Dave Thurman's Real Estate Blog

Homeowners defaulting on mortgages today may be surprised to learn years from now that they still owe thousands of dollars – and a collection agency is coming after them to get it.

That’s because lenders have been quietly selling second mortgages and home equity lines left unpaid after foreclosures and short sales. The buyers: collection agencies, which in California have up to four years to make a claim.

If they win court judgments, these collectors could have years to pursue borrowers with repayment plans, and even garnish their wages, … read more  from Sacramento Bee, Real Estate by Jim Wasserman.

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More news for the housing market…I found this article today on Recordnet.com 

WASHINGTON (AP) — Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales dropped 11.2 percent last month to a seasonally adjusted annual sales pace of 309,000 units, the lowest level on records going back nearly a half century. The big drop was a surprise to economists who had expected sales would rise about 5 percent over December’s pace. Read more if you like bad news…

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Wow! Look what I found on the CAR (California Association of Realtors) website regarding foreclosures and short sales. Also, check out the info and progress of the statewide MLS (Multiple Listing Service).

California:

Press Enterprise: Inland foreclosure pressure eases; short sales rise
By Leslie Berkman
2/11/2010
In January, combined filings for defaults, trustee sales, and bank repossessions declined more than 24 percent in the Riverside and San Bernardino counties region. It was led by a nearly 50 percent decline in notices of default. Also, from December to January the amount of all foreclosure-related filings declined almost 13 percent.

National:

Los Angeles Times: U.S. aims to stop backing mortgages
By Walter Hamilton and Jim Puzzanghera
2/11/2010
The Federal Reserve plans next month to end a $1.25-trillion mortgage-bond-purchase program that has helped keep mortgage interest rates near a record-low 5 percent. 

Inman: ZipRealty: Fewer sellers slash prices
2/11/2010
Sellers reduced the asking price on 40.4 percent of available homes in January, down from 44.8 percent in December, to an average discount of $21,925, a rate of 6.54 percent lower than the month before, according to ZipRealty. The report covers 27 of 36 U.S. metropolitan areas in which the company operates.

Home prices fell in November for the first time in seven months, according to a industry report released Tuesday.

The S&P/Case-Shiller 20-city home price index recorded a decline of 0.2% from October. Prices were down 5.3% compared with 12 months ago. Read more from CNN.com…

Good Faith Estimate form effective January 1st.

Under the new rules, lenders and mortgage brokers are required to give consumers the standard estimate form within three days of receiving a loan application. The Good Faith Estimate form requires lenders to combine all of the bank’s fees into one “origination charge,” enabling consumers to compare one lender’s fees with another’s. Lenders also are prohibited from increasing the origination fee from the estimate.

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I found this on my CAR website…

Testifying before the Housing Financial Services Committee yesterday, Secretary of Housing and Urban Development (HUD) Shaun Donovan announced possible policy changes for Federal Housing Administration’s (FHA) borrowers.

Rising defaults on FHA loans have led to the FHA’s cash reserves falling below federally mandated levels. FHA officials hope that policy changes will ensure borrowers have a stronger equity position and are less likely to default.

Proposed changes include:
· Raising the minimum credit scores requirements: Currently borrowers with FICO scores as low as 500 may qualify for an FHA-insured loan. The new minimum credit score has yet to be determined.

· Increasing down payment requirements: FHA borrowers currently can put down as little as 3.5 percent. A proposed change would raise that amount to a minimum of 5 percent.

· Limiting the amount sellers can provide as concessions: The agency is considering lowering the maximum permissible level to 3 percent from its current 6 percent limit.

· Raising up-front insurance premiums: Agency staff is reviewing whether to increase the monthly insurance premiums charged to borrowers, which come on top of insurance paid up front. The current up-front premium is set at 1.75 percent of the value of the loan. The FHA may decide to increase that premium. The amount has yet to be determined.

According to Donovan, the rules will not be finalized until the FHA determines how to craft them in a way that weeds out the most problematic borrowers while ensuring that qualified borrowers will not be inadvertently shut out, thereby derailing the housing market’s recovery.

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Image by inman newsvia Flickr

The Stockton, CA real estate market is sooo… crazy. Approximately 50% or more of the home buyers are pre-approved for FHA financing for the very low priced inventory available. They find homes for sale on the Internet, but become frustrated due to the fierce competition from other buyers. Most buyers have made offers 5-10 times before finally getting a chance to close. Many home buyers just give up after a while, but in my opinion, expect the market to stay very active right through the winter holiday season due to the extension of the tax credits from uncle Sam.

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I found this fascinating quote today:

We have already seen the real estate market improve every quarter of this year to date, stimulated by the tax credit, great mortgage rates, and moderate prices. Though the lack of mortgage liquidity negatively impacted the attempts of some buyers to gain entry to home ownership, on the whole , the true worry was whether the gains in the market would be sustainable – with the extension of the tax credit through the spring, that question would be answered.Bill Lublin, MOVEPHILLY, Oct 2009

 You should read the whole article.

 

If you are a first-time home buyer planning to purchase a home within the next 90 days or so; the above title should be on your mind. Will the $8,000 First-Time Home Buyer Tax Credit Be Extended? The deadline is coming up the end of November 2009.

There has been discussions in congress of  a six month extension of the credit and Sen. Johnny Isakson, a Georgia Republican who worked in the real estate business before turning to politics, has been pushing for an expansion of the credit for some time. Read more…

The auto industry got “Cash for Clunkers”…How about a little help for the housing industry? Wouldn’t that help our economy???

Almost every buyer seems to be frustrated about the home buying process…well they certainly should be! The inventory of homes, active listings has been delayed for months, due to foreclosure moratoriums. Usually, the home has a sale pending or ten offers waiting for an answer which never comes. Well, another problem which many home buyers are not aware of is called Home Valuation Code of Conduct (HVCC).

 The Home Valuation Code of Conduct (HVCC) establishes standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. REALTORS® and mortgage brokers are prohibited from selecting appraisers. It was effective May 1, 2009, for any mortgage that will be sold to Fannie Mae or Freddie Mac.

 All summer real estate transactions have been delayed, re-negotiated and cancelled. According to a July 2009 survey of REALTORS®, 76 percent of respondents said the length of time to obtain a completed appraisal report increased after May 1, 2009. More than one third of REALTORS® have lost at least one sale because of a delay in the appraisal process.