four units, with certain exceptions for lenders and loan servicers acting on their own behalf.  Violations can be penalized by, among other things, a $10,000 fine plus one-year imprisonment for individuals, or a $50,000 fine for businesses.  Real estate brokers with existing Advance Fee Loan Modification Agreements reviewed by the Department of Real Estate (DRE) can no longer, as of October 11, 2009, enter into these agreements or collect advance fees.  Agreements entered into and advance fees collected before October 11, 2009 are not affected. For the DRE announcement, go to http://www.dre.ca.gov/pdf_docs/SB94WebAnnouncement(brokers).pdf.  Senate Bill 94.

Advance Fee Redefined: Aside from loan modifications discussed above, Senate Bill 94 also broadens the definition of an advance fee which must be specially handled by real estate agents, such as by submitting an advance fee agreement for DRE review and placing funds received into a broker's trust account.  Under the new definition that took effect on October 11, 2009, agents cannot separate advance fees or services into components to avoid the advance fee requirements.  More specifically, an advance fee is now defined as "a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed."  Exceptions include advertisements in newspapers of general circulation, tenant prescreening fees, and tenant security deposits.  Senate Bill 94.

Mortgage Loan Originators Regulated: Beginning in December 2010, a real estate licensee acting as mortgage loan originator must obtain a license endorsement, which entails education, written testing, and reporting requirements.  A mortgage loan originator is anyone who, for compensation or gain, takes a mortgage loan application or offers or negotiates terms of a mortgage loan for residential property containing one-to-four units.  Exemptions include real estate agents who only engage in selling, buying, or leasing activities, unless compensated by a lender or mortgage loan originator.  This license endorsement requirement comports with the creation of a Nationwide Mortgage Licensing System and Registry under recent federal law.  Finance lenders and residential mortgage lenders under the Department of Corporation must also register in the nationwide system.  Additionally, if a real estate broker or the broker's salesperson makes, arranges, or services loans secured by residential property containing one-to-four units, the broker must notify the DRE by January 31, 2010 or within 30 days of commencing such loan activity, whichever is later.  Senate Bill 36.

Mortgage Broker Activities Restricted: Commencing January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower's economic interest above his or her own.  This fiduciary duty pertains to a mortgage broker who makes loans secured by residential property of one-to-four units.  Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans.  Assembly Bill 260.

Appraisal Industry Oversight: The Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC).  Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined.  On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction.  Such prohibited conduct includes withholding or threatening to withhold an appraisal fee, withholding or threatening to withhold future appraisal business, and promising future business, promotions, or compensation.  Senate Bill 237.

Mortgage Fraud Becomes a State Crime: As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law.  A violation of this law is a crime punishable by one-year imprisonment.  Under existing federal law, loan fraud against a federally-insured lender is a crime punishable by a $1 million fine, plus one-year imprisonment (18 U.S.C. section 1014).  Senate Bill 239.

Increase in Homestead Exemptions: Coming into effect on January 1, 2010, the homestead exemption protecting a homeowner's equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified.  Assembly Bill 1046.

60-Day Notice to Terminate Tenants Extended: Existing law generally requiring a 60-day notice to terminate a month-to-month residential tenant, which was originally slated to sunset on January 1, 2010, has been extended indefinitely.  A 30-day notice to terminate is sufficient if the tenant has lived in the property for less than one year, or if the landlord has sold the property and certain requirements are met as specified in our standard-form Notice of Termination of Tenancy (C.A.R. Form NTT).  The 60-day notice requirement does not apply to fixed-term leases, such as a one-year lease.  Other laws address tenants in properties foreclosed upon.  Senate Bill 290.
Other Significant Laws: Other new laws that may interest REALTORS® include, without limitation, the following:

Landlord Utilities: Requires certain utility companies to notify residential tenants of landlord's past due accounts and upcoming shutoffs, and allows tenants to begin service in their own names and deduct payment from rent (Senate Bill 120).

Mobilehome Parks: Prohibits management from requiring a homeowner to use a specific broker or dealer when replacing a mobilehome or manufactured home on a space in a mobilehome park (Senate Bill 804).

Swimming Pools: Requires anti-entrapment devices for owners of apartment buildings, condominium complexes, and others, including the filing of compliance statements (Assembly Bill 1020).

Mechanic's Liens: Provides new procedures, including service of a Notice of Mechanic's Lien to the owner and mandatory recording of a lis pendens when enforcing a mechanic's lien (Assembly Bill 457).

Low Water-Using Plants: Renders unenforceable any HOA provision prohibiting landscaping with water-efficient plants in common interest developments (Assembly Bill 1061).

Reverse Mortgages: Provides new disclosure and other requirements under the Reverse Mortgage Elder Protection Act (Assembly Bill 329).

Disposal of Records: Shields from liability businesses that dispose of abandoned records containing personal information by shredding or erasing, and gives a legal presumption that a tenant owns records remaining on the premises after tenancy termination (Assembly Bill 1094).

Plumbing Fixtures: Provides new disclosure and other requirements for water-conserving plumbing fixtures effective on or after January 1, 2014 (Senate Bill 407).
 

I have been involved in home loans in Van Nuys, The San Fernando Valley and most recently Hemet and San Jacinto for 20 years.  I have seen up and down markets and I never fail to end up scratching my head when it comes to political action within the industry.  Why is it that law makers find it neccessary to change the laws after the fact.  California has always had stringent licensing guidelines and now we get a new set.  We also now penalize our borrowers by no longer allowing them access to every loan program that might be available.  Quite frankly I believe that the path to a recovery is more lending not less.  Arnold came in as a Republican but has been a turncoat almost from the beggining.  I have attached a link to the bills that he signed in to law today.

I wonder how much of our cash was used to debate a program that no longer exists.  We are no longer allowed to offer Negative Amortization Loans in California.  It's funny but I have not seen one available in quite sometime.  I don't think they will be coming back very soon but one never knows.  The reality is that the market place eliminated the program.  Now if the market happens to find a way to bring it back we are out.  Of course we can spend some more money to rescind the law then.  We will also be spending money on testing mortgage originators (licensing is a good thing that we already do well) and then hiring a new enforcement crowd.  Oh well, I guess that is what we get for being responsible for the current financial condition.  Oh, wait a minute maybe it was not us maybe it was the multi-billion dollar companies that we bailed out even though they were responsible for selling the CDOs

http://www.latimes.com/business/la-fi-mortgage13-2009oct13,0,6365006.story

Many know me as the owner of Symphony Mortgage Company.  I was in Van Nuys, California for many years.  Most who know me also know that I have been doing loans for 20 years.  Some also know that I'm a drummer and that my passsion is music.  A few years ago I had the occasion to meet a Realtor from Hemet, California.  John Occhi and I met through a mutual relationship with an online realty service.  After 4 years of working with John and others in Hemet, I moved in.  That is to say that I have moved down to Hemet.  It's a beautiful community and the change is awesome.  

The question I'm asked most is where is Hemet and finally why Hemet.  Well the answer is simple.  Business in Hemet is awesome.  I also felt that the community really benefits from local service companies.  In Los Angeles I was used to constantly using email, fax, delivery and telephone to transact entire deals.  I'm sure that my LA business will still be done that way.  Down here though, I look forward to having the time and closeness to meet my customers first hand.

I've not posted in awhile.  The loan business and the chaos it has created on a business and personal level has been a challenge.  However I am back and in a big way.  Security National is a great company.  We specialize in FHA.  We are a direct lender and we are not a bank!  Like all there have been challenges with determining The Government's role in our business and the ever changing underwriting guidelines that cost time and effort.  However, the market has picked up and the lenders, including us, have stabalized rules and guidelines.  For now we are enjoying speedy underwriting times and great rates.  

With John Occhi's help I was able to secure a nice home here and was introduced to a great bunch of people at a network lunch organization. They are responsible for my growth and even my son's.  He owns a video production company called Another Happy Ending Productions and he's found that Hemet has been welcoming to him too.  So when my friends say Hemet, Hemet?  I say come on down and check us out.  There's a lot to do and you won't be ignored like you are in the big city. 

Ok so I've recieved some phone calls about the fed and rates.  My clients that are at 6 and above are ready to refinance and seem very in to what they see on TV.  This is what I've explained to them lately.

The Fed does not matter when it comes to mortgage rates.  What matters is who is buying the coupons and right now it's you and I.  Simply put the whole mortgage market has come down to 3 players.  Fannie, Freddie and FHA. The first two are currently owned by us. 

We basically are there without the help of the fed.  I can quote 4.875 today at a cost to the borrower.  Most of my clients are familiar with pricing because I go to great lengths to make sure they understand how much I make for assisting them with the process of getting a Mortgage Loan.  I always find it rewarding for them to understand why they should pay the point and get that rate down.  Of course when appropriate I will guide them the other way.

One of the things that occured when the fed funds rate was low, was the borrowing of money by certain companies that lent that money out at much higher rates based on high risk.  We called that sub-prime lending.  I don't see it coming back soon.  Right now credit is tight and Fannie and Freddie are not helping by charging a premium for lower fico scores.  Hopefully they will loosen up a bit and we can go back to helping those that are not postal workers or public school teachers to get a loan.

Happy Thanksgiving from Sylmar, Van Nuys, The San Fernando Valley and the State of California.  We are still lending, home loans, loan modifications, mortgages in Sylmar, Van Nuys, The San Fernando Valley and the State of California.

Well this has been an interesting year to say the least.  I have been watching the Government reaction to the credit squeeze and I just can't understand why we just keep giving big bucks to the corporate structure.  It seems like the correct action to take but I wonder if they might go a different way.

I mention this because I've spent most of the last few months realigning myself to work hard for REO business.  I understand the business and I am exclusively working with Realtors that sell and list REOs.  The grapevine says that we are about to have a big slowdown.  Basically the banks are not foreclosing due to the fact that FNMA and FMAC have decided on a moratorium until January 9, 2009.  It takes about 3 weeks or so from a bank getting a property to the property getting on to the market.  With no new activity we can expect a cleaning of the pipeline and then we hold.

So, what might help?  I hate the idea but we really need the economy to get out from under the housing collapse.  I believe that all can be healed if housing prices will stabilize and increase.  Just this year I have worked in an area where the average month depreciation is around 3%.  That's monthly not annually.  I think the Gov. should stop bailing out the guys that bought the secondary market paper.  I think if the tax payers are paying for it that we should go direct to the source.  Bail out the individual homeowner.

Guess what, we made mistakes.  Some people got loans they should not have.  Some of it was created by the brokers, some by the lenders, much by the greedy homeowner who bit off more that they can chew.  Whatever the reason, it no longer matters.  The theory is simple.  Line up all borrowers and modify all the loans.  Many people suggest that there would be no incentive for those that are paying to pay.  Well there is not now.  I know several people that have made a conscious choice to not pay so that they can get a modification.  What if we modify all the notes to current value and set a base rate?  It hurts but only once and the dollar loss is spread across all instead of the tax payers giving it to the bank and trying to regulate what they do with it.

In the end I believe that the market would be stabalized.  Some will still not make it.  That's ok.  We can use the traditional foreclosure method and keep moving.  Thousands will get relief and we can say that the bottom is here.  So far we have spent over a Trillion in bail out and as far as I know none have really gotten relief.  The new rules are hard to qualify for even if the bank is willing to modify.  Lets just take it right to the people.  It's radical and I firmly believe it's coming.

Happy Thanksgiving from Sylmar, Van Nuys, The San Fernando Valley and the State of California.  We are still lending, home loans, loan modifications, mortgages in Sylmar, Van Nuys, The San Fernando Valley and the State of California.

Well this has been an interesting year to say the least.  I have been watching the Government reaction to the credit squeeze and I just can't understand why we just keep giving big bucks to the corporate structure.  It seems like the correct action to take but I wonder if they might go a different way.

I mention this because I've spent most of the last few months realigning myself to work hard for REO business.  I understand the business and I am exclusively working with Realtors that sell and list REOs.  The grapevine says that we are about to have a big slowdown.  Basically the banks are not foreclosing due to the fact that FNMA and FMAC have decided on a moratorium until January 9, 2009.  It takes about 3 weeks or so from a bank getting a property to the property getting on to the market.  With no new activity we can expect a cleaning of the pipeline and then we hold.

So, what might help?  I hate the idea but we really need the economy to get out from under the housing collapse.  I believe that all can be healed if housing prices will stabilize and increase.  Just this year I have worked in an area where the average month depreciation is around 3%.  That's monthly not annually.  I think the Gov. should stop bailing out the guys that bought the secondary market paper.  I think if the tax payers are paying for it that we should go direct to the source.  Bail out the individual homeowner.

Guess what, we made mistakes.  Some people got loans they should not have.  Some of it was created by the brokers, some by the lenders, much by the greedy homeowner who bit off more that they can chew.  Whatever the reason, it no longer matters.  The theory is simple.  Line up all borrowers and modify all the loans.  Many people suggest that there would be no incentive for those that are paying to pay.  Well there is not now.  I know several people that have made a conscious choice to not pay so that they can get a modification.  What if we modify all the notes to current value and set a base rate?  It hurts but only once and the dollar loss is spread across all instead of the tax payers giving it to the bank and trying to regulate what they do with it.

In the end I believe that the market would be stabalized.  Some will still not make it.  That's ok.  We can use the traditional foreclosure method and keep moving.  Thousands will get relief and we can say that the bottom is here.  So far we have spent over a Trillion in bail out and as far as I know none have really gotten relief.  The new rules are hard to qualify for even if the bank is willing to modify.  Lets just take it right to the people.  It's radical and I firmly believe it's coming.