Daily Real Estate News

Nearly half the homes sold in March – 48.2 percent – were purchased by first-time buyers, according to a survey of more than 1,500 real estate practitioners by Campbell/Inside Mortgage Finance.

"Many observers had felt that the pool of first time home buyers had been depleted last fall," Thomas Popik, research director for Campbell Surveys, said in a statement. "Instead, the normal spring-summer buying season is combining with the tax credit to produce blow-out results for first-time home buyers."

First-time buyers must have a signed contract on or before April 30, 2010, to qualify for the $8,000 federal tax credit. Qualifying escrows must close on or before June 30, 2010.

Mortgage applications to buy homes increased 10.1 percent last week on a seasonally adjusted basis compared with the previous week, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, the purchase index increased 11 percent compared with the previous week, but was down 5.2 percent from the same week a year ago.

“Purchase applications continued to increase coming out of the Easter holiday, as we approach the end of the home buyer tax credit, and are up modestly over last month.” said Michael Fratantoni, MBA’s vice president of research and economics.

Declining Treasury rates pushed loan rates down from the previous week:
30-year fixed-rate mortgages decreased to 5.04 percent from 5.17 percent. 15-year fixed-rate mortgages decreased to 4.34 percent from 4.45 percent. 1-year ARMs decreased to 6.95 percent from 7.02 percent.

Source: Reuters News Service and Mortgage Bankers Association (04/21/2010)

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Closing your escrow in May? Better make it early, experts say

California Association of Realtors

The $100 million allocated for California's first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.'s Economics team. California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.

Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become available.

Realtors are reminded not to give their clients any tax or legal advice, such as the availability of funds under the California tax credit program. Agents should encourage their clients to seek specific advice from an accountant, attorney, or other professional as they deem appropriate.

For more information, please refer to C.A.R.'s Homebuyer Tax Credit Chart 2010.

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Freddie Mac-owned homes reserved for buyers with special financing

Dozens of Inland Empire properties will be auctioned in April to owner-occupant buyers, using special Neighborhood Stabilization Program funding.

Investor buyers will not be allowed to purchase any of these homes, clearing a major hurdle for first-time buyers who have become accustomed to losing out to cash buyers. Winning bids automatically include 3.5 percent seller contribution for the buyer's closing costs and a two-year home warranty. The homes are all in livable condition, and buyers will have a chance to preview them before the auction.

Prospective buyers must pre-register at least 24 hours before the auction and must have a loan preapproval from an approved lender.

This is an incredible opportunity for buyers entry-level homes who have little down payment money and cannot compete in a white-hot real estate market.

For more information, contact us at the number below for a list of homes and an appointment to meet with an approved lender.

Brian Bean
Real Estate Broker
951-314-5402
Brian@BigDreamInc.com

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Daily Real Estate News

Interest rates are likely to remain low into 2011, Federal Reserve policymakers hinted this week in at least two presentations. These indications came one week after the Fed shut down its program to buy mortgage-backed securities, which had kept rates at or near record lows in recent months.

In a speech Thursday, Fed Governor Daniel Tarullo said, "The relatively modest pace of recovery, the continued high rate of unemployment, subdued inflation trends, and well-anchored inflation expectations together suggest that the need for highly accommodative monetary policies will not diminish soon.”

Likewise, Donald Kohn, Fed vice chairman in a speech in San Francisco, said the Fed would raise rates, “in due course,” but he also noted that low rates "help offset the lingering restraining effects on economic activity and prices."

So far, rates have risen modestly, but analysts speculate they will likely become much more volatile down the road.

“It’s an uncertain type of market,” says Keith Gumbinger of HSH.com.

Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association, predicts that the Fed will have created a situation where there are days or weeks of low-rate opportunities, and other days and weeks when rates rise significantly.

Sources: The Wall Street Journal, Nick Timiraos (04/08/2010), and The Wall Street Journal, Jon Hilsenrath (04/09/2010)

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula

Today is the true deadline to submit loan applications before new requirements kick in

To shore up its balance sheet and dwindling capital reserves, the Federal Housing Authority is rolling out sweeping financial changes. Starting next week, FHA borrowers must look better on paper and be better credit risks.

Mortgage insurance premiums are rising, too.

In its official announcement, the FHA said its trying to better position itself to "manage its risk while continuing to support the nation’s housing market".

Here are the new rules, which hit April 5:

• Minimum down payment remains at 3.5% for borrowers with credit scores of 580 or more, but it increases to a minimum 10% down payment for borrowers with FICOs below 580.

• FHA Up-Front Mortgage Insurance Premium (UFMIP) increases to 2.25% of base loan amount from 1.75%, effective with FHA case numbers issued April 5 and beyond. (That means you need to have your applications in TODAY, people! Friday is Good Friday, and most banks will be closed.) While most FHA borrowers roll the UFMIP into their loan amount, the increase would cost borrowers of a $200,000 mortgage loan an additional $1,000.

• Maximum seller-contribution to pay for buyer's actual closing costs, prepaid expenses, discount points, and other financing concessions will be capped at 3%, down from 6%. These are the costs that other interested third parties, such as a home seller, the real estate agents, builders, developers, etc., or a combination of parties, can contribute to help a buyer qualify for a home purchase. Regular closing costs, including the up-front MIP, changes throughout the year because the reserve requirements for your property taxes changes from month to month. But right now, that cost is about 3.5 percent. Adding another half-point of costs will require borrowers to have more money in the bank before they can buy a home.

Is this a good thing or a bad thing? Depends on your perspective, I guess. But when times are tough, the responsible thing to do is take responsibility. Tighten the belt. Either way, the rules are here, so deal with it.

With the federal government hemorrhaging money, FHA is attempting to become more self-sufficient. Its cash reserves have fallen below mandated levels and so it must now reduce risks by limiting funds to borrowers with dicey financial pasts. Additionally, mortgage insurance companies have been hammered by paying out on policies for loans that went bad, thus the policy increases.

Think of it this way -- if 25% of the drivers in your auto insurance portfolio all suddenly were acting like the Malachy Brothers in a demolition derby, you could expect your rates to go up, too. That's the situation in the housing market -- one-quarter of homes in the United States are upside-down financially, and it will get worse before it gets better.

Will it impact the housing market? Depends on your perspective, I guess. In most of Southern California, we're dealing with multiple offers on almost every property. FHA borrowers who can't pay their own closing costs right now have a low probability of having an offer accepted because they are competing against conventional borrowers with higher down payments and cash buyers (yes, in droves). Those paying their own closing costs will have to save a few extra months to make a purchase. Those who need seller contributions will have to save a few extra months to make a purchase. At the end of the day, when people are faced with reality, they tend to do what they need to do.

Scott Chappell and Brian Bean
Real Estate Brokers
http://www.scott-brian.com/
http://www.orangecrestriversidehomes.com/

Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula