Record Price Decline

I found this interesting information on CNN Money and thought it worth sharing. This real estate market is not for the faint of heart.

The question is, "How long can this last?" if any one has the answer please let me know. So many people are upside down in their properties right now and wondering if it is worth waiting it out or is now the time to find a way out. Jingle mail is back big time. It is hard to think of making payments on a house that is not worth as much as your mortgage. When is one throwing good money after bad? Is there a moral issue in just walking away from your mortgage? How long does a foreclosure usually hurt one's credit and can you ever get another mortgage? If there are any accountants or loan brokers out there that would like to comment on this please, I welcome your post.

Reverse Mortgages

I've had lots of clients ask me, "Heather should I sell this home or should I take out reverse mortgage on it?" and "How does the reverse mortgage work?". Well, first let's keep in mind that I am a Realtor not a loan broker but I will try my best to answer the basics.

1.) WHAT IS A REVERSE MORTGAGE? A "reverse" mortgage is a loan against your home that does not have to be paid back until you no longer live in the home, die or sell your home. With a reverse mortgage, you can take the equity out of your home and not have to worry about monthly payments. The cash can be paid to you in a number of ways:

• A single lump sum of cash.
• A regular monthly cash advance
• As a credit line that allows you to control the amount available
• A combination of the above

To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.

2.) IS A REVERSE MORTGAGE GOOD FOR YOUR NEEDS?

AARP has five questions you should ask yourself if you are considering a reverse mortgage. They are:

• Do you really need a reverse mortgage?
• Can you afford a reverse mortgage?
• Can you afford to start using up your home equity now?
• Do you have less costly options?
• Do you fully understand how these loans work?

Before you decide whether to take a reverse mortgage or sell your home and rent read the article on the subject on the AARP website. Another good source for information on reverse mortgages is The U.S. Department of Urban Development (HUD).

These mortgages can be VERY expensive and one should give a lot of thought before taking one out. Always talk to a professional money advisor before making the decision.

FHA Lifts The 90 Day No Flip Policy

To help facilitate the sale of bank-owned properties, the FHA (Federal Housing Administration) has suspended its 90‑day rule against flipping properties until June 9th, 2009 for properties acquired by lenders. Under the anti‑flipping rule, the FHA will not insure a mortgage loan if the property was sold within 90 days of the sellers purchase of the property. Foreclosed homes are vacant/abandoned and can harm neighborhoods and delay an areas recovery.The hope of FHA’s new policy is to facilitate the sale of bank-owned properties. However, FHA still requires homes to be “safe, secure, and sound," which isn't always the case with REO (Real Estate Owned) properties.
For more information about the waiver of FHA’s anti‑flipping rule, go to www.fha.gov.

Point-Of-Sale Update

BIG WIN FOR REALTORS® ON ENERGY AUDIT/POINT-OF-SALE BILL - The California Association of Realtors and thousands of REALTORS® won their fight in Sacramento. The author of Assembly Bill 2678 agreed to remove the requirement from the measure that would have mandated that homes and commercial property on the market in California undergo an energy audit at point-of-sale and forced completion of energy efficiency upgrades."This is a significant win for every REALTOR®, homeowner, and potential home buyer in the state," said C.A.R. President William E. Brown. "C.A.R. wishes to thank every one of its members who rallied behind our efforts to have these point-of-sale contingencies removed as a way to preserve housing affordability." Way To Go C.A.R.

Quick Facts From C.A.R.

Calif. median home price - April 08: $403,870(Source: C.A.R.)

Calif. highest median home price by C.A.R. region April 08: Santa Barbara So. Coast $1,170.000(Source: C.A.R.)

Calif. lowest median home price by C.A.R. region April 08: High Desert $210,860(Source: C.A.R.)

Calif. First-time Buyer Affordability Index - First Quarter 08: 44 percent (Source: C.A.R.)

Mortgage rates - week ending 06/12/08 30-yr. fixed: 6.32% Fees/points: 0.7% 15-yr. fixed: 5.93% Fees/points: 0.6% 1-yr. adjustable: 5.09 % Fees/points: 0.6% (Source: Freddie Mac)

Getting A Mortgage In This Tight Market

I was having a conversation with one of my favorite loan brokers, Page Moseley of Premiere Financial and we got to talking about how tough it can be to get a loan in today's real estate market. He told me that "although mortgage rates are up this week, they are still near historic lows. But it is still a challenge to get a loan in this market. Jumbo loans can be a real challenge." Here are a few tips from Page to help you get the best loan in this credit crunch.

1. Figure out what you can afford and if this is a good time for you to buy a home. Mortgage calculators can be found all over the web. Be honest with your figures and you will get a good idea as to your purchasing power. My website has lots of tools and information to help.

2. Use a trusted source. Ask for a referral from a friend or someone who has recently gone through a purchase or refinance. Ask questions, a lot of questions and if it sounds too good to be true it probably is.

3. Things you are going to need:
· 1 months pay stubs
· 2 years Federal tax returns or W2’s
· 2 months bank statements on all accounts with money ie: savings, checking, money markets and all retirement type accounts.

If you have any questions give Page a call 818-761-6080.

Higher Loan Limits

The House of Representatives has passed reform proposals for FHA, Freddie Mac & Fannie Mae that include the increased loan limits of the economic stimulus legislation permanent. This is very important for states, like California, that have a high cost market. Increased FHA/GSE loan limits are providing a much needed infusion of stability, liquidity and security into the market. If the Senate doesn't insist on higher limits, the recovery will be thrown into a period of additional turmoil.
Don't let the Senate stop progress through inaction. Tell Senators Boxer and Feinstein that realistic and permanent loan limits help all areas of the country and are needed now.